Kevin D. Williamson’s “Socialism Is Back” (January 24) is a very informative, delightfully written piece. But I want to dispute what may seem like a minor point: his characterization of the Marxist theory of prices as “objective” vis-à-vis “the radical subjectivism of Mises.”
Respectfully, I suggest that the exact opposite is true. The Marxist theory of prices lives only inside the head of whichever Marxist is trying to think about it. It is whimsical, capricious, and arbitrary, and thus is markedly subjective by any reasonable definition of the term. Mises’s theory of price, by contrast, is anchored in the objective facts of reality, i.e., in the behavior of the market itself. That the market responds to the irrational as well as the rational desires of people does not mean that the market itself is subjective or irrational.
Henry E. Blackwell
Kevin D. Williamson replies: I wrote that Marxists believe prices to be objective, which they do. And Austrians believe prices to be subjective, in the sense that the price is not inherent in the thing itself but dependent upon the buyer’s valuation of the thing.
Educational Penny Stocks
Kevin A. Hassett (“Ivy Chase,” January 24) is correct to point out that education at public colleges and universities can be an excellent investment. However, his conclusions are hardly as surprising as he suggests, the data he uses are fuzzy, and his basic assumption is misguided.
First of all, asserting that private schools are better than public ones may be “conventional wisdom,” but asserting that they are several times as good, and so worth the several-times-higher tuition, is not.
Moreover, Hassett provides no evidence that the Payscale data he cites are controlled. Might there be a difference between the pool of students who go to the University of Delaware versus those who go to MIT versus those in the control group of high-school graduates? Might they have different abilities, and choose different careers? And might these discrepancies affect the results?
But the biggest problem is that calculating a “return on investment” (ROI) for one’s tuition money yields a meaningless figure. If, as Hassett writes, you’ll make a 12.3 percent ROI at a private school and 13.4 percent at a public school, does the smart money shell out a few grand for the public school and park the rest in pork-belly futures? Also, not everyone pays retail price. If Siwash State offers enough financial aid that you have to pay only a few thousand dollars, should you give up on Swarthmore in favor of this super-sweet ROI?
Most students are trying to find the best place to spend four years of their life while gaining an education, not the best place to spend their parents’ money. For those concerned with such things, the cumulative lifetime return on their education is much more important than the return as a percentage of tuition. And by that measure, as Hassett concedes, private schools are, in fact, better.
St. Cloud, Minn.