Earlier quoted context omitted.
What amuses, and irritates, me is that academics frequently project this insanity onto Business or The Profit Motive. Having close connections in academia, that world is the worst of what can be imagined. A highly competitive start-up, or scale-up, environment has a level of Reason and Merit imposed by the market which rationalises most everything (even the insane VC fantasyland headline-driven stuff is intelligible)…
I don't know if I'd agree that Reason and Merit are always applied by the market, unless the market is referring to "whatever VCs can be convinced to give money to". However, the crux of what you're saying, which is that in academia Reason and Merit are thrown directly out of the window is completely true. My favorite discrepancy is in hiring. In startups, you can win a $150k/year job in a ten minute conversation wit…
Every time something goes wrong badly enough to cause a scandal, new processes are put in place to prevent that specific harm in the future. On the other hand, nobody really cares about effective and efficient use of tax money. People surely complain about waste, but the complaints are rarely specific enough to have consequences. Given a choice between preventing a specific harm and using tax money better, people almost always choose preventing the specific harm.
The salaries are what they are, because universities can't afford to pay more. There is only so much tax/tuition money available to them. People like to complain about administrative bloat, but it's their fault really. Every time people complain about something specific in the academia, they are advocating for giving more money to the administration to fix that, and for giving less money to the people who teach and do research. That's just the way public management works.
Additionally, academic hiring processes are more involved than in the industry, because there is less responsibility. Not despite it. People are effectively given money to do things they would do anyway, and the employer often can't tell the difference between a good hire and a bad hire, except maybe much later. If you can't fix you mistakes in a timely manner, you'll probably want to think things through before making the decision.