When I was at the University of Arizona, I once had a conversation with one of the teaching faculty. This particular individual was an instructor for a class that had something to do with economics. I know this only because he planned to show his class the famous barroom scene from A Beautiful Mind. My colleague thought that this would be a fun and interesting way to illustrate the basic principles of John Nash’s work.

Fun and interesting? Perhaps. But Nash’s research program? Not likely.

If you are reading this, then you are probably a behavioral scientist, which means that you already know how crudely interactive decision-making is presented in A Beautiful Mind. At the time of this conversation, I had just finished James Miller’s excellent introductory book, Game Theory at Work, so I was familiar with this scene. As Miller points out, this fictional account misrepresents the Nash equilibrium, at least by implication. In the film, Nash, played by Russell Crowe, is sitting in a pub with three male graduate students. Each of these four men is considering whether he should approach a beautiful woman. If they all approached her simultaneously, then at least three of them would be unsuccessful. In response to this predicament the fictional John Nash used game theory to propose a solution. This storybook solution, unfortunately, failed to meet the requirements of the Nash equilibrium. Nash-the-celluloid-hero suggested that the men should cooperate by each pursuing a less attractive partner. Were the four comrades to execute this strategy, then at least three of them would have been better off. For all I know, this is a sound dating tactic. Regardless, the movie scene does not accurately depict the Nash equilibrium. If all four men took this advice, then the most desirable woman in the bar would go home alone. Hence, each of the four guys would regret his premature move to a different option. For this reason, Dr. Miller concludes that “Seeing the movie A Beautiful Mind will not increase your knowledge of game theory.” One might as well use clips from the Saw franchise to demonstrate power tool safety.

I pointed out these considerations to the instructor, naively assuming that scholarly consensus would settle the matter. My counterpart took a different view of things. He had at least one other priority – customer satisfaction – that was roughly co-equal with scholarly excellence. Keep this in mind: It was not that he took issue with Miller’s and my assessment of A Beautiful Mind; it was that he didn’t think that accuracy should be the deciding factor. Instead, he reiterated what, to his thinking, was an irrefutable argument: “The class will find it interesting.” We were talking past each other, and I could only counter by repeating my focal argument, which was irrelevant to him – “A Beautiful Mind does not accurately represent game theory.” The fellow remained unmoved. “Russell,” he sniggered in triumph, “we’re in the ‘edu-tainment’ business.” This was my first hint that James Burhan’s managerial revolution had come to higher education.

Now here is the thing that might surprise you. Before that very moment I did not know that I was in any sort of “business.” Rather, I thought of myself as a scholar, and this was a rather different vocation. To understand the point, consider that quintessential business goal – the profit motive. Everyone, including scholars, requires economic resources to do their jobs well. However, that does not mean that obtaining economic resources is what their jobs are about. Speaking very generally, scholarly professions place their highest value on knowledge. Among scientists and social scientists who work in university settings, scholars generally perform two sets of intellectual tasks – knowledge creation (e.g., research) and knowledge dissemination (e.g., teaching).

It would take some time, and a bit of sociology, before I was able to make sense out of this exchange. Fortunately, about a year or two later a colleague recommended a couple of chapters from Academic Capitalism and the New Economy. Academic Capitalism is a scholarly book, co-authored by the sociologists Sheila Slaughter and Gary Rhoades. Sociologists seem to identify and describe big societal trends well before the rest of us. In this case, Professors Slaughter and Rhoades filled in the missing pieces of my analysis. According to these authors, academic capitalism refers to the increasing tendency of universities to emulate the behaviors and values of “for profit” enterprises.

Pursuing profit, a principle goal of business, is distinct from pursuing knowledge, a principle goal of the scholarly life. Sometime the two are in conflict. When they disagree the decision-maker will wish to set priorities. This is what happened to me in my conversation with the other faculty member. I thought like a scholar. For that reason, I granted priority to the veracity of the course material, as determined by research. My colleague thought like a businessperson, particularly one in a sales job. For that reason, customer satisfaction with the course material was at least equal in importance to research evidence.
Drs. Slaughter and Rhoades build on this argument. Professors understand their raison d’être as contributing to the body of knowledge. However, if the demands of academic capitalism become too pronounced, then intellectual pursuits might be subordinated to the requirements of the marketplace. Stated more strongly, teaching and research could remain activities for improving cash flow, but might possess little significance beyond that. In this dystopian world the faculty job is about earning money for the university. Scholarship remains, but it is not an end in itself; it is subordinated to the demand for profit. As such, scholarly activities are only a means to the end of greater revenues. Put differently, there is no inherent “value” in teaching and research apart from how these activities improve the “bottom line.”

To some extent, the push toward academic capitalism seems almost inevitable. In the present economic climate, public universities are facing diminished state support, at least on a per student basis. Many legislatures are taking a closer look at funding for higher education, insisting that schools demonstrate their economic contribution to the state. When confronting this demanding financial climate, the methods of business can be useful to scholars and administrators. With these and other considerations in mind, Drs. Slaughter and Rhoades take a balanced view. They understand why colleges often participate in market-oriented activities. Academic capitalism is not always bad. However, these authors also explore potential risks and caution against compromising our academic mission.

To get a sense of these trade-offs, I recommend a short but interesting book by Dr. Derek Bok, the former President of Harvard. His Universities in the Marketplace: The Commercialism of Higher Education takes the reader through three domains in which academic capitalism (or “commercialization,” as Bok terms the movement) exists – “big time” college athletics, scientific research, and education (mostly classroom instruction). Professor Bok discusses a number of concerns with sports, especially football and basketball. For the other two activities, research and teaching, there are some risks and there are some opportunities as well. To his thinking, academic capitalism is acceptable to the extent that it provides economic resources that support the scholarly and educational mission of the institution. It is not acceptable to the extent that it chips away at it.
Let’s take a closer look at Dr. Bok’s book, beginning with a research success story.

In 1980 the United States Congress passed the Bayh-Dole Act. Signed by President Regan, the act adjusted federal laws for licensing and patenting discoveries. When research was funded through public monies, the Bayh-Dole act made it easier for universities to own the rights to new technologies. Since this act became a law, successful universities such as Stanford and MIT have earned a good deal of money from technology transfer. This is good for the school, since it brings funds that can support classroom instruction and research. Society benefits as well, since consumers have readier access to the latest innovations. No revolution is perfect, but many observers see the Bayh-Dole Act and the resulting technology transfer as a success. For instance, much of the biotech revolution was nurtured by university technology transfer. This is all to the good. It is a cause for celebration when people have access to medical technologies that can save their life or at least make them healthier.

However, this is not the whole matter. Professor Bok presents other examples that should serve as cautionary tales. Consider the case of Dr. Betty Dong of the University of California – San Francisco. Professor Dong was awarded a corporate grant to compare the effectiveness of the drug Synthroid to less expensive alternatives. When Professor Dong tried to publish her findings, the firm that had awarded the grant threatened her with litigation. It was seven years before Dr. Dong’s findings were published.

Notice how Professor Dong’s experience highlights two value-systems, that of the scholar and that of the capitalist. We can also see from this story that these two systems sometimes compete. As wealth can provide a strong incentive to action, then the latter value system (the capitalist) may disrupt the smooth functioning of the former (the scholar). To the extent that this occurs, the quality of academic research is placed at risk. As Dr. Bok emphasizes, it is not always the case that commercialization produces unhealthy results. The Bayh-Dole Act brought innovative medical technologies to the public. Still, some of his other examples, such as the events surrounding Professor Dong, should give us pause.

Let us now turn attention to academic capitalism’s impact on college teaching. In this regard, I would also encourage you to read an article by Brad Wolverton; it was written for the Chronicle of Higher Education and titled “Need 3 Quick Credits to Play Ball? Call Western Oklahoma.” In recent years, West Oklahoma State College has had trouble attracting full-time students. To alleviate this problem, they built a profitable set of online course offerings. Wolveton tells us that Western Oklahoma “now offers more than 400 course selections, with some 11,000 online students.” According to critics, some of these web-based classes are not sufficiently rigorous. For example, many of the classes are only two weeks long. Big times sports programs, such as football, use the Western Oklahoma’s classes to maintain NCAA eligibility. This is a sensible strategy, as some students seem to get higher grades at Western Oklahoma’s online program than they do in conventional classes offered by their home university. Assuming the accuracy of the Chronicle’s report, this is an interesting academic program. It appears to be built so that it attracts paying customers (i.e., short online courses that do not appear to be terribly difficult). From the perspective of those who care about traditional scholarship, this is the opposite of what we would have preferred.

When confronted by economic pressures, universities will need specific guidance as they work to strike the right balance. As regards teaching, Dr. Bok tells us that three conditions should be met so that the desire for profit does not overwhelm academic quality. I quote from page 162 of Universities in the Marketplace, though I added the bullet points.

• “Students have to know what they really need.”
• “[Students] must be able to evaluate the available alternatives and make reliable choices.”
• “[Students’] preferences must correspond reasonably well to the needs of society.”

Professor Bok is onto something here. These criteria may help us to understand the ill-effects of the profit motive on Western Oklahoma’s online education. According to the Chronicle, many of the students in the Western Oklahoma program were athletes attempting to maintain their eligibility. If this report is accurate, then it suggests that these students may not have met Dr. Bok’s third criteria – society has one set of goals (e.g., educated citizens) but some students have others (e.g., participation in sports).

There are deeper implications of Professor Bok’s guidelines. Notice that adherence to these three standards would allow universities to pursue capitalist ventures, but it would subordinate those ventures to academic quality. Business opportunities would be treated as a viable means for supporting scholarly ends. To state the matter more simply, commercialization is beneficial, but only to the extent that it serves the educational and research missions of the institution. This is easier said than done. As Dr. Bok observes, his three criteria are difficult to meet. In many cases, such as traditional undergraduate education, students will lack sufficient knowledge of their long-term needs and best alternatives for meeting them. Hence, the university will need to provide them with guidance, and we will need to do so even if costs money.

Professors Bok, Slaughter, and Rhoades have provided us with a serious examination of the potential trade-off between the goals of the marketplace and the goals of the scholar. Strictly speaking, the problem is not with earning money. Troubles arise if universities begin to serve money, by making it an ultimate goal of their mission. “Serving” is not the same as “earning.” We can all agree that sound finances are a good and important thing, without going so far as to argue that making money should be a primary objective of a university. Metaphorically speaking, we should eat to live and not live to eat.