Higher education can be a path to a successful life. Yet many successful people did not graduate from college — and many unsuccessful people have impressive degrees.
So who should go to college? And who should pay for it? Let’s start by imagining an average student who wants to go to college but has no money and compare that student’s options in a socialized and a free-market education system.
In a socialized system, the government pays for it. The student eventually graduates, goes to work, and starts to pay taxes.
In a free-market system, the student does some combination of working, receiving gifts or scholarships, and borrowing money from friends, family, and banks. The student eventually graduates, goes to work, and starts to pay back the loans.
So what’s the difference?
In both systems, the student pays the education’s cost — in the socialized system via taxes for the rest of his or her working life, and in the free-market system through loan payments via money earned from work.
But there are at least five differences, all of which are morally charged.
* Venture capitalism: Economically, education is about developing human capital. Who is more likely to judge better which potential students will be a good investment—the socialized system’s government officials, or the free-market’s family members, private loan officers, and the students themselves? We should also ask, under each system, how many more or fewer people will attend college and how many more or fewer will succeed there?
Here we need to make some delicate calculations about the types of student who go to college. One type is this: Those who will not go to college if they have to work and save upfront for it or ask for money from their families or get bank loans themselves—but who would have done better in life had they gone to college. Another type is this: Those who will go to college because it’s government-paid and “free” but then waste their time and everybody’s money—and who would have done better had they gone directly into the workforce. In each system, are we likely to get more of the former type of student or the latter?
* Overhead and accountability: Will a government’s or a private bank’s administration likely be more efficient? Which system is more likely develop bloated bureaucracies that skim off a large proportion of the monies to cover overhead? And which will be more likely to monitor the long-term effectiveness of the education-monies invested and be responsive to the data?
* Education delivery: Will colleges and universities deliver better education if their funding depends upon satisfying students who are their paying customers — or if their funding comes from governments and so depends upon satisfying criteria established by government officials?
Answering the above questions requires a lot of hard economic and social-science work. All of that work is morally charged because if we are supposed to be social engineers of education — as most of our public officials see themselves—and we are creating public policies that affect hundreds of millions of people and spend billions of their dollars, then our fiduciary responsibility requires that we do that hard work.
Yet the sad truth is that much education-funding policy is decided by those who don’t have a clue about how to answer the above questions. And that means they are deciding by other methods, methods take us directly into moral philosophy.
* Moral responsibility for education. By the time you are an adult: Are you are responsible for making your way through life, including your post-childhood education? Or: Are we are all collectively responsible for each others’ important life needs and goals?
Many discussions education funding are tied directly to questions about what “society” needs. Do we need more college-educated humanists or more electronic technicians — or more art historians and economists — or more nursing assistants or travel agents or videographers?
If we think that is a society-as-a-whole decision, then we will expect our governmental representatives to craft policies to encourage young people to go into certain professions and to discourage them from pursuing others. We will also expect then to divert society’s resources to the government-preferred educational paths and away from the unapproved-of paths.
Or is it my judgment call whether I become a physicist, a deep-sea explosives expert, or open a convenience store? If we think that is an individual decision, then we will encourage individuals to pursue their own chosen paths, depending upon their dreams and their judgment of the employment market. We will also expect them to find a way to pay for it.
Which brings us to the fifth ethically-charged element:
* Moral methods of payment. The private methods of funding education—working, gifts, scholarships, bank loans—are all voluntary. By contrast, government funding uses compulsion.
Suppose that Jerome is studying philosophy at a university in New England. (Good choice, Jerome!) And suppose that Juanita earns $100,000 per year from her landscaping business in California. If Jerome’s $25,000 per year education is paid for by the government and Juanita is taxed at 25%, then we are in principle and in fact forcing Juanita to pay for Jerome’s education.
Making the compulsion element explicit sometimes brings out a wistful sadness in people — Well, I wish we didn’t have to use government compulsion to fund higher education, but it’s the only realistic way. In this case, the thinking is, the end does justify the means.
But is compulsion really the only way — or even the best way?
Maybe we think that private financial institutions won’t loan poor young students the money. But why not? If education really is a good investment, then the data will show this — and young people who are serious about higher education should be able to convince loan officers of their potential and mettle.
Or maybe we think that a wealthy society won’t generate enough philanthropic dollars to fund scholarships and non-profit institutions committed to higher education. There are only tens of thousands of them, after all.
Or maybe we think that an entrepreneurial society can’t find ways to lower the costs of quality education, expand the number of students on athletic scholarships (A sound mind in a sound body is one noble educational goal), develop more combined work-study options, internships, apprenticeships, and more.
Or perhaps we secretly don’t think much about our college-aged kids—we don’t really believe that they have what it takes to find a way to make college work.
But actually look at them: millions of young people have the energy and resourcefulness to open their own businesses — to start rock bands and take them on the road — to join the military and learn to use weapons that can kill people—and to find a way to scrounge up enough funds to travel through Asia or South America for a few years.
So, yes, let’s continue to look at the social science comparing the results of the two systems. But let’s also give ourselves and our students more credit for being able to find creative and self-responsible ways of achieving high educational goals.
[This article was originally published in English at EveryJoe.com and translated into Portuguese at Libertarianismo.org. Related: The full archive of my articles in The Good Life series.]