Phi Beta Cons

Re: Profit Motive

I’d like to toss in my two cents’ worth.

There is nothing wrong with profit-seeking in any sort of education. Government subsidies are the villain here, as they are in every market in which they appear.

A market I’m very familiar with is music education. It’s a truly free market: no licensing, no regulations, no subsidies, no price controls. (In North Carolina, at least. I wouldn’t be too surprised if a few of our more dirigiste states have begun subjecting it to political control.) People who want musical education for themselves or their children can search for teachers, work out deals, and quit at any time they don’t think they’re getting their money’s worth. I don’t think you’ll find any high-pressure sales tactics. My 20-year-old son has been taking lessons since he was five, and while some of his teachers have been less than ideal, we’ve been overwhelmingly satisfied with the music instruction.

Now, what if the feds passed a law to give more young people “access” to music, setting up a program whereby the government would give grants of, say, $2,000 per year toward the cost of music lessons with “qualified” instructors. Very soon we’d find a) most teachers increasing their rates to capture at least some of that new music money, b) schools scouring the neighborhoods for parents of kids who might have great hidden musical genius in them, c) music schools employing financial-aid personnel to help all the new students sign up for their grants, d) politicians and consumer advocates bemoaning the shoddiness of some of the music teachers and schools, alleging that they pocket the money but actually teach very little music, and e) a new bureaucracy to promulgate and enforce standards for music instruction.

In short, the simple efficiency of music education as we know it would be supplanted with a wasteful, bureaucratic mess. And if the educational market for non-musical skills and knowledge had never been poisoned with federal money, it would be as clean and efficient as the music market is today. When people are spending their own money, they’re careful to weigh costs and benefits. That is the powerful “regulation” that disappears when you introduce third-party funding.

Sure, some for-profit higher ed is a scam. So is a lot of non-profit higher ed. The root of all evil: government money.

George Leef is the director of research for the John William Pope Center for Higher Education Policy.

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