The New York Times–shocker!–hates the University of Phoenix

Cite this Article
Geoffrey Manne, The New York Times–shocker!–hates the University of Phoenix, Truth on the Market (February 12, 2007),

william pepicelloPeter Klein at the always excellent Organizations & Markets Blog has a characteristically excellent post on the New York Times’ characteristically anti-market article on the University of Phoenix (and for-profit higher education).

Lest there be any doubt that the article was meant to cast UOP in an unflattering light, check out the picture of UOP’s president, William Pepicello, that accompanies the article.  The picture makes him look like a cross between a clown and a devil–some sort of devil clown!

At any rate, the article is little short of a hatchet job, as Peter aptly demonstrates in his post.

I don’t know for certain whether UOP students maximize their utility by choosing UOP over Princteton (aka clown college, coincidentally), but there is, at a minimum, some theoretical merit to the form of organization. 

Here’s what I (and Adam Smith) said on the topic once before:

Here’s Adam Smith on universities:

The endowments of schools and colleges have necessarily diminished more or less the necessity of application in the teachers.  Their subsistence, so far as it arises from their salaries, is evidently derived from a fund altogether independent of their success and reputation in their particular professions.

In some universities the salary makes but a part, and frequently but a small part of the emoluments of the teacher, of which the greater part arises from the honoraries or fees of his pupils.  The necessity of application, though always more or less diminished, is not in this case entirely taken away . . . and he still has some dependency upon the affection, gratitude, and favourable report of those who have attended upon his instructions . . . . 

In other universities the teacher is prohibited from receiving any honorary or fee from his pupils, and his salary constitutes the whole of the revenue which he derives from his office.  His interest is, in this case, set as directly in opposition to his duty as it is possible to set it.

Faculties in today’s universities are substantially insulated from both the reputational and remunerative consequences of offering poor (or exceptional) education.  As direct payment by students — and, eventually, the conferring of degrees on “independent” courses of study — becomes more commonplace, this insulation will be seriously weakened, much to the likely benefit of the students.

I have no doubt that UOP isn’t perfect.  But it certainly mitigates some of the problems of traditional, nonprofit higher education.  Perhaps a comparative institutional analysis would have been in order.  The implication that UOP’s shortcomings derive necessarily from its for-profit status is both unsupported and unsupportable.