The Economics of Tenure
Be Careful What You Wish For
by edward tenner
illustrations by hal mayforth
edward tenner a frequent contributor to the Review, is a research affiliate of the Smithsonian Institution and Rutgers University.
Tenure is academia’s paradoxical institution. Hailed as a safeguard to dissent, it originated in a hierarchic, authoritarian society. Defended as a backbone of career security, it is apt to buckle just when needed most. Jeered as a refuge for lazy, burnt-out time-servers, it is indispensable for the recruitment of research stars.
No other academic custom has been so scorned. In his still remarkably current book The University: An Owner’s Manual (1991), the Harvard economist and former dean of faculty Henry Rosovsky quotes the Economist, which once cracked that tenure is an arrangement allowing its holders “to think (or idle) in ill-paid peace, accountable to nobody.”
If tenure is so pernicious, you might wonder why universities still offer it. In fact, they seem ever less inclined to do so: only a quarter of college faculty enjoy it, down from nearly 40 percent in the late 1980s.
But (pardon the cliché) it’s not so simple. While universities could rapidly accelerate this decline by offering premium salaries to faculty willing to waive tenure rights, they rarely do. For, absurdly generous as it appears to many nonacademics, the tenure option makes economic sense to institutions as well as to anointed faculty. Indeed, the issue is deeply entangled in the complexities of deciding what universities’ priorities are and how to pay for them.
Made in Germany
First, a definition. The 45,000-member American Association of University Professors (AAUP) sees tenure as “an indefinite appointment … that can be terminated only for adequate cause or under extraordinary circumstances, such as financial exigency or program elimination.” Take special note of that last innocent-sounding escape clause – we’ll be coming back to it.
Tenure is popularly thought to shield progressive doctrines of race, class and gender. But it certainly did not start that way. Tenure originated in the highly stratified world of the German universities that their American counterparts began to emulate (and later to surpass in achievement) in the late 19th century.
Tenure as a guarantor of free speech didn’t work so well when first put to the test in the United States. When Washington entered the Great War in 1917, dozens of dissenting professors were caught up in the nationalist campaign against pacifists, suspected German sympathizers and Socialist war opponents, and many were fired by their universities.
As the Stanford historian Emily J. Levine concludes in Allies and Rivals: German-American Exchange and the Rise of the Modern Research University, tenure was partly “a proxy for social and economic status” and for maintaining privileges against the claims of lower academic ranks. This academic nobility, far from using its autonomy to examine state policies critically, became “the bodyguards of the Hohenzollerns.”
Not to mention fervent nationalists: at the outbreak of World War I, dozens of prominent German academics signed a manifesto celebrating the empire. A mere handful of others, led by Albert Einstein, drafted (but never published) an appeal to Europe for peace.
Tenure as a guarantor of free speech didn’t work so well when first put to the test in the United States. When Washington entered the Great War in 1917, dozens of dissenting professors were caught up in the nationalist campaign against pacifists, suspected German sympathizers and Socialist war opponents, and many were fired by their universities. And despite the organization’s ringing endorsement of academic freedom in its 1915 Declaration of Principles, the American Association of University Professors endorsed this persecution.
Indeed, the link between tenure and academic freedom was not fully forged until the Red Scare of the early 1950s and the campaigns to dismiss faculty members who were Communist Party members or sympathizers – or simply unwilling to sign loyalty oaths. For, despite right-wing agitation, the numbers of faculty members dismissed for political reasons during the McCarthy era, the Vietnam War and the recent Gaza protests has been small considering the scale of faculty dissent.
But this civil liberties justification for tenure may be its weakest point. Ironically, the very strength of tenure as a bulwark of free speech for those with the status may work against controversial candidates for tenure because it mandates an up-or-out decision that can end badly.

This happened in 1984, when the MIT historian of technology David Noble was denied tenure, allegedly for his criticisms of the university’s (undeniable) ties to industry. He was popular among students but a passionate and uncompromising neo-Luddite and Marxist. More recently, Norman Finkelstein, a critic of Israel from a Jewish family, was denied tenure at Chicago’s DePaul University – yes, that De- Paul, the largest Catholic university in the country. Then in April 2023, Florida’s New College, led by hard-right trustees appointed by Gov. Ron DeSantis, rejected tenure for five assistant professors recommended for promotion by the faculty and administration.
Enterprise Trumps Ideology
For all the fuss emanating from the right, it is left-leaning institutions like Evergreen State College in Washington and Hampshire College in Massachusetts that have abolished tenure, while conservative ones including Hillsdale College (Michigan), Claremont McKenna College (California) and George Mason University (Virginia) have retained it. In fact, they are proud of using it to challenge progressive-minded schools in the prestige race: “Mason’s tenure-line faculty are central to our success in growing our R1 [national research university] status,” the GMU website declares.
GMU is on to something. It is conservatives who need protection from woke administrators and colleagues. The first celebrated faculty free-speech case – the successful campaign of the obsessively domineering Jane Stanford, widow of the robber-baron founder of Stanford University, to dismiss Edward A. Ross illustrates this.
Ross was a respected economist, but he was also a racist fascinated with eugenics who opposed the Stanfords mainly because they were threatening to dilute American racial purity and living standards by employing Chinese immigrants to build the Western railroads. The controversy helped make Ross’ 1901 book Social Control a best seller, and he went on to a distinguished career at the University of Wisconsin. The progressive commitment to academic freedom thus originated in the defense of “race suicide” theory and hate speech.
It gets worse. Tenure protected the University of Illinois classicist Revilo P. Oliver, in his spare time a founder of the John Birch Society who believed that John F. Kennedy’s assassination was the result of JFK’s participation in
a communist conspiracy. Tenure battles, it seems, too often balance on the knife edge between principle and farce. Oliver’s palindrome given name inspired jokes that he didn’t know whether he was coming or going. And his
political views certainly begged for mockery. But he was a Guggenheim and Fulbright fellow who knew 11 languages and ably translated from Sanskrit. The University of Illinois trustees formally repudiated his politics but never questioned his right to teach philology.
Undergraduate applicants say they want great teaching, especially now that tuition and fees at some private universities are approaching $90,000 annually. But as I argued in the Milken Institute Review online, people’s behavior does not always conform to their stated beliefs.
The list goes on. Tenure is currently protecting the conservative Amy Wax of the University of Pennsylvania Law School, who is fighting a one-year suspension brought on by cancel campaigns initiated by hostile administrators, peers and students. (One must wonder, though, what her critics are so hot and bothered about. The ability of college professors of any ideology to influence students’ values has been perennially exaggerated. The best-known alumnus brainwashed by Yale’s postwar liberal profs was William F. Buckley, Jr.)
Conservative donors and legislators are catching on, deciding that it is better to create new tenured positions and fill them with likeminded academics than to fight the concept of tenure. Benjamin Storey and Jenna Silber Storey, senior fellows of the American Enterprise Institute, have even suggested that the conservative civic education movement, inspired in part by criticisms of progressive hegemony, might spark a “renaissance of the humanities.”
Revealed Preferences
Liberals and conservatives alike blame tenure for the aggrandizement of research at the expense of teaching. They are partly right. But here, too, the issues blur under close examination, for research-oriented universities must think not only about undergraduate teaching but also about graduate-student mentorship.
How can professors guide successful PhD dissertations if they have not made original contributions themselves? It is professors’ research and job-placement track records that draw grad students, who typically do much of the up-close-and-personal teaching of undergraduates and are indispensable as research assistants. In her book on Nobel Laureates, Scientific Elite, the sociologist Harriet Zuckerman underscored the importance of top scientists in guiding their grad students to hallowed ground. The physicist Julian Schwinger mentored some 75 PhD candidates at Harvard, four of whom then followed Schwinger to become Nobel Laureates.
Undergraduate applicants say they want great teaching, especially now that tuition and fees at some private universities are approaching $90,000 annually. But as I argued in the Milken Institute Review online, people’s behavior does not always conform to their stated beliefs. I called that the mood versus attitude problem, while economists call it “revealed preferences.”
Consider Harvard and MIT, tied for a mediocre 48th in the 2024 U.S. News & World Report ranking for undergraduate teaching. With admission acceptance rates of under 5 percent, it’s plain that applicants don’t hold it against them. Elon University in North Carolina ranks first for teaching on the U.S. News list, yet its acceptance rate is 73 percent – about the national average.

Team Spirit
If tenure is not mainly about free speech or about teaching, what’s left? Tenure can be justified because it has helped to create predictable career paths among many disciplines and many institutions, increasing academic productivity.
Trading flexibility for stability, it seems, is in the interest of both faculty and administrators. A university, a historian friend of mine suggested, is like a confederation of partnerships managed by a central authority. And academic tenure is not so different from the approach followed by law firms, with an intense probationary period followed by what is traditionally an up-or-out decision.
There are, of course, some important differences. Senior faculty don’t necessarily mentor assistant professors as law partners are supposed to help young attorneys transition from the abstractions of law school to the realities of practice. But both associate lawyers and assistant professors are expected to work strenuously toward a career goal that most of their peers will never attain.
Moreover, like lawyers, academics must be team players, creating programs that will be highly rated and attract talented students – especially the graduate students who will be their collaborators. Prospective PhD candidates need a stable faculty rather than a series of contract appointments. Research funders also depend on continuity.
Tenure is almost universal, not only because that helps institutions coordinate but because it suits the nature of self-directed research. Outside of a few fields with lucrative consulting potential, an academic career inevitably has opportunity costs in the form of roads not taken and effectively closed forever. Whether in the humanities or the sciences, academia demands hyper-specialization. And even after investing many years in research and course preparation, there is the risk of tenure denial.
But the up-or-out nature of tenure does make economic sense from the perspective of elite universities, minimizing the risk of allowing inertia to undermine the quality of a university department for three or four decades. And anyway, if the denied scholar makes a splash at another university, his former employer can always bid to bring them back. Thus, the controversial political scientist Samuel Huntington, best known for his clash-ofcivilizations theory, returned to Harvard as a full professor after a few years at Columbia.
As in the corporate world, the gentlest are voluntary buyouts – usually in the form of early retirement. Infla-tion, moreover, is on the side of the admin- istration as tenure carries no guarantee of cost-of-living increases.
The benefits are less clear from the young scholar’s point of view. But even for them, the forced decision has career advantages. In their early 30s, they still have a shot at starting over with another career. Of course, this will probably not impress their former colleagues who managed to join the tenure club. As Henry Rosovsky put it in his Owner’s Manual, even if an academic defector/dropout “owns half of Manhattan and regularly has lunch with the President,” they will always be remembered as not good enough to get tenure at Berkeley.
From Here to Exigency
Of course, some unproductive and even wayward professors slip through the tenure net. But administrators still have means to correct what they see as errors. As in the corporate world, the gentlest are voluntary buyouts – usually in the form of early retirement. Inflation, moreover, is on the side of the administration as tenure carries no guarantee of cost-of-living increases. Then there’s the path of denying tenured professors the perks they assume are their due – say, exemption from teaching remedial classes or class schedules that eliminate three-day weekends. To paraphrase President Óscar Benavides, the former Peruvian strongman: “For my friends, everything; for my enemies, the faculty regulation manual.”
The enviable life of the tenure-track job is under pressure even for faculty considered model academic citizens. But the rain on their parade is not coming primarily from populist governors, snarky journalists or billionaire alums. The dislocations of the pandemic accelerated a purely economics-driven conversion of tenure-track budget lines to term (often “adjunct”) appointments as full professors retire. According to a 2022 report of the AAUP, more than half of the schools they surveyed have replaced some tenured positions with fixed-term positions in the last five years.
From the faculty’s standpoint, the true Achilles heel of tenure is the rising inclination of schools to close entire departments regardless of their academic merit when enrollment or government appropriations drop. Here, tenure is no protection: institutions can act like fast-food chains that routinely close unprofitable locations.
This is increasingly a top-down phenomenon rather than the consequences of survival of the fittest. Geography as a discipline bears no resemblance to the lessons you learned in sixth grade. But don’t tell that to administrators still smarting from forgetting the capital of Kazakhstan. Harvard abolished its geography department in 1949 because President James Bryant Conant, a chemist, did not believe that geography was a college subject. Penn followed in 1963; Yale in 1967. Columbia’s strong department was abolished in 1986, and in the same year Chicago’s department was allowed to expire with the retirement of its senior faculty.

Yet the cascade of cancellations did not reflect any crisis in the discipline; geography continues to evolve in vital ways in public universities in the U.S. and in other countries. Rather, the cascade showed that mimetic isomorphism – sociologists’ Greek-derived phrase for the copycat imperative – can work in reverse. Once Harvard revealed it could keep its premier university standing without a geography department, other major private universities followed the leader.
“Financial exigency” is one of the grounds acknowledged by the AAUP for legitimately terminating a tenured appointment. Yet the definition of exigency can be elusive when even some wealthy institutions are challenged to fund all that their constituencies would like them to cover. And the problem is growing more urgent. For one thing, schools face more resistance to tuition hikes, in part because the value of college degrees as an investment is being questioned, in part because students are loath to graduate with tens of thousands in debt. Equally important, the demand for college will inevitably be affected by a so-called demographic cliff, a sharp fall-off of the number of high school graduates beginning in 2025.
An average of two colleges are failing each month – recently including Philadelphia’s celebrated University of the Arts. Major state budget cutbacks are already squeezing public institutions, and even tenured positions are not necessarily safe.
History also suggests that tenure will be a fragile shelter in any future economic storm. Consider the emergency at the University of Michigan in 1983 – one of the top public universities by everyone’s reckoning. The auto industry’s troubles had crushed the state’s finances, resulting in an 11 percent loss in real funding over a decade and the necessity of charging the highest tuition of any public university.
The Michigan school administration rejected across-the-board cuts beyond 10 percent reductions for all units, instead targeting what administrators believed to be weaker departments for abolition while continuing to build programs in fields like genetics and robotics. The national AAUP and the Michigan chapter leaders did not formally protest.
Michigan’s approach reflected a strategy espoused by Frederick Terman in the 1950s and ’60s, when as provost he built Stanford as the engine of Silicon Valley by both encouraging academic-industry relationships and faculty entrepreneurship. The Darwinian strategy called for promoting the strongest departments and cutting the weak ones, developing a limited number of world-class programs that Terman dubbed “steeples of excellence.”

Department survival depended partly on enrollment, but mostly on the promise of federal and private grants and contracts. Terman was one of the first administrators to promote computer science to star status, and his philosophy stuck at Stanford, while Ivy League presidents were still cautious about sources of funding with government and corporate strings attached.
The shortage of academic positions, especially tenure-track appointments, is an old story in the humanities and nonquantitative social sciences. And since the pandemic, doubts about the future have been spreading to science and engineering PhDs as well.
The search for The Next Big Thing, it’s worth remembering, is never-ending. And as artificial intelligence booms, specialists in large language models may prosper while other scientific and technical specialties languish. Silicon Valley is in its third year of layoffs. Sixty thousand have been reported in 2024 – not a big number in a national labor market of some 157 million, but a big deal in a high-profile sector long accustomed to double- digit growth. At some point, universities may find it prudent to trim the number of graduate students in STEM, an acronym that is coming to seem ominous to many academics outside its fields.
But untangling a system built on the assumption of nonstop growth would be no small feat. And it is possible that a future economic downtown will trigger drastic actions affecting entire departments. In a controversial recent book, Colleges on the Brink, former college presidents Charles M. Ambrose and Michael T. Nietzel suggest that instead of waiting for a cash crunch, schools should declare their emergencies early – preemptive exigency. Tenure would take a big hit, of course. But, as they put it, “Tenure, in its present form, is too blunt an instrument to accomplish the faculty protections that are needed without the excess baggage that’s sometimes encumbered.” Would-be Terminators are no doubt taking note.
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Tenure might be compared to the seawalls protecting the Pacific coast of Japan before the 2011 tsunami, built for eight-meter waves but defenseless against breaches from higher surges. Private schools with brimming endowments and state flagship universities could withstand the shock and possibly emerge stronger after the failure of weaker counterparts – creative destruction, as Joseph Schumpeter put it.
But many of the sworn enemies of elite education and tenure in particular may rue the day, since a small number of universities dominate cutting-edge graduate education. Indeed, the campaign against tenure and its champions may cement the hegemony of the upper crust that the populist right so detests.