When Will Academe Learn A Few Management Lessons?

As a former financial manager at an Ivy League university, I was especially interested in "Time to prune the ivy" (Economics, May 24). The initial catalyst for the escalation of college costs was the oil crisis of the early 1970s. Heating is a significant item for colleges and universities. Eventually, they recovered those cost increases and discovered a very beneficial phenomenon--namely, that people were willing to accept double-digit fee increases ad infinitum. In most cases, colleges' customers are parents--not students--since parents end up with most of the liability. What parents will not nail themselves to the mortgage wall, if there is any chance their kid can get into Harvard?

But wait. There is another major force at work here that I will call the corporate/university complex. In Corporate America today, many job descriptions carry the phrase "bachelor's degree required." Want to get ahead, kid? Unless those magic initials--BA, BS, or BE--are on your resum, you'll never get past the personnel department. So why not keep raising the ante? Mommy and Daddy will come up with it one way or another.

David G. Barlow

North Grafton, Mass.

Near the end of the story, you state that universities are expanding their ties to industry to fund research because "the return on academic research is a lush 28% per year."

Return to whom? To industry, very likely--but to the universities, too? Not a chance. The overhead charged on funded research in a university is typically 70%. In a lean, mean small business, where I now work, after 20 years in academe, the overhead is about 100%, with an expected, modest profit of 15% to 20%. How does a top-heavy college bureaucracy end up with a net gain based on only a 70% overhead? The answer is, it doesn't. The extra money to support the research activities comes out of education, either directly or indirectly.

The truth is that most of the research does not need doing in the first place. Most faculty would be making a more useful contribution, to their students and to the country, by doing what they are paid to do first and foremost--teach.

Douglas L. Marriott

South Lebanon, Ohio

While an unrelenting search for comparative advantage and an unflagging emphasis on cutting costs is always welcome, there are extremely positive facets of our education system that must be recognized.

Higher education in the U.S. is the best in the world. Productive research is conducted here with consequent benefits for all of civilization. Professors and students recognize this, and all the world's best and brightest vote with their feet and flow to our shores, many remaining permanently to advance their discipline. Higher education provides a tremendous positive flow to our balance of payments.

While your points are valid, we should recognize the unique contribution of the higher education system in the U.S. and beware of throwing the baby out with the bath water.

Finn M.W. Caspersen

Chairman of the Board

Beneficial Corp.

Wilmington, Del.

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