One interesting argument I came across recently is that most of the great science and innovation of the world has been produced by institutionally independent scientists and inventors:

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The university as an institution has approached irrelevance several times in its history. Most of the new learning of the Renaissance, the great revival of classical studies, took place amongst small groups of learned men and leisured aristocrats outside the universities. They formed "academies" and learned societies in which they could discuss the literature and philosophy that had been rediscovered, not in the universities, but by men of letters like Petrarch and by wealthy collectors of manuscripts like Cosimo di Medici. After a century or so, the classics were finally co-opted by the universities, where they soon ceased to be the province of readers for whom they contained living wisdom, and fell into the hands of the gerund-grinders.

Early natural science was burgeoning at about the time the classics started to be sapped of life by the university, and for a couple of blessed centuries the sciences flourished in similar learned cenacles, like the Accademia dei Lincei or the Royal Society, while the inmates of the colleges considered such mere mechanical activities unworthy to soil their dainty fingers. Galileo, Boyle, Huyghens, etc., were not university men; Newton's university appointment was in mathematics, not the natural sciences. As late as the early nineteenth century, most scientists were not of the university, but operated outside it, e.g., Rumford, Davy, or Faraday. While there are isolated examples here and there of university instruction in the sciences as early as the late 17th century (e.g., Barchusen at Utrecht, Boerhaave at Leyden), Iaboratory education in physics and chemistry at universities did not really gain acceptance until after 1850. Independent scientist-inventors, e.g., Lammot du Pont, the Maxim brothers, Edison, or Tesla, continued to be dominant in this country until World War I gave the first government funding to institutionalized research. (source: http://unqualified-reservations.blogspot.com/2007/07/my-navr...)

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You can also add to the list above Darwin, the Wright Brothers, and Einstein.

Wholesale government funding of research worked well at first, as it essentially put the independent thinkers of old on steroids. But overtime, grant money started going to a new generation of scientists whose main ability was to work the government grant system. By the present, the modern university has essentially become a government bureaucracy where top scientists spend most of their time hunting for grants and doing paperwork. Worse, because of high taxes and the high costs of living in high IQ cities, the gentleman scientist is going extinct, thus cutting off the flow of new innovation.

What do people think of this argument? There are thousands of professors researching computer science, and tens of millions in grant money going into the field. But does anyone know what they are working on? Has anything useful come out of the computer science departments in the past twenty years? ( I'm asking seriously - not rhetorically). Will modern independent scientists like Trevor Blackwell and Jeff Hawkins by themselves out produce all the computer science professors in the country combined?