Felipe Fernández-Armesto

American students are back in their classrooms. The academic year starts early in the US. But there are other, deeper, ways in which American universities are ahead of those in Europe.

They are, on average, the best in the world. They take horrible American schoolchildren and turn them into conscientious, cultivated adults. American academics, like their counterparts everywhere, bemoan current trends: campus culture wars, benighted political interference, threats to academic freedom, growing hostility to science, constraints on student recruitment abroad, low standards in high schools. But in a time of national decay, universities have a unique advantage in making and distributing one product in which America still excels: knowledge. They could save the country.

Under George W. Bush's ruinous rule, the universities - although they are suffering along with the rest of the economy - are among the most prosperous and most effective sectors. Industry, fossilised by protectionism, is incapable of facing competition in a free world.

Agriculture is glutted with overproduction. The high-tech sector, though still world-beating, feasts like Damocles under a threat of severance. The US has a government that, for ignorance and incompetence, makes Deputy Prime Minister John Prescott seem wise and efficient. The sclerotic bureaucracy chokes enterprise. Uncle Sam seems to have aged into Alzheimer's, forgetful of all the traditions that made America great, including constitutional equilibrium, judicial independence, generous immigration policies, self-denial abroad and fair breaks at home for dreamers of the American Dream. Democracy - an ideal in which the US once led the world - has become a sick joke where millions of dollars buy elections and millions of voters abandon them. In foreign policy, the word has become an embarrassing shibboleth, empty of real meaning. The country that was once a beacon for humanity has never been so suspected or detested.

Between American decline and the rise of new superpowers, the extinction of US global hegemony is inevitable. The current Administration is speeding the process up. But if anything can arrest or retard it, the universities can. Despite the difficulties the Government has imposed - capriciously excluding "aliens", undermining foreigners' esteem for America - US universities remain magnets for some of the world's best and brightest students. Because US society values education and research, the universities are relatively well funded. State legislatures are proud of their colleges and generally vote for the cash they need. Private benefactors compete for the public honour that generosity to universities inspires. Most institutions have well-managed property and investment portfolios of their own, with the autonomy that independent wealth confers.

In consequence, there are plenty of grants and endowments for outstanding foreigners who want to undertake advanced research. Typically, these visitors receive decent stipends as well as exemption from fees. Some of them go home and help staunch anti-Americanism. Many stay in the US and renew the lifeblood of the economy: innovation, enterprise, ingenuity.

The US Government does its best to subvert its universities' advantages. In one respect, however, President Bush's policies may have an unintended benign effect. Everyone knows that genetics is the field of the future. By foreclosing on stem-cell research, the US Administration has seemed to hobble American competitiveness in what promises to be one of the most remunerative areas of genetic science: medical applications. It may, however, channel research in even more profitable, unexpected directions.

Gene manipulation could solve global energy problems - for instance, by developing fuel-yielding plants. At a stroke, the same developments could redeem recent environmental profligacy by giving us unpolluting energy sources. We could have bio-efficient packaging and waste disposal. There will be Asians, Latin Americans, Europeans and Africans in the teams that develop them. But the programmes will unfold in US universities, or in the US private sector, thanks to academic input.

Can European universities catch up with their US competitors? Only by one of three means. If America continues to forfeit the goodwill of the world, the supply of foreign skills to US institutions could shrivel.

Alternatively, Europeans could revolutionise their attitude towards education and research and start investing in the sector at American-style levels. Neither of these prospects is likely. The third possibility is that European governments might start taking universities seriously and giving them the means and freedom to challenge US supremacy. But is that a hope or just an illusion?

Felipe Fernández-Armesto is Prince of Asturias professor of history at Tufts University in the US.