Brian Gongol Show on WHO Radio - January 31, 2016

Brian Gongol

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Please note: These show notes may be in various stages of completion -- ranging from brainstormed notes through to well-polished monologues. Please excuse anything that may seem rough around the edges, as it may only be a first draft of a thought and not be fully representative of what was said on the air.

Free college for everyone? Why not?

"Free" college sounds attractive in theory, but you have to justify the huge intergenerational transfer of wealth that it would require by law. Why should my grandmother pay higher taxes (potentially much higher) so that I can go to college for free? If I earn more money in the workplace as a result of my degree, do I have to pay it back? There are lots of good reasons to make college accessible and affordable -- but calling it "free" is dangerously misleading. Someone has to pay, and just because college was right for many of us doesn't mean it's the *obligation* of everyone else to pay for it.

Why not free college education for everyone?

Because I can't justify it as a substitute under all circumstances for other better usees for the same taxpayer dollars.

Some college education is a high-return investment. Some is very low-return. Some is even negative on a lifetime-earnings basis (if someone chooses a low-return degree and loses out on several years of high earnings potential). Some is a net benefit to society, some is a net loss (if a brilliant mind goes into a useless field, what's the impact on society?).

Society's interests and input don't matter if it's a private transaction.

They matter only partially if it's a subsidized transaction.

They matter a great deal if it's a fully-subsidized transaction.

If it's "free" to the consumer, isn't that a transfer from taxpayers to the student? If so, how do you justify taking an intergenerational transfer from, for instance, a low-education retired person who would otherwise have spent their money on vacations or medical care? That transfer, to a young person who may choose to pursue a high-return education, may disproportionately diminish the surplus happiness experienced by the retiree while subsidizing the long-run benefit to the student.

We have very good reason to be irritated by intergenerational theft as occurs when one generation builds up a huge debt and leaves it for the next generation to pay. We shouldn't be hypocritical by insisting that older generations have to subsidize the wants of a younger generation.

To the extent that a well-educated workforce is a net benefit to society (especially in terms of higher tax returns via a larger economy), then society has an interest in providing a subsidy to human capital development. And there are less tangible benefits, like the value of an informed voter. But as college is still an area with quantifiable returns to investment and a wide range of possible outcomes, then it's arrogant to suggest that all college education should be subsidized equally without regard to what we are taking away from the taxpayers who provide the subsidy. Just as we should expect returns on investments in things like roads and airports and levees, so should we expect a return on other investments, like that of a college education.

We can't just offer it for free because it's "nice" -- nor because it helps someone get a higher-paid job; so owuld free transportation or free clothing or free housing. These things involve lots of individual choice, values, and discrimination among options and should be held to a high standard.

Note also that it's not just intergenerational transfer that can be hypocritical: What about the person who goes into a skilled trade for good reason and is then forced to subsidize with their earnings the shiftless pursuits of a Polynesian dance major? Or, perhaps worse, that of a future Wall Street broker?

This week

News "Why is it that voters in the world's greatest democracy are turning away from accomplished leaders in favour of untried individuals with worryingly simplistic ideas?"

Hard to put it better than that.

Reasonable people are needed at the caucuses this week. The two parties are both in critical condition. We need as many reasonable people as possible to show up and help mitigate the potential harm to be done by the crazier actors in the race.

Tin Foil Hat Award

News Denmark to confiscate cash and valuables from refugees to pay for asylum

On the surface, it looks like they're just using it to pay for the cost of shelter and care. But that kind of confiscation most certainly will have a chilling effect on the interest of any wealthy or middle-class asylum-seekers in going to Denmark, which probably will have the opposite of the intended effect. If you have wealth and you know it will be taken away, you'll probably avoid going there (which means asylum-seekers with advanced skills will be weeded out). But those who don't have anything consequently have nothing to lose.

Yay Capitalism Prize

Business and Finance Fixing poverty through market-friendly mechanisms

If we misunderstand the basis of poverty, then it's going to be hard to get the solutions right. On the other hand, if we recognize that market economics are probably the best tool for creating the wealth that resolves poverty and then deliberately apply lessons for enhancing that growth, then maybe we can do better at eliminating poverty.

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