Richard Lewis offers this comment on my animadversions
against Columbia:
“One theory favored by more neo-liberal types is 'Baumol
Cost disease' whereby human labor intensive services get relatively more
expensive over time as technology makes manufacturing, communications,
transport, etc cheaper in relative terms. In other words, you can automate
production of toothpaste but not nursing or university teaching, so costs in
health and education will tend to rise relative to the technology intensive
parts of the economy. The neo liberal aspect of this is a kind of 'automatic
compensation' principle whereby fridges and airline tickets get cheaper while
health and education get more expensive.”
I decided to do a little Googling to check this out, and my
scattered investigations suggest Baumol is correct. For example, in 1965 one year of Columbia
tuition bought 1462 pounds of steak. In
2019, one year of Columbia tuition will buy 8400 pounds of steak. [And so forth for many other consumer
items.] But how does Columbia do
compared with other labor intensive elite services?
Well, in 1965, Columbia tuition was $1900, and my
psychoanalyst on the Upper East Side charged me $25 an hour, so one year of
Columbia bought 76 hours of analysis [I will leave it to others to decide which
was a better bang for the buck.] Today,
Google tells me that New York analysts are charging $200 an hour, which means
that one year of Columbia buys 295 hours of analysis. Somehow Columbia has managed to raise its
prices almost 400% as much as Manhattan psychoanalysts. I trust no one will accuse analysts of
selling themselves cheap, so William Baumol to the contrary notwithstanding,
Columbia’s dramatic escalation of its tuition requires some additional
explanation.
Professor Goldfarb offers a more detailed objection. I am afraid I have a long history, going back
almost seventy years, of bad mouthing Harvard, and Professor Goldfarb has on sever
al occasions taken me to task for my carping.
Here is his comment:
“Prof. Wolff posts on this topic regularly, but his point is
completely undercut by his inattention to JKR's point. Sticker price is paid
only by the well-off. The elite private institutions have very robust financial
aid for most of their students. In fact, I am surprised that Prof Wolff does
not applaud this highly redistributive arrangement. The colleges and
universities bump up their sticker prices with an eye to how much the well-off
can pay, and then give it back to the less well-off. Here's an example.
TwinBob is a senior at Forest Hills High School applying to Harvard in 2019.
His father is a high school principal in NYC, in his third year in that
position. His mother is a secretary at a non-profit. He has a sister already in
college. As a guess, I'll take his father's salary to be $125,000, his mother's
$45,000. According to the Harvard financial aid tool, he can expect a tuition
scholarship of $51,400, making his tuition payment $7,520, about 12% more than
what 1950 tuition would be in current dollars. Now the following year,
TwinBob's mother has to retire due to health concerns, but his father gets a
hefty seniority raise, so the family income is now $140,000. In that case,
TwinBob pays $600 in tuition. Financial
aid at the elite institutions nowadays also eliminates the necessity for
students to take out any significant loans. The sad story, however, is in
the public institutions. Here the sharply rising tuition costs are driven much
more by legislative strangulation.”
First of all, let me say that this is an extraordinarily
gracious and rather touching comment, drawing as it does on details of my
family history to be found in my on-line Autobiography. Now, I am and always have been an admirer of noblesse oblige, whether at Versailles
under the ancient régime or in
Cambridge in the elite redoubts of mature capitalism. So I applaud Harvard’s redistributive
efforts, even if they are made necessary by its inexplicable ballooning of the
tuition it charges its undergraduates. I
confess that sitting here in North Carolina, far from Harvard Square, I
experience a perhaps reprehensible suspicion that this is not just some clever
scheme to soak the rich, but Professor Goldfarb is on the spot, and so I bow to
his superior wisdom.
4 comments:
One obvious benefit that Columbia has in return for its generosity and beneficence towards students who come from less wealthy families is complete control over them since they are dependent on Columbia for their tuition. If one's father is paying the bill and one is a bit rebellious and unruly during one's student days, then that's a problem between the student and their father, but if one is a bit rebellious and unruly and the university is generously paying the bill, then it is possible that it will be less tolerant towards youthful rebelliousness than a basically loving father. I will note that after the 1968 building occupations Columbia did not expel or even discipline the majority of the students who had occupied university buildings (whose families in general were paying the bills), although they did expel the leaders. I wonder if Columbia, in its current philanthropic avatar, would be so lenient with students who are financially dependent on it. I will also note that when I entered Columbia College in 1964, my dorm room-mate was the son of a plumber and I do not recall that he needed financial aid. I also wonder if an obviously successful plumber could pay for Columbia tuition at present.
Good grief. You arrived the year I did!
I'm not convinced that the price of tuition at elite US colleges has not gone up on average. How to check? Divide total tuition fees by the number of undergraduates, then adjust for inflation. My guess is that it will still have gone up. it certainly has *effectively* at Cambridge England my alma mater. In 1976 my tuition was paid for by the state. I emerged with no student debt whatsoever.
Another factor that may be at work here is the size of university endowments. Schools that have huge endowments are able to post a high sticker price and get that price from the wealthy, and at the same time provide generous scholarships to everyone else--so, perhaps, on average, the effective rate of tuition is much smaller than the public sticker price at those schools. But that doesn’t work for the multitude of colleges and universities whose endowments are well below the multi-billion dollar level. Students who attend these colleges are not so fortunate. Loans are their only option. Further, the once “reasonable” rates charged by public colleges and universities are largely a thing of the past as (mostly Republican) state governments have drastically cut their support to their state colleges and universities.
Post a Comment