In other words, a misperception of lower prices paid by the student economically translates into a lower estimate of the worth of the student and consequently to a lower desire to cater to the student's needs. In a subsidized system, students and parents also tend to misperceive prices. This misperception is a natural reaction and leads to lowered respect for the educational system. Human beings just never muster the same respect for things they perceive as cheap, i.e., very low priced - because a perceived low price carries the implication that the good or service is easily replaced. We do not value easily replaced items as much as we do hard to replace items.
Value is what prices in a free market accurately reflect.
Under our tax-subsidy system, the reflection is badly distorted. Market Principles Apply Let me emphasize that the principles of pricing as applied to education are principles of economics which apply to all fields of production and services equally. And let me emphasize also that, yes, there are many good, conscientious people in our educational establishment. This paper has not been meant as an attack on them. But from an economic viewpoint, the result of a wrongly viewed estimate of the price of education will, in the long run, tend to result in all of the profoundly negative effects mentioned.