In the the Scottish system, “the salary makes but a part, and frequently but a small part of the emoluments of the teacher, of which the greater part arises from the honoraries or fees of his pupils,” he explains. It is not hard to see why the founder of modern economics might prefer such a clear system of incentives, but his reasons are also not easy to dismiss, even if they’re built on a cynical view of human nature: “It is the interest of every man to live as much at his ease as he can; and if his emoluments are to be precisely the same, whether he does, or does not perform some very laborious duty, it is certainly his interest…either to neglect it altogether, or…to perform it in as careless and slovenly manner as the authority will permit.”

Incentives matter, as the rest of The Wealth of Nations might as well be summarized. And although he spends much of his time on the educational disparities between Scotland’s universities and Oxford focused on the question of teacher quality—it was notoriously terrible at Oxford—buried in the middle of Smith’s analysis is the more contemporarily relevant question of producing a better alignment between value obtained and cost willingly paid.

Prices are information about what people need and want, so the trouble with bundling together a large number of services on a single bill is that it becomes difficult to tell exactly what one is paying for, or for the people sending out that bill to determine what students in fact want to pay for. In the current American system, such decisions are based on fluctuation in enrollment—a very high-level piece of data that can encompass any number of students’ preferences—but not on the micro-level of whether the students of Texas Tech University, for instance, really wanted a water park instead of more or better Spanish-language instructors.

There are of course reasons why it could be very problematic to unbundle tuition and let students pay their professors directly. Disturbing evidence has recently pointed to the patent unfairness and sexism of student evaluations of their professors. Many an academic has bemoaned the growing “customer” mentality of their students, and with good reason: It can lead to grade inflation and a subsequent lowering of standards.

But as Smith would surely have appreciated, the right incentives could bring 18-year-olds to seek out the highest-quality teachers rather than the most forgiving graders. That’s how it worked in Scotland in the 18th century, where there was a simple way of dealing with the problem that the best professors were not always the easiest fellows: rigorous, frequent, and comprehensive oral and essay examinations, which were administered in lieu of evaluations in individual courses. Students were allowed to select which university services and which university teachers they would pay for, but in the end if they could not pass a university-wide exam, their choice to take the 18th-century equivalent of Rocks for Jocks would have been swiftly punished.