It’s been a while since I’ve written a ‘what is public and what is private’ post. The premise is that goods and services fall into varying degrees of uses but what is important to note is the dynamics for their supply and demand differs.

Consider the shift from funding for higher education. Several generations ago parents were the main financiers of their childrens college education. Some kids could put themselves through school with scholarships and work programs, but those kids were particularly driven. In an effort to open higher education up to those who did not have the support of a family, the governement got into the student loan business.

Pretty soon norms shifted. No longer did parents see it as their responsibility to pay school. Kids became comfortable with taking out loans. And institutions of higher education saw a means of obtaining extra dollars for their operating expenses. And that is how we got to the point of kids graduating with large amounts of debt and schools having far more administrators on the payroll than professors.

Just to review. It used to be that kids had access to the public good education through their tribe. No kin, no school. Then government said- no here’s a way to make education public for all kids who wish to go. The outcome to this, however, was to have kids retain a private debt once they were done. Some kids under the old system may have come out debt free or with far less debt.

What maybe wasn’t considered at the time was this government intervertion not only created a demand among students but also demand from Universities and Colleges via the students. This is because the later group, although a non-profit and seemingly public in nature, is respondong like a private entity to incentives. We have expenses, here’s a source of revenue that we must pursue.

But did it work as intended? Did more kids that would not have gone to college end up getting a degree? It’s funny that no-one declares victory here. Was the public objective achieved?