EconAir

UPDATE. In the 15 years since I wrote this, college tuition continues to rise faster than the overall price index, admin costs continue to go up, and full-time faculty number are going down. But the most outrageous change is that as state and federal aid goes down, students are assuming much of the cost of college in the form of student loans. Many were from private colleges that were frauds; some have been closed down. Total student debt is around $1.8 trillion, more than credit card debt. About an average of $40,000 per borrower. A high percent are in arrears or default. And, unlike credit card debt, student debt does not disappear in a personal bankruptcy. Students learn a new,  scary lesson - about compound interest.  A report published on August 16, 2010, using the largest database of information on higher education (IPEDS), has concluded that a major reason for the rapid increase in the cost of higher education has been the increase in the number and cost of administrati...

Eric Kandel Receiving Nobel Prize There is a private liberal arts college near me.   They allow outsiders to audit summer courses (applying the profound wisdom that if there are empty seats, the marginal cost of one more student is zero.   Any revenue is pure gain.)   I was interested in a course Introduction to Neuroscience .   I checked out the course.   That got me thinking about the economics of a college course. This college charges students about $4,000 a course.   The course is probably taught by a full-time professor, probably an Assistant Professor since it fulfills a liberal arts field requirement.   There are no pre-requisites.   The prof probably is paid about $8,000 to teach this course.   Assuming 20 students in the course, each student is paying $400 to listen to the prof.   About 10% of the total cost.   What does the other 90% buy you? The main reading is In Search of Memory by Eric Kandel, wh...

Over this weekend (October 23-24), The Wall Street Journal had an article entitled “Putting a Price on Professors,” which you can read at http://online.wsj.com/article/SB10001424052748703735804575536322093520994.html As a reader of murder mysteries and a fan of the Sopranos, the title scared the hell out of me. After I calmed down, I realize they were talking about something more like economics (a non-violent major) – attempts at cost/benefit analysis. The main idea is that some states, especially Texas, are trying to determine which college professors, majors and programs make money and which lose money. The accounting methodology is a very primitive version of profit and loss statements, focusing primarily on salary costs. Excluded are revenue from grants and the cost of capital equipment, which makes analysis of the sciences particularly worthless. But at least it’s a crude attempt at accountability, in a financial sense, which is understandable since taxpayers pay for m...

I generally think management books are a waste of time. But occasionally I come across some advice I think is worthwhile. Such as this: Conscious organization is the great spiritual task of man. We speak of the “composition” of a picture; it is the way the artist has organized his material. The harmony of a piece of music depends on the way the musician has organized his material. The statesman organizes social facts into legislation and administration. The greater the statesman, the greater power he shows in just this capacity. It might be fun to try to do it in one’s own life, to say: “Here are the materials of my life. How would the artist arrange them in order to make the composition the most significant? How would he subordinate lesser values to higher values? How would he manage to give everything its fullest value? Or we might ask ourselves the craftsman’s question, “How can I make of my life a whole whose beauty and use shall be one?” Organization is what separate...