It pains me to say this, as both an economist and a graduate of Columbia, but: It may be time to break up not only Columbia but also America’s entire system of elite higher education.

America’s large private research universities, such as Columbia and Harvard, have long been crucial to its economic exceptionalism. The symbiotic relationship between universities and the federal government, which subsidizes tuition and funds research, has created growth and innovation that is the envy of the world.

Now, instead of being a source of national pride, many elite universities have become a source of national division, with some Americans viewing them as decadent, hypocritical or even hostile to their values.

It was thus inevitable they’d become a target of President Donald Trump’s administration. First it capped NIH grant reimbursements for costs indirectly related to research (utilities, administration, facilities, and so on), and it is now cutting grants entirely at elite research universities such as Harvard. The administration is also threatening to revoke the tax-exempt status of its endowment and trying to prevent Harvard from enrolling foreign students, a critical source of funding and talent.

Universities say these cuts are ending important research projects into diseases such as cancer and ALS. European universities, sensing an opportunity, are trying to poach talented professors and students in the U.S., many of whom are European and came to the U.S. because it is more lucrative.

Federal money helps to pay those higher salaries, as well as to defray research costs. This is why U.S. universities have become the world’s research centers, attracting the most talented students and scientists, many of whom stay and make enormous contributions to the U.S. economy — such as Elon Musk.

This whole system is mostly the brainchild of Vannevar Bush (yes, of that Bush family) who headed the U.S. Office of Scientific Research and Development during World War II and advocated for government support of research in the university system. His view was that if scientific research happened at universities, it would be protected from political influence.

There turned out to be other benefits too: More money and prestige made American universities the best in the world. Universities doing research could attract and retain the best talent, which wouldn’t be satisfied just teaching undergraduates. They could also train graduate students.

Some eight decades after Bush first advertised his ideas, however, many taxpayers have come to see elite universities as overtly political institutions. It is not just the lack of intellectual diversity among the faculty. It’s the research tinged with politics, the canceled speakers, the discrimination in hiring and admissions, the loyalty oaths, the institutional statements on issues that had nothing to do with the university. The response of many universities to the events and aftermath of Oct. 7, 2023, only served to highlight how out of touch they were.

True, most science researchers have little to no engagement with politics. So why should they and their research be punished? The answer is that they shouldn’t — and that’s why the research university model may not work anymore.

Universities played a critical role in the U.S. economy in the 20th century, but in the 21st they have strayed from their mission. If the implicit bargain of Vannevar Bush was taxpayer money in exchange for staying out of politics, then too many universities have not lived up to it. It’s not so much that the scientific research itself is tainted by politics; it’s that the institutions themselves are.

The question is not whether the U.S. system of higher education needs to change, but how. The current arrangement, apolitical graduate scientific research programs paired with highly political undergraduate arts and humanities departments, has become untenable.

Taxpayers may be OK with subsidizing cancer research or an education for the less fortunate, but not with the excesses of what some universities have become. The subsidies may have also blunted market signals, resulting in too many students getting useless degrees.

At the same time, government-supported research is critical to America’s long-term economic success. One option is breaking up universities. For a university such as Columbia, for example, the engineering, medical and business schools, along with some of the hard sciences, could form one entity. The college, the humanities, and the social-science schools and departments could form another and continue with their activism.

Alternatively, if the U.S. wants to keep the private elite research universities in their current form, they will need to make sincere and major changes. Universities have always had professors who say and even teach offensive things. The more recent failure involved extreme views becoming university policy. That is an institutional failure that is not easily remedied.

Institutions evolve over time, of their own initiative or at the behest of society. One of the strongest criticisms of the Trump administration’s policies is that they are rash; university faculty and administrators are right that Trump has gone too far and suppressed their independence and free speech. The restrictions on foreign students may be his most economically destructive policy yet.

But Trump’s attacks on the U.S. system of higher education didn’t come from nowhere. Given the behavior of America’s great universities over the last decade, it is hard to have much sympathy — or to believe they are capable of a transformation. Their entire economic model, weakened from within, is now under pressure from external forces. The threat of a breakup may be the only thing that can force them to change.

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This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Allison Schrager is a Bloomberg Opinion columnist covering economics. A senior fellow at the Manhattan Institute, she is author of “An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.”

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