TWO SYSTEMS OF BELIEF. A recent Inside Higher Ed commentary (unwittingly) notes the fundamental dynamic of higher education.

On one hand, there is a cherished and sentimental view of universities as academic places where caring teachers mold young minds through unhurried and probing conversations about poems and politics, the human condition and the forces of nature. In this utopia, a university’s classes are small, tutored by sage and patient scholars; juvenile errors and excesses are gently but firmly corrected; and, of course, football games are always won. And in this romanticized view, lush and leafy campuses are sanctuaries for eccentric intellectuals to think deep thoughts, develop whimsical theories, and indulge in the time-consuming trials and errors of research.

On the other hand, when talk turns to matters of state funding or, even worse, tuition, sweet sentimentalities are replaced by a fulminating call for universities to become ruthlessly efficient – no time or treasure squandered on small classes or idle contemplation or tending to pretty flowers on campus. Things must be run as “lean” as business would have us believe it has become. Fat must be excised, indolence must be punished mercilessly, unnecessary processes must be re-engineered and unnecessary people banished. Over-extended and under-funded state budgets have only served to increase the clamor for universities to become more frugal than friendly. And tax-phobic critics of state government spending, in particular, have elevated the no holds barred efficiency-as-a-mandate rhetoric.

The authors get to the heart of the matter several meandering paragraphs later. (Nothing quite focuses the mind like "If you send us a shorter manuscript that also addresses these comments.")
The evidence is not at all clear that “efficiency,” as commonly understood in business jargon, is in any way rewarded by the higher education “marketplace.” Imagine, for example, the least efficient institution of higher education in your state. Chances are that the teaching loads of its high-paid faculty are largely discretionary and barely measurable, with faculty efforts focused instead on the publication of esoteric thoughts in widely-unread journals; its library contains hundreds of thousands of volumes that haven’t been opened in decades; it has well manicured lawns and, probably, a facility that seats tens of thousands of people but is only used five or six Saturdays each year (hint–think football stadium).
One wishes that some of these business wannabees and their unthinking accomplices in the legislature would develop a better understanding of efficiency. Efficiency refers to the identification and fulfillment of all feasible gains from trade. That "least efficient" institution quite likely is catering to the excess demand for perceived quality, an excess demand augmented by the toxic blend of "customer satisfaction" with "access for all" that the authors would have readers believe is efficient.
Imagine then, the most “efficient” higher education institution in your state. It likely has under-paid faculty with teaching loads that approach sweat-shop labor conditions; it may well be housed in a store-front; its library might be little more than a set of encyclopedias; and it is marketing hard for a student body that will keep it marginally solvent.
The late Fred F. Loock would wisecrack that the businessman who sold his product for a lower price knew what it was worth. That's not the way to endow museums and libraries.

The real test of efficiency, though, requires demand as well as supply.
Now ... which one has accomplished students waiting with baited breath for word of a favorable admissions decision? Which one receives tens if not hundreds of millions of dollars in largesse from loyal alumni or proud donors each year? Which one commands the almost slavish allegiance of those very state legislators who cheer loudly from prime seats at athletic pageants but publicly threaten to discipline their spendthrift habits? Is “efficiency” — in a business definition — really recognized or rewarded in the higher education marketplace?
The "efficiency" of cheaper for its own sake ought not to be. The efficiency of recognizing and realizing gains from trade ought to be.

A commenter to the column asks readers not to generalize.
The author’s example of the least and most efficient institutions misses the point of the need for controlled spending. The purportedly “inefficient” institution that has all the frills can probably afford them. Otherwise it would be in a position where it had to control costs (like the purportedly “efficient” institution). Any college can go into massive debt to provide amenities, but they do so at the risk of going out of business if the gambit doesn’t pay off in increased revenue. Frankly, mediocre schools with mediocre revenue streams have to live within their means. The American public needs to do the same.
The column does argue from the extremes, and in its willingness to take a dig at the state flagship institutions, misses the main point. Where the efficiency is one of offering the sentimentalized college experience, for which there appears to be excess demand, rather than making universal college inexpensive, for which the unproductive output is in excess supply, a strategy of drawing invidious comparisons with the private colleges and the state flagships, rather than ending access-assessment-remediation-retention strikes me as less productive.

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