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Notes -
Old post of mine at the old place, but I want to reiterate my objection to referring to education as a public good:
On student debt forgiveness, I'm seeing the emergence of a new framing that seems almost completely nonsensical to me. In a recent Voxsplainer, this quote is included from a policy person:
I want to emphasize the use of "public good" there - this doesn't mean something that's good for the public, this is a specific economic term used deliberately. The meaning is:
...
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This is not at all what university educations look like. Not only are degrees both rivalrous and excludable, they're also positional goods that convey signaling benefit to their recipients. To make them non-rivalrous and non-excludable would substantially remove their value to the individuals receiving them. We can imagine a world that looks like that, where Harvard offers all of its classes online to anyone that would like to take them and anyone that signs up and passes receives that Harvard degree, but that looks nothing like the world we actually live in.
From my perspective, student loan forgiveness would be one of the worst policies in American history. It would:
Reward irresponsible people that had no plan to pay debts freely entered into.
Reward universities that conferred expensive degrees that don't have an actual return on the investment.
Reify moral hazard and perverse incentives related to the above.
Continue to inflate college costs due to the expectation that no one actually has to pay for anything.
Further the class/social war by explicitly choosing to extract from non-university labor to reward the formally educated.
Almost all of the upsides seem to me to be incredibly short term and ignore normal human reactions. To me, the justifications all look like sophistry in service of smash-and-grab politics.
As an addendum to the above, even if I were to take a less formal definition of "public good" as just meaning something that has positive externalities, I would need an explanation for why the value of an education isn't primarily captured by the educated individual and instead accrues more broadly. Sure, there is going to be surplus value from some educations, but it's going to be pretty hard for me to understand how a Harvard-educated attorney or financier isn't actually capturing the majority of the economic value produced by their skills.
I think there’s a problem in the sense that not all education has positive effects. Which is something that’s almost always missing from such debates. I can teach everyone Swahili — that’s education, but it doesn’t really give much of a positive externality. It probably would end up being a net negative if the public were paying for it. Having science, math, and logic literate voters is a set of positive externalities in the sense that they’re at least likely to be able to understand science and make sound decisions on science and technology. Having lots of people with good science and engineering skills means being able to invent new technologies that the public generally benefits from.
I’ve less of a problem with paying for genuinely useful education. Science, tech, finance, mathematics, computing, that kind of stuff. I get the need to create engineers. Where the entire thing gets silly is when it’s stuff that really doesn’t create value to the rest of society. French literature is useless as a skill. What’s the actual benefit to the rest of society that you’ve read Proust? Or speak Latin?
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And I think most people wrongly believe degrees represent human capital (with the idea that human capital creates spillover benefits which is an empirical question always just assumed in these discussions) whereas I believe education is more a signaling and therefore more akin to Tulips in Holland.
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Particular College education, but primary education is a public good, and I think the people is support of affirmative action take the same framing and extend a position of what college ought to be. Even if not economically a true public good, college as part of education collectively as a public good, not in the "benefits the public way", but in a way that is somewhat more abstract.
(tbc this isn't actually my opinion)
Suppose one claims that water should be a public good, in the technical sense. In economics, "both non-excludable and non-rivalrous." However, particular water fountains and taps can't themselves be accessed non-rivalrous or excludable due to their limited availability adn disproportionate desirability or pressure. One solution could be truly truly treat water fountains themselves as public goods with completely even lotteries for access.
Another solution could be to maintain that 1. water is a public good, that 2. access to particular water fountains isn't, and yet that 3. laissez-faire access to water fountains collectively leaves access to the public good unfulfilled. They could make an argument that targeted affirmative access to water fountains is a tool for keeping the water publicly accessible, while allowing the specific taps to be excludably regulated in their availability.
I'm not saying this is correct or has no holes in it, but it is a way of squaring the abstract concept of education as a public good with universities not being so, without resorting to a 'good for the public' definition.
I think that if we buy this argument, the solution would be for the government to directly run its own public supply with 0 or controlled nonprofit tuition costs, the same as they do with the water supply and public schools, not subsidize the costs of private universities. If the government just says "every college student gets $50k towards their tuition" and applies this equally to all schools, then the long term result is that all colleges raise their tuition by almost $50k, because that's where the new market equilibrium lies.
If instead the government has its own free universities, then all of the fancy ones need to offer a better product with cheap enough tuition in order compete.
You can't just subsidize profit-maximizing companies and naively expect them to divert all of the extra money towards the customers. That's like trickle down economics fallacies but worse.
This wouldn't work either.
Adding a free college option means that a college education is the new high school education. Students will have to waste 4 (or more) years in another poorly-run government institution or be forever marked as suitable for only the lowest employment.
Billions of person-years, and trillions of dollars, will be wasted by low IQ people struggling over book reports while the labor shortage gets even worse.
We need to stop spending government money on positional goods, and yes that means drastically reducing existing spending on post-secondary education:
https://en.wikipedia.org/wiki/Positional_good
In countries with government provided free higher education there is a contest for limited number of places in specific programs. In Russia people who get free college are generally smarter than those who pay for it.
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