Debate in California about the funding cuts for higher education has become quite perplexing, partly because some of the parties are not thinking very clearly about it, partly because the question is fairly complicated, partly because the politics of California budgeting have become so pathological. In response to relentless nagging from David Schutz (well, he put two comments on an earlier post [Update 26/XI: and offered this link to some thinking similar to what follows]), here are some reflections.
The economics of the issue are pretty cut-and-dried if we think higher education is only about job skills for alumni. In that model, it’s an investment, the alums make money from it (better jobs and higher pay), and so students should pay full tuition and if they don’t have it up front, take loans. The “problem”, if there is one, is just a capital market failure. If schools want to compete for better students with scholarships and such, or if California wants to bribe stars to come here for college because they tend to stay here afterwards, they are free to do so, and how nice for the A students; otherwise full tuition is the rule and college accessibility is a matter for banks.
On this theory, a state giving students from poor families a free or cheap ride, however you set it up, is a well-meaning but ill-targeted idea, because most won’t be poor when they graduate, because some will leave the state after graduation, and because in-kind subsidies are generally bad practice. If you want to help the poor, give money to the poor (including poor college graduates teaching in bad K-12 schools or lawyering in the public defenders’ office), and lend it to the about-to-be-not-poor.
If there’s more to education than job training, or if you think the market doesn’t reward all the value created by everyone’s work perfectly, things get a lot messier. I think both those things are true. First, the idea that higher education is just about employment is inconsistent with the whole American model of liberal education. People should study literature and ancient history and complex function theory and all that good stuff in college, but it’s very hard to argue that it’s because every engineer is going to make better bridges because of his Shakespeare course. Also, a lot of benefit from education is made and consumed by the student himself. We could say, so what; he should still pay for it. But a lot is also consumed by his friends and family, because educated people are more interesting and fun to be around, and these benefits are not necessarily returned to the alum, nor are the benefits of his better-informed voting, participation, and judgment as a citizen. The idea that education investments will be made optimally by the student runs aground on all sorts of market failures like free-rider problems, the well-known deficit of adolescents in processing delayed-payoff choices, and cultural flywheel effects like the undervaluing of education in minority groups with little historical experience that it really pays off better than working in the family restaurant, or cultural conventions that it adds little value for women. In my view, these market failures, plus the symbolic demonstration that we think it’s just really good for all of us if everyone has lots of it, justify the idea of heavily discounting it, just as we give it away free (and make you take it) through 12th grade.
There’s also more to an educational institution than students taking courses. Research, for example. A society could probably set itself up with research institutions separate from teaching-focused colleges, but we have chosen a different system, and it’s not clear that the former recipe would really work; can a university that does no research really train the PhDs who will do it in a think tank or industrial lab? It’s conceptually possible to have an accounting system at a place like Berkeley that properly costs research and teaching so as to charge tuition only for the latter, but the existing system barely costs anything plausibly now, and how could we confidently separate those functions for graduate students getting independent study units working in a lab on an NSF grant, or a prof writing a book he will teach from next year?
The confident and pervasive assertion that undergraduates at research universities necessarily learn more than undergraduates at liberal arts colleges or in the Cal State system because their professors are more distinguished and productive scholars is not much more than that, an assertion. Because of the degree’s prestige, we admit the students who will do best in any environment, and the value added from going to Berkeley rather than Cal Poly may well be illusory. My friend from Swarthmore came out every bit as well-trained as I did from Hahvid, and the teaching at research universities doesn’t generally impress me. However, I don’t believe we are operating at the production possibility frontier for teaching and research, and the quality assurance system for teaching at my own school (and Harvard) is shameful and feckless. So there’s no reason the research university couldn’t be a good undergraduate ignorance processing system, if we were to take it seriously, with no hit to research excellence or amount.
One of the less useful tropes of the current California uproar is that “Education should be free!” Exactly what could this mean, if taken seriously? The best I can make of it is either a silly plea that facts be turned upside down by magic, like “Brussels sprouts should taste good!” or a proposition that it should be offered at a price of zero. Carry all the signs you wish, but education consumes real economic resources, hence has a real cost no matter what its price. So we’re talking about who should pay for whose, and how. European experiments with zero-price education have not gone so well; many European students are as well-trained and capable and interesting company as our best, but a lot more are flailing around for years, getting very bad educations in overcrowded and shabby facilities, from profs whose main concern is their second and third jobs. Even highly subsidized state schools here have significant prices that help students stay focused on finishing up and getting on with it, and minimum unit requirements to stay registered along with grading in which it is possible to fail. The problem is that subconsciously we understand price to be an important signal of value, and to some degree “what you get for nothing you value at nothing.” Giving it away at the college level seems to signal for many students that it’s an entitlement, and delivered to them, rather than an opportunity to invest their own effort productively.
In sum, if we were setting up the system from scratch, there’s no reason it couldn’t be based on full-cost tuition, discounted by some estimate of the external benefits the educated provide to all of us (but no fair loading unreasonable amounts of research cost into it), lots of loans, and salaries that better reflect the public benefits of employment choices of people like poets, schoolteachers, and luthiers. However, we go to reform our schooling with the social and economic structures we have, not the one we wish to have, and especially in California, that structure has several iterations of a deal whereby generation t receives a big endowment of personal, social, and physical capital from generation (t-1) that enables it to consume lots of resources and have a happy life, while still adding to (and maintaining) that kind of capital to bequeath to generation (t+1). The current generation of California voters has broken that deal, realizing it would be even nicer for them to just consume everything they earn and leave my students to fend for themselves educationally and in lots of other ways. They are making the transition to full-price education quickly, ignorantly, and heartlessly under the malign influence of leadership, especially Republican Party leadership, that has made an ignorant and idiotic worship of markets and private wealth into an ideology, and abetted by catastrophic constitutional decisions through an initiative process that was the solution to a problem Californians had at the beginning of the last century.
My generation and the next owe my students a big transfer of wealth entrusted to us by our parents and grandparents for that purpose; we may decide not to pass it on in the form of tuition discounts, and could reasonably engineer a fair and humane transition to a different system over an extended period or adaptation, but what’s going on in California now is a vast looting of a trust fund, a violation of fiduciary and parental responsibility. It’s generation K for klepto running loose here, and it’s really ugly. When it comes to your state, you’ll see what I mean.