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Brick and Mortarboards

"Arguing in My Spare Time," No. 4.16

by Arnold Kling

April 17, 2001

Recently, I toured two institutions of higher learning. In both cases, what struck me was the outlandishness of the physical plant. The auditoriums, student lounges, dining areas, and fitness facilities exceeded those of large luxury hotels. The office space would have accomodated a corporation several times the size of the faculty.

The number of square feet of improved real estate per student must be astronomical. If a shopping mall had this high a ratio of space to traffic, it would go broke in six months.

Much of this physical plant was of recent vintage. To me, it seems counterintuitive that colleges and universities would be making huge investments in construction in today's economy. I would not have thought that the response to the information age would be to pour resources into brick and mortar. Is academia, home of the last believing Marxists, also the last bastion for factories?

If I were undertaking a strategic plan for a college or university, I would take into account three major features of the post-industrial economy.

  1. As I have been saying for years, The importance of physical capital has decreased, and the importance of human talent has increased.

  2. The importance of general human capital (knowledge that can be applied across many different types of firms) has increased, and the importance of specific human capital (knowledge of a particular firm's procedures and terminology) has decreased.

  3. The cost of distributing information over the Internet is approaching zero.

What do these trends imply for the future of higher education?

The diminished importance of traditional capital implies that the critical investments for universities will not be those that enhance physical facilities. They will be investments that enhance the effectiveness of faculty and students.

The diminished importance of firm-specific human capital means that university-wide curriculum initiatives are going to be relatively unfruitful. Relationships with colleagues outside a particular college or university are going to be increasingly significant.

The low cost of distributing information means that it will become increasingly difficult to charge for course materials. Instead, as John Perry Barlow has argued, people will be paying for relationships rather than for information.

Administrators in higher education should be focused on relationships.

My guess is that we will see a trend in which a student's college becomes his or her "home base" but not the sole source for education. With the opportunity to study abroad, spend a year at another college, and use the Internet, the typical undergraduate may obtain at least half of the necessary credits from outside the home institution.

Faculty also will be less focused on their institutional colleagues and more focused on their peers at other universities. More professors may affiliate with multiple institutions.

Administrators will find it difficult to convince faculty to implement a college-wide educational "vision." Instead, they will have to let individual professors decide which courses they are best suited to teach. When this process leaves gaps, they will be filled from the outside.

As students and faculty increase their external interactions, administrators may become uneasy. They might experience the ongoing changes as a loss of control. As their institutions become more fluid, they may yearn for something solid and concrete. Like more buildings.