The Economic Consequences of a “Free” Education

I am somewhat glad that Bernie Sanders is running in the election.  No, I don’t support him or any of his policies but, his candidacy at least will stimulate real discussion about real issues.  Unlike Hillary, who only seems to gin up talk about emails and how she is a woman.

Anyway, the latest issue is higher education.  Long story short, Sanders wants to provide a full four year education, gratis, to all qualifying students.

Sanders: “We live in a highly competitive global economy and, if our economy is to be strong, we need the best workforce in the world.”

Yes, we live in a very competitive global economy.  But, we also live in a very competitive domestic economy.

Now, what happens when a commodity becomes more abundant, but demand stays roughly the same?  The price of that commodity goes down.  Is not labor, even educated labor, little more than a commodity?

It is already hard enough for college graduates to find jobs.  What about adding thousands – no, hundreds of thousands – more?   It is something to have an increased number of college graduates.  But it means nothing if they cannot find a job or career worthy of their talent.

So I fear then, that this “investment” Sanders speaks of will be in vain.  If a private investor makes a bad investment, he accepts the consequences of that and with his own money.  Quite the contrary when a government makes an “investment” – it is done with other people’s money and the government will not have to accept any consequences of a mistake.

And the consequences will be far more reaching than this.

Not only will we have a glut of educated and qualified employees with no jobs for them to fill, we will also raise the cost of education higher.  Was it not government subsidy which prompted the colleges to raise the price further?  Do colleges not have an unending quest to squeeze out every dime they can?

And, thirdly, because of the increased amount of persons with Bachelor’s degrees, we might someday expect politicians to call for subsidized Masters degrees or even Doctorates degrees in order for us to become “more competitive.”  What will we say then?

Conclusion?  None of these people really understand the concept of competition.

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