GRADUATE education is the Detroit of higher learning. Most graduate programs in American universities produce a product for which there is no market (candidates for teaching positions that do not exist) and develop skills for which there is diminishing demand (research in subfields within subfields and publication in journals read by no one other than a few like-minded colleagues), all at a rapidly rising cost (sometimes well over $100,000 in student loans).

Widespread hiring freezes and layoffs have brought these problems into sharp relief now. But our graduate system has been in crisis for decades, and the seeds of this crisis go as far back as the formation of modern universities. Kant, in his 1798 work “The Conflict of the Faculties,” wrote that universities should “handle the entire content of learning by mass production, so to speak, by a division of labor, so that for every branch of the sciences there would be a public teacher or professor appointed as its trustee.”

Unfortunately this mass-production university model has led to separation where there ought to be collaboration and to ever-increasing specialization. In my own religion department, for example, we have 10 faculty members, working in eight subfields, with little overlap. And as departments fragment, research and publication become more and more about less and less. Each academic becomes the trustee not of a branch of the sciences, but of limited knowledge that all too often is irrelevant for genuinely important problems. A colleague recently boasted to me that his best student was doing his dissertation on how the medieval theologian Duns Scotus used citations.

The emphasis on narrow scholarship also encourages an educational system that has become a process of cloning. Faculty members cultivate those students whose futures they envision as identical to their own pasts, even though their tenures will stand in the way of these students having futures as full professors.

The dirty secret of higher education is that without underpaid graduate students to help in laboratories and with teaching, universities couldn’t conduct research or even instruct their growing undergraduate populations. That’s one of the main reasons we still encourage people to enroll in doctoral programs. It is simply cheaper to provide graduate students with modest stipends and adjuncts with as little as $5,000 a course — with no benefits — than it is to hire full-time professors.

In other words, young people enroll in graduate programs, work hard for subsistence pay and assume huge debt burdens, all because of the illusory promise of faculty appointments. But their economical presence, coupled with the intransigence of tenure, ensures that there will always be too many candidates for too few openings.

The other obstacle to change is that colleges and universities are self-regulating or, in academic parlance, governed by peer review. While trustees and administrations theoretically have some oversight responsibility, in practice, departments operate independently. To complicate matters further, once a faculty member has been granted tenure he is functionally autonomous. Many academics who cry out for the regulation of financial markets vehemently oppose it in their own departments.

If American higher education is to thrive in the 21st century, colleges and universities, like Wall Street and Detroit, must be rigorously regulated and completely restructured. The long process to make higher learning more agile, adaptive and imaginative can begin with six major steps:

1. Restructure the curriculum, beginning with graduate programs and proceeding as quickly as possible to undergraduate programs. The division-of-labor model of separate departments is obsolete and must be replaced with a curriculum structured like a web or complex adaptive network. Responsible teaching and scholarship must become cross-disciplinary and cross-cultural.

Just a few weeks ago, I attended a meeting of political scientists who had gathered to discuss why international relations theory had never considered the role of religion in society. Given the state of the world today, this is a significant oversight. There can be no adequate understanding of the most important issues we face when disciplines are cloistered from one another and operate on their own premises.

It would be far more effective to bring together people working on questions of religion, politics, history, economics, anthropology, sociology, literature, art, religion and philosophy to engage in comparative analysis of common problems. As the curriculum is restructured, fields of inquiry and methods of investigation will be transformed.

2. Abolish permanent departments, even for undergraduate education, and create problem-focused programs. These constantly evolving programs would have sunset clauses, and every seven years each one should be evaluated and either abolished, continued or significantly changed. It is possible to imagine a broad range of topics around which such zones of inquiry could be organized: Mind, Body, Law, Information, Networks, Language, Space, Time, Media, Money, Life and Water.

Consider, for example, a Water program. In the coming decades, water will become a more pressing problem than oil, and the quantity, quality and distribution of water will pose significant scientific, technological and ecological difficulties as well as serious political and economic challenges. These vexing practical problems cannot be adequately addressed without also considering important philosophical, religious and ethical issues. After all, beliefs shape practices as much as practices shape beliefs.

A Water program would bring together people in the humanities, arts, social and natural sciences with representatives from professional schools like medicine, law, business, engineering, social work, theology and architecture. Through the intersection of multiple perspectives and approaches, new theoretical insights will develop and unexpected practical solutions will emerge.

3. Increase collaboration among institutions. All institutions do not need to do all things and technology makes it possible for schools to form partnerships to share students and faculty. Institutions will be able to expand while contracting. Let one college have a strong department in French, for example, and the other a strong department in German; through teleconferencing and the Internet both subjects can be taught at both places with half the staff. With these tools, I have already team-taught semester-long seminars in real time at the Universities of Helsinki and Melbourne.

4. Transform the traditional dissertation. In the arts and humanities, where looming cutbacks will be most devastating, there is no longer a market for books modeled on the medieval dissertation, with more footnotes than text. As financial pressures on university presses continue to mount, publication of dissertations, and with it scholarly certification, is almost impossible. (The average university press print run of a dissertation that has been converted into a book is less than 500, and sales are usually considerably lower.) For many years, I have taught undergraduate courses in which students do not write traditional papers but develop analytic treatments in formats from hypertext and Web sites to films and video games. Graduate students should likewise be encouraged to produce “theses” in alternative formats.

5. Expand the range of professional options for graduate students. Most graduate students will never hold the kind of job for which they are being trained. It is, therefore, necessary to help them prepare for work in fields other than higher education. The exposure to new approaches and different cultures and the consideration of real-life issues will prepare students for jobs at businesses and nonprofit organizations. Moreover, the knowledge and skills they will cultivate in the new universities will enable them to adapt to a constantly changing world.

6. Impose mandatory retirement and abolish tenure. Initially intended to protect academic freedom, tenure has resulted in institutions with little turnover and professors impervious to change. After all, once tenure has been granted, there is no leverage to encourage a professor to continue to develop professionally or to require him or her to assume responsibilities like administration and student advising. Tenure should be replaced with seven-year contracts, which, like the programs in which faculty teach, can be terminated or renewed. This policy would enable colleges and universities to reward researchers, scholars and teachers who continue to evolve and remain productive while also making room for young people with new ideas and skills.

For many years, I have told students, “Do not do what I do; rather, take whatever I have to offer and do with it what I could never imagine doing and then come back and tell me about it.” My hope is that colleges and universities will be shaken out of their complacency and will open academia to a future we cannot conceive.