In order for them to play this important role, professors have to personally sacrifice: "[T]he free competitive market for higher learning would not guarantee all the academic freedom which society ought to provide in the interest of progress; without the interference through the universal tenure system the degree of academic freedom would be only that which professors would be willing to pay for, and this would be much less than what is socially desirable." Machlup portrayed the intellectual marketplace as beset by "externalities." For Machlup, professors produced the fruits of academic freedom. The problem was that they did not reap the full benefits of such freedom, while at the same time they solely bore the costs of it. In forging a binding commitment amongst professors, trustees, and administrators, tenure operated as a corrective for this "market failure."

Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, loc. 126