Economists writing on education who should go back to school

Sounds like the reactionary right is reacting (There is No Such Thing As a Free College Education) against Germany’s decision to make university education free. I know I’m not going to get anywhere near the amount of readership that Christopher Denhart is going to get, so try to spread this around as much as you can.

Long story short, free college education will cost the taxpayer (duh) and encourage free-riders and reckless (read: non-economically-productive) use of the newly-public good (ie, education). Which is the sort of argument I’d expect an ‘A’-level Economics student to come up with, who then fails his ‘A’-levels, because this line of reasoning is terrible.

My main problem with this article is that basic logic and data-analysis skills appear have completely fallen out of the writer’s skull. Now, I’m the furthest you can get from an economics wonk: when I attended a PPE interview for Oxford, my interviewer who asked me to draw a graph had to awkwardly remind me that graphs need X and Y axes as I stared at the paper in dismay (needless to say, I didn’t go to Oxford); I was the despair of my Economics teacher in junior college; I would probably be the despair of current Economics students in the school in which I teach English. Still, this article is either the product of someone whose grasp of economics is either worse than mine, or who is being deliberately obtuse in order to present a biased argument.

I genuinely cannot tell which it is.

While I know that this is bad form, I’m going to look at his points one by one rather than adopt an argument-based rebuttal, because unlike him I’m not paid to spew bad economics all over the Internet.

Weirdly enough, Christopher Denhart starts off by quoting Dorothee Stapelfeldt, senator for science in Hamburg (“Tuition fees are socially unjust”) and then completely fails, in his entire article, to address the issue of justice entirely, instead harping on cost and how it will affect behaviour, in an entirely one-sided manner.

Yes, Germany has a high tax burden at 49%. At the same time, the US has many times the rate of violent crimes than Germany: 3 times more gun crime (admittedly, this one is pretty unsurprising), 6 times more homicides, three times the rapes. All of these numbers are per capita, by the way: the gross figures are both much higher and literally gross. It has seven times the number of incarcerated persons per capita. It prosecutes eight times more adults per capita than Germany does.

Now it’s time for “I can do math too.” It costs $21,000 a year to keep someone in non-maximum-security prison. If America reduced its prisoners per capita to German levels, it could afford to put 1.02 million more students through college for free. That’s 5% of the current college cohort all across America, magically debt-free overnight, if America decides it wants to spend more money on its children than its convicts. Heck, you could send half of all incarcerated persons to college for that kind of money.

That seems like some pretty substantial value, Denhart.

“In a typical economic model for financing higher education, the consumer (student) would pay for the good that it consumes (education) and the research that researchers do would lead to innovations that have positive economic impact on society, therefore paying for themselves.”

1. The student is not the only, and arguably not even the main, ‘consumer’ or beneficiary of education. Not every student will go on study things that will necessary benefit them economically (it is often suboptimal for someone who qualifies for college to study nursing, teaching, and a host of other degrees); how is it fair to charge them for doing something less optimal than starting a business or going into a trade? In these cases, the main beneficiary and consumer is clearly society, that benefits from having nurses and teachers and social workers and artists and literati, even though all of these people are undercompensated for their choices. A free education is the *least* that can be done for them.

2. I’m not sure any workable (I’m not sure about typical) economic model can or should expect that “the research that researchers do would lead to innovations that have positive economic impact on society, thereby paying for themselves”, at least not in a manner that helps people pay for their education. That isn’t how research works. How many archaeology professors do you think pay off their student loans by stumbling on lost Confederate gold or by selling the Ark of the Covenant to Nazis? The notion that university research has to pay for itself in terms of ‘positive economic impacts on society’ is either going to lead to the humanities and the arts becoming utterly extinct (a real possibility) or requires an extremely flexible interpretation of ‘positive economic impacts’.

Denhart claims that “It is clear in the United States, with annual tuition fees in the $40,000s or $50,000s and millionaire university presidents, that federal subsidies have led to outrageous increases in university spending, as universities, administrators, and faculty enjoy the benefits of captured student loan and grant moneys.”

Except that isn’t clear at all. Are tuition fees high? Yes. Are some people in the university racket earning big bucks? Also yes. Is it clear that this is due to federal subsidies are leading to lavish increases in university spending? Hardly.

We have to ask what universities are spending all that money on. That Denhart has mentioned ‘millionaire university presidents’ is telling. Noam Chomksy suggests that the problem isn’t that universities are over-funded, whether by high tuition fees or excessive federal subsidies, but rather that universities are bloating administration and management at the expense of faculty.

Denhart then goes on to assay that tired piece of conventional wisdom: that higher taxes will drive people out of the country, and that Germany will suffer brain- and capital- drain due to rich people fleeing the country for not wanting to pay for other people’s college educations, tax revenue will fall, and then the system will collapse. Really? Sweden has higher taxes almost across the board compared to the US, but it has almost double the net migration (proportionately, more people are migrating to Sweden and fewer are leaving) and Sweden also has more billionaires per capita than the US does.

The thing is, no matter how educated or able you are, you can’t succeed on solo talent alone. Becoming a billionaire isn’t just about personal talent, that you can pack up and relocate to wherever your newest tax-haven-du-jour happens to be: it’s about building a successful company, an organisational process that is dependent on the welfare and well-being of people who might, on paper, be less ‘able’.

Denhart’s right-wing thinking, that hardship provides incentive for success is thoroughly entrenched in the Industrial era and post-Great-Depression bootstrappism.

This kind of wilful ignorance of inconvenient facts and misinterpretation of data is pretty much a feature of Denhart’s article.

1. “The United States has seen the rise of the five year degree. Of the 60% of students who graduate from public schools in the U.S., over half take longer than four years to graduate. Compare that with private institutions (there are natural differences in students at each type of school that pay (sic) a role) which see 80 percent of its graduates out in four years. Their sensitivity to the marginal cost of that fifth or sixth year factors into their decision to consume.”

Wow, gee, Denhart, “there are natural differences in students at each type of school that pay a role”. ‘Natural differences’, really? You don’t say? Would you like to say something about how only 25% of the top 20 American universities are publicly-funded? If the argument you’re making is that “our public universities are by and large worse than the private ones, and the students there somehow take longer to graduate”, congratulations! You’re now in the running for the No Shit, Sherlock Award of Q4 2014. America’s public universities are on the verge of collapse. Is it any wonder students who have scarcer resources to work with are taking longer to graduate? Not to me, but apparently the phenomenon is entirely inexplicable to Denhart, who thinks that it must be because they’re ‘insensitive to the cost of education’.

To the kind of student who has to attend public university, the cost of education isn’t just factored in tuition debt or not, but opportunity cost: they’re stuck in college, attending classes, working dead-end part-time jobs if they can get them at all, instead of going into a trade. That’s a pretty significant cost. Do you think they wouldn’t graduate faster if they could?

He then links to an off-site article, and claims that Germany is facing the same problem, that will get worse, because their students are graduating late.

Except he asserts (not proves) that the reason American students graduate late is essentially because they’re a bunch of free-loaders; the article to which he linked instead says that “(German) students were allowed to take semesters off to work, earn cash, travel, do work experience placements or study abroad”, and that attempts to shorten the study period of German universities students led to protests that the reforms would “would restrict the flexibility and depth of study”.

Gee, Denhart, they sure do sound like a bunch of slackers to me. All that work experience and worldliness is definitely not going to help them more than a degree would, am I right? High-five!

But wait! He says his argument only applies “If everyone decided to take an extra year to graduate, because it was free“. Well, that’s easily-solved, then! People take longer to graduate not because it’s free, but because they’re either going to schools that are worse (public universities in the US are suffering from budget cuts, shrinking faculties, fewer tenured teachers, and a whole host of other woes) or because they’re doing more important things while preparing for the workforce (like becoming worldlier, getting more work experience, and broadening their expertise). There! Misunderstanding solved! You’re a pretty OK guy, Denhart, it’s just that you make dumb assumptions with no evidence that they’re true.

He also says that publicly-funded education sucks in general, and his case in point is… America! Where schools are closing down but they can afford to give $3 billion to Israel to fund the illegal settlement of Palestinian land. Ooookay then. Maybe it has to do with the fact that America’s publicly-funded education system is inadequately funded (it receives below-average funding for an OECD country).

On the other hand, if we take a peek at the best education systems in the world, we notice that many of them (I believe the main exceptions are the UK/Ireland and HK) belong to countries with extremely generous public funding of education.

Maybe the public funding = shitty quality argument is a bit more complicated than you think, Denhart?

In fact, what all of his evidence seems to point at isn’t that Germany’s move to nationalise university education is a bad idea, but rather that America has no idea what it’s doing when it comes to social spending.

Let’s keep in mind that Christopher Denhart is the administrative director for The Center for College Affordability and Productivity, which aspires to “make higher education more affordable and qualitatively better”.

That really does explain a lot.

Nigel Na teaches rhetoric, argumentation, logic, critical-thinking, and aesthetic appreciation of language at a publicly-funded school in Singapore. He doesn’t administrate or direct anything particularly important but he once ran a D&D game at Cambridge University with a bunch of STEM types, so he obviously knows what he’s talking about when it comes to number-crunching.


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