Because most philosophies that frown on reproduction don't survive.

Tuesday, November 24, 2009

An Interesting Thought on State Universities

Some interestingly counter-intuitive thoughts on the UC student protests against rising tuition from David Henderson of EconLog:
Taxpayer funding of higher education is a forced transfer to the relatively wealthy

Socialist author Robert Kuttner once called Proposition 13, California's 1978 property-tax-cut initiative, the revolt of the haves. The latest opposition by UC students to a 32% increase in tuition is a revolt of the "will-haves."

Milton Friedman used to remark that the California government, with its state funding of higher education, taxed the residents of Watts to pay for the residents of Beverly Hills. I think Friedman exaggerated substantially. Even though the California's tax system relies heavily on sales taxes, which probably makes the state tax system on net somewhat regressive, it's still the case that a given Beverly Hills family pays much more in taxes than a given family in Watts. But Friedman also focused on family income of the student, and that's misleading.

What Friedman could have said, and Armen Alchian did say in a classic 1968 article, is that state subsidies to higher education are a subsidy to the relatively rich.

I don't have strong opinions on this particular instance one way or the other (though with the state of California being close to bankruptcy, I don't see but what they have much choice to get more of the cost of running the UCs from the students) but it does strike me as interesting that providing more subsidies for college level education is often seen as a way of helping the poor and working class. The idea is, of course, that they don't have much money to go to college, so subsidies will allow them to go when they otherwise couldn't, and thus to improve their financial condition later in life.

The potential issue with this, as I see it, is that given that only 40% of those in the US earn a college degree, and given that those with college degrees earn a good deal more (on average) than those without, taxing everyone in order to help those who are able to graduate from college to do so with less personal debt is essentially a wealth transfer from everyone to the people who will make up the top 40% (roughly) in incomes in the long run anyway. So while there are lots of deserving people from low income backgrounds who would benefit from lower college costs, most of the time it would turn out that:

a) If they go to college and do well, they'll make much more money in the long run, and thus be in a position to pay off college debts themselves.

or

b) If they aren't actually able to do well in college, luring them in with lots of encouragement and cheap tuition won't actually achieve much other than landing them with a sense of failure and a costly delay on getting on to doing work which they would be good at.

So while as a "give everyone a chance to succeed" kind of guy, I certainly want to see everyone who needs it get the chance to go to college -- I'm also fairly comfortable with people financing their college educations through student loans, since they are, after all, the ones likely to reap significant earnings benefits from having gone to college.

The alternative, human side to all this, of course, is the plight of those who take out a lot of loans to go to college and then find, for whatever reason, that they don't make very much. The question would seem to be: is this group large enough and/or problematic enough for it to be worth while for society to heavily subsidize university tuition at public colleges, or not?

16 comments:

Anonymous said...

I'd like to see the government (whether state or federal or local) distinguish between majors in its student assistance programs. Philosophy majors are, I'm afraid, useless. As are literary criticism majors. But math, engineering, hard science (NOT sociology), and statistics majors have a very good chance of actually contributing something to society. Do any government tuition-assistance programs make these distinctions?

Joel

Darwin said...

I suppose at the grad level there are some distinctions. MBAs (especially at big name schools) are often charged higher tuition than other grad disciplines, and are usually not eligable for many grants, just loans.

I've read that in the UK, where you're required to definitely declare a major within your first year at university, tuition and government loan/scholarship opportunities vary by major -- but that would be difficult in the US because people often switch majors very late.

I would disagree on the question about the utility of majors, however. Philosophy is not unheard of as a pre-law major, and indeed, one of our senior VPs at the company I work at mentions fairly often that he was a philosophy major. I'm certainly glad that I studied Classics rather than Business or Marketing, even though I work in Marketing and am apparently half-way decent at it.

I'd tend to argue that outside of obviously vocational disciplines like Engineering, the main reason for picking a college major would be achieving a breadth of knowledge and an ability to learn quickly and think critically, rather than the utility of the actual field of study.

Mrs. Cranky said...

I believe the argument for funding Universities is not just about education. They also (theoretically) do research that promotes the common good, and they can bring prestige to the state on a number of levels. UT, for example, has an extensive geology program to accompany the oil and natural gas industry in TX. UT also has one of the largest collections of rare books, original papers of English writers, early printed works, etc at the Ransom center. The goal of the collection was to "put Texas on the map" as a major research center in the humanities. All these things are not about the dollars and cents of undergraduate majors.

All that being said, I'm not a huge fan of taxpayer dollars going to Universities, especially federal dollars. I'm more amenable to state and local dollars.

Anonymous said...

darwin, the fact that a philosophy major can later graduate from law school doesn't tell us anything about the usefulness of a philosophy degree - it tells us that pretty much any degree will get you into law school. Likewise, your own success in marketing in spite of majoring in classics probably just means that you're an intelligent and level-headed guy who would be doing equally well at your job even if you hadn't gone to college at all. Indeed, while those years of studying classics may have made you a better-rounded person and citizen, the purely economic impact of that degree is probably negative. It kept you out of the workforce for four years, and assuming you went to a state school your education there cost the taxpayers a princely sum. And the material that you studied has close to zero application to what you actually do in your work (though I'm sure it does help your blogging).

If the real goal of a college education is "achieving a breadth of knowledge and an ability to learn quickly and think critically" then that goal could be better served by taking a breadth of classes in different topics, including some technical classes requiring logical rigor and critical thinking. In other words, a General Studies degree. I would rather see my government subsidizing that sort of education than art history, political science, or literature.

Joel

Darwin said...

MrsCranky,

Indeed, and the track record for large universities resulting in thriving local economies is pretty good. I certainly wouldn't say that the state shouldn't be involved in universities at all -- I'm just not sure that either large state grants or heavily subsidized in-state tuition are the most just use of tax dollars (unless your taxation is so progressive that it mostly comes from the college graduate population anyway -- which state taxes usually aren't.)

So for instance, that the UCs where these protests are going on, undergrad in-state tuition is currently $9,000, while out of state tuition is $31,000. I would think, given the benefits of having a degree from one of the UCs, it would be fair to push that undergrad tuition all the way up to 20k or even 25k for in-state, and expect people to finance that either through merit-based scholarships or student loans.


Joel,

Well, fortunately I went to a private school and got not government funds at all...

I suppose this is likely to be a matter of some difference. I would tend to see one's ability to deal with complex problems, adapt to circumstances, etc. as being a matter of developing mental abilities and aptitudes -- rather in the same sense that muscle mass and endurance can be developed through any of a number of sports. Golf is now powerlifting, but if you actually train really hard at your golf swing, you'll develop a fair amount of muscle tone. (Queue co-workers in the next row who spent considerable time the other day arguing if Lance Armstrong or Tiger Woods was "a better athlete.)

So I guess the question is: To what extent is spending four years (or more) studying Classics or Philosophy or Literature of what have you an advantageous way to develop one's mental abilities?

I would tend to rate it rather high (rather higher, indeed, that getting a Business or Advertising or Computer Science degree -- of which stike me as topics one could cover in a year or so of semi-on-the-job training much better than a four year college environment) but others might not. Of course, I'm also biased in that I would have considered getting a four year degree in the sciences or humanities worth doing at a humanistic level regarless of social or economic utility.

The lack of ability to discern this with certainty actually seems like another pretty good reason for college to be primarily funded either through foundations (merit scholarships from the college endowment or some other source) or student loans: because if there's utility to the degree then the student will well be able to afford it, and if there degree is primarily an intellectual or personal indulgence, then the student should pay for it anyway.

Rebekka said...

re: "So I guess the question is: To what extent is spending four years (or more) studying Classics or Philosophy or Literature of what have you an advantageous way to develop one's mental abilities?"

I would say not so much - at least not for literature. I have a BA from UCB in Slavic Lang + Lit and I have to say I got waaaaaay more critical thinking and reasoning, as well as philosophy and ethics from my professional-BA in nursing (taken at a professional school) - as well as something so practical as a degree in nursing!

But maybe it's just me, or the major I had.

Enbrethiliel said...

+JMJ+

I'll have to disagree with Joel that the end of education is how much money one is able to make (and be taxed for) after one finally gets a job.

My own degree in English Literature (with some Latin language papers), which I earned as an international student, is obviously a luxury. I might as well have asked for a Lexus after high school graduation--except that a Lexus wouldn't have made me work so hard for something that must seem so little.

Yet whether or not that experience has made me better able to contribute to society is not something I worry about--if only because I didn't receive any public funding. Indeed, going to uni in another country meant that I actually gave its government revenue with which to subsidise the tuition of native students!

Having said all that . . . my view of education as a luxury means that I don't think it should be funded by taxpayers.

The Opinionated Homeschooler said...

My philosopher husband thought it should be pointed out that the entire modern computer industry is built on a foundation laid down by philosophers. I mention George Boole as one whose name at least might be familiar.

But putting that aside, the question "What use is it?" and its underlying cultural assumptions--and sheltering our small children therefrom--must count as Reason #1 we homeschool. There's a reason the "useless to society" academics and intellectuals are usually the first against the wall (or escaping across the border) when revolution strikes. (On a smaller and more benign scale, my philosopher-hubby was recently kicked out of a jury pool on the basis of his occupation: spotting flawed arguments for a living is not welcomed in the courtroom.)

If the question isn't "What use is philosophy?" but rather "How can you hope to earn a living as a philosopher?" I can only say that we are comfortably managing a family of five on one philosopher's income. Though if you really want to hit the jackpot, go into ethics and sign up with BioMegaloCorp.

class-factotum said...

MBAs (especially at big name schools) are often charged higher tuition than other grad disciplines, and are usually not eligible for many grants, just loans.

Which would lead one to think that perhaps the utility of an MBA is higher than that of a field that receives grants? Otherwise, wouldn't there be loans to the students in the sociology program? Or would those loans not be repaid?

Daddio said...

"...those who take out a lot of loans to go to college and then find, for whatever reason, that they don't make very much."

Maybe their first course should have been economics...

Daddio said...

Really though, I don't think it's fair of them to raise tuition mid-stream on students that are halfway through. But I suppose if they only did it on new students, a lot less freshman would come in and the whole darn thing would collapse.

Also, interesting point about the one who will benefit (i.e., the student) paying for school without govt assistance. But the govt itself will also benefit an awful lot over the next 50 years from that students' increased income and tax revenues, and that of the student's own children who will be more likely to repeat the cycle. It's sort of an investment in future taxpayers.

The Opinionated Homeschooler said...

"...those who take out a lot of loans to go to college and then find, for whatever reason, that they don't make very much."

... are very often, in my experience, women who discover that their biological clocks will not wait for their career to take off so they can pay back their loans, and that--often to their own great surprise--they want to be home with their children instead of leaving them in day care or with a nanny.

Does this not uncommon situation count as sufficiently "problematic" to affect analysis of the situation, at all?

Art Deco said...

The alternative, human side to all this, of course, is the plight of those who take out a lot of loans to go to college and then find, for whatever reason, that they don't make very much. The question would seem to be: is this group large enough and/or problematic enough for it to be worth while for society to heavily subsidize university tuition at public colleges, or not?

One way of ameliorating this problem is to abolish the current hierarchy of degrees (associates, baccalaureate, master's, and doctoral) and establish an alternative which would excise the filler to be found in the current degree programs.

1. Certification programs that prepare the student for a specific examination series. The certificate would be issued by the examiner (e.g. the state Board of Regents), not the institution.

2. Certificates issued by institutions, e.g. a teaching certificate for aspirant secondary teachers that consisted of about three courses and an apprenticeship. These programs would last less than a year (i.e. < 33 credit-hours).

3. One year degrees composed of ~33 credits in a single subject;

4. Two year degrees composed of ~66 credits in a single subject.

5. Three year degrees composed of ~99 credits.

6. Four year degrees composed of ~122 credits.

7. Doctoral degrees, which would add a dissertation, additional coursework, or an internship onto the four year degree.

The subjects for which an institution could award the degree would be defined by charters which would have to meet the approval of the state legislature and the board of regents. There would be additional consumer protections to ensure, under penalty of severe fines, that the courses actually offered would be so on a schedule that would ensure that a student could complete his course work on time barring a failure.

Your aspirant lawyer might complete a one-year degree in philosophy, a one year degree in one of a menu of other subjects (rhetoric, political science, history, sociology, or economics) and then (if possible) enter law school. Your aspirant business executive might complete a one year degree in economics, a one year degree in a technical subject, and a two year business degree. Your aspirant school teacher might complete a two year degree in the appropriate academic subject and then a brief certificate program in applied psychology. Less time, less money, lower opportunity cost.

The Opinionated Homeschooler said...

I gather legal education used to be something not dissimilar; instead of a 4-year B.A. followed by a 3-year J.D., one would get just a LL.B. (Bachelor of Laws), which focused on the subjects you mention, more or less.

Hannah said...

Darwin, as far as I'm aware, the main (state) grants for UK university students are not differentiated by subject, however, there are funds available from other bodies (professional organisations, foundations, etc.) for sciences and engineering which aren't available for, say, philosophy. For example, I'm a classicist and my boyfriend studies physics. We both receive loans for fees and grants for living costs, as well as some financial support from the university. However, he also receives money from the Institute of Physics, while I receive no additional funding. Hope that clears things up a bit for the state of affairs on this side of the pond.

Anthony said...

California's taxes are paid largely by college graduates, except for sales tax. Property tax is paid by homeowners, who are generally richer than the median earner (and those who aren't are often not paying much property tax due to Prop 13). Something like 40% of California's income tax revenue comes from the top 1% of taxpayers; if there are any who don't have college degrees, they're probably CompSci dropouts who started their own companies before finishing school.