Russ Roberts: Let’s think about that just for a second. Why is it—and when I was at [the University of] Chicago in graduate school in the 1980s, in the late 1970s, Chicago had struggled in the late 1960s and 1970s with crime. And they thought about relocating—I think to Arizona. It’s interesting that they didn’t start a second campus. And then things got better. But—and they decided to stay. I think it was a threat to the city, basically: Rumor had it that the city punished Hyde Park, where the University is, for not supporting Mayor Daly and other Democratic candidates. So they would give them—they supported them in the election, but in the Primary they would always support the challenger. And so they’d give them lousy police service and lousy roads—no clearing—and garbage pickup. So the University created its own police department. Which was pretty effective. But they threatened to move—partially, I think just as a threat. But, why didn’t they—not move, but why don’t they create, why don’t universities create franchises, extend the brand name? It’s one thing to say, ‘Well, Stanford wouldn’t be Stanford if were 70,000 students.’ That’s true. But why isn’t there a Stanford East, or a Harvard West, or a Chicago South? Why don’t universities—or a George Mason West? You know, George Mason has a much better reputation than its sort-of on-paper quality—because it’s distinctive. And its economics department is a huge part of that. Why wouldn’t George Mason try to exploit that reputational advantage somewhere else outside of Virginia? Tyler Cowen: I think it’s hard to do. Keep in mind what makes George Mason, say, special, is faculty of a particular kind. So you can’t duplicate those faculty in a Star-Trek-like machine. You might hope to hire the equivalent. But to tell people, ‘Well, there’s this new school, George Mason West.’ And it’s starting with near-zero faculty and you’re the first one to go there; and the colleagues you really want to interact with, they are 3000 miles away. I’m not saying no one would take it. But it’s not such a compelling offer if faculty is a scarce asset. Keep in mind: Many schools do now have branches. Most commonly you see this branching into Singapore. There’s a bit into China. Some—George Mason has a program in Korea. These are all new. We’re not sure how they’ll go. I think some of them actually will work. So, the branching we’re seeing is into this high-demand area of Asia. And I think there’s also about admitting too many Asians into the main campus branch for a lot of schools. And this is a way around that. Russ Roberts: Yeah, but I think you are—obviously, the faculty is a key part. I don’t know how—it’s quite as irreplaceable or unduplicatable as you might want to think. But, you’d think there would be some faculty who might want to live somewhere else other than Fairfax. Tyler Cowen: I think that a Harvard/California could work. I believe normatively Harvard should do it. I see zero signs they are about to. It would mean a dilution of control, a lot of headaches, a lot of new legal issues. You know, some reputational risk. But you could increase the number of people getting into some version of Harvard by really quite a bit. And that would be a wonderful thing for the country. And the world. Russ Roberts: So, I’m going to suggest a simpler explanation for this. Which is: Nobody has an incentive to do it. The faculty like where they are, mostly. There’s no owner. The alums [alumni, alumns—Econlib Ed.] are something of a residual claimant. They are probably against this. They, as you say, they risk diluting their own reputational name. Tyler Cowen: That’s right. They are significant, the alums. Russ Roberts: Yup, very. But it’s just interesting how—it always bewilders my parents—that no one’s really—there’s no boss in a modern American university. The Provost or the President only give the illusion of control. It’s a very strange enterprise. And it’s interesting because it’s something we ought to think about given how important it is, or at least how important it seems to be in our lives—both not just material lives, in the economic growth that we’re talking about, but in other ways as well. Tyler Cowen: But these universities, they do take other value-maximizing actions, like trying to improve the sports team or treating their donors better or having the lawn look
nice on graduation day. So, they’re not incapable of responding to incentives. So, I suspect this idea of control is quite central, and risk, and alums, and the administration and the board just not wanting the headaches. And it’s like when a lot of departments grow, the previous incumbents lose control. Some similar issues. Russ Roberts: But I really think it gets at the heart of what’s dysfunctional about the non-profit sector, in general—and there are many wonderful things about them, the non-profit sector; I’ve sung its praises many times on the program, so don’t misunderstand me. But the inevitable challenge of non-profits in my experience is that they want to grow. They just want to be bigger. They will sacrifice their mission, after a while. At first, the first founders of the organization and the early leaders are passionate about the mission; and they are very careful to make sure the mission is preserved. But after a while, the leaders care about just bigger. And they are willing to sacrifice the mission if bigger is the result. And that’s just because there’s no incentive for them to do something else, unfortunately, except for the passion of the people who care about that mission, either of the workers or the employees or the staff; sometimes the donors. The donors do care: that’s why they give, generally. But if you think about the modern American university, the amount of money that they are sitting on in the endowments is shocking, really, as a social phenomenon. Because I think most people have a romance about the university—that it’s created to help people and to allow people to educate themselves, and teach them, and help transform the world. And if that were true, they would do something really different from what they are doing. Tyler Cowen: I like the [?]
of the new university called Minerva. I don’t know if you’ve heard of it. Russ Roberts: I have— Tyler Cowen: You spend 4 years abroad with peers in a setting—so, you live in like Istanbul, Buenos Aires. You learn things from living there, and then you take shorter, intense classes online with your group and receive instruction at a distance. That, too, is new. It’s too soon to judge. But I have some hope that that will be a success and lead to some alternative models and more experimentation. Russ Roberts: It’s just interesting as a parent of a 17-year-old and two other college students who are in traditional universities, that, the idea of a parent saying, ‘Oh, you ought to try this. This looks good,’ the way you might say if a new car model came out, you might encourage them to try, or a new style of clothing. The amount that’s at stake with your university degree is—at least it’s perceived to be quite high. And so I think the challenge that Minerva has, and other innovators, is getting people to jump who might otherwise go to a first rate brick-and-mortar university. And maybe not get the return from it that they could get at a place like this one. Tyler Cowen: I wish Harvard cared more about being bigger, actually. It seems to me, so many universities—they are willing to grow if they can grow in ways where they maintain some kinds of control. So, there’s like new facilities; there’s new external programs; there’s new, say, athletics; new initiatives that require more administrators. But, just for
the school to be bigger—I’m used to George Mason, which has gone from a few thousand students to 34,000 and improved quality pretty much the whole way through. Not that many schools are doing that. I’m spoilt, in a way. I know it’s possible. Russ Roberts: Yeah. Well. It’s hard to steer those cats on the faculty. We know that.