An interesting post by the Invisible Adjunct on the differences in academic hiring between historians and economists. I think he misses the key insight of the original article he discusses. Let's assume that there is a disequilibrium price being maintained in the market for history professors. Wherever something is scarce, rationing must happen. If there's a shortfall in history positions, the way markets want to solve this is to allow history Ph.Ds to bid down the price. The ideal might be to have all qualified candidates stand in a line and have someone call out salaries starting at $50,000 and going backward. When all but one leave the line, you've found your professor and the market-clearing price. That's a rather absurd example, but many economists think markets work rather like this (what economists from the time of Leon Walras have called "tatonnement").

Now suppose for some reason prices are not allowed to ration. In the case of universities, salaries for new hires are often griped over by current faculty not only in the department the person will teach in, but in other departments. It surely grates on the new history assistant professor that the new economics assistant professor makes $15k more. So there's a tendency to shade the two salaries towards each other. (No fancy name for this; it's simply my observation over twenty years in academia.) We always teach in economics: If prices don't ration, something else will. Since positions are decided by search committees, being a good "fit" for a department becomes the criterion of choice. And this, says Robert Wright, is leading to something dire.

the fit criterion makes academic freedom a cruel joke for scholars who are not on the tenure track. Where fit is the key to getting a permanent job, one must be careful of what one says and writes. Attempts to fit are distorting scholarship and teaching. Woe to the job candidate bold enough to suggest in an interview that financiers were not uniformly pernicious, or that there is more to business history than the concept of class struggle. The academic freedom of the professoriate, in short, is purchased at the cost of the academic freedom of the untenured.

The solution is to use price to allocate jobs. But IA is not impressed with that solution.

Could departments then afford to hire more tenure-track historians? Or would the money simply go elsewhere? That is, would university administration simply take the money saved on salaries and put it into faculty recruitment in other departments, new buildings, technology upgrades and the like?

Would this really tend to raise the value of history PhDs, or would it rather tend toward a further devalution?

Around here, we call the reallocation of that money "the snowplowing fund". But the presumption is that the current salary of history assistant professors is somehow a measure of their value. By what metric do you make that measurement?

Remember, once more, all scarce goods get rationed somehow. If you don't want to use price/salary, and you don't want to use "fit", and you don't want to use job security/tenure ... How do you allocate scarce jobs?