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This article attempts to answer the knowledge management jibe that universities are ‘dumb organisations’ in need of restructuring or, worse, dissolution. In its place, the author proposes that the university is the original entrepreneurial organisation, one designed to engage in the ‘creative destruction of social capital’. Creation occurs as research gains one temporary advantage, while destruction occurs in teaching, which removes that advantage. However, this cycle is currently subject to severe disruption by such signature trends of our so-called knowledge society as credentials inflation and expanding intellectual property regimes. Contrary to the name ‘knowledge society’, knowledge functions more as a principle of social stratification or a source of capital development, but not a form of inquiry. Epistemology thus becomes what the author calls ‘phlogistemology’. This problem is diagnosed in terms of the emergence of ‘capitalism of the third order’. The author then shows how the welfare state temporarily reversed this tendency by institutionalising the university as a public good. However, with the decline of the welfare state, academic knowledge has now reverted to the status of a positional good. The author observes that the ultimate source of the university's identity crisis is the theory of value shared by the welfare state and contemporary neo-liberalism, both of which regard the university as a glorified short-term, client-centred service provider. In response, the author explores the consequences of taking seriously the idea that the university was one of the original chartered corporations, funded mainly by the alumni's lifelong financial commitment, not student fees or graduate taxes.

Can Universities Solve the Problem of Knowledge in Society without Succumbing to the Knowledge Society?