Another Dot, For Good Measure

Lest you think my previous post was just an attempt to make hay out of a crisis currently under the popular spotlight, let me toss out another example where efforts to artificially decrease the scarcity of a “good” thing can backfire: Higher Education.

The pattern fits: “Having a college education is good.”  Agreed.  “College educations are expensive.”  Agreed.  “There are well-meaning and hard-working people who would like a college education but can’t afford it.”  Agreed.  “Let’s distort the market by making a college education artificially inexpensive.”

Now, let’s do a quick mental exercise: what can we expect to happen when we try to artificially deflate the cost of a college education?  There are a few ways to do so, each with its own particular side-effects.

If we make a lot of free money available to pay for tuition (grants and scholarships), we have reduced the scarcity of tuition dollars, and thus can expect an inflationary rise in tuition.  (People can still afford the same out-of-pocket cost as they could without the grants, why should the college not extract just as many dollars from them PLUS the newly-minted grant dollars?)

If we create alternative subsidized institutions (city/county/state universities), we can expect for them to be perpetual cost centers in government budgets and for them to need to limit enrollment (demand) by capping class sizes (rationing).  In terms of the price curve, the “state option” doesn’t actually compete with private options because it’s understood that it can hemorrhage money and that the shortfall will be covered by the good faith and credit of the state, so the low tuition at these universities does not actually cause other universities to compete with them on price; nobody is “kept honest” because everybody knows that public tuition is a shell game in which everyone’s contribution via taxation is hidden under the table.

But let’s flip the economics around the other way: is it necessarily a good thing to get everyone into and through college?  The road to a bachelor’s degree in many ways is a poor fit for someone who wants to go into the trades (traditional or modern).  Mass enrollment combined with the incentives of a school’s reputation for achievement naturally drive grade inflation, which in turn drives an overall devaluation of the bachelor’s degree, driving the employers everyone went to college to qualify to work for to demand masters degrees for those positions instead.  And so begins a treadmill: higher education is turned into a commodity; a secularist value-free market then reduces it to the lowest common fungible denominator in order to drive efficient low-cost delivery; higher education’s original value proposition (a competitive advantage) is replaced with factory-floor, cookie-cutter information transfer (once the realm of technical/trade schools) devoid of relationship, character formation, critical thought, and innovation; the resulting certification thus devalued, our beneficient leaders drive to do the same thing to graduate education, and while they’re at it, to impress the same dehumanizing regularity upon earlier stages of education as well to “prepare” students for the mill.

Is it good to have universities?  Yes.  Is it good that many people attend them?  Yes.  Does this necessarily mean that coercive tax policies and tax-underwritten market intrusions are going to be good for the university as an institution or the people whom it intends to serve?  No.