Adam Smith Goes to College: An Economist Becomes an Academic Administrator

The author asks whether it is useful to view universities in a utility-maximizing framework and shows that university organizing virtually guarantees that the utility-maximizing model is the incorrect approach. He then discusses resource allocation issues at Cornell and reflects upon how concepts that are obvious to economists helped or hindered decision making at Cornell. The author hopes to convey not that economic concepts are irrelevant in operating a university, but rather that it takes a long time to explain to all the actors in the system why these concepts should matter and even longer to actually make them matter.