Many Americans have been conditioned to believe that for-profit enterprises (or any sort, but particularly in education) are suspect if not downright immoral, whereas entitles organized as “non-profit” are presumptively good. The latter supposedly put the interests of the people they serve above the interests of the greedy shareholders. Behind the smokescreen of noble intentions, the people who run non-profits often operate far more in their own interests than any profit-seeking enterprise could.

All of that pertains to today’s Pope Center Clarion Call by law and economics scholar Henry Manne. In the piece, he takes severe issue with a recent paper by Robert Shireman, a zealous opponent of for-profit higher education. Shireman’s paper makes the case that for-profit education requires far more strict regulation than non-profit because administrators in non-profit schools can be trusted not to put their own interests first. Professor Manne argues strongly that the difference between for-profit education and non-profit education is a mirage.

One point I would add is that the evident scams we see in both the for-profit and “non-profit” sectors stems from the easily availability of government funds. Where individuals spend their own money on education, whether at for- or non-profit entities, they’re pretty good at making sure they receive sufficient value for their money. Otherwise, they quickly go elsewhere. Milton Friedman’s point that no one spends other people’s money as carefully as he spends his own applies with great force here.