Barack Obama – a graduate of Columbia and Harvard – wants his government to assume direct responsibility for making student loans. Obama is upset that politically-connected banks are profiteering off of the current government-backed loan regime. He has a point. If you’re going to have socialism, why involve “capitalist” middle men?
Obama’s official stance is that direct government lending will help make college more affordable, and thus improve American “competitiveness.” I don’t know how one goes about measuring “competitiveness,” or for that matter, how much of an improvement is sufficient. Will direct government lending be a success if competitiveness improves 50%? Or 25%? And how long a time period will we need to aggregate the data?Setting that problem aside, the basic error with Obama’s argument is his assumption that a college degree – one financed by debt, mind you – is an essential factor in economic production. It is not. Tim Swanson and Gary North, among others, have written eloquently on this subject. A key point is that the price of a college degree price is driven not by the cost of receiving instruction, but by consumption of tangential services. As Swanson explained,
Campuses across the country, especially those run at large State institutions are inefficient planned economies — microcosms of socialism in action. As Rothbard’s law predicts, the University is not specializing in what it does best. Like an octopus, its tentacles end up in many unrelated pies in which scarce resources are diverted to enterprises and endeavors that stray from what its human capital does best: research and scholarship. The administration involves itself in a smorgasbord of activities that range from acting as surrogate parents and landlords to maintaining campus hospitals and transportation services. Monopolizing food services, dorm-room cleaning (which now apparently involves class-warfare) and even landscaping – no enterprise is too small to be left alone nor too big to be undertaken.
It is the “microcosms of socialism in action” that most excite politicians like Obama. The modern university is their model for the country as a whole. The university teaches emerging adults important lessons in statism: Early assumption of debt, overconsumption of inferior services at artificially inflated prices, the moral superiority of leisure over work, and most importantly, how to get others to subsidize your specialization in subjects with little or no value on the free market. In short, college teaches young adults to think like politicians.
Obama and his courtiers are just smart enough to realize they need to keep the university system functioning at or above current levels of non-productivity. The fear is not that young adults will be unable to get high-paying jobs due to a lack of a state-backed college diploma; it’s that these same people will – Obama forbid! – go out and become productive without the “benefit” of the state’s generosity. A nation of 18- and 19-year-olds starting their own businesses would be a death-knell for the political class and its dreams of perpetual graduate study and “community service.”
(Of course, thanks to the forced institutionalization of humans from the ages of 5 to 18, many young adults lack the capacity to engage in productive activity on their own; in a sense, college is “bayoneting the survivors.”)
It’s scary to ponder how much potential wealth creation has been lost to the scourge of university socialism. In what should be prime years of mental and physical development, millions of young adults are practically forced to spend four (or more) years engaged in unproductive tasks, spending beyond their non-existent means, and abusing their minds and bodies with various substances. Indeed, college itself has become a narcotic, a mechanism for addicting people to the state and its institutions.
Don’t get me wrong. I’m not anti-education or even anti-university. All libertarians agree that health care is good, even though health care socialism is bad. The same is true of university socialism. Unfortunately, I have occasionally crossed paths with relatively bright young libertarians who continue to cling to the notion that “taking over the academy” is a valid method for advancing individual rights. I remember one dinner I had with an Objectivist student who berated me for writing articles about government abuses of individuals. They told me it was useless to do such work; the real advances would be made by going to school, obtaining a Ph.D, and becoming a prominent professor. Then I could begin the real work of advancing liberty! University socialism, it turns out, is not an exclusively liberal or leftist phenomenon.
Given the choice between advancing Austrian economics and libertarian ethics directly to the public or attempting to navigate a socialist, fundamentally anti-libertarian university system in the hopes of exercising a modicum of influence in 20 years, I’m taking the former route. If only I’d learned that lesson before spending five years of my life getting a bachelor’s degree (er, I mean they were the best years of my life!)
{ 14 comments }
“Obama is upset that politically-connected banks are profiteering off of the current government-backed loan regime. He has a point. If you’re going to have socialism, why involve ‘capitalist’ middle men?”
Am I right in assuming that capitalism is in quotes because politically-connected banks are fascist, not capitalist?
As a high school teacher, I’ve seen how public schools are more socialist–albeit of the totalitarian flavor–than universities.
For me college was financially a bust, as I borrowed 90k for my undergrad and master’s all to become a teacher; at least in a free market system, I could go bankrupt, but the corporatist system will not allow it. Obama will replace the bad corporatist setup with a worse socialist system; the government will directly own my debt, making me a debtor to the state for the next 30 years. Frightening.
For some reason you believe that Obama actually means what he says. The truth is that this has nothing to do with education. This is a method of paying the Teacher’s Union directly from the government. There is always a hidden agenda in anything Obama does because his people know that if he says or does it directly the political backlash will be overwhelming.
Assuming a six year tour of indoctrination, you accumulated debt at $15K a year. You have apparently chosen, based upon your comments, to play the victim – a stooge for the creditor class – by swallowing the statists’ propaganda hook, line and sinker.
The debt you speak of is miniscule in the lifetime of a productive individual. Work two jobs for five years and pay off your indoctrination fees. As you go about that, attempt to uncover the real source of your “debtor status”. I think you may find a much more frightening realization (it ain’t Obama), upon true introspection.
The collusion between the statists and the corporatists to “engineer” a wimpering, mind-numbed, obedient proliteriat is rampant. Wait until the “nanny state” transforms itself into the “Crazy Uncle Joe/Adolph/Bennito” state. Wanna work for food? Whatta deal!!!
Pardon for not knowing, what’s the purpose of getting a higher education? Rather, what is the purpose for getting 12 years of compulsory education? Why not six or three? After a Ph.D., I am still asking these questions? I maintain my existence without dragging letters behind my name. But if it pleases others, I’ll oblige in order to get my invoices settled.
Whether you work or attend a university, it is the best example of true socialism in the United States of America. The walls are closing in more so with government control of student loans, run students, run.
All your pretty prose don’t obliterate the fact that the Chinese have more post-graduate students with IQ’s of 130+ than the U.S.A. has high school students, drop-outs included! It is not by dumb-fvck luck that the Chinese have a Chev “Volt” knock-off driving the streets of Shanghai as we speak, and a contract to provide America’s best friend, Israel, a shipment of them, ouch! Yankee Doodle! that hurts the tender brown spot doesn’t it, and it is not by mere chance that GM, is searching in Korea for batteries to install in the “All-American” U.S. “Volt”, which, by the way, is still vapor-ware, airbrushed P.R. or simply Bullshit – at best! Asia controls the computer world from India by satellite to the U.S., reducing employment here, and we paid for the fvcking satellite! Ubuntu, an Open Source free software package available on the net trumps Microsoft’s well financed, very expensive “American Developed” products, and will soon replace them world wide, as computing folks shy away from that companies attempts at covering its ass with crap like the “Vista” line! The old vulture capitalists ruse , the annual model change for cars has been forsaken by Asian manufacturers, and quality has been built right into their products and ten year guarantees show they know what they are doing! Ramming indolent, uncaring fat-assed, over-fed, underemployed uninspired American children through to useless college diplomas, that lead nowhere in a dying country, will not turn America around! The great republican depression, and all its misery and doom will! Hungry, deprived, inspired, hurting hard pressed hard running morally chaste seekers of a better circumstance, as the Chinese are, and we used to be, make more of school time than socialist backed, guaranteed graduates, (See the downfall of the U.S.S.R. and alcoholism there) and they strive, after graduation, as before graduation, to do better, rather than sit about in expectance of more handed our rewards by a socialist and broken government!
^^ Wow. That was neither intelligent nor civil. Perhaps you could put a beat behind it and make it a new hip-hop sensation. Really, what was the point of that whole rant?
venting as therapy.
frank, i think robert is right. if 90K is the price you have to pay to see the bankruptcy of the education paradigm, you’re better off than many who don’t wake up till much later in life.
frank, i think robert is right. if 90K is the price you have to pay to see the bankruptcy of the education paradigm, you’re better off than many who don’t wake up till much later in life.
frank, i think robert is right. if 90K is the price you have to pay to see the bankruptcy of the education paradigm, you’re better off than many who don’t wake up till much later in life.
sorry. fell into the echo-chamber.
Schooling is the second biggest racket in America (after war, of course). It’s completely statist, and has been for a very long time.
It stuns me (even though I am largely beyond being stunned by much any more) that Obama would even attempt to argue that government-sponsored easy credit for schooling will make college more “affordable.” Sure. Just like government-sponsored easy credit for mortgages made housing more affordable. Unbelievable.
If I had it over again, I would have left school at 15 and made my own way in the world. Participating in the scam we call schooling was worse than a waste of time. Schooling was affirmatively counter-productive, setting me back both financially and intellectually.
One of my favorite questions to ask my fellow collegiates (especially the econ and business major) is, “does the law of supply & demand not apply to your college dimploma?”
“Unfortunately, I have occasionally crossed paths with relatively bright young libertarians who continue to cling to the notion that “taking over the academy” is a valid method for advancing individual rights.”
Yes, the academic route is not a very good strategy for promoting libertarianism. Secession is much more effective.
But if we’re talking about promoting economic science, then there’s no real alternative to joining the scientific community. Reaching out to the public will popularize Austrian economics, but will not advance it.
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