The preceding discussion is concerned mostly with primary and secondary education
Private universities have in consequence had serious financial problems, and have quite properly complained of “unfair” competition
For higher education, the case for nationalization on grounds either of neighborhood effects or of natural monopoly is even weaker than for primary and secondary education. At successively higher levels of education, there is less and less agreement. Surely, well below the level of the American college, one can expect insufficient agreement to justify imposing the views of a majority, much less a plurality, on all. The lack of agreement may, indeed, extend so far as to cast doubts on the appropriateness of even subsidizing education at this level; it surely goes far enough to undermine any case for nationalization on the grounds of providing a common core of values. Similarly, there can hardly be any question of “natural monopoly” at this level, in view of the distances that individuals can and do go to attend institutions of higher learning.
Governmental institutions in fact play a smaller role in the United States in higher education than at lower levels. Yet they grew greatly in importance until at least the 1920’s and now account for more than half the students attending colleges and universities. 3 One of the main reasons for their growth was their relative cheapness: most State and municipal colleges and universities charge much lower tuition fees than private universities can afford to. They have wanted to maintain their independence from government, yet at the same time have felt driven by financial pressure to seek government aid.
The preceding analysis suggests the lines along which a satisfactory solution can be found. Public expenditure on higher education can be justified as a means of training youngsters for citizenship and for community leadership – though I hasten to add that the large fraction like it of current expenditure that goes for strictly vocational training cannot be justified in this way or, indeed, as we shall see, in any other. Restricting the subsidy to education obtained at a state-administered institution cannot be justified on these grounds, or on any other that I can derive from the basic principles outlined at the outset. Any subsidy should be granted to individuals to be spent at institutions of their own choosing, provided only that the education is of a kind that it is desired to subsidize. Any government schools that are retained should charge fees covering the cost of educating students and so compete on an equal level with non-government-supported schools. The retention of state schools themselves would, however, have to be justified on grounds other than those we have so far considered. 4 The resulting system would follow in its broad outlines the arrangements adopted in the United States after World War II for financing the education of veterans, except that the funds would presumably come from the States rather than the Federal government.
For the lowest levels of education, there is considerable agreement, approximating unanimity, on the appropriate content of an educational program for citizens of a democracy – the three R’s cover most of the ground
The adoption of such arrangements would make for more effective competition among various types of schools and for a more efficient utilization of their resources. It would eliminate the pressure for direct government assistance to private colleges and universities and thus preserve their full independence and diversity at the same time that it enabled them to grow relatively to State institutions. It might also have the ancillary advantage of causing a closer scrutiny of the purposes for which subsidies are granted. The subsidization of institutions rather than of people has led to an indiscriminate subsidization of whatever activities it is appropriate for such institutions to undertake, rather than of the activities it is appropriate for the state to subsidize. Even cursory examination suggests that while the two classes of activities overlap, they are far from identical.
