Democrat presidential candidate and Vermont senator Bernie Sanders is perpetuating the myth of the free lunch with his recently introduced College for All Act, legislation with a gloriously populist title (Marx would be proud) and about as much hope for success as the never-ending search for sparkly pink unicorns.
Bernie’s audacious legislation will “eliminate undergraduate tuition at four-year public colleges and universities.” And Sanders himself alleges that it is “fully paid for by imposing a Robin Hood tax on Wall Street.”
The bill is an impressive demagogic appeal: it takes a snipe at those evil Wall Street guys, hands even more power to our benevolent and completely unbiased federal overseers, and promises free stuff to starving college students. As intriguing as the offer might sound to the uninitiated, the College for All Act is sheer economic fantasy; its failures begin with the fact that it gives colleges and universities the perfect chance to waste even more time and money on a federally funded racketeering scheme, pushing tuition costs to loftier and loftier heights in an accursed circle of perverse incentives.
“Most people now see college as an entitlement to be provided largely at ‘public’ expense. It shouldn’t be,” says George Leef, “If we hadn’t made the blunder of getting government involved in college education, it would today cost much less and deliver more value. That’s because it would be subject to the test of the market. Instead, it’s like an overweight gorilla that has been stuffing itself on taxpayer dollars for many years.”
When government begins to finance a failing corporation, or otherwise one that allegedly needs “strengthening,” the recipient corporation is freed from its obligations to run efficiently and satisfy its consumers. The federal government began subsidizing tuition and universities in 1944 and has not looked back since.
A few student loan crises and credential-based college bubbles later, the wisdom of government involvement in higher education is questionable—particularly in light of the skyrocketing costs of tuition and textbooks. Interestingly enough, college tuition has gone up 1225% since 1978; the CPI has only risen by 279%.
Unfortunately, there is no such thing as a free lunch. Sanders pays halfhearted lip service to this fact by pretending that only despicable Wall Street desperadoes will suffer in funding America’s college degrees, but in reality such a proposal would create enough perverse incentives for students to misuse and abuse college opportunities and for colleges to jack up prices (since, after all, a person who isn’t paying isn’t concerned with costs) that overall tuition costs would balloon out of proportion and affect all participants and taxpayers in the United States economy. In the end, an absurd chunk of GDP would be swallowed up by higher education’s ever-rising costs.
The pink unicorn will never be found; it does not exist, and Sanders should stop feigning that socialization of tuition would bring it into existence. Rather, government intervention and funding of higher education—at all levels—should end. The United States should return to reality and privatize its public universities and colleges, end federal student aid and federally backed student loans, and allow the price of a diploma to return to reasonable levels that match actual market utility.