Postsecondary education is big business. In 2007, 4,352 accredited public and private degree-granting institutions enrolled 18.2 million students (15.6 million of whom were undergraduates and 11.3 million of whom were full-time students) and the year before, those institutions had enjoyed total revenues of more than $410 billion. The enrolled students represented 39 percent of all eighteen- to twenty-four-year-olds (and 46 percent of those who had graduated from high school). Approximately 3.6 million people were employed at colleges and universities in 2007, 1.4 million as faculty members.¹ Undergraduate education is also a growth industry. In 1960, 392,000 students earned bachelor degrees....

Which colleges are liberal arts colleges seems a simple question to answer: “They’re, you know, like Oberlin or Wellesley.” Actually, it isn’t simple. The word liberal used in the context of education has not been well understood and is a source of confusion, especially outside the academy. Former Lawrence University president Rik Warch recalls a graduating senior who told him, “When I came to college, I really had no idea what the liberal arts were. I just thought there would be a lot of Democrats here.”

Webster’s Third New International Dictionary has a long entry for the word liberal and,...

Liberal arts colleges’ revenues have never covered their expenses. The colleges have always had to search for outside financial support. Church affiliations, which most colleges had at least at the outset, did not provide adequate revenue supplements (although they sometimes stimulated the eleemosynary instincts of church members) and colleges have eagerly sought wealthy donors, regardless of faith or denomination. From the beginning, the colleges showed entrepreneurial initiative in the pursuit of funding, for example renaming themselves after wealthy donors like William Denison (Granville College) and William Carleton (Northfield College).¹ In the eighteenth and early nineteenth centuries, states also provided needed...

There has, of course, long been a demand for liberal arts colleges and the degrees they award, but it is far from clear that there has ever been any significant demand for the liberal arts education they provide. Henry Adams, for example, reflecting on his four years at Harvard College (1854–1858), where he had been preceded by “generation after generation” of Adamses and other forebears, described attending the college as the “next regular step” after completing Mr. Dixwell’s School on Boylston Place in Boston. Although, he said, none of his ancestors “as far as known, had ever done any...

Thomas Carlyle’s apt appellation for economics, “the dismal science”, could well have been coined by a liberal arts college president. Unhappily, however, as we plunge deeper into the twenty-first century, understanding the economics of higher education is required if we are to understand the current state of liberal arts colleges, the challenges they confront, and why they are having such difficulty meeting them.

The United States is a free market economy to a greater degree than most. We believe Adam Smith’s “invisible hand” will lead the market to give us higher output, lower prices, and better-quality goods and services. In...

We have seen that competition has not reduced liberal arts college tuitions. It has advantaged well-off colleges and well-to-do students. It has tended to concentrate even more wealth in the hands of the richest colleges, increasing the already severe disparity between rich and poor schools. By fostering high-risk endowment investment strategies, it has made even the richest colleges more vulnerable to recession and other financial reverses. It has caused the shaky financial condition of a majority of liberal arts colleges to become even more unstable.

Competition has not increased the output of liberal arts college education services or, more precisely,...

Promoting the general value of a liberal arts college education has largely been left to the Annapolis Group and occasional forums like the Pew Foundation Roundtable of liberal arts college presidents. The efforts have been scant and not very effective. Realistically, it would be too much to expect a college to tell a prospective student, “We don’t care which college you attend so long as it is a liberal arts college.” Each individual college devotes substantial resources to promoting demand for its own offerings.

In promoting the value of the unique educational experience they offer, all liberal arts colleges face...

The core element of the special value of liberal arts colleges is excellent teaching. In reflecting on this fact, I found myself thinking about what is unique about the liberal arts college teaching experience, and why I find many liberal arts college professors inspiring.

One evening, while I was visiting with a professor in my office, the telephone rang. It was a friend calling to tell me a joke. I laughed at the joke and said good-bye. When I hung up, the professor asked, “Why did whoever was on the phone call you?”

“To tell me a joke,” I said....

John Wyatt died on June 27, 2008. For twenty-five years he had taught Greek, Latin, classics, and comparative literature at Beloit College. Shortly after he died, a former student created a Web site in his memory. In the month after it was created, more than 2,500 persons, most of them former students, visited the site. Many of them left remembrances of John as a teacher and a friend:

“John deeply touched everyone he met.”

“He found the moment to believe in each one of us.”

“He was curious about your life and remembered everything you ever said.”

“He sent our...

One need not be an opponent of tenure to recognize that, once granted, it provides no further incentive for teaching excellence and can provide a safe haven for nonexcellence. Says prolific commentor Richard A. Posner, “In effect what tenure guarantees is that you won’t be replaced—even by a better candidate!”¹ Further, tenure can be—and often is—awarded to merely “good” teachers, which is not a good thing. As my former law partner (and dean of Harvard Law School) Erwin Griswold often observed, “The good is the enemy of the excellent.”

Some years ago, I wrote an article for...

Teaching excellence is the focus of an earlier chapter of this book because it is centrally important to the success of a liberal arts college education and college faculties tend to give it insufficient attention. I include this separate chapter on curriculums because, in contrast, course distribution and major requirements tend to attract obsessive and excessive faculty attention, even though they are not centrally important to a liberal education.

Most liberal arts college curriculums have distribution and major requirements, but not all. The Great Books curriculum at St. John’s College, for example, is a four-year, all-required course of study.¹ Most...

Today, a few public voices are still raised in support of liberal arts education. For example, while quipping that when “the going gets tough, the tough take accounting” and observing that students feel they “have to study something that will lead directly to a job,” New York Times columnist David Brooks nonetheless “stand[s] up for the history, English and art classes, even in the face of today’s economic realities, … the rich veins of emotional knowledge that are the subjects of the humanities.”¹ Wesleyan University president Michael Roth optimistically adds that if we “educate individuals broadly so that they are...

In the make-believe country of Nomohighered, colleges and universities have given up selling educational services and are now leasing automobiles. In every market, there are at least two dealerships, Private Auto, Inc., and the State Public Car Company. Both offer two car models, a high-end, liberal arts, LA model and a stripped-down, vocational, V model. The LA model is much more luxurious, but both models provide reliable basic service.

A potential customer enters Private Auto, Inc.

“Good morning. I’d like to buy a car.”

“I’m sorry, sir. Our cars are available only on a lease basis.”

“Well, all right, I’ll...