In the midst of the ongoing debate about the crisis that is student loans, one option that increasingly is floated, that was floated during the last elections is ‘free college education’.
I encourage you to hear me out, not freak out when I say introduction of free college education in the United States of America will in aggregate hurt Americans and the American economy.
First, introduction of free college education implies professors’ salaries likely are revised downwards. A downward revision to salaries implies loss of incentives for provision of high quality education. A decrease in quality of college education at a time when Asian countries have become intellectual threats to American interests or comparative advantages cannot in long run augur well for Americans.
Second, introduction of free college education means much smaller funding for research. Research is engine of innovation. Absent good research, America would not lead the rest of the world when it comes to innovation. In presence of much smaller funding for research, and lower quality of education, relative to the rest of the world, America is guaranteed to lose it’s innovation edge.
How does a country shipping manufacturing jobs overseas maintain any comparative trading edge if it loses it’s edge in research, innovation, and quality of education?
Introduction of free college education is the knee jerk, give it to the capitalists, socialist or communist response to the current debacle that is state of student loans.
An economy whose viability relative to the rest of the world resides in it’s innovation potential, and actualized innovation, which combined are essence of capitalism, cannot afford an education system rooted in socialist or communist ideology. So then while free college education sounds idealistic and can work for countries whose economies do not revolve around innovation, it is not a pragmatic solution for the USA. What we really need is a ‘Pareto optimal Capitalist’ solution.
A Pareto optimal Capitalist solution attempts to balance interests of all parties…