Why Have Public Universities at All?

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Noah Millman -- blogger for The American Conservative

As long as I'm arguing with Matt Yglesias, he wrote something last week about higher education with which I have a bone to pick. His post was an argument with Mike Konczal over whether we should shift from our current system of subsidizing tuition for poor students to a system where we more heavily subsidize tuition for all students at state schools.

Here's Konczal:

What vision should we advance in response? . . . [O]ne where college is free and grants and loans cover supplemental expenses for the poor. Higher ed would be broadly accessible, with a variety of options ranging from elite schools to community colleges.

Beyond ensuring equality of opportunity, another advantage of this approach is that it would help stop cost inflation. Free public universities would function like the proposed "public option" of healthcare reform. If increased demand for higher education is causing cost inflation, then spending money to reduce tuition at public universities will reduce tuition at private universities by causing them to hold down tuition to compete. This public option would reduce informational problems by creating a baseline of quality that new institutions have to compete with, allowing for a smoother transition to new competitors. And it allows for democratic control over one of the basic elements of human existence--how we gather information and share it among ourselves.
Here's Yglesias in response:

Public universities started privatizing themselves before Medicaid and the Great Recession started squeezing state budgets precisely because they don't want to be subject to democratic control, they want to compete with private universities to recruit top faculty and move up the selectivity rankings. That means tapping all available sources of revenue--public subsidies, yes, but also donors and paying customers--in order to get the budgets necessary to have nice facilities, to prevent all your best faculty from getting poached, to keep those basketball programs going, and all the rest. Because obtaining a degree from a prestigious institution does carry private economic benefits, the tendency is for competition to push costs upwards as schools spend what it takes to be "the best" and find that students and their families are willing to pay what it takes.
Forgive me, but that sounds an awful lot like an argument for eliminating the public university system. Why, after all, should the state subsidize certain educational institutions if what they are fundamentally trying to do is the same thing that private universities do and in the same way?

I'm also puzzled because I raised this argument in a post last year, asking whether, if we were primarily interested in reducing costs in higher education, it wouldn't make sense to shift from subsidizing demand to subsidizing supply, which is precisely the argument that Konczal is making. I assumed Yglesias would disagree. But in comments he said, "Yeah, I agree with this analysis. I'm not sure why you think I disagree."

Of course, he doesn't tackle the cost question in his recent post directly, so it's possible that what he thinks is that, yes, a subsidy of supply would bring down costs, but that it's not worth it because it would reduce quality. That would be consistent with agreeing with my argument and disagreeing with Konczal, but it would tend to substantiate the title of my post ("Matt Yglesias Is Not A Left-Winger"). But it would raise the question of how one measures quality - something that I had thought Yglesias was very interested in. Indeed, I thought Yglesias was interested specifically in "increased demands for accountability" - particularly for highly selective universities that may not be adding much value at all, but simply sorting students by ability. Yet in this post he acts like calls for such accountability are a problem.

And, frankly, I'm very troubled by Yglesias's cavalier assumption that "democratic control" implies an end to academic freedom. Does he think "donor control" has similar implications, for those private colleges that rely on donations for a substantial portion of their budgets? Or "religious control" for those institutions of higher education that are affiliated with particular churches? I'd assume so. Why is "democratic control" uniquely pernicious, then? Nobody is talking about the state taking over the university system in its entirety.
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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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