The State of Higher Education Part 3: Free College + Time = ∅
“I don’t know what they have to say / It makes no difference anyway / Whatever it is, I’m against it. / No matter what it is or who commenced it, I’m against it! / Your proposition may be good / But let’s have one thing understood: / Whatever it is, I’m against it. / And even when you’ve changed it or condensed it, I’m against it!”
-Groucho Marx, Horse Feathers
“In general, if any branch of trade, or any division of labour, be advantageous to the public, the freer and more general the competition, it will always be the more so.”
-Adam Smith, The Wealth of Nations
I began this series, “The State of Higher Education” with a quote from a Woody Allen movie, and by God, I’m going to end it with a quote by Allen’s forebear, Groucho Marx. The song he sings, as Professor Wagstaff, the newly elected President of Huxley College, is meant to depict Wagstaff as an ornery and absurd character (like any other one Groucho played over his career). But, in the context of runaway college tuition hikes, graduates trying to enter the marketplace (or worse still, not bothering to) with worthless degrees, tax hikes should we all #feeltheBern for, and subsidies for foolish professors with their backs against walls facing the Publish or Perish Monster, we should look to Groucho’s song as instruction for how to correct the out of control spending and stagnation of the skills of recent college graduates.
The captain of a ship needs to instill in his officers and seamen discipline and self-denial so they may reach their destination quickly and safely to trade their goods, so as to receive a return on their investment. Indulgence leads to inefficiency so the ship will list and sail off course, and thus a loss of market share.
The captains of America’s education system are not, and have not for an extended time, been good stewards of spending.
Part 1 of “The State of Higher Education” was a critique of the “feminist glaciology” paper, the result of a 5 year long grant from the National Science Foundation. Part 2 was an examination of the spending practices and lack of accountability and transparency that leads to egregious waste, fraud and abuse. The NSF has an annual budget of about 7 billion dollars, and accounts for a quarter of all federal funding enjoyed at the college and university levels. I intend for Part 3 to be an additional expansion on the topic, to convey the effects of all the existing “free money” expenditures, and future ones proposed by some on the Left, namely Bernie Sanders.
I use the term “free money” (I know the money comes from somewhere, so it’s not free in the sense it has to be taken from a productive source) to describe funds that are awarded with no strings attached. Research grants, subsidies to prop up public sector union pensions, scholarships to college athletes, grants to undergrads: these are not investments, since no return is asked for, and all too often, none is given, let alone created. The sole portion of free money that flows towards academia that is not really free, at least not yet, is student loans. But of course, we are now learning it is immoral for lenders, whether they be private or public, to treat students as “profit centers.” Countless economists and better and more popular writers than I have written numerous articles about student loan rates, critiques of Sanders’ plan to make college free, so I will focus on some of the effects of all this free money.
Hiring post-grads to perform research that results in useless papers that develop dumb ideas like “feminist glaciology,” is a disservice to that post-grad. It’s like when during the financial crisis, untold sums from the stimulus package were directed to favored groups, like teachers unions and welfare agencies (the state has to hire public sector workers to deal with the influx of laid off private sector workers seeking welfare checks; those cases don’t process themselves), so workers in those special interest fields didn’t have to feel the pinch. Throwing free money at economic sectors that are no longer, or much less, productive than they were during a boom is just a prolonging of agony. Maybe the workers and firms of industries experiencing contractions and shortfalls that receive Keynesian spending will make it through the recession without being laid off, but taxpayers and consumer classes who can’t absorb currency inflation as well as wealthier classes can, sure will. The agony is always felt, and it is public expenditures that work wonders to prolong, rather than alleviate, it.
Let’s say a post-grad finds herself in the position of being offered a salaried position to perform research and write papers. If she takes it, she is either 1. Putting something on her resume so she can get a teaching job, or 2. Delaying her entry into the job market. Since there is a finite amount of teaching positions available, either for high school or higher education, most likely she is making herself less competitive by not applying for open positions. Gaps in employment history set off red flags in the minds of H.R. managers.
In the end, what are the professors and post-grads who are beneficiaries of the largess of the NSF, by way of the taxpayers, learning? That they will be paid in advance, and that they do not have to bring any product to market in order to be compensated.
Admittedly, it is not a perfect comparison, but it is clear that the more government tries to make higher education and healthcare more affordable, they inevitably become more expensive.
Almost as soon as you exit a hospital and/or college campus nowadays in these United States, with a service rendered and payment terms arranged, you are hit up for a donation. In this way, colleges and hospitals are like street-level dope dealers: they guilt trip you for a little something extra, even though they just were party to a transaction in which they benefited thanks to mutual involvement. In other words, they expect a tip, some compensation that wasn’t part of the original deal. You have to kick back to the dealer a line, a taste so he isn’t a dick to you the next time you want to get high. But you’d already paid him! He isn’t middling for you out of the goodness of his heart, he’s getting something out of the transaction; he’s just being greedy.
One night last week, I answered my phone and listened to the incessant stuttering of some work-study student enrolled at my old college deliver the poorly thought out, and poorly-written, justification as to why I should donate my hard-earned dollars to my alma mater.
What other concern operates in this fashion? No company in the private sector could operate with this business model, or lack thereof. Can you imagine a company you buy a product from, something that raises your standard of living via voluntary exchange, guilt tripping you into sending them a check, even though you have just purchased their product at market rate? Wouldn’t and shouldn’t everyone be embarrassed if that were the case? “Hey, you were just here, and you paid us, and that’s cool, that’s totally cool, but, um, the thing is, we could use some help…” Any sort of enterprise which grosses, even nets, several more zeroes than my yearly salary, and then has to shake its cups for alms outside my door deserves to be swept into the dustbin of history.
When I go to the supermarket, I walk out with groceries and leave cash behind. I don’t dash into the parking lot of an appliance store with a TV cradled in my arms without paying for it first, and I don’t drive a car off the lot without signing a contract. And I don’t receive calls from Shop-Rite, Best Buy, nor Honda asking me to send them some free money. The transaction has been completed, and we’re both better off.
Even when you drive a car off the lot, the value depreciates… until multiple decades go by, and you keep it in pristine condition… and even then, you still have to find a buyer. Should a college education not be held to the same market standards? What is so sacrosanct about a college education? It doesn’t have any inherent value. Spending money on a commodity doesn’t mean it’s worth that amount; it only means you’re a fool for not doing everything to recoup that initial layout plus an appreciation so you’re not taking a loss when you try to pass it on to a potential buyer.
It is this ignorance of the effect time has on value that should have all of us worried.
We need to think about what labor markets will be like in a generation or two should Progressives’ plans for the costs of higher education come to pass. Maybe we’ll have very few college graduates with debt, and surely that’s a good thing… but if you go to school knowing you won’t have to pay for it, would you be more or less concerned with finding a good paying job? Not something with a “livable wage” (what is the attraction of this ideal? How is it inherently noble to eke out something just above a subsistence-level existence?), but a salary in which you won’t have to suck on the teat of the state to pay for your home, family and retirement. Right now, Sanders’ plan is to of course confiscate wealth from the rich to pay for college for all. But, in a few decades, if we have less wealth being generated, how will future generations have their college paid for? Populations grow, they tend not to contract (this is one reason why lenders attach higher than market interest rates to their student loans).
If a commodity or service is a right, and therefore deserves to be accessible and affordable for everyone, then it is even more important for it to be a product of market forces, because competition is what allows a product to be made cheaper, and over time, improved.
College spending needs to be treated as an investment, and as such an expectation of return needs to be a string attached to it. But Sanders, et al. claim education is a right, which means they should just have it, regardless of the costs and effects. It is clear they have not thought their plans through, and it’s why whatever their proposals for making college cheaper or free are, I’m against it.
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