It is remarkable that most of the debates we have in today’s society are but constant echoes of our past. We have become the proverbial hamster running in a wheel. The same issue of whether to subsidize higher education was alive and well in this 1985 video that I viewed today courtesy of the American Enterprise Institute in which Milton Friedman has a conversation with students and continues to pose the simple questions to them of, “How do we justify the education welfare state? Why should I be forced to pay for your college education?” I appreciate how Friedman turns this pointedly into an issue of whether we should have welfare for students, dispensing with euphemisms such as “society should support higher education” and turning this into a debate about whether we think it is appropriate to have such a regressive form of wealth redistribution from low income to middle class and wealthy individuals. He pointedly asks the question of if this logic applies to education, why does it not apply to welfare transfers to those that start businesses irrespective of their income level? What is it about education that it requires income transfers from largely lower classes to the current or future upper echelons of society? Friedman makes this point in the video when he states that, “there is no other governmental program that so clearly takes from the low income groups and transfers it to high income groups as education.” When challenged by one of the students that society desires broad education as a goal, Friedman’s retort is a masterfully succinct, “societies don’t have goals, people have goals.” The implicit and unanswered question is why should we be forced to subsidize the individual student’s goals and future income?
Fast forward to the current day, I think Friedman could have accurately predicted today’s higher education malaise – tuition rising much faster than income or inflation growth, bloated administrations, colleges that constantly clamor for more funds while simultaneously binge-building, unaccountable and tenured faculty that focuses more on research and publication than teaching, misaligned and misallocated resources that fail to connect to economic outcomes of the degree and so on. This is the predictable outcome of heavy government subsidization and regulatory involvement as seen in other rapid increase cost decoupled from quality outcomes industries such as healthcare that also have their fair share of government intrusion. Thus, the primary challenge of the rush by the Bernie Sanders crowd to fund college education as “free” for everyone is the simple fact that this doubles down and exacerbates the challenges – colleges would in turn have no incentive to focus on innovation, the needs of consumers, the creation of programs that align to the economy at large, and perhaps most perniciously, devaluing higher education entirely. To borrow a line from the villain Syndrome in The Incredibles, “when everyone’s super, no one will be.” In other words, mass production and a sharp increase in the supply of college graduates due to obfuscation of the pricing mechanism of higher education will only serve to muddle and devalue a college education at large, and the result will be those that still want to send a signal to the market of their higher worth relative to everyone else will still be willing to shell out more money for masters degrees, doctorates, and other forms of specialized training. We will have created a system full of more challenges that is further away from the moderating influence of market signals and fueled more cost increases while doing nothing truly in the name of equal access – which is a utopian and unfulfillable fantasy.
As an aside, one neat component of this clip is a young David Brooks, now a fairly moderate voice of reason at the New York Times. I hope you enjoy the video, if for nothing else, Friedman’s manner of speaking and his mannerisms always give me a chuckle.