That’s one of the key questions Rich Vedder poses in this op-ed, which ran in the Austin American-Statesman.
Looking at the data Texas A&M has collected, he finds that professors who teach few students do a goodly amount of research. But what is the value of that work compared with the value that could be had if they were teaching instead? We have no idea about the value of the research because there is no price on it. This is reminiscent of the “calculation debate” over socialism. Ludwig von Mises observed that economic planners under socialism would never know whether they were using resources wisely or foolishly because they would have no market prices to guide their decisions. Universities are in the same boat, assigning various combinations of teaching and research to faculty members without prices to guide them.