Foremost on the minds of most university leaders these days are
the devastating cuts in appropriations as the states struggle to
cope with crushing budget deficits and the erosion of private
support from gifts and endowment income associated with a weak
economy. Of course, the optimist might suggest that this is just
part of the ebb and flow of economic cycles. In bad times, state
governments and donors cut support, hoping to restore it once again
in good times. But this time it may be different. There is an
increasing sense of pessimism about the restoration of adequate
state support, particularly for flagship public research
universities such as the University of Michigan.

Yet there is a certain irony here, because society’s
dependence upon higher education in general and the research
university in particular has never been stronger. Today we are
evolving rapidly into a post-industrial, knowledge-based society, a
shift in culture and technology as profound as the shift that took
place a century ago when our agrarian society evolved into an
industrial nation.

A radically new system for creating wealth has evolved that
depends upon the creation and application of new knowledge. In a
very real sense, we are entering a new age, an age of knowledge, in
which the key strategic resource necessary for prosperity has
become knowledge itself — educated people and their ideas.
Unlike natural resources, such as iron and oil, that have driven
earlier economic transformations, knowledge is inexhaustible. The
more it is used, the more it multiplies and expands.

But knowledge can be created, absorbed and applied only by the
educated. Hence schools, in general, and universities in
particular, will play increasingly important roles as our societies
enter this new age.

Yet today the United States, which once viewed education as
critical to national security, seems more concerned with sustaining
the social benefits (and tax policies) demanded by an aging baby
boomer population (and to hell with the kids). The priorities of
those of us in this impacted wisdom group are clearly heath care,
prisons, homeland security and reduced tax burdens for the near
term rather than the education of the next generation and the
future. This situation is unlikely to change until a new generation
establishes a more appropriate balance between consuming for our
present desires and investing for our children’s future.

This is particularly important for the leaders of
America’s public universities. Today, in the face of limited
resources and more pressing social priorities, the century-long
expansion of public support of higher education has slowed. We now
have at least two decades of experience that would suggest that the
states are simply not able — or willing — to provide
the resources to sustain the capacity and quality of their public

Most pessimistically, one might even conclude that
America’s great experiment of building world-class public
universities supported primarily by tax dollars has come to an end.
It simply may not be possible to justify the level of tax support
necessary to sustain the quality of these institutions in the face
of other public priorities, such as health care, K-12 education and
public infrastructure needs — particularly during a time of
slowly rising or stagnant economic activity and an aging generation
that apparently cares little about the future it leaves for its
children. Flagship public universities, such as the University of
Michigan, must come to grips with this reality and take those
actions, both courageous and no doubt controversial, necessary to
preserve their quality and capacity to serve future generations in
the face of declining state support.

Duderstadt served as the University’s president from
1988 to 1996 and is currently a University professor of Science and

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