Describe the political economy of money coming out of a hole in the ground.
This was a rhetorical point posed by a grad school professor when we were reading about petro-states. It also applies to the student protesters who’ve barricaded themselves in the top floor of NYC’s Cooper Union since Monday.
First, the students have a point. The college’s trustees have mismanaged its finances, and are about to charge the students for tuition at the historically free school. On that level I sympathize.
But only on that level.
I see two problems.
(1) Higher education is not a “right” as one of the interviewed protesters claimed. There’s a strong claim that its benefits mainly accrue to the students. As such, they should be the ones paying for it.
(2) The students aren’t protesting mismanagement of their tuition dollars; rather, they’re protesting the mismanagement of the free lunch Cooper Union gets from the people of New York without their consent.
As to (1), the only reason I can imagine the protesters coming to this conclusion is that they’re pessimists who believe that it’s impossible to create living wage jobs for non-college educated people. I’ve brought this up before: It’s endless education as the least-worst solution to job polarization. Allow everyone to go to college for free, and we’ll all found the next Twitter. Ignore the underemployed graduates and the inflated credentials.
People who say that higher education is a “right” would be ideologically consistent if they were advocating a kind of citizen’s dividend for young adults ala Thomas Paine in his lesser-known pamphlet Agrarian Justice. There, he argued for taxing land rents and giving the proceeds to young people as they got their start in life and to the elderly as a pension. It’s one of the earliest polemics for social insurance. Thus, until the protesters demand free money to young people who do not go to college (whether they start working or even join the military), I see this as incoherent anger at losing their unjustified subsidy at the hands of incompetent university officials.
Speaking of which, why has Cooper Union been free for students for so long? Because among other revenue sources, it owns the land under the Chrysler Building tax free. That means every time land values rise, Cooper Union gets a windfall from the building’s capitalist overlord tenants without creating anything new. Consequently, the protests are more a disagreement over how best to distribute money coming out of a hole in the ground (Okay, a building on the ground, same principle). It makes sense to side with the students since the money is supposed to be spent on their behalf, and they are short-term stakeholders who might be poor after the graduate, but you’re still engaging in a debate about who should spend money that should be taxed to fund services for the people of New York City. Cooper Union isn’t the worst party to subsidize, and the city might mismanage the added revenue if given the chance. However, it can’t be that much worse than the city and state charging a combined 8.875% sales tax that crushes commerce, discourages residential construction, and subsidizes needless saving and land ownership.
Those who want to ensure that the students at Cooper Union have real options for how to live their lives would be well-advised to protest these taxes, and advocate shifting taxes onto land values. We can start with Cooper Union’s plot under the Chrysler Building.