University of Virginia Library

Professor Analyzes Economics Of Growth

— Ed.)

In the economics of
underdeveloped areas it is
often observed that the new
nations have an advantage in
being able to avoid repeating
the mistakes of the older
nations. I would apply this
argument to higher education
as well. Virginia has lagged
behind many other states in
higher education. I believe we
can learn some lessons from
the mistakes of other states. I
wonder whether states such as
California and
Michigan — acknowledged
leaders—would choose to build
their higher educational

institutions as they now exist,
if they could make a fresh
beginning. I am skeptical.

Let us leave aside the
question of how we can most
cheaply educate our young
people. Surely all of us would
reject a stand-pat philosophy
of turning out the same old
product at a faster rate at the
same (or even lower) cost.
Most of us, I believe, are
progress-minded. We have an
explicit goal of building a
major university center in
Charlottesville—one that can be
compared with Berkeley, Ann
Arbor, Ithaca, Palo Alto.

Some who favor growth use
the argument that growth is
the key to excellence. The
argument takes many forms.
Some say that our academic
departments have not reached
the "critical mass" needed for
excellence. This I do not
understand. Our economics
department, for example, is
not appreciably smaller than
the departments at MIT,
Michigan, Princeton, Carnegie
Mellon, Berkeley. If we do not
enjoy the status in the
academic pecking order that
these schools do, it cannot be
because we are too small.

A variation on this theme
acknowledges that in time, by
judicious hiring policies, we
could gradually improve
faculty quality. However, it is
objected that this will take a
very long time. Since our
faculty have academic tenure,
we cannot ruthlessly weed out
the incompetent. I am not
convinced by this argument,
since there are countless
examples of dramatic
improvements in academic
departments in short time
intervals without expanding
size significantly.

Still others argue that the
key to faculty improvement is
money, and that undergraduate
expansion is the only feasible
means of financing the
recruitment of a distinguished
faculty that is capable of
developing excellent graduate
programs. In other words,
undergraduate expansion is
viewed as a means of
subsidizing graduate
improvement, indeed the only
means available. Let me say at
once that I am sympathetic to
a greater emphasis on graduate
education at the University.

However, I wonder whether,
at current undergraduate
tuition levels, very much
subsidy is generated by our
undergraduate operations. But
be this as it may, there is at
least one other source of
finance for graduate education:
substantially higher graduate
tuition. Some argue that raising
our unusually low tuition
would accomplish little since
this would merely place greater
burdens on our fellowship
funds.

However, it seems to me
that across the nation we are
moving into an era in which
fellowships will become
progressively less important
and loans and the students'
own resources more important.
This, it seems to me, is entirely
appropriate since the social
benefits from graduate
education accrue largely to the
educated individual; I see no
warrant for taxpayer subsidy
of programs to enhance private
wealth, and graduate education
is clearly an instance of this.

In these brief remarks I have
mainly been raising questions,
not offering solutions. My
purpose has been to sketch an
analytic framework within
which a thorough study of the
expansion issue can take place.

Let me express my thanks
to the Committee for making it
possible for me to participate
in its vitally important inquiry.