Markets, Minds, and Money by Miguel Urquiola

I first encountered Miguel Urquiola’s book Market, Minds, and Money: Why America Leads the World in University Research while listening to a Freakonomics episode titled “What Exactly Is College For?”. Urquiola’s insights were featured throughout the discussion, and I found his perspective compelling. Soon after, I read the book, which deepened my understanding in two key areas related to the core idea of the NTRN project.

First, Urquiola draws attention to a fundamental question: how to pay for research. For U.S. universities to lead globally, they need revenue streams that allow them to offer faculty salaries and research support exceeding those available elsewhere. The American system—characterized by high tuition, aggressive fundraising, large endowments, and merit-based federal funding—has enabled universities to sustain these high levels of spending. Urquiola traces how these features developed over time and how U.S. universities climbed the research rankings as they accumulated more resources and attracted the world’s leading scholars.

Second, Urquiola highlights the importance of autonomy and competition. Universities everywhere face the net tuition revenue dilemma, but in many countries, they have little freedom in how to address it. U.S. universities—especially private institutions—enjoy greater flexibility to raise tuition and shape enrollment. They also operate in a competitive environment where other institutions may use their autonomy to secure more revenue. If a university fails to keep pace, its funding and research standing will decline.

Urquiola devotes little attention to topics pertaining to the net tuition revenue dilemma, but when he does, his observations are striking. One comment from the Freakonomics episode immediately caught my attention:

“The genius of the U.S. university system is that research is funded on the backs of the wealthy.”

To secure that wealth, universities have adopted admissions, recruitment, and pricing strategies that often favor students from affluent families over those from modest backgrounds—reducing intergenerational mobility in the process. For this reason, many might question his use of the word genius.

But Urquiola’s focus is research performance rather than mobility. He argues that concentrating top minds and large sums of money at a small number of universities has fueled world-leading research. Such research, he notes, advances the global public good—and the U.S. higher education system heavily relies on wealthy individuals to fund it through high tuition payments and generous gifts. That dynamic, in his view, is what prompts the use of the word genius.

For those who question his word choice, Urquiola’s work forces a reckoning with the trade-offs involved in sustaining research—or the need to propose realistic alternatives that avoid them. He also makes clear the scale of that challenge. His book underscores how deeply embedded certain forces are within the U.S. higher education system, noting Supreme Court decisions that affirm private institutions are governed by their trustees rather than the state. In short, autonomy—and by extension, competition—is baked into the system.

Of course, the Trump administration has begun to challenge the fabric of the system and the precedents established by past Supreme Court decisions. Its actions are not aimed at enhancing intergenerational mobility, but they raise the possibility that a future administration could use similar tactics toward that end. Whether a left-leaning version of the Trump approach is a realistic scenario is a question I leave to the reader.

Urquiola acknowledges—and worries about—the inequality that accompanies world-leading research. In his concluding chapter, he identifies it as one of the primary risks to the sustainability of the current system. However, he does not directly address whether the costs of inequality are offset by the benefits of research, nor does he devote much time to practices that favor students with wealth over those with ability. He does note the presence of such practices by referencing legacy admissions.

Urquiola also devotes little attention to public research universities. As a review in the Journal of Economic Literature notes, this omission is a limitation given the substantial role public institutions play in producing research. Still, several themes in Urquiola’s book are increasingly relevant to publics as they rely more heavily on private donations and tuition payments from nonresident students.