Working within the context of the evolutionary-institutional transformation of higher education, the authors trace the development of an economic model by which the behavioral tendencies of modern universities can be evaluated. That model is expanded to provide insights to the following questions: Why do universities compete and how do they develop and implement their competitive strategies? How do universities make critical institutional decisions about operational missions, academic policies, and internal resource allocation? Do universities efficiently and effectively pursue the special social functions assigned to them? Patrick Raines and Charles Leathers present an integrated, coherent theory to explain the behavior of universities and provide a realistic economic model that predicts how universities allocate their scarce educational resources. This alternative view is contrasted with the mainstream explanations of university behavior based on the maximization of student welfare or faculty influences. The authors extend the existing literature on the operation of universities by presenting a history of the evolution of the modern entrepreneurial universities as well as an explanation of academic capitalism. This absorbing volume will appeal to anyone interested in the history of economic thought or the history of education. Scholars of Veblen, Smith, and Malthus will be fascinated by their individual and comparative theories of the purpose and failures of higher education.