Note: The author of this column is not an economist, a financier, an expert on how universities spend money or even majoring in a field related to anything presented in the following work. Even worse, he’s a physics major, which means people like him caused the recent financial debacle and thus should be the VERY LAST person you should take advice from. To compensate for this lack of expertise, he has attempted to include academic footnotes to make him sound smarter1.

Let’s talk endowments. When a student of economics learns demand theory, an endowment represents a parcel of capital, goods, skills, investments etc. that a consumer starts off with. From there, we could find all possible ways of spending or reallocating this endowment, and then determine which of these allocations would maximize the happiness of the consumer. With a few basic assumptions and all the best rigor of mathematics, a carefully crafted theory of capitalism pops out that can be conveniently ignored by the Federal Reserve when engineering corporate welfare.2

At a university, the endowment represents a giant pot of money given by a bunch of really rich people who want to see their names on buildings. When buildings run out, we can always rename old ones, especially ones named generically3 or in honor of founding fathers4. The “principal,” or base amount of money from the endowment, in general cannot be spent. Instead, interest accrued from investing the endowment in the stock market is spent. As a result, the endowment must be friggin’ huge — like $35 billion huge — for a university to do crazy things like guarantee that no one pays more than 10 percent of their income on tuition5.

A smart move for universities would be to invest wisely in safe, stable things like companies that make lawn mowers or hospital lollipops … you know, something the internet can’t make obsolete. Thus, said university would slowly gain more and more capital, through boom and bust cycles: an impenetrable fortress of stability and wealth.

Instead, universities hire hedge fund managers, who hire physicists, who make rapid-fire investments back and forth among volatile stocks in an attempt to “beat the market” only to watch their strategy blow up in everyone’s faces6.

And so the endowment shrinks, jobs are cut, and the Physical Sciences Library closes, so Munier has to walk over a mile from his classes to Carpenter Library7 every day to check out an optional text book that’s not even guaranteed to help him understand whatever abstract concept failed to sink into his thick skull during lecture.

When the endowment does end up shrinking, people are quick to point out what exactly the remaining interest should be spent on. And so, idiotic Sun columnists will suggest halting construction on a Hotel School’s observation deck to save a library that services four core departments of modern science, highly ranked and rife with Nobel laureates … but I digress once more.

What the idiotic Sun columnist fails to realize is that the endowment is not simply a large sum of money that can be spent on absolutely anything. It represents a large collection of small donations, many of which are donated with a specific intention by a specific person or foundation, for a specific purpose. And so, if one wealthy alumnus of Dartmouth had a fetish for crackling fires, she might donate to the endowment so that Dartmouth could always keep the President’s fireplace stocked with wood for fireside warmth. Of course this doesn’t protect against the occasional loophole which allows the funding to branch out when this small endowment grows to thousands upon thousands of dollars8.

What loopholes, you ask? Well, we can always go with a creative interpretation of the mission of the money. So if money was donated to Cornell Library for “creating a library dedicated to the study of ornithology,” we could recognize that birds are made of cells, which contain atoms, which are studied by chemists and physicists, and so the Ornithology Library could technically reallocate its funding to the Physical Sciences Library. This is just a thought for the Karl A. Kroch University Librarian to ponder … not that I don’t love ornithologists. I just don’t have a car to take me to under-staffed libraries miles away from central campus, whose chief patrons include school children on a field trip to learn about birds.

My suggestion for the Cornell Administration, those champions of “clear as glass transparency,”9 identify which University expenditures are and are not covered by our lovely, violently contracting endowment. That way, we can know if we’re spending thousands of dollars re-seeding the grass every year because we have an endowment that completely covers this cost, or because the University just decided it was more important than a course on creative writing. I love green pleasant spaces as much as the next Cornellian, but we pay $40,000 a year for things like creative writing. Not lawnmowers.

1. He will also use a lot of academic-sounding passive voice and pretentious logical segue phrases like “thus” and “and so” and “what Loser et al failed to realize was that …”

2. With the obvious exception of physics, this theory is probably the most successful example of applying mathematics to the behavior of real, observable phenomena. This is why I scoff when people tell me psychology is the most “scientific” social science. But I digress …

3. Uris Library was actually University Library before the Uris family became a frequent sugar daddy of Cornell. My guess is that they donated money for Uris Hall, saw the ugly monstrosity, and said, “That totally doesn’t count! Give us the library!”

4. Benjamin Franklin was America’s first great scientist and electrical engineer. Cornell built Franklin Hall as America’s first school of electrical engineering and on its façade one can see the profiles of physicists and engineers who contributed to the field. Today we know this building as “Olive Tjaden Hall,” despite all the physicists still embedded in the rustic stonework.

5. Harvard.

6. For an interesting discussion of this hubris, see D.J. Griffiths, Why I am So Smart I can Beat the Stock Market, Am. J. Physics, Vol. Pi, 1969. For proof that this columnist saw the bailout coming before the housing bubble even burst please see “Cornellian Psycho,” The Cornell Daily Sun, 10 April 2008.

7. 10 bucks says this library is the next to close. 50 bucks says the Ornithology Library will stay open.

8. Paper, envelopes and pencils are made of wood. These are also office supplies. Thus, office supplies for the office of the president now come from said fireplace endowment. I’d cite The New York Times article I pulled this from, but then this would become an actual footnote, and the humor, sadly, would be lost.

9. If, by glass, you mean a Faraday cage of some tricked out metal which acts as a perfect conductor at all frequencies, which you could read about from a book you checked out from the Physical Sciences Library …