As soon as commercial interests get a look in, you can kiss goodbye to academic freedom, insists David Healy . Not so, says Robert Jackson - the modern academy needs to reduce its reliance on the State and embrace new partners.

The modern university and modern economics came into being at much the same time, after a revolution in science in the 17th century. In the university, this revolution allowed us to answer key questions by bringing data to bear on the issues rather than by appealing to authority or tradition. In economics, data also took on a central role - the market in goods being replaced to a certain extent by a market in data, spurred by government interest in mapping populations to predict how much they could raise taxes.

These overlapping interests in data and data production have made for fruitful interactions between industry and academia, most notably in the years that followed the Second World War, when academia was primarily publicly funded. Persuaded perhaps by this success, and against a background of disappearing public funds, many have regarded closer links between academia and industry as a marriage made in heaven. Universities are tripping over themselves in their haste to get down the aisle, where government bridesmaids await, to pledge their troth to commercial partners who have checked out the dowry. But this hasty marriage will leave academics repenting at leisure.

There are fundamental incompatibilities between academic and commercial markets. Academia has traditionally been an unfettered market for data and ideas. There were, in principle, no restrictions on access to data, and inconvenient facts were sought after rather than excluded. Academic entrepreneurs entered new areas simply because they were there, without undue consideration as to whether any immediate monetary return on investment might justify their efforts. The value of ideas was revised relentlessly so that today's leading brands were all but certain to end up on tomorrow's conceptual scrapheap.

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In contrast, today's commercial markets bear a greater resemblance to a Soviet command economy. Data are cordoned off by patent and copyright laws.

New evidence is not welcome. The only data sought are those that suit the interests of the company. New markets remain undeveloped unless marketing departments know what the return on an investment is likely to be. To judge by recent biomedical scandals, such as clinical trials involving the use of selective serotonin re-uptake inhibitor antidepressants for children, the commercial market tolerates, indeed appears to encourage, an almost complete mismatch between what the data show and authoritative representations of what they supposedly show. The science shows what the CEO says they show. Anyone who thinks otherwise is likely to face a legal writ.

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Where one might have expected academia to influence industry, on the basis that the scientific way has been shown to produce a better mousetrap than anything else humanity has devised, the influence seems to be all the other way round. Universities are increasingly likely to have corporate mission statements, with academics asked to indicate how their research contributes to the goals of the institution. Funding as a matter of policy is now linked to projects that offer the promise of short-term gains, or is matched to funds from industry in projects that almost never involve cutting-edge science.

In disciplines involving science with a commercial application, the writing of scientific articles has been put on a new footing. While the names of prominent academics continue to appear on the most cited articles published in the highest impact factor journals, these appearances are often ornamental rather than substantive; the authors don't have access to the data, probably in many instances never saw them and certainly cannot share them. The articles are better written than before, appear in a timelier fashion, and tick all quality control boxes, but their apparent authors are becoming actors in the scientific field rather than its leaders.

It may not be obvious how much we have lost, as there are continuing scientific developments but, in many cases, the basis for the latest applications lies in breakthroughs made decades ago. We are living off scientific capital accumulated in an earlier age. The rate of novel drug development in the West is now far lower per academic in the biomedical sciences than it was, for instance, in Czechoslovakia before the Iron Curtain was lifted. The life expectancy of Western patients with major diseases such as schizophrenia is falling. New drugs are more likely to be for cosmetic indications rather than agents that push forward the frontiers of freedom by liberating us from the threat of disease.

In the short term, the new buildings on campus look great but, behind the fascia, the academic furniture is rotting. Industry and academia are not necessarily incompatible. When commerce embraces the philosophy and discipline of the free market it might be possible to reconsider links between the two - until then, everyone, including industry, will lose if academia is bedded by commerce.

David Healy is professor of psychiatry, Cardiff University.

The phrase "academic freedom" has always struck me as a bit of a puzzle, since every reader of Plato's Republic and his Laws must know that his ideal Academy was rigorously dedicated to training "guardians" who were obliged to enter the service of the polis - over whose morals and culture they were to exercise a strict censorship. We should talk, rather, of "Lycean" freedom, since it was in Aristotle's Lyceum that the principle of free inquiry for its own sake first became a programme. But this was justified by the belief - which seems remote from today's "academic" concerns - that it is in the theoretic imitation of divine self-contemplation that man can best hope to become like God.

The debate about academic freedom is an ancient one. What exactly is academic freedom anyway? Is it simply a particular dimension of the wider freedoms of thought that are generally guaranteed in modern Western societies? Or does it involve something else - something that might even be taken so far as to justify "jobs for life with no reference to performance"? Does it justify academics doing whatever kind of work they like? And if some regard to the interests of those who pay for the academy is justified, how far should this go? And how should the balance of conflicting interests be managed?

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We can answer the first set of questions by a lowest-common-denominator utilitarian and pragmatic argument that singles out academic freedom as a special freedom because of its links with creativity. Modern societies and economies need creative knowledge: creativity requires manifold options and possibilities and creative people need to feel that they are free to explore those options.

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The second set of questions is more difficult to deal with. In mid-20th century Britain, one kind of answer was attempted. It was that the state should take over financial responsibility for the academy, while academics should be free to do what they wanted with the money. Of course, in practice this was not how the old University Grants Committee arm's-length system worked: a lot of those arms were effectively twisted behind the Establishment arras.

But this formula has broken down irretrievably because of a change in scale. It was conceived for a small number of institutions, involving small numbers of people and costing peanuts. Today, we have lots of institutions, well over a million people and costs amounting to billions of pounds. It is not the case that the old system secured academic freedom while the new one does not. The difference is, rather, one between more personal styles of accountability and more impersonal ones. States consist of large-scale bureaucracies governed by rule-bound accountabilities.

But there is no doubt that the effects of this on academics are demotivating. And in the light of our crude utilitarian-pragmatic argument for encouraging creativity, this must be an unacceptable outcome. If the old formula has gone, and the present one does not work, we need a new one.

The old formula embodied two mistakes. One was philosophical: that academic autonomy was an unconditional absolute. The other was one of political judgment: that the State and the academy were on an equal footing.

It is a cliche to characterise the approach that is needed as a turn to the "market" (a boo-word for too many people). But it can be described in strictly political terms. The interests of academics are conditioned by those of many others - taxpayers, students, employers, non-academic staff, society, economy and culture. Political balances have to be struck. No balance is attainable between the academy and the State - the State will always be the overwhelmingly dominant partner.

The only hope of achieving a political balance is for the academy to call in a wider range of partners and reduce its dependence on the State. In this way it can play partners off against each other - and will stand on a more equal footing with the state.

The academy will always be economically dependent on others: its best hope of defending its interests is to diversify its dependence. This is not just a defensive move. The academy has much to learn from connecting more intimately with a fuller range of the vital forces emerging in modern society.

Will it work? The US higher education system has its problems but its success and self-confidence shows the way. Europe's experiment with state-dominated universities has failed. We need a new approach.

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Robert Jackson was Minister for ³ÉÈËVRÊÓƵ and Science in the Thatcher and Major governments. He crossed the floor to Labour in 2005, partly in protest at the Conservatives' opposition to tuition fees.