Universities are—or, better said, until recently have been— among the only institutions that survived more or less intact from the High Middle Ages. As a result, universities still reflected an essentially medieval conception of self-organization and self-governance; this was an institution managed by scholars for the pursuit of scholarship, of forms of knowledge that were seen as valuable in their own right. This did not fundamentally change at the beginning of the nineteenth century, when university systems entered into an often somewhat uneasy alliance with centralizing states, providing training for the civil service in exchange for keeping the basic principle of autonomy intact. Obviously this autonomy was compromised in endless ways in practice. But it existed as an ideal. And it was important. It made a difference both in legitimizing the basic idea of a domain of autonomous production driven by values other than those of the market, but in any number of very practical ways as well: for instance, universities were, traditionally, spaces in cities not directly under the jurisdiction of the police.
In this sense what’s happened to universities since the 1970s—very unevenly, but pretty much everywhere—has represented a fundamental break of a kind we have not seen in eight hundred years. As Gayatri Spivak remarked in a talk she gave to Occupy Wall Street, even twenty years ago, when people spoke of “the university,” in the abstract, they were referring to the faculty; nowadays, when they speak of “the university,” they are referring to the administration. Universities are no longer corporations in the medieval sense; they are corporations in the capitalist sense, bureaucratic institutions organized around the pursuit of profit, even though the “profit” in question is, nowadays, slightly more broadly conceived. They are most certainly not institutions dedicated to the pursuit of knowledge and understanding as a value in itself. In that sense, I really think it can be said that the university, in the original conception of the term, is dead.
The whole article is fantastic, open access, and available here: http://www.haujournal.org/index.php/hau/article/view/hau4.3.007