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in Econ and most other fields, professors need to be active and publishing in their fields, which imposes a fairly high level of technical competency (though not necessarily aligned with what the market needs)
Is there no similar requirement for music professors, like that they need to be active in the performing community?
Many perform regularly, including faculty recitals and what-not. What many can't do, is actually hang on a pro gig. Obviously, there's a massive diversity of routes one can take to get paid to perform, and there are a decent amount to music profs who can't really hang in any of them. The typical audience at a faculty recital isn't the demographic that's paying for it, and many music classes force the students to go to them as part of their grade. On one level, that makes sense as you can't learn music if you don't experience it. On another level, it creates a fake sense that these professors have a consenting audience. Don't get me wrong. There are lots of great musicians in academia, but there are plenty of terrible ones as well.
I just noticed who I was talking to here. I definitely don’t doubt that’s true in your discipline (Econ, right?), but not in music. I learned pretty quick that many (not all) music profs can’t hang on even entry level gigs.