The peculiar case of higher education

Via a request from Ezra for topic coverage, here are some very good remarks from Ryan Avent.  Excerpt:

A sector dominated by the state—state-run in some cases, merely subsidised and regulated in others—is, I think most Americans would agree, both a major contributor to American prosperity and one of America’s most competitive industries on foreign markets, despite its glaring inefficiencies. What ought we to conclude based on this example?

Certainly, one could reasonably argue that the sector would be even better if state control were relaxed, monopolies broken up, subsidies curtailed, and market controls (like those on immigration) eliminated. But one also has to wrestle with how different the American economy would look if the state had never muscled public universities (including a broad network of technology-driven, extension-oriented schools) into existence.

This stuff is harder than we often pretend.

A few observations:

1. Postwar higher education has proven one of America’s most effective subsidies, and it has paid for itself many times over.  It is also one of the more significant successes of federalism.

2. We are fortunate that U.S. state universities are more or less autonomous, compared to the Continental model where professors and administrators are treated as part of the state civil service bureaucracy.  The latter system does not work well, and those countries have struggled to move closer to American models.

3. To refer back to a distinction from the David Brooks column, we should not be trying to squeeze the entire economy into the shoebox of the dynamic but risky “Economy I.”  For public choice reasons, as well understood by Karl Polanyi (an underrated public choice theorist if there ever was one), the polity requires some respite from Economy I, whether we like that or not.  Read also this analysis by Interfluidity, which is one of my favorite blog posts of all time.  Furthermore the more “sluggish” Economy II, by operating under different principles, often serves as a useful R&D lab for Economy I.  Think MIT and Stanford, or note that Adam Smith ended up as a customs commissioner, as his father had been.  Goethe and Bach worked for governments for much of their lives.  It’s about balance and synergy, though it is perfectly fair to see contemporary Western Europe, especially in the periphery, as a region which has far too much Economy II and too little Economy I.

4. Maintaining the truth of #1 will prove a significant challenge going forward.  It’s not about blaming the critics or defunders of state universities, or the critics of public subsidies to private universities.  The real problems are a few.  First, successful state programs tend to stultify and decline over time, and if nothing else the danger is that health care costs will eat up state budgets.  Second, the absolute returns to higher education (as opposed to the wage for not going) are not currently high enough to maintain the current fiscal structure of those institutions, furthermore those fiscal structures do not have so much “give,” due to tenure and various self-imposed cost inflexibilities.  Third, although most state universities have relatively little explicit debt, they are implicitly massively leveraged through reliance on ongoing tuition boosts, ongoing enrollment boosts, and timely retirements, none of which can be counted on in the future.

It will prove a daunting path forward.

Addendum: David Henderson comments.


Agreed on the best blog post ever. That interfluidity post is one of the reasons I started reading MR. Tyrone's storytelling doesn't seem to have reduced his IQ as much as you sometimes worry, either: multiple overlapping and conflicting stories seem to be IQ boosters, in fact.

The features that make government involvement in the economy a perilous exercise - politicized, bureaucratic, top-down control; non-meritocratic hiring and promotion, etc - in most cases are weaker or largely nonexistent in the case of American postsecondary education. Those features are very much present in American primary school education though, and we all know how well that sector is performing.

Perhaps we should work to make our primary schools resemble our universities - but hey, isnt that what voucher-oriented reformers are trying to do?

Have you seen a university administration lately?

You are absolutely right about the distinction between the teaching...but administrative bloat continues to threaten that goal at many US universities, in my opinion.

USA schools appear to be the best in the world:

Of course the competition is not much as all are run by governments with the same problems so maybe it not saying so much. The same for our Universities?

It appears to me that their are bigger factors than school quality at play in PISA and whole schooling/education thing.

"the Continental model where professors and administrators are treated as part of the state civil service bureaucracy. The latter system does not work well": really? The German universities were universally recognised as the best university system in the world before Hitler ruined them, and that in spite of the fact that the best individual university for the preceding few decades was not part of it.

"The German universities were universally recognised as the best university system"
I tend to doubt that this statement is true. Do you have a source?

And even assuming it was true, wouldn't a failure to recover from events that were 70 years ago, still be an indication of a pretty significant systematic weakness?

Interesting point. As to the post-war rise of US universities relative to Europe: could it be that WWI and WWII delivered such a devastating shock to European universities' human capital that they never fully recovered?

The problem with civil service is there is no way to measure performance. Private sector performance can be measured by profit. Public sector can't. In my experience therefore performance = getting on the good side of the right people. If tomorrow you decided to fire 20% of civil servants and give top performers raises, the odds you'd actually be able to identify the top and bottom performers is low. That's not to say they don't exist. And not to say if you took the consensus of the office/school/department you wouldn't get a decent answer. But the actual process would be 100% political. People would get promoted based on something like loyalty to their boss as easily as actual merit. They would be fired based on being independent thinkers that challenge the orthodoxy as much as laziness. The same is true in many large private sector bureaucracies, it's just more extreme in government.

Whenever these performance fads come through it sets off a wave of busy make work and cover your ass bullshit. Those will always be the Nash equilibrium for trying to "crack down" on civil servants.

In my experience, and I'm mainly talking about people in more important posts that can actually effect something (not the accounts receivable drone) they either will or won't be productive and work hard based on whether they believe in what they are doing. I've seen public servants turn in long hard weeks if they believe in what they are doing. I've seen them totally unplug if they don't. All the external incentives barely do anything at the margin, its just not much of a motivation for smart people. Maybe it could work on the lower level drones, but really those people aren't the ones making decisions that affect your life or break the budget.


That's one of the more interesting justifications for academic tenure at universities I've heard in a while! And, considering that the politicization of schoolteacher jobs in the early 20th century was one motivator (or at least justification) for primary-secondary tenure, perhaps even in that system (though the relative ease by which teachers gain tenure, compared to the generally more systematic review that univerities require comes into play here).

Naturally, the decision to grant or not grant tenure can itself be highly politicized, and probably is in too many cases. But over time, the political consequences of that politicization tend to cancel out. After all, coalitions shift, deans and provosts come and go, the politics change, so the merely political consequences of politicization tend to fade. Moreover, individuals change too, meaning that they are at least somewhat released from future political pressure by the fact of being tenured. At the same time, any actual considerations of relative merit that played during the tenure process are likely to continue to apply. Even where tenure processes are politicized, it is hard for someone who has published nothing, who has a terrible teaching record, and who refuses to do any service to get tenure. So as long as the tenure process shows any tilt toward people who do some research, teach reasonably, and do at least minimal service, the net effect will be a consistent tropism in favor of merit as the tenure system defines it. Moreover, it is not irrational to presume that people who publish steadily as assistant professors are more likely to continue doing so as associate professors, etc., on the average. One can still argue that the publicly-stated criteria of merit are misaligned with what universities 'really need' (but that's a political question too, isn't it?) -- or, more radically, that the publicly-stated criteria for tenure are so arbitrary that no selective effect takes place. Such debates are worth considering and thinking through.

But unless the tenure process -- whether at universities or schools -- becomes entirely routinized (everyone who sticks at the job for x years gets tenure) or utterly politicized (only Party members get tenure), some performance-enhancing effect is likely to result from having tenure, compared to leaving such employees employed entirely 'at will', which leaves them permanently subject to the political pressures you describe (in the absence of a criterion of institutional success such as profits), and will thus tend to force them to conform (at least outwardly) to all changes in political orientation as they happen.

You don't need tenure if you have civil service rules. There are whole swaths of civil servants that work in atmospheres more political than a French teacher, and who rely on civil service protections, rather than tenure.

I am sure we could come up with some methods short of tenure to protect voices from arbitrary conduct.

In any case, I don't see any viable challengers for American Higher Education yet; who's the main threats that could supplant the US as #1 in higher ed? .

I can't think of any serious competition on the near horizon.

I'll say that Congress is the main threat. Every new Federal mandate/regulation creates a ripple effect that grows university administration, reporting requirements, and paperwork generally. It also introduces perverse incentives. There's a risk to doing a difficult STEM program when your financial aid is dependent on the same absolute grade standard as someone doing easier majors. Students game the financial aid system in all sorts of ways. Colleges are evaluated based on graduation rates - now what does that mean for grade inflation? And so on.

Indeed! The rapid Federal takeover of university accreditation -- and with it, the ideological/corporate agendas of the current administration, whatever that agenda is -- is quite disturbing, as the AAUP and Inside Higher Ed have been reporting over the last few years.

" Second, the absolute returns to higher education (as opposed to the wage for not going) are not currently high enough to maintain the current fiscal structure of those institutions, "

This is the disaster that's already happening. The higher education establishment's appetite for funding exceeded what parents and government were willing to provide. The "solution" - nonrecourse student loans, is nothing more than exaction of rent as provider of credentials. These loans prevent a large portion of graduates (and failed to graduates) from acting as entrepreneurs and forming households, both of which are vital engines of our economy. Instead we place these students in indentured servitude to rentiers (vital engines of coupon clipping). Many of these loans can never and will never be repaid, like debt to the company store.

Furthermore the growth in student loans is unsustainable and the rate of nonperforming debt is exploding. This is subprime all again, and the results will be in their own way every bit as ugly. I'm amazed that having just suffered through the human cost of popping one bad lending bubble, we're busy pumping up another one. Are we, as a society, so dysfunctional and stupid?

BTW, I'm not a student, and neither have nor have ever had student loans. I don't have a dog in this fight.

@Peter N

The fact that the cost increases of higher education are increasingly the result of branding and thus, at least in part, constitute rents of the brand rather than payment for services, is a major problem in higher education.

But it's not an either-or issue, is it? There has *always* been a branding effect as well as a educational-quality element in the cost of universities. Good higher education probably really does cost more to deliver than poor higher education, after all, on the one side; on the other, the visibility of branding (expressed most onerously in the USNWR 'rankings', which rest largely and critically on 'perceptions', that is, brand values) has been growing. Moreover, more and more universities decided to play the branding game by investing in brand-enhancing things that are expensive but make minor contributions to educational quality (high-profile professors, expensive and extensive research programs, etc.)

More importantly, much of the recent cost-increases to students at in public universities have only a minimal connection with _increasing_ the rent::value ratio; rather, they are almost entirely compensatory for reduced public funding. To be sure, some of the costs previously paid by state taxpayers, and now increasingly paid by individual students, consist of rents, and the proportion of rent to value may well have risen, especially in the 90s and 00s. Nevertheless, the fact that individual costs (largely charged to non-dischargeable loans) are rising sharply in the last 10 years is almost entirely distinct from that trend.

Believe me, people inside public universities are alarmed and distressed by the trend, and most of them are just as concerned about the coming crisis in the rise in student loans, and the negative consequences they entail, as you are. But caught between fairly rigid institutional structures and large rapid decreases in public support, tuition increases to students are the path of far least resistance. Rental-phenomena contribute to this, for sure: tenured faculty are hard to fire, and administrative growth is even harder to curb (not least because of the incessant rhetoric of 'transparency and accountability', which turn out to be very expensive to implement -- far more expensive in many cases, I suspect, than the evils they are purported to prevent.) Moreover, ranking (aka branding, which remains tied to rental extraction) continues to operate. Most likely, the crisis will come first at lower-tier public institutions who tried to get into the ranking-and-branding game over the past two decades, and now lack the resources, by a wide margin, to play: they simply have to give up, will suffer brutal internal/political fights over how to cut back on branding/rental costs vs. instructional delivery costs (which are hard to disentangle), will thus see a decline in applications and application quality, creating potential death-spirals that will be very ugly, I'm afraid. Look for it to start soon...

I largely agree, but I would like to single out for blame the banks for twisting bankruptcy law, and the low graduation rate paper mills (that's you Washington Post) for shameful exploitation.

I also see hope in the trend of the elite universities expanding their free public curriculum (which, given their unassailable position in the hierarchy, they can afford to do with no financial cost to them [thank you MIT]).

Grade inflation is probably an inevitable side effect of tuition inflation. Students and parents can get pretty irate when an investment equal to a few years salary is at risk from low grades.

What's the nature of US Federal student loans: are they means based or merit based or neither or a combination?

Also, let's say my parents are rich but yet refuse to pay a dime for my education; am I then worse off from a loan context than a kid with poor parents?

"What’s the nature of US Federal student loans: are they means based or merit based or neither or a combination? "

Mostly they are breathing based.

Subsidized loans are means tested
Unsubsidized student loans are given to anyone, up to a maximum.
Unsubsidized loans taken out by parents are tested on the basis of credit history, with a maximum equal to the costs of attendance.

The following perception of what has been evolving (and what will change) in post-secondary education is no doubt biased by something over 70 years of perspective. The fiugures "up front" (today) loom larger than those of the past.

We see today the "institutionalization" of most larger establishments of what is called (in the aggregate) "higher education." The original instrumentalities for learning, formed to meet the increasing quests by increasing numbers for learning required operators and facilities; faculties and capital goods (buildings, e.g.). Their functions were directed toward learning by the learners both students and scholars, some to attain, others to advance, knowledge.

By "institutionalization" the operators and providers of facilities (the latter now heavily political) have now shifted most of the major functions of the establishments to serving the objectives of the operators and the political providers of facilities. True, those objectives are not always uniform or consistent. Bur, they have become "guild-like" with departmentalizations, political-type bureaucracies - and many other departures from the objectives of providing learning for the learners.

However, learning still continues in the establishments. But there is a rising current to circumvent the institutionalization (and its formats) whereby learning can be achieved outside the burdens of supporting the institutional structures and constraints.

This libertarian insistence that all good things must come from the market is so obviously perverse, and yet so many people cling to it. You teach about externalities, you teach about public goods, but yet deny them or pretend that they don't matter in your writing and analysis. That's why you're stunned that something like universities matter, when it's obvious to most people that public goods are immensely valuable. It's so frustrating to me that this massive blind spot leads you to so denigrate such key institutions: I really don't understand it. How to improve the efficiency of government is an important, and sadly open, question, but eviscerating it would be catastrophic for all but the rich. I guess most libertarians are rich enough that this doesn't bother you.

Just wonder why is a university a 'public good'. It seems to me that it is very strongly internalized.

I live just near a faculty of 'Human stadies'. I think there is a good reason to think that most programs on this faculty are a 'loss' to the society. Considering that there is absolutely no way to distinguish objectively between a faculty teaching nonsense and faculty teaching useful things (if you try, you immediately get into an argument of the type 'you are not educated enough to judge this' - yet those who are, are essentially only insiders with vested interests and mostly lack of economic education), is there any reason to think that public-funded university education would be a net gain to the society?

Andy - if there is no way to distinguish nonsense from useful things, then there is no knowledge, language, meaning, or value whatsoever: in one fell swoop, you eviscerate academia, but the price of such renunciation is everything else you might possibly care about save to the extent it creates immediate pleasure.

I can distinguish it; you can distinguish it. Most people can distinguish it when it is about *their* money. There is no way to find an objective criteria when it's about 'someone else's money'. You won't persuade a member of such faculty that what he's doing is nonsense.

economically unproductive /= Inefficient =/ wasteful =/ nonsense.

The faculty will have no problem making sense of what it is they do. Proving the other terms may be harder.

actually, 'economically unproductive' == inefficient, if you factor in the externalities and consider 'economically' in a broader sense. Wasteful == inefficient seems to me pretty much the same, if you consider 'economic profit' as the key measure. And yes, that's what I am saying - the faculty has no problem making sense of what they are doing, but there is no mechanism in government-financed system to consider such investment (of public money) to be wasteful. You can have people doing research in topics that nobody would pay a dime to have, yet the faculty:
- is publicating in journals
- has students (because it's free, and it's at least some amusement, and you can signal something with your degree)
I didn't actually mean classic greek type subjects - what I meant is like 'gender studies', 'social ecology', 'politology'...

It's nice that you like to run words together, but that misses the point.

Yes, you can stretch and bend and narrow words to make them mean the same things. Or you can maintain a richer conception of the world.

Plenty of things are inefficient, but economically productive - one only has to be efficient-enough to be economically productive.

As to waste, waste is a more normative category. Producing luxury yachts is economically productive - and it may even be done very efficiently. But it's a waste. (If you disagree, substitute 'luxury yachts' with 'gender studies' professors.')

As to your inane opinions about what people publicate in, well, they're without a doubt worth less than scholarship in gender studies, social ecology (not actually a field, but an obviously valid field of study. You'd have to be an idiot to think that social processes didn't affect ecology), and political science (who knows where you've dreamt up paranoid fantasies about 'politology')

In principle, a humanist would do research on and teach a body of work that has made an impact on contemporary culture either over the long-term or in the very short term - it is useful to have people who study Marcus Tullius Cicero because one of Cicero's major works, "On Duties," has impacted the development of Western ideas about political through a number of channels. For example, Locke, like many gentlemen of his time, kept a copy of "Tully's Offices" on his desk. Read Locke alongside "On Duties" and you will see that they share some important overlapping concerns, especially in regard to property-rights. The list of examples could go on - one of my favorite anecdotes (don't know if it is 100% true): Harry Truman never went to college, but he claimed to learn a lot about politics from Plutarch, who wrote our first series of political biographies, on men that many recognize - Brutus, Cato, etc - but also on men like Titus Quinctius Flaminius, who conducted the expansion of the Roman Empire against the successors to Alexander the Great in the first half of the second century CE.

Ideally, a humanist would research the historical record, teach students how to think about qualitative evidence, and teach them how to improve their own ability to do qualitative work - write, write, write! That task is complicated by a number of factors that interact, oftentimes to the detriment of the education process. Administrators are interested in seeing the highest percentage of students graduate, with excellent grades, in order to go off to excellent professional programs, graduate programs, or private-sector careers. Students, especially those at elite institutions, share the same goals.

In theory, the student acquires his or her grade by demonstrating mastery of a subject. By "mastery" I do not mean "competency." A competent student understands the content and the methods of a subject, but could not necessarily point out the methodological limitations or develop the methodological innovations that produce either new content or a better understanding of the old content of a subject. A master-student is capable of this kind of critique and inventiveness.

In practice, students and administrators have a shared goal, and professors are often caught between two populations, each of whom seeks the professor's help in achieving the desired goal: the student (who often thinks of himself as a customer, or his parents consider themselves customers), and the administrator. In theory administrators and senior faculty have the capability of setting stringent criteria for evaluating student performance - for example, Princeton tried to set a limit to the number of A's, A-minuses, B-pluses, and so forth, that could be awarded ( But the students have some bargaining power, especially because the administrators, in order to prove their effectiveness, need the students to succeed. My guess is that because of the shared interest between student and administrator, there is an tacit, unofficial tendency to adjust the stringency of grading-criteria downward.

But who does the adjusting? Not the students, obviously, and not the administration, but the junior faculty. In addition to developing an impressive publication-cv, junior faculty (at all but the most elite universities, I would guess) require a) decent enrollment numbers and b) decent performance-reviews, in order to win tenure. The performance-reviews are done by the student in the form of evaluations, and at some universities administrators will review these and create their own institutional review. Either way, the junior faculty have a strong incentive to make sure that the students are pleased with their course - which typically means "pleased with their grade."

In the STEM fields, junior faculty can at the very least point to specific and hard data for stronger versus weaker performance. In the softer social sciences and the humanities, professor's have a harder time dropping the hammer because a student can always make the following retort: "this is all just a matter of opinion." Now, humanists have themselves contributed to the notion that work in the humanities is "just a matter of opinion." Thirty years ago, when a humanities professor might consider himself an arbiter of cultural taste, that would be true. But in the past 30 years, at least in my field (classics and ancient history, in which I ), the humanities have shifted its focus from questions of aesthetics in itself, i.e. to questions of "cultural ideology and institutions." No one in my field asks this question: "who is a better, more objective historian: Thucydides, Polybius, or Herodotus?" Now, we ask this kind of question: "what are the cultural-concepts that Herodotus relies on to understand Persian monarchical politics? why does he turn to those concepts, and how does he modify them when he talks about the Scythians, the Persians, the Egyptians, and so forth? What does that tell us about the emergence of democracy in the world of Mediterranean politics circa 450 BC?" Or, my favorite question: "what sorts of conceptual vocabularies for economic-life does a democracy develop, and how do we see the fault lines between the elites of Athens, who react quite poorly to the democratization of the city, and the 'people,' who react poorly to those men who demonstrate excellence and superiority?

Those questions are certainly not quantitative, and because they are about qualitative evidence, they present problems of interpretation of a different sort from those faced by a physicist and an economist. But the academic humanities have spent the past 3 decades testing out different ways to confront those problems of interpretation. Ideological and methodological fault-lines have developed - one thinks differently about the problems of understanding the ancient economy, or ancient ideas about ethnicity/sexuality/imperialism at Stanford, Yale, Duke, etc. But there are major points of agreement, and often our debates over problems of interpretation are specifically designed to make sure our assumptions do not utterly confound our understanding.

Frankly, in my experience at 2 elite universities, the problem (in it's simple form) is: student laziness + junior-faculty lowering standards to help their career = overall inflation of the number of people receiving marks thats signal excellence. Ask around where you work about whether the senior members of your company/institution think that, in general, the quality of our best and brightest has declined. My guess is yes, and my intuition is that it is a matter of identifying genuine talent, because a) we give out the signals of talent too broadly to too many students, and b) parents with means will do everything possible to make sure their children, regardless of talent, acquire the necessary markers of talent that lead to success.

(postscript: after undergraduate I taught at an pricey prep-school, an experience which I found supremely jading. then i taught writing in the UC system, which I found deeply saddening. Now I am in graduate school at a prestigious R1. Perhaps when I start teaching undergrads here I will revise my perspective on higher-ed.)

Is this the winner for longest MR comment ever?

If it isn't, I shall have to try harder next time.

"Just wonder why is a university a ‘public good’. It seems to me that it is very strongly internalized."

Yep, you benefit from a well educated new employee as the employer because your investment in a new employee is very much reduced.

With employers demanding greater immigration and government training programs to locate in a State or region to fill their employee skill requirements, education is internalized in the employer by forcing it on the public sector.

We have abandoned the idea of golden handcuffs as part of the employee training process. No pension, no job security, no seniority system means you lose if you train a new employee because as soon as you get them up to skill, he bolts for your competitor who pays him one or two pay grades higher, jumping over the seniority pay system that shares the cost of training between the employer providing the training and the worker benefiting from it.

Look at some of the 1940 census records to see how many people had never attended high school and how many had 6 or fewer grades. In 1930, my grandfather reported he was illiterate (at age 54), not uncommon at the time. Employers had to train a lot of their workers in the basics - women being more literate were probably a lot easier to train, and of course they would take over the office work - when they filled the labor shortage of the war.

Gibbon, to whom are you replying? It's certainly not Tyler. Tyler is claiming that education is a public good here, enormously so, and he has consistently claimed that.

You appear to have a massive blind spot, a lack of reading comprehension, an inability to comprehend the arguments of others, and a profound intolerance. It is no wonder that you rely on ad hominem arguments and refuse to respond to Tyler's actual post.

Gibbon, can you read?

If we could identify Gibbon's college or university, we could probably save society a lot by shutting it down.

Both US healthcare and US education are accurately described as "[a] sector dominated by the state—state-run in some cases, merely subsidized and regulated in others". Both are also accurately described as "more or less autonomous, compared to the Continental model", and as "examples of federalism." Both US healthcare and US education are viewed as more expensive (especially for those who directly consume their services) than the competing foreign systems, and both have wealthy foreigners who come to get US healthcare or education despite the price because of its high reputation for quality.

However, one is taken is a great US success, whereas the other is looked at as a shame. Odd that.

(On a political note, the center-left insists that the US healthcare system is "capitalistic," relying on international comparisons, but prefers to stress the government influence on the education systems. The center-right, of course, does the reverse. This is because of the perception of how good each sector is.)

John - ask a politician opposed to health care regulation, and they will tout the greatness of the American system compared to Canada/UK/France (esp. France!)...the problem is not one of chimera based on numeric measures (how many insured? life expectancy? live deliveries v. dead deliveries?), but of principles (why is your death/discomfort my problem?) and veiled, artificial scarcity (my child gets Dr. Superior, your child gets Dr. Nobody; you could get Dr. Superior too if I let you join my company and keep you...). higher education honestly contends with its own conflicting elitisms (legacy? meritocracy? diversity?) - but in healthcare, the notion that exclusivity is tolerated is so appalling it must be covered up with 6,000 pages of red ink to obscure it - while the notion one feels comfort lining their pockets while their neighbors perish is very problematic for those claiming any religious conviction (so problematic they need to change the subject to more important crises like the War on Christmas). "Healthcare" - as an industry - cannot confront its demons, while universities, to some extent, can and do.

But poor people in the USA have a better chance of receiving free healthcare than a free higher education. Medicaid, for all its flaws, covers a much greater proportion of healthcare costs than Pell Grants do. And that's not even discussing that poor people can and do receive "healthcare"-- as separate from "health insurance". And if anything, the scarcity and difference in prestige-- and in real life outcomes-- between going to an ordinary school or community college and the best university is far greater than that between "Dr. Nobody" and "Dr. Superior."

The recent health insurance law debate didn't seem to be about helping the poor at all, nor about getting them access to "healthcare" as opposed to "health insurance." It seemed to be more about making sure that the middle class didn't get their savings wiped out in an emergency, and about trying to force the poor to pay more so they don't get so much free care, even though the cost of the health insurance subsidies may exceed that of the forgone free emergency care.

Quick, John, do you know what the income qualifications are for Medicare are in your state?

Post your answer below. And, then tell us why the poor have a better chance of receiving free healthcare.

medicaid, not medicare.

You seem to have completely failed to respond to my post. May I assume that you're conceding my point?

Certainly, as Tyler pointed out, the US higher educational system, while with extensive government control, is much less government controlled than in other countries. The same is also true of the US healthcare system. Indeed, the poor have better access to the best US healthcare has to offer (though certainly far, far from ideal) than they do to the best US higher education has to offer, in my opinion.

It strikes me as inconsistent among people of both the Left and Right to pretend that the two systems are very different. It is poor argumentation for those on the Left to pretend that US education is very government dominated when praising it, and yet focus on how US healthcare is more privatized than other countries when attacking it. Certainly I can grant the point that US persons on the Right will pretend that the US healthcare system is more free market when they defend it, but emphasis its government-controlled nature when attacking it.

I would be perfectly willing to hear an explanation of why it works for education but not for healthcare, or an explanation of why in reality both work or both don't, or a very good explanation of how I am wrong and the two industries really are quite different.

However, donzelion apparently prefers to rely on crude ad hominem arguments, ignore my points, and refuses to engage in reasoned debate.

The idea that the poor are shut out of the best higher education is a joke. Any poor kid with strong test scores and drive can get into the very best schools for nothing.

If by equal access, you mean that they don't get the background and social support to succeed in high school and college, that is something else entirely. But there are few countries in which the poor have an easier time of getting acceptance and access to elite education. And as we know if they are the right kind of underrepresented minority, schools will bend the requirements to accept them with below average scores.

Higher ed in the US is heavily funded at the individual level with
- individual grants from taxpayers in kind and cash grants that are not limited to public schools
- individual grants from people who reaped great rewards from their higher education (directly or indirectly)
- individual closet servitude in debt that can never be shed while alive even if it was a very bad investment
Then private and public higher ed schools then compete heavily for the money those individuals have by adding luxuries unrelated to academics.

A second class of public school are the votech, community, junior college schools which provide few frills but subsidized operating costs and non-tenured part-time instructors to keep tuition hour costs very low to all takers, with limited individual aid.

The private competition for the community colleges are very aggressive at finding the individuals with individual grants (GI Bill) and then they provide stripped down classes at high credit hour costs funded by debt. (Cost cutting is done by online learning, class room only instruction - no labs, and very limited course/program offerings - why should a class in business economics at a for profit cost more than a lab course at a community college - even with the lab paid for by government and the businesses served, the lab course requires more student-instructor interaction, and the class+lab fees will pay those costs).

In health care, no one is seeking business by looking for the people who are willing to make and take loans to fund their health care. Lots of banks will make student loans because they know the debt can't be shed in bankruptcy without pretty much dying, but when it comes to people needing health care, no banks are offering as much debt as you need, and exempting medical debt from bankruptcy wouldn't help increase that lending.

The medical institutions aggressively pursue those with employer or government health insurance, and lobby heavily to make sure neither public nor private health insurance does anything to control costs. And the medical institutions flee the poor, even the poor with government aid, when it comes to medical care, but they do go after the poor students with government aid.

Those on 'the left' who look at public provision of higher education seriously are not at all happy with its success at guaranteeing accessibility for the disadvantaged. So, nice strawman?

“[T]he polity requires some respite from Economy I, whether we like that or not.” That respite is found in family relationships, friendships, voluntary associations of all kinds—including religious and charitable organizations. And, of course, dealing with the government is necessarily different from operating in Economy I; but dealing with the government is not usually thought of as “respite”!

Pave those parks! Behold the stars with your own eyes, why subsidize some telescope? biology is for biologists - every ordinary citizen is born with all he needs to know of science! - and who needs some literate fool to inflict shakespeare upon them, when the Economy offers us Twilight and Transformers (which earn so much more money anyway)! if you want those high-brow things, go to your church, your pastor learned all he needs from prayer (and not some subsidized seminary), or find friends who read it with you (after all, Jefferson did - so why can't you? by the way, best have your servants/help do some chores as your clique clicks away)... And freeways! Bah, too much trouble! Toll roads are far better (besides, if my neighbor puts the toll to high, I can shoot him - assuming he didn't spend his toll revenues hiring gunmen to shoot me).

The fallacy of modern political libertarianism is the failure to conceive of anyone uniting to strip one's liberties and property other than the government.

You show a remarkable inability to grasp others' arguments, combined with a lot of ad hominem arguments.

For many, relying upon relatives and religious organizations is not usually thought of as respite either - modernity's flight from parochialism and all that.

Observation number 3 is based on what arguable assumption? Citing some exceptional historic figures makes no headway that I can see.

That the state made relatively small subsidies to education almost 100 years ago, and has now totally jumped the shark makes the case that observation 1 should be that government cannot constrain itself in anything, and inevitably ruins even a 'wet dream' situation. I am doubtful there can be any reliable evidence we would not have been better off without it by now.

The Federal investments in public colleges began in a big way 150 years ago at the beginning of the Republican Party and its half century in power.

Oddly the oldest public university in the US is claimed by the University of Georgia, the University of North Carolina at Chapel Hill, and The College of William & Mary. all in the South, but since the Morrill Act, the land grant colleges are the iconic public universities.

Off topic, but if you haven't already read it, Cowen has a GREAT piece in Atlantic magazine on eating out.

We need vouchers. So many more benefits. Competition. Students don't graduate with so much debt.

Like the GI Bill and Pell Grants? Those are socialism and a government takeover of funding education!

We are fortunate that U.S. state universities are more or less autonomous, compared to the Continental model where professors and administrators are treated as part of the state civil service bureaucracy. The latter system does not work well, and those countries have struggled to move closer to American models.

For how long will this BS myth be propagated? Fact: In the critical sectors like biotech/biomedical research Europeans now have higher more papers and higher citation impact factor than Americans. And the quality lead becomes even higher when normalized by expenditures.

In education, there is always the chance for self-education, especially in the age of the Internet (and I believe higher ed will be radically disrupted over the next 20 years).

There is no chance for an enterprising individual to pursue self-chemotherapy or homebrew insulin.

Author says: "Economy II, by operating under different principles, often serves as a useful R&D lab for Economy I."

I think the main point of the interfluidity post that discusses Economy I and II is that Economy II (government) is not so much an R&D lab (except for public goods) but a "shock absorber" of dislocations and social 'negative externalities' caused by labour saving technical innovations created in Economy I (the private sector). Economy II gets bigger because technological advance creates labor mobility and layoffs more and more, and people are frightened and want to keep their same standard of living as before, so they look to government as rent seekers. Seems to jive with my thoughts over the years. I did pick up an original thought (to me, i.e., one I had not thought of) and that is that the Reagan "revolution" was simply pushing rent seeking onto private areas of the economy that were lightly regulated and worse, not competitive in international markets, and that would be the 'signaling' fashion-conscious area of the Goldman Sachs type finance sector. In retrospect, this seems to be true. The Interfluidity author could have also raised the point that Reagan was a bit of a fraud in that he increased the size of government as well, but that's another matter.

Only because the banks have yet to find a way to squeeze money from the dead. Something about the capacity to contract. Nothing a few legal changes couldn't fix. Give them time.

"Postwar higher education has proven one of America’s most effective subsidies... one of the more significant successes of federalism."

Which war? The Civil War, perhaps?

The land grant colleges were part of the first Republican administration's central planning to provide growth and opportunities after the end of the Civil War.

By the 20th century public universities were well established across the nation. In 1935, Federal cash funding to all the land grant colleges was begun, and most of the universities played major roles in the run up to the US entering the wars already raging in Europe and Asia. Then they had a huge role in providing opportunities for the GIs on the GI Bill.

Of course, you could argue the Democrats under FDR focused on the individual and student choice: instead of grants to the States to fund the creation and operation of public colleges, the GI Bill gave the grants to the individual who could then chose public or private.

Now we have the Republicans opposed to both funding the public universities and opposed to grants to the students so they can chose public or private, and this is the policy advocated by Republicans at both the Federal and State levels.

A rather strange shift in principles for the Republican Party in 150 years - the Sesquicentennial of the Morrill Act, signed into law by President Abraham Lincoln, is on July 2, 2012. Obama will probably mark the day; will Romney call it socialism?

(I wonder if Republicans will note the other Morrill Act: the Morrill Anti-Bigamy Act, signed into law by Lincoln 6 days later on July 8. That began a Federal "war on religion" and a "war on religious liberty" that most recently sent Warren Jeffs to prison for practicing the same religion as Mitt Romney's great grandfather, with the Mormon church forced by a "Republican" Supreme Court ruling they have no religious liberty into changing the Mormon church doctrine. Of course, Obama's father was a bigamist, in a nation where Christians practiced plural marriage before Muslims. I mention this because today's political debate reaches back to the founding of the Republican Party and the presidency of Lincoln.)

It's really not that strange. The southern realignment is pretty well understood nowadays.

"The land grant colleges were part of the first Republican administration’s central planning to provide growth and opportunities after the end of the Civil War."

Land grants colleges aren't central planning, they are grants. Indeed, they are basically block grants for education to the states. Since in almost every case the state was responsible for running the schools afterward. Republicans have pretty consistently supported this policy.

"Now we have the Republicans opposed to both funding the public universities and opposed to grants to the students so they can chose public or private, and this is the policy advocated by Republicans at both the Federal and State levels.":

No, that's not the policy advocated by Republicans. Republican's have, in response to state budget crunches, cut funding to schools. But of course California and Illinois both have had massive cuts to their state systems and both are run by Democrats.

As to being against Grants. Republican's have generally been in favor of vouchers and school choice. Democrats have generally been against vouchers.

Two Americas. That's what I've been saying. John Edwards was onto something.

Also, our education, like our dollar, may just be the best of a bad lot, benefiting from winner-take-all features of those business models.

For education to work as "welfare" it actually has to benefit the disadvantaged. This is also not obvious. It is possibly of all things mostly a hierarchy reinforcing system. Get back to me when we give everyone degrees. As an aside I think "degrees" should be degrees, not thresholds, but that's for another day.

At best education is a filter to determine who gets to get their hands on capital in a winner-take-all feature of the capital economy.

Education is one of those things I consider "perfect political issues." The more you fight for it, the more you undermine your goals. But you fight for it because your enemy seems to be against it.


Because its funded by real estate taxes, spiraling education costs have regressively raised the cost of living while dissuading home ownership for quite some time. The whole thing is an impractical boondoggle. If I was king for a day, I would immediately discontinue all federal subsidy and sell every public university. Period. Costs would plummet, perhaps by 200+%.

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