What would a Libertarian America be like?

Great Debates
161

Tony Blair and New Labour agreed with you, hence why we have exactly that system in this country now for all unis (so they are in essence now all private). However those that claim they really are too poor to be able to go to uni are assessed and given grants if its found that not doing that would stop them going. Unfortunately this fairly sensible (and necessary, given that the funding needs of universities) change to higher education funding was done on top of a separate target that 50% of the population should attain higher education at some point in their life.

So it’s now very expensive to go to uni and you finance yourself the same way you buy a house (large loan, low interest rate over a long time, you only take out what you can afford to repay, your financial staus is screwed if you default) but half the population is expected and strongly encouraged to go. Result: the people who wouldn’t have gone to uni due to the costs are being advised to go at 18 anyway to get bums on seats, and this leaves them with a degree that doesn’t necessarily help their career (meaning they don’t earn more money than not having a degree, making paying off a huge loan a bit difficult). The 50% target has also had the effect of lowering the entry level requirements for lots of unis (again, bums on seats) meaning that there are people going to uni who really probably shouldn’t just to make up the numbers, which is having a recognised impact on

  1. the respect a UK degree now carries (“anyone can get one”) and
  2. the number of people at uni who shouldn’t really be there (“unis are full of people who wouldn’t have gone years ago so they really must be dumbing down”).

1 means that degrees are now less valuable in the eyes of employers (and therefore worth less financially) and 2 means that teaching degrees to a higher standard to counteract 1 is made harder. A friend of mine is a lecturer at uni and will testify that this really is the case, although in her opinion the small number of pupils who shouldn’t be there are just more likely to be remembered by lecturers as the most difficult to teach (which probably has a detrimental impact on subjective assessments of whether there really is a decline on the intelligence/ability of uni students).

So sorry to burst any libertarian bubbles, but the evidence in the UK is that taking away grant funding for degrees doesn’t necessarily make them more valuable to employers unless other efforts are being made to ensure that the degree is also respected as a qualification. Making them more expensive on its own doesn’t work, because to make that funding fair and not restrict access to education you need to do it in a way that doesn’t disincentivise higher education, and so the problem remains just with bigger debt for each student (aka a “second mortgage before you’ve left university”, as it has been dubbed).

This last point is why the reform to student finance was so violently opposed in Parliament and the media to the point that at one point it looked like it was going to topple Blair (if the bill had failed it would have been a vote of no confidence in the government as it implementing a manifesto commitment, which normally triggers a general election).

Anyway, back to US libertarians (the gun-carrying kind): Jared Diamond made a point in “Collapse” that it was mainly anti-government libertarians with rifles in their hands who made it difficult for any public discusion to be had on how best to get federal funding for environmental protection necessary to ensure that Montanna stays the naturally beautiful state that he claims it is. So in essence the libertarian idea of freedom from central government tyranny means terrorising others into submission (potentially with guns) if they look like they disagree with you. Sounds like a wonderful system to base a government on, and definitely much better than the current system most western countries have were the government taxes wealth to try and make society better for everyone :rolleyes: .

162

How, exactly, did these gun toting “libertarians” prevent public disucssion from taking place? Did they break into town halls and start shooting? Methinks either you misread Diamond, or he’s a bit kooky (or both). And the last time I was up in Montana (just last year), it was just as beautiful as it was when I first went there about 30 years ago.

163

Illuminatiprimus - you’re missing the problems inherent in public funding of higher education. First, it illustrates the problem with letting the people vote for their own bread and circuses - everyone wants their kid to go to college. But no one wants to pay for it. So we get public funding of higher education, and we remove the barriers for anyone to get in. What would econ 101 tell us is going to happen? You’ll get a spike in the demand for higher education. Crowded classrooms, harried professors, and lots and lots of disruptive students who are only there because they can party on the government’s nickel.

How do the schools respond to increased demand? One of two possible ways - they expand, or they raise prices. So the private schools get much more expensive, we get a huge expansion of public universities and colleges, etc.

And of these people we push into higher education? Lots of them don’t graduate. Or they graduate because standards have been drastically lowered. The end result- a worthless degree. In the meantime, they’re swallowing up resources that could be used by the ones who would really benefit from it.

The dirty secret about our education system is that not everyone belongs in college. There’s nothing wrong with learning a trade. But tradespeople are getting scarce around here - they typically make far more than your average university grad. My brother is a journeyman, and right now he’s pulling almost 75K in regular salary and another 40K in overtime.

Going to college is a serious luxury that poorer people just can’t afford. And I’m talking about AFTER college, not the cost of actually being there. Take two people - send one to college for 4 years, and put the other one in an apprenticeship program. At the end of 4 years, the college student will be starting with maybe 40K-100K in debt and no job experience. The other guy will be a licensed journeyman, having earned maybe $100K in those 4 years and he’s got a job with seniority and a very good salary. He may already own a house. Financially, the college student may never catch up. And he’ll be living like a pauper for the next 5-10 years as he tries to get started in life while paying back all that loan money.

When you offer zero-down mortgages, do you expect more people to buy houses - people who possibly shouldn’t be buying, but are enticed by the no-cost front end of the deal? The same thing happens with college. Give somebody a gift for going, and you’ll push people in who otherwise wouldn’t or shouldn’t be there.

Put a kid in college who doesn’t belong there, and it will cost them dearly. It used to be that the cost of admission was high enough that only the really motivated kids went to college. Or if you were smart enough, you got good enough grades for a scholarship. The result was a high grade of post-secondary student, and they took degrees that had a good chance of landing them a job good enough to pay back their loans.

Putting the burden on the kids and the family also meant that the kids studied their asses off in high school to get scholarships, and their parents actually saved money for college. These are positive incentives that make for good students, and for students who arrived better prepared for a university curriculum.

Now think about what happens when you publically fund the schools, and set the standards such that almost anyone can go. The parents become ambivalent - they’re not footing the bill for school, so hey, whatever the kid wants. The kids become ambivalent. With nothing at risk, it’s easy to slack off. The schools become ambivalent. They’re not answerable to parents any more - just to the government bureaucracy. Quality goes down, prices go up, and a lot of kids take the lure of an easy college lifestyle and make bad choices about their careers and education.

I understand the social need of having poor kids properly educated. I just wish people on the other side would recognize that government isn’t a panacea, and that government action carries unintended consequences.

164

Samstone - I don’t think I am missing the point, seeing as nothing you wrote necessarily contradicted what I said. I’m agreeing that social manipulation of a market force can have unintended and negative outcomes, therefore better not to do it unless you really know what you’re doing (which politicians often don’t, I’m sorry to say). I think the modern funding system we have of easily obtainable, low interest loans that you pay back over the course of your career to finance higher education is better than grants for everyone, for exactly the reasons you’ve outlined. My point is that this reform was made whilst at the sametime having a target for higher education participation that negates the benefits of that reform.

So I don’t think we’re disagreeing, are we? Maybe your stance is different to mine in that I believe that the children of poor people should be given greater access to that finance (or to limited grants) to ensure they’re not discriminated against due to their poverty, which you don’t need to do for the rich because they can finance it out of their own pocket (which is exactly what they should do). Is it that last part you don’t agree with?

165

I agree that we shouldn’t use college as a place to pack away high school graduates with no better plans for four years. (The consequences of these kind of students are clear - they end up getting elected President and invading Iraq.) But I do believe that a eighteen year old who is qualified to attend college in every way except for a lack of tuition should be provided with a loan. The student gets to go to college, where he or she improves their prospects for life and makes themselves better able to pay back the loan; the college gets tuition money and a good student; and, once the loan is paid back, the rest of us are out nothing and get the benefit of another educated citizen.

166

So… Would you tie a student loan to the ability to repay? Is it acceptable for a kid from a poor family to get a student loan so that he/she can study, say, medieval literature with no prospects for ever getting a job in that field?

I’m right with you if we can agree that kids with no other source of income have to take degrees in fields that have good job prospects, and if we tie the continuation of student loans to getting acceptable grades each semester in college. You want to study to be an engineer or a doctor? Fine. Here’s a student loan. You want to spend four years taking a general fine arts degree, because you don’t know what to do with your life? Find your own way to pay for it.

One of the problems we currently have is that we hand out student loans willy-nilly under the assumption that ‘all education is good’. So we encourage kids to take degrees in subject with no possibility of developing into a real career. Then they get out of school and wind up working at Radio Shack and trying to pay back $80,000 in student loans. This does them no favors.

167

Sam, if you’ve figured out a means to determine future ability to pay back a loan, you should be talking to the banks. Absent that, we’ll be forced to stick with the established methods of statistically determining a level where the majority of borrowers pay back their loans and use the interest from them to cover for the losses caused by the minority of defaulters.

As for me, I’d pretty much make it a universal loan for any college. If a young student wants to go $80,000 in debt to study Medieval Literature then I guess he’s either going to have to become a really successful scholar or he’s going to be working a lot of overtime shifts at Radio Shack. But I don’t think the government should be setting standards on what is useful work and telling people what careers they should follow.

168

I agree completely that if a student wants to spend 80k to study medieval literature, he should have that right. I’m not sure why I should have to fund it though. Private loans for education are available, and they work on exactly the principle you describe: the interest covers both inflation and the risk of default. Such loans tend to have higher interest rates than govt loans, because banks–brace yourself–are in the business of not losing money on bad investments, unlike the govt.

I completely agree with your last sentence, but would use it as an argument for govt to get out of the business of loaning money for higher education entirely. Why should “pursuing one’s dream” in the classroom by taxpayer subsidized, but pursuing one’s dream in business not? If I want to open up a store selling widgets, I either need to fund it myself, or get a loan from someone who thinks it’s a good enough idea to invest in. I’m not entitled to a below-market rate loan at the taxpayer’s dime just because it’s been my life long dream to own a widget store. Nor should people be entitled to such a loan to follow their lifelong dreams of studying underwater basketweaving.

169

Some countries have much more generous public funding for college students than the U.S. has. Do those countries have the problems you’re worried about?

170

How do you envision America in the future.? We can not compete with the rest of the world in wages. Therefore all the work will go abroad. This is good according to Libertarians. Competition is good and driving down wages will increase god ,I mean profits. The rich will get incredibly richer and the poor will eat rocks. But only for a short time. Then we discover the mass market requires mass people with money. If the rest of us poor suckers dont get a ride on the gravy train we suffer. Who will buy cars/ Who will buy anything not related to survival.?
No public education if you can’t afford it you don’t deserve it. We will dumb down our populace. No programs to feed and help support the needy. They are not worthy.
What does it look like when you are done?

171

Excellent points gonzomax–on par with your lucid comments on gas prices in that thread. I had not thought about the consequences of the poor eating rocks if we eliminate federal subsidies for higher education, or the fact that god=profits according to some people. I’ve also thoroughly [sic]'ed your post to show the value of a good education.

172

The point is that banks are in the business of maximizing their profits - assuming they make college loans at all (they may decide car loans or home mortgages are a better investment) they’re going to target the students who come from better fiancial backgrounds, are better prospects for a loan, and don’t actually need a loan as badly as somebody who’s genuinely dirt poor.

The government, on the other hand, does not have a direct profit motive. It can afford to pursue a revenue-neutral program to give loans to students who would not qualify for a commercial loan. The results of such a program would be fewer poor citizens and more educated citizens - both of which benefit the nation as a whole.

The problem is a lot of Libertarians are apparently willing to write off anyone who didn’t have the foresight to be born into a well off family. If you’re born poor in an “ideal” Libertarian society, you will probably never be able to afford to do anything to change your condition, so you’ll most likely die poor (after having the next generation of poor children). I feel it is a legitimate goal of society, acting through the services of a government, to intervene in some cases and offer opportunities to some of its citizens to rise out of poverty and become capable of supporting themselves.

As for “underwater basketweaving” I believe the only higher education institute currently offering a major in that field is Strawman University, so I don’t see any need to address that special case.