Today U.S. News & World Report releases a report ranking Princeton University first among American research universities. Competing college ranking services and alumni of other colleges have different views, but U.S. News & World Report has been successful for clear economic reasons.

All successful ratings services — whether for colleges, automobiles, hotels, corporate creditworthiness or publicly traded securities — have four common characteristics: being a privatelyowned rating service, subject to competitive entry, effectively unregulated, and rating a relatively unregulated product or service. If the government were in the business of heavily regulating private ratings services, the results of these services would be uninteresting. No one would pay attention.

The government regulates the quality of food and pharmaceutical products, removing most value in private ratings services for these products. The federal government also requires labels on the energy efficiency of automobiles and many consumer products. Private ratings services still evaluate these products, and consumers use the rating services for the many characteristics unregulated by the government. Consumers rely on private ratings guides as references in purchasing automobiles not because government regulates and measures all relevant information but precisely because it does not.

But of all private ratings in America, those for colleges are among the most important and most controversial. Postsecondary education is a service where America excels relative to other countries.Although many educators fret that the federal government is already far too involved in higher education, our government meddles less in higher education than practically any other central government in the world.Not surprisingly, top students from around the world flock to American colleges.As with most sectors of the economy, the less the government meddles the better.

Governmental non-academic “standards” have left America with primary and secondary education systems that compare poorly with those of other countries. We rigidly regulate days spent in school, textbooks used and teacher training, but not standards for student academic achievement. There is little interest in measuring and comparing the academic success of students in highly regulated primary and secondary institutions. In contrast, our higher education system with few (if any) governmental “standards” is frequently measured for academic success and is regarded as the best in the world.

Curiously, the value of higher education does not show up separately in the detailed government accounting of the economy.The Department of Commerce assigns educational institutions collectively an industry code and collects substantial information about these institutions other than post-secondary schools. The government keeps detailed track of the economic value of Stanley Kaplan and other test preparation services to get students into college, but keeps no track of the economic contribution of colleges and universities.

Measuring the contribution of higher education to the U.S. economy cannot be done directly with government statistics, even if they existed. University activities include not just classroom instruction but hospitals, research administration, and entertainment, particularly in athletics. Government data do not allow separating university-owned businesses from other businesses, such as university hospitals from others, and university sports from other forms of athletic entertainment.

Much of the leading research and development in America, particularly in the fields of medicine and engineering, is conducted at university facilities. Plus, ideas originating in campus laboratories often flourish into the fruits of the business world: Silicon Valley, the Research Triangle, the Route 128 corridor and other research centers are where they are for just that reason.

Unlike most other countries, we have no national standards for what a college degree entails, much less do we have government agencies monitor these standards. Private standards are set and enforced by non-governmental regional educational accreditation bodies that review college programs and certify them as they see fit. Americans can and do attend educational institutions that are not accredited by regional bodies, and labor markets interpret credentials from these programs based on the reputations of those institutions.

As in years past, today there will be both celebration and griping about the new rankings in the U.S. News & World Report. Although they might publicly dismiss both the methodology and outcome of the magazine’s university rankings, practically everyone in the higher education industry sits up and takes notice every year at this time.The mere existence — and longstanding success — of these ratings is a testament to the competitive nature of American colleges and universities.

A former FCC commissioner, Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He can be reached at hfr@furchtgott-roth.com.