Lifetime Learning

Visit to “Mr. Jefferson’s University”

A Message from Henry Spearman from Ken Elzinga’s The Mystery of the Invisible Hand


I recently visited with my friend Marshall Jevons at the University of Virginia, the place he calls “Mr. Jefferson’s university.”  Because I’ve heard the University of Virginia called “UVA” many times, Marshall’s term for the place seems odd to my ears.  I mean, nobody on the Harvard faculty, myself included, ever calls Harvard, “Mr. Harvard’s university.”

Sometimes Marshall will even refer to UVA as “the University,” as if every other school was just “a university.”  There must be something special about the place.  I’ve tried to lure Marshall to Harvard, but he won’t consider it.

This was my second visit to the campus (or what Marshall always calls, ‘the grounds’ – which I always associate with coffee).  I gave a talk in the “Dome Room” of the Rotunda, and I have to say: there’s nothing at Harvard to match that setting.  My wife Pidge came along for her first trip to Charlottesville.  She immediately fell in love with the architecture, at least the part designed by Thomas Jefferson – or what our friend calls “the Lawn.”

Marshall told us that Thomas Jefferson considered UVA to be an “academical village.”  I was struck at how the Lawn’s design efficiently reduces transaction costs among faculty and students.  But not all my colleagues at Harvard would want those costs reduced.

Marshall and I have been working on the whole question of art and economics.  When someone buys a cup of coffee, that’s a consumption good.  When someone buys 500 shares in Intel, that’s an investment good.  But when someone buys a painting, that acquisition could be a consumption good, an investment good, or both.

The economics of art is not unexplored terrain, but it raises important questions.  For example, if a consumer valued art purely as an aesthetic experience, and not as an investment, is that consumer better off or worse off because other buyers value art solely as an investment good?   We’ve also been asking ourselves: how many other assets have this dual consumption good/ investment good characteristic?

Here’s another puzzle my friend Marshall and I noodled over: when faced with a budget shortfall, why don’t museums sell those paintings they keep in inventory and never display to the public?  With my economist’s hat on, I can’t really explain this.

Our work on art and economics has not been without controversy.  Humanists worry about the intrusion of the economic way of thinking into the world of art.  Recently, when I was a visiting professor at Monte Vista University in Texas, I had a colleague who claimed that “once the wheels of economics commodify something… you may have a price, but you don’t have a value.”  My friend Marshall is a G.K. Chesterton fan – and he reminded me of Chesterton’s contention: “Price is a crazy and incalculable thing, while value is an intrinsic and indestructible thing.”

During my visit to UVA, I told Marshall about meeting a member of the Board of Trustees at Monte Vista University.  She told me something I never heard at Harvard: that universities should have artists on the faculty “not so much to teach as to inspire.”  Marshall and I wondered whether inspiration from a faculty member is limited to the field of art, or if it should be a trait common to faculty across all disciplines?  I see a problem, though: articles, books, and research grants can be counted. I asked my UVA friend how Harvard or “Mr. Jefferson’s university” could assess and reward a faculty member’s “inspirational output”?

Recently, I’ve gone back to reading Adam Smith.  That’s where I got my start in economics, and I may still read Smith after I quit trying to accumulate human capital.  Although this last time, I came across something I’d missed every time before.  Smith wrote that “power and riches produce a few trifling conveniences… which despite all our care, are ready every moment to burst into pieces or crush their possessor.”  Sounds like the hedonic treadmill principle that modern psychologists now teach.  With so many of my Econ students wanting to go into investment banking these days, I wonder what Smith would tell them?

OK: if you follow my blog, you may know I’m a night owl.  But it is 3 AM and I have a nine o’clock price theory class to teach tomorrow.

Definitely time to turn in.

So Good Night, Good Luck, and Go Hoos!

H. Spearman


Join HooReads! on December 10 for a live-stream interview with Ken Elzinga. You can submit your own questions for Ken.

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