Not Just Towson Baseball

On Wednesday Peter, one of my good microeconomics principles students, sent me this very gratifying email:

I don’t know if you have followed the whole fiasco with Towson’s baseball team very much, but they were offered 300,000 … [in] Maryland tax dollars and student fees. I … realized it has some similarities to special interest groups that benefit … at a large group’s cost. I just wanted to let you know your teaching has had an effect on the way I think about things.

(The turmoil over Towson baseball—a Baltimore Sunpapers account is here—concerns the program’s being terminated in order for Towson to comply with Title IX and then being reinstated with the help of Maryland politicians offering other people’s money.)

Peter is referring to what he had learned about the special interest effect, the tendency for special interest groups to get benefits from legislatures at the expense of the general public. Because the benefits of the government action are concentrated on the special interest group, the benefits are relatively large for each member of the group. By contrast the costs of the action, being dispersed over all the many taxpayers, are relatively small for each taxpayer. Hence the special interest group works hard for the program while few taxpayers oppose it, and the politicians respond accordingly.

But in this instance it is not just Towson Baseball that is the special interest group, and it is not just the Maryland politicians’ power to hand out money for sports that is the problem. I wrote back,

Peter, I agree with your analysis. In fact, I think that higher education in general is a coddled special interest group of already fortunate people who benefit at the expense of many taxpayers who never went to college. I think higher education should pay its own way, with no tax money at all. Indeed, I think America would do well with a separation of education and state, in the same way we have a separation of church and state, and for the same reasons.

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One Response to Not Just Towson Baseball

  1. Sean Lansberry says:

    To say we have a seperation of church and state is absurd. Religious organizations benefit greatly from our overly complex tax system. In addition, there are many organizations that recieve direct funding from both state and federal government(largely to help feed the poor, and combat other social ills).
    I do however agree that our Higher education system has become bloated and should be fixed, but it is but a symptom of the larger disease. I can’t say it better than Frederic Bastiat in The Law:

    Men naturally rebel against the injustice of which they are victims. Thus, when plunder is organized by law for the profit of those who make the law, all the plundered classes try somehow to enter — by peaceful or revolutionary means — into the making of laws. According to their degree of enlightenment, these plundered classes may propose one of two entirely different purposes when they attempt to attain political power: Either they may wish to stop lawful plunder, or they may wish to share in it.

    Woe to the nation when this latter purpose prevails among the mass victims of lawful plunder when they, in turn, seize the power to make laws! Until that happens, the few practice lawful plunder upon the many, a common practice where the right to participate in the making of law is limited to a few persons. But then, participation in the making of law becomes universal. And then, men seek to balance their conflicting interests by universal plunder. Instead of rooting out the injustices found in society, they make these injustices general. As soon as the plundered classes gain political power, they establish a system of reprisals against other classes. They do not abolish legal plunder. (This objective would demand more enlightenment than they possess.) Instead, they emulate their evil predecessors by participating in this legal plunder, even though it is against their own interests.

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