College campuses and the value of egalitarianism

At Bowdoin College, where I teach, students have vastly different degrees of wealth. About half are on financial aid, and a not insignificant number receive a full ride because their families have very little, if any, money to spare. Other students can simply fork over the $90K per year, and their families might barely notice.

However, wealth cannot buy one’s way into the college; the extremely competitive admissions process is done on a need-blind basis. And after the students arrive at Bowdoin, the institution strives to create an egalitarian environment in which differences of wealth matter as little as possible: Rich students do not get better food at the dining hall; they cannot buy their way into overenrolled classes, get extra office hours or favored treatment by professors; and college housing is decided by lottery. 

We could do all of this differently. Instead of such forced egalitarianism, we could operate on more free market principles. We could auction off seats in popular classes to the highest bidders; we could have deluxe dining hall meal plans with better food served to those who could afford it; we could rent the best dorm rooms at significantly higher prices; we could offer enhanced professorial feedback and attention for those willing to pay extra. Or we could encourage secondary markets: for example, a student who was lucky enough to get a slot in an oversubscribed course could sell their space to someone willing to pay enough for it.  

All of that would be quite normal by capitalist, free market standards. After all, Milton Friedman says that “Adam Smith’s key insight” was this: “both parties to an exchange can benefit and that, so long as cooperation is strictly voluntary, no exchange will take place unless both parties do benefit.”[1] If we had such systems, then each such transaction (“I’ll give you $1,000 for your seat in Computer Science 101!”) would, if done in a completely voluntary way, presumably leave each party to the deal happier than they were before the deal. Nobody would sell their housing lottery number or their seat in a class unless the price was worth it to them.

And yet, instead of this, we operate more or less in accord with Marx’s slogan, “From each according to his ability, to each according to his needs.” So far as I know, nobody at Bowdoin has even seriously suggested employing market mechanisms for classes or housing within the college setting. When I bring up this possibility in my classes, even my conservative, pro-market students don’t want it.

I think that there are two lessons to be learned from the example.

(1)  Adam Smith’s “key insight” should come with a significant caveat. True, if you allow a market in which students can buy and sell their spots in classes, or their housing lottery numbers, then each transaction will make everyone a little bit happier. But, and this is the crucial point, it might nonetheless be a mistake to allow a market at all for that kind of good. After we have allowed a market for a particular kind of good, each completely voluntary and well-informed transaction should increase overall well-being; but, for certain circumstances and certain kinds of goods, we will increase overall well-being even more by not having a market in the first place.

(2) If you want to promote human happiness, then there is something good about an egalitarian social environment. Nobody likes the idea of wealthy students getting extra office hours with professors or more comments on their papers; nobody wants rich students to be able to pay their way into oversubscribed classes. So far as I can tell, the reason we balk at such ideas is that we see significant value in having a more egalitarian atmosphere within the college. When I have suggested the market mechanisms with my students, they quickly object that this would make students from poorer families into second-class citizens. My students know that there are vast differences of wealth within the student body, but, to the extent possible, they don’t want those differences to translate into different educational opportunities, and they don't want a situation where the poor students are seen as second-class and are segregated into dorm-ghettos. Even my most politically conservative students see the value in an egalitarian atmosphere in which key elements of their experience are equally available to all and in which the wealthy students have no particular advantage.

So what did these points tell us more generally about capitalism, socialism, and redistribution? To what extent to these points generalize? Since the example shows that there is admittedly something nice about an egalitarian distribution of key resources, should we follow the college model for goods more generally? Should wealth be far less connected to privilege in "real life" beyond the four years one spends at college? I think that the College example at least makes that plausible. We need to rethink what sorts of things we allow onto the market and why; we need significantly more wealth redistribution than we currently have, especially in the United States.

Objection 1: In the real world we need competition to make people productive. The possibility of gaining more wealth than your neighbors is precisely what makes people work hard, and this leads to a system that benefits everyone. If everyone was guaranteed exactly the same wealth regardless of how much they worked, then a lot of people would not work very hard and far less wealth would be produced overall.

Answer: I imagine that is true to some extent, and I would not want to get rid of the market in general. But even my most conservative and capitalistically inclined college students recognize the value of an egalitarian distribution of key goods in college (like classes, professorial attention, food, housing); they don't want some students to be second-class citizens because they lack the wealth of other students. So even if we recognize that we must have some degree of inequality in order to motivate people to work hard, we should also recognize that something is lost when we move too far away from egalitarian distribution of resources.

Second, we should question how much inequality we need in order to motivate people. As things stand, the wealthiest 1% of the U.S. population owns 31% of the wealth of the country, while the bottom half of the country owns only 3% of the total wealth; the 19 richest households in the country saw their wealth grow by $1 trillion last year alone. (These numbers from the WSJ.)You will have to do a lot to convince me that such extremes of wealth inequality are necessary or productive for motivating hard work.

Finally, many people do not need the prospect of getting rich to motivate them. As I say in my book, Socialism: A Logical Introduction: “In my own field of academia, there may be a very rough correlation between one’s salary and the number and influence of one’s publications. But how well you teach seems to have almost no correlation at all with the degree of your compensation. And yet nearly every academic I know puts a large amount of effort into teaching.”

Objection 2: Unlike in the real world, 18 year-old college students have done nothing to earn their wealth. But when wealth is earned through honest work, it is fair and makes sense that this wealth brings extra privileges.

Answer: First, much of getting wealthy is a matter of good luck rather than hard work. Even the second wealthiest man in the world, Mark Zuckerberg, agrees:  “You don’t get to be successful like this just by being hard working or having a good idea. . . . You have to get lucky in today’s society in order for that to happen.” Some luck is a matter of having the right teachers, the right upbringing, and the right opportunities. But it also helps to see how luck functions on a broader scale. Consider Zach Wheeler, whose salary is $42 million this year. He has worked hard, and he is extremely good at what he does. His particular talent is to throw a spherical object a distance of 60 feet and 6 inches and to do so in a way that makes it difficult for other people to hit that sphere with wooden club-like objects. While Wheeler was lucky to have the right coaches and the right training on his way to his current position with the Philadelphia Phillies, I have in mind a broader sense in which he is lucky: his particular talent, and it is considerable, would have been worth far less had he born in, say, 18th century France instead of late 20th century America.

Second, once one has a fair degree of wealth, getting more wealth is often not a matter of hard work or talent, but just a matter of raking in capital gains from investments, charging people rent to use your property, or charging interest on loans to those less fortunate.

Third, and most important, a large percentage of wealth is simply inherited (estimates range from about 40% to as high as 60%). People who have inherited wealth have done nothing whatsoever to earn it, unless you think they deserve credit for having chosen the right parents. Moreover, children of wealthy parents are allowed to gain all kinds of advantages in the real world outside of college, not least of which is going to better secondary schools. Wealthy parents can send their children to expensive private high schools, and even among public schools, those in those in wealthy districts tend to be far superior to underfunded schools in poorer areas.

So if the point of the objection is to claim that the enforced egalitarianism of college life is reasonable precisely because so few college students did anything to deserve their wealth, then that argument should equally apply virtually across the board.