From: leonard@mimsy.umd.edu (Leonard Dickens)
Newsgroups: alt.politics.libertarian
Subject: Re: Paying for education
Date: 7 Jan 93 04:45:55 GMT
Distribution: inet
Organization: Deep Thirteen, Gizmonics Institute

Mike Huben writes:
>[me:]
>>[him:]

>The distribution
>of capital-intensive education has ALWAYS been predominantly to the wealthiest
>EXCEPT where government subsidy occurs.

"Always been" being the key word here.  (I agree with this statement, btw.)
Just because something has always been, doesn't mean it must always be.  In
this case, the whole point of my article was to show a third way: a
libertarian way.  

Libertarian society still lies in the future; in my opinion there has never
been any society yet on this earth that one could honestly call libertarian.
Our own nation?  Gimme a break!  We have had slaves, and their oppressed
descendants, even up to the modern day.  Libertopia not.


>>The difference between our nation and the third world
>>is obvious: money!  We got it.  They don't.  Education -- a capital
>>intensive affair -- can be arranged here in ways that could never work
>>in the third world due to the far greater affuence of our society.
>
>The rest of your article was sufficiently intelligent that I won't bash you
>for using your "obviously" heuristic in your first sentence and then violating
>it in your third sentence here.  I'll presume you're joking.

Actually not, I used it entirely accidentally.  Mea culpa.  It is easy to do;
you see it a lot.  Nonetheless, I think that my heuristic applies: "obvious"??
Examine my statement carefully; I unknowingly flagged it myself.

I still think it makes sense.  If you go to a third world nation, I think one
of the most salient things you will almost instantly notice is the almost
unbelievable poverty, everywhere you look.

Obvious?


>>The government is
>>certainly capable of redistributing wealth -- but that wealth has to
>>ALREADY be there, somewhere, to be redistributed.
>
>It is in the interests of a nation to ensure that all its occupants are
>well educated to raise their productivity.  

True.  Given a choice between no redistribution at all, and government
mandated redistribution, I think I would go for the latter, at least until the
society was somewhat more wealthy than our own.  But I think there are even
better ways.


>Essentially all formal education
>is paid for by means of redistribution of wealth, either by government or
>within families because most students have little wealth.

Absolutely true.  What I am proposing is to redistribute the wealth from the
student's own future to his/her present.


>>In this case, the
>>government took money from many folks to pay for your education.  This
>>is a sense fair, however, since you will now be forced to pay money
>>until you die, partly for other folks' educations.
>
>Essentially the same situation, and same fairness as parents paying for a
>child's education as a way of repaying their own educations.  However there
>are several important and beneficial differences.  First, government
>redistribution helps ensure access to education for all, whereas family
>redistribution doesn't work for the poor.  Second, family redistribution
>doesn't work well "fairly" unless you have exactly two children: non-parents
>never repay, and parents of many overpay or can't pay enough.  Third, those
>who benefitted the most (and there is a strong correlation with amount of
>money spent) repay the most under government redistribution.

All three points are astute; however, I urge you to examine point 2 in the
context of government redistribution.  Government redistribution is unfair
unless each person has one child; those who have more are effectively
benefitting at the expense of those who have less.

Note also that having the government run things essentially takes away from
anyone who manages to get by WITHOUT getting an education; such self-made
people would still have to pay for the education of others.

Contrast the above with my libertarian idea.  Essentially every person at the
age of eighteen has a future; and he or she has exactly one future; no more.
(Possibly less, but unlikely.)  This is a much neater balance.


>>Therefore, it should be worth it for
>>students to BORROW their $60K from a financial institution, subject to
>>repayment over, say, a ten year "mortgage" starting in four years.
>
>Why start at college?  Let everybody graduate high school with a $60,000
>debt (that's extremely low compared to many school districts).  :-(
>Then we'd be well on our way to restoring indentured servitude.

I have some 40 more years of work ahead of me, paying perhaps 60K average.
(Just an estimate, but ballpark.)  That's 2.4M dollars; about 800K will go for
taxes.  Indentured servitude?  No.  Resentable?  Yes.


>It's funny that so many libertarians complain about our all owing about $20K
>each for the national debt, yet think everybody who wants to get educated
>should be saddled with a much larger debt.

We would not complain had the 20K apiece been in our control, to spend on
ourselves.  At least, I would not.  I am perfectly willing to assume
responsibility for my own debts.  I am unwilling to assume responsibility for
the debts of others.  Especially foolish ones.


>>It would be
>>nice if people could contract with the government to "tax" them
>>"extra" at some rate to pay into things like student loans or IRAs.
>>Lenders could then merely stipulate such a contract for their repayment 
>>as a term, freeing them from worrying about your default
>
>This is exactly the purpose of the guaranteed educational loan program.
>The government guarantees repayment to banks to encourage risky loans to
>students.  I used this program also.  (All paid back for several years now.)

The difference being, the loans do not tend to be large enough and the
government seems to be unwilling to pursue people defaulting on their
repayment.


>There is a basic problem of anarchistic libertarianism in that little money
>will be invested in schemes where it is uneconomic to collect fees from the
>beneficiaries.  Such as risky educational loans.  Or public goods.

I think my scheme shows that risky educational loans, at leat, are conceivable.
It is up to the founders of a libertarian society to implement mechanisms to
insure such goods are worthwhile to invest in.

-Leonard
Newsgroups: alt.politics.libertarian