This article argues that development of the modern university in many ways mirrors that of the modern state. Over time it has become increasingly centralized and bureaucratic with power passing from its members to the central administration. This has led to a bureaucratization of the university mind. In turn this has increased the tendency of universities to more extreme forms of scholasticism. The consequence is the creation of knowledge which is removed from the wider world and which mirrors its bureaucratic nature. In such a world there can be no true creativity or beauty. The only way to reverse this trend is create smaller, flexible entities which seek to maximize their creative potential.