A RESPONSE TO WARREN GOLDFARB

Warren Goldfarb offers a spirited defense of Harvard in response to my idle snarking about the rise in  the price of tuition.  If there is anyone reading this blog who does not know [and that is unlikely], Professor Goldfarb, a distinguished logician and philosopher of mathematics at Harvard, is the latest in a long line stretching back through my old friend, Charles Parsons, to his teacher and mine, Willard Van Orman Quine, and thence to his teachers Clarence Irving Lewis and Alfred North Whitehead.  Here is what Warren says:

"I don't understand your objection, since what Harvard (and the other rich universities) do is simply an income redistribution, which I presume is the sort of thing you like. Here are our facts: only 40% of Harvard undergraduates pay full freight. They subsidize the others: those with family income at most $65K pay nothing (neither tuition nor room & board) — and apparently this is 20% of our student population; and there's a sliding scale up to family income of $150K, who pay at most 10% of their income.
This is far more generous financial aid than was available in your day or my day. Of course it presupposes the greater income inequality that exists in America today, but it exploits it for good purposes. I see no reason not to soak the wealthy families whose kids get admitted."

Warren describes a curious situation.  Let me see whether I can summarize it.  In the middle of the twentieth century, an old and highly respected firm sells a service to its clients for $6000 a year in constant 2015 dollars.  There are more clients than the firm can or wishes to serve, but not many more.  An impecunious client can, if he wishes [all of the firm's clients then are male], find a job for 0.75 cents an hour [which, in 2015 money is $7.39 an hour, just about the federal minimum wage] and by working ten hours a week during the Fall and Spring and full-time in the summer earn enough to pay for the service and associated expenses.  He will not need to take out loans or beggar his family to obtain the service.

Sixty-five years later, the same old firm, now even more highly respected if that were possible, is offering essentially the identical service for 45,000 2015 dollars, and it is simply flooded with young men and [now] young women frantic to obtain the service, whose price has risen 750% but whose quality and essential character have not changed.

The firm, now fabulously wealthy, decides to give away its service free to some of the least well-to-do of its potential clients, and at discounted rates to others [some of whom need only pay two and a half times as much as the service used to coast], while yet another group of clients are required to pay the full $45,000.  This sounds a trifle like department stores that double their prices and then announce fantastic sales of 30% off.

The obvious question is, Why has the price of the service gone up so much that virtually no young man or woman can, by means of part-time and summer jobs, earn enough to pay for the service?  One obvious possibility is that the firm is paying higher wages to the employees who deliver the service, and indeed that is so.  My salary during my three years as an Instructor at Harvard averaged $6000, which in 2015 dollars is a tad less than $50,000.  Harvard Instructors today earn roughly twice that.  Now, the service provided is labor intensive [but no more so now than then], so the increase in real compensation only explains a small fraction of the jump in the price of the service provided.

Why the soaring demand for the service despite its astronomical rise in price?  Well, we all know the answer.  America has a steeply pyramidal job structure, with the compensation at the top many times that in the middle or at the bottom.  There are many too many people trying to get the jobs at or near the top of the pyramid, and a certificate attesting that one has purchased the service offered by our firm is a ticket to the elevator going to the top of the pyramid [almost irrespective of the effect the acquisition of the service has had on its buyer]. 

The explanation behind the soaring cost of elite higher education is interesting and complex, but this is not the time for an exploration of that enigma.