In Fact I Don’t Complain of Being Wronged When Students Enroll at Universities Other than GMU

by Don Boudreaux on November 12, 2018

in Myths and Fallacies, Trade

Here’s an open letter to Cafe Hayek commenter Steve Walser:

Mr. Walser:

This letter is a response to your comment on a blog post in which I argue that producers, including workers, have no property rights in the sales that they make to consumers. You wrote that you “imagine that if such a foreign power [that is, a government] targeted George Mason and came to our shores and built a beautiful new campus, hired prominent and learned professors and then started offering tuition far below GMU’s ability to match you might see things differently.”

You’re mistaken.

Begin by recognizing that ‘foreign powers’ on our shores frequently build beautiful new campuses, hire prominent professors, and charge tuition lower than is charged by GMU. We call these powers “state governments” – all but one of which is foreign to my home state of Virginia. Whenever Maryland, Ohio, and other of these ‘powers’ open new – or expand existing – state universities and (as is not uncommon) charge tuition lower than is charged by GMU, fewer students than otherwise enroll at GMU. And yet I never complain about these state subsidies artificially reducing the demand for the services of GMU professors. I don’t complain because the demand for my services that I would enjoy absent these state subsidies to other universities does not belong to me. When that demand shrinks, I lose nothing to which I am entitled.

Perhaps my point is better seen with the following hypothetical. Suppose that Jeff Bezos and Warren Buffett combine their private fortunes to build a spectacular new university directly across the street from GMU. And suppose that Bezos-Buffett U. hires the finest scholars and teachers – ones far better than myself – from around the world, and annually enrolls 50,000 students tuition-free. (Bezos and Buffett are very rich; they can afford to operate such a philanthropic enterprise.)

BBU would greatly reduce the demand for GMU’s (and my) services. And while I would lament the resulting fall in my income, I would surely have no cause to complain that I’ve been wronged. Bezos’s and Buffett’s decision to supply high-quality university instruction at a price to students – $0 – well below cost violates no property right of mine even though it might very well destroy my current job.

Importantly, this conclusion would not change if BBU, still across the street from GMU, were instead funded by, say, the governments of Brazil and the Bahamas. While the taxpayers of those countries would have just cause to complain of their governments’ seizure of some of their property, this BBU’s successful operation in Fairfax would nevertheless no more violate any right of mine than would a BBU funded exclusively with the private funds of Bezos and Buffett.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030


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