Public Goods, Private Benefits, and The University

Gordon G. Brittan Jr.
Regents Professor of Philosophy

[Gordon G. Brittan Jr. is Regents Professor of Philosophy and Director of the Burton K. Wheeler Center for Public Policy at Montana State University-Bozeman. He is one of only six faculty members in the Montana University System on whom the special designation of Regents Professor has been conferred. He earned the Ph.D. in Philosophy from Stanford where he was awarded the Donald Peter Jacoby and Wilson Dissertation Fellowships.

Prof. Brittan joined the faculty at MSU in 1973. He has won the University's highest honors for both teaching, in 1990, and research, in 1978, and was awarded the Silver Star Medal for Scholarship and Service by the Montana Committee for the Humanities in 1985.

Prof. Brittan has been active in the American Philosophical Association and the North American Kant Society and has served as a referee for the University Presses of Princeton, Chicago, Stanford, Cambridge, and the State University of New York. He has authored, co-authored or edited six books and has authored or co-authored more than 35 published articles. He has also given more than 70 invited presentations.

In 1977, the Montana Board of Regents created the title of Regents Professor to allow the recognition of those few MUS faculty members who stand as the University System's very best. The title is conferred by the Board upon the recommendation of the campus CEO. Currently, six persons hold the title of Regents Professor. Prof. Brittan does represent the very best of those who combine teaching that engages students, research that advances human knowledge, and service that improves the lives of Montanans. I'm proud to lead a University where the faculty includes Gordon Brittan.--Geoff Gamble, President, Montana State University]

In his article, "Privatization: an Unheralded Trend in Higher Education,"/1/ George Dennison ably documents the rather recent shift of the Montana University System from a tax-supported to a tax-assisted institution. I view the shift with dismay. For, like many others, I think of our university system as a public good, which it is principally the government's task to provide./2/ But as students have been asked to pay for an ever-larger share of their education, this thought has very much been called into question. Indeed, as the privatization of government services generally has proceeded, the whole notion of a public good is more and more taken as a relic of our benighted past.

As I understand it, the idea behind privatization is that those who benefit from a service should pay for it, even in the case of services traditionally provided by the government. This idea, moreover, is taken to have an important corollary: as responsibility moves from the public to the private sector, markets come to determine costs and benefits, resulting in apparently greater responsiveness and increased efficiency.

President Dennison claims that the privatization idea is invoked whenever governments are stressed fiscally, as a way of rationalizing the reduction of expenditures. There is undoubtedly some truth in this. But it is also the case that the idea has been gaining ground for a long time (since the 18th century, in fact) and that its increasing acceptance is linked to a variety of factors, among them the fall of communism and the globalization of the world's economies.

Whatever the strategic use of the idea of privatization made by state legislatures, there is a great deal to be said for it in connection with university education. First, those who obtain an undergraduate degree do benefit financially from it, on average by an amount of $2.1 million over the course of a person's career./3/ Second, there is the moral consideration that it is not fair for all to pay, by way of taxation, when only some receive this benefit. Third, those who pay for it will presumably take their education more seriously and demand more from themselves and those who provide it, raising the standards of both teaching and learning in the process. There is, in fact, some evidence to suggest that those who teach at private colleges and universities spend more time with their students and give them greater attention.

So the privatization idea, especially as applied to higher education, cannot be dismissed out of hand. At the same time, however, I think a strong, although somewhat more complex, case can be made for taking the university as a public good, which in consequence should be principally if not entirely funded by government.

On the classic formulation of the economist Paul Samuelson, a public good "differs from a private consumption good in that each man's consumption of related to the a condition of equality rather than of summation."/4/ Take strategic weapon defense systems for example. Each of us is protected by them (at least in principle) to the same degree, and the degree to which each of us is protected is equal to the degree of protection afforded generally. In this respect, it differs from such private goods as food, which are not consumed equally and whose total consumption is simply the sum of individual consumptions. It follows that if public goods are supplied to any one person, they must be supplied to all, neither withheld from some nor rejected by any./5/

Two easy corollaries follow from this rough characterization. One is that markets cannot in the nature of the case supply public goods; such goods as the market allocates are consumed unequally as a function of an ability to pay for them, which varies from one person to the next. It is for this underlying reason that public goods are provided by the government. The other corollary is that universities and the educations they offer are not exemplary public goods; some people are excluded from university educations while others, for a variety of reasons, reject them, and not all do benefit equally. But if universities are not public goods, then no good case for their public funding can be made. In this respect, university education is unlike K-12 education, in principle "consumed" by all and rejected (in some relevant sense) by none, the case for whose public funding is generally (although not universally) granted.

So far as I can see, two sorts of reply to this line of argument--that universities are not public goods--are often made. Both involve a modification of Samuelson's concept. One is that if some students are to be excluded from a university education, it should not be on the basis of an ability to pay. Rather, it should be based on one's ability to profit from such an education. The university should, in the classic phrase, be "open to talent," and while this modification transforms the notion of "equality" already invoked, it also precludes the play of market forces in rationing educations. A reply of this kind to those who want to privatize the university needs to be spelled out in more detail, and I will try to do so shortly. There is something to it.

The other line of reply is that university educations are public goods insofar as they have important and widespread economic benefits which are in everybody's interest. Although the individuals educated thereby profit, so too does the whole community. President Dennison instances Ireland: a massive public investment in higher education there has been accompanied over the last decade or so by the highest growth rate among developed countries, and now the highest gross domestic product per capita. A rising tide lifts all boats. I have some reservations about this line of argument.

Of course, universities are engines of economic development, as regards the technical training they provide, the new technologies (in some wide sense of the word) to which they contribute, and perhaps also the rising standards of consumption they promote. It was at least in part with the first two in mind that the system of state and federally-funded land-grant colleges was established, with the important "public-good" provision that no one could be excluded on the basis of race, gender, or ability to pay. But while I very much agree that the university is and should be an engine of economic development, it is not as such that the university is a public good and thereby deserving of state funding.

First, it is not at all clear that public investments in higher education are economically more efficient than other such investments might be, or even more efficient, up to a point, than tax cuts in stimulating the economy. The situation is complex, and looking only very casually at the data, I have been unable to come to any firm causal conclusions. In particular, despite such apparently marvelous examples as Ireland (and perhaps nearer to home, Utah), I have not even been able to find any sort of perfect linear relationship between public investment in the Montana University System and economic growth, although as President Dennison's article makes clear, the decline in public investment has been offset by a rapid increase in tuition. In the 10-year period, 1990-2000, our Gross State Product (in constant dollars) grew at an annual rate of 2.8% (as against 3.4% for the U.S. economy as a whole). During the same period, the annual rate of increase of general fund + millage contributions to the university system was 1.9%. When tuition is added in, the rate was 5.0%. Hence, in this decade, at least, it does not appear that increases in expenditures on higher education in Montana had the effect that the experiences of Ireland and Utah might predict./6/

The problem is that there are so many unanswerable counterfactual questions: Would we have had less economic growth if public investment in the university system had been even less? Would there have been even more growth if the Legislature had increased university budgets dramatically? Would a policy of direct public investment in private enterprises have resulted in a great deal more economic activity? Certainly we know this much, that there is an important connection between our country's pre-eminence in technological innovation and enterprise and the scope and quality of its system of higher education. It is much more difficult to detail this connection in the case of Montana.

Second, the criterion of economic benefit cuts in a number of unwelcome ways. Let me suggest two of them. On the one hand, if general economic benefit is a criterion of public good, then it would seem to follow that all private enterprises (tobacco companies, for example) that provide such benefits are public goods, hence meriting public support. This idea has clearly caught on in recent years, with the government handing out subsidies, tax relief, and so on to promote economic growth. There's nothing inherently wrong about this; it's just that the notion of a "public good" becomes so generalized, and weakened, in the process. Moreover, once again, there is little reason to think that government support of these enterprises is more economically efficient than other private sources of support would be.

On the other hand, if we make general economic benefit a criterion of what constitutes a public good, then what do we do about such traditionally accepted "public goods" as the corrections or national park systems,/7/ whose economic benefits for society as a whole are limited at best?

Third, and much more to my point, if we make a case for public funding on the basis of economic benefit, then what becomes of those of us who teach the arts, humanities, at least some of the social sciences, and even such "hard" subjects as astrophysics, for which my own campus has acquired an international reputation?/8/ Several years ago, the Dean of the Stanford Business School was quoted as saying that businesses in the New Economy were looking for people who had a "tolerance for ambiguity." I seized my chance and now regularly begin my introductory courses with the words "The most useful thing you'll gain this semester is a tolerance for ambiguity!" But I honestly don't think that my classes can be justified on the basis of their contribution, direct or indirect, to the state's economic well-being. While it may be true that at least some students will "profit" from having taken a philosophy course or two, the value I create is of a very different kind.

Is there, then, a case to be made for the university as a public good that does not tie it closely to economic benefit, thus avoiding some of the problems inherent in President Dennison's argument? I think there is. It depends on redefining "public good" in a way that does not fall victim to a strict reading of the equality condition in Samuelson's economic characterization. On my interpretation, a public good is any good which makes possible the effective functioning of our democracy. It follows, I think, from any characterization of a good as "public" that access to it should not be limited by the ability to pay. It does not follow from my conception, as it does from Samuelson's, that public goods be supplied in equal measure to everyone, although in senses to be indicated later, we all share equally in and benefit from them.

As it is, many goods traditionally taken as "public" violate Samuelson's equality condition./9/ People who have more children benefit more from K-12 public education; people who live near national parks, as we do, benefit more than people who do not; people who are for one reason or another more vulnerable to assault benefit more from police protection; and just as not all people benefit to the same degree, not all are burdened by the taxes that support public services to the same extent./10/

Like Samuelson's, mine is a rough characterization, but it ties the notion of a public good much more directly than Samuelson does to a particular conception of what is public, the framework principles in terms of which our common social life is organized.

Indeed, I don't think that there is a usable notion of a public good that is not so tied, although this would require more argument on my part. For now it is enough to point out that if we look at universities in general in long historical perspective, then we see that their role as engines of economic growth has been identified only relatively recently. They have long played other social and, if I might, moral roles in virtue of which they are public goods, although the specific nature of these roles has varied as a function of their cultural context. In terms of our own context, that provided by a liberal, democratic society, at least three of these roles are crucial./11/

First, the university more than any other public institution safeguards and keeps fresh the memory of our culture's past; it transmits a body of practice and belief which is a source of the values in terms of which we can understand ourselves as members of a democratic community; it makes possible a deeper knowledge of the world around us, importantly including other cultures, and a richer appreciation of its many beauties; and it provides (at least ideally) the ways and means by which conflicts can be resolved rationally. It is of fundamental importance in the case of the university, especially the public university, that none of this is owned or otherwise used for private benefit. It is made available, at least in principle, to all the members of our society, which is what a democracy requires if its members are to make their own knowledgeable and imaginative choices. It is in this way, moreover, that those of us who teach at land-grant universities have a responsibility not primarily to our students, but to everyone who lives within our reach.

Second, the university, at least to some extent isolated from economic and political pressures, engages in the informed and articulate criticism of that same body of practice and belief, generates new ideas and different standards of appreciation, re-thinks the origin and nature of conflict. This self-criticism is characteristic of the western intellectual tradition, scientific as much as humanistic or artistic. But it is, in particular, the essence of a democracy. Our responsibility here is to resist the outside pressures to conform, just as it is to resist the demands of students who sometimes confuse what they want with what they need.

Third, the university allows for, indeed encourages and at times even forces, the development of a fuller range of interests and ability than any other institution. These interests and abilities are those of individuals, of course, but to the extent they are developed, the whole community can take pleasure and instruction from them.

But there are two more specific ways in which individual development and the full flowering of a democratic way of life are linked. On the one hand, the university is easily the chief means in our society whereby mobility is made possible. The current controversy at Michigan and other universities is so intense for just this reason, that the social mobility of minority students is at stake. To the extent that they are excluded from a university education (although able to benefit from it), to that same extent (with occasional exceptions) they will be denied a chance to "rise." I put the word in quotation marks, for social mobility is not to be confused with economic advancement, although the two have been linked closely in our history. Economic success is not guaranteed the members of a democratic society; but that one has a chance to succeed, and more especially that one is not confined to a particular class (however defined) for life, is.

On the other hand, and in a related way, it is of the essence of a democratic way of life that all citizens have the opportunity to realize themselves as completely as possible. Universities cannot help everyone to realize all of his or her talents. As it is, on my view we try to do too much in this respect, perhaps especially in the case of athletic abilities. It is on this basis only that admission to universities may be restricted: not everyone can benefit. But it is also the case that across a great spectrum of interests and abilities and for a great number of people, universities are able to promote the full blossoming of individuals in a way that our democracy requires but that would not otherwise be possible./12/

These are very general and abstract claims, and made in a more rhetorical way than I originally intended. But they begin, I hope, to get at some of the concrete ways in which the university is genuinely a public good. Perhaps unexpectedly, it is here, as well, that we find the benefits which university-educated individuals actually enjoy. On the basis of talking with thousands of students, over more than thirty-five years, I can say that these benefits, at least as they perceive them, have very little to do with larger salaries earned. They have to do instead with the experience of an intense, critical, and common intellectual and emotional life lived across a broader spectrum of possibilities for oneself than in most cases could possibly have been imagined. Year after year alumni come back to campus not seeking to recover their youth so much as to link up once again with that sense of possibility, of community, of the disclosure of mystery that lies at the core of a university education. I haven't yet met one who was disappointed or felt short-changed, or who didn't believe that it was in society as a whole's best interests to continue and expand the opportunities we make available./13/

It doesn't follow from this characterization of the university as a public good that it must be funded entirely, or even overwhelmingly, by the state, or that there be no restrictions on how much it spends on education. What does follow is that admission on the basis of ability to benefit (which, unfortunately, is not universal) and not on the ability to pay be guaranteed and, for want of a better word, the "vibrancy" of its programs be maintained. Looking over The Digest of Education Statistics, I cannot see that the recent increases in tuition at public universities have so far limited access, at least not in any general way, although I'm also aware that students are taking on increased levels of debt as a result (in a way characteristic of American society, but still dangerous) and that the rhythm of their educations becomes increasingly disjointed as they drop out of school or reduce their enrollment to part-time status for the sake of employment. But costs are increasing more rapidly at public four-year universities than they are at public two-year or at private schools generally. Last year, in fact, they increased 7.7%, triple the rate of inflation./14/ At this rate, university education at public schools will soon be rationed on the basis of ability to pay, inconsistent with the fact that we are a public good, and inconsistent with the effective functioning of our democracy.

Nor have we yet lost any of the "vibrancy" of our programs. I know that it's a conceit of people who teach at public universities around the country to think so, but we do have a wonderful school. I'm proud to be here/15/ and have rejected without difficulty the offers to leave that have come my way over the years. But the number of students enrolled cannot continue to grow as it has in recent years without State funding increases, if we expect to maintain anything like the collegiate character of the MUS institutions, including, especially, the close and fruitful relationships with students who devote themselves fully to their studies.

The Legislature faces very difficult funding decisions, and it would be simply self-serving to say that we deserve a larger increase (or rather, perhaps, less of a decrease) in support than other state agencies. But it is also the case that our representatives must think through the role that Montana's universities play in its public life and realize that at some point, sooner rather than later, the ability of people with little money to come to the outstanding institution that it took generations of people to build will be in jeopardy.

I want to end on a more personal note. Each of us is going to derive a set of special responsibilities from the conception of the university as a public good that, in one form or another, we all share. In my own case, this has meant trying to be responsive to at least some of the traditions of our state and region, celebrating and criticizing them by turns. I've devoted a good deal of time over the past ten years or so to raising money for Chairs in Western American and Native American Studies, and for new library materials to support them both. It has also meant trying to involve as many people around the state as possible in public policy discussions sponsored by the Wheeler Center about our common future. Like all of my colleagues, I continue to believe, perhaps at times naively, that some courses of social action are better than others and that an informed, imaginative, and self-governing people will eventually find them./16/


  1. The Montana Professor 12.3 (Fall 2002): 10-16.[Back]

  2. Of course, public goods can be, and often are, privately funded as well, but there is no obligation on the part of the private sector to do so, and no obligation in particular to guarantee something like equality of access to them.[Back]

  3. "The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings," July 2002, Bureau of the Census, Department of Commerce.[Back]

  4. "Diagrammatic Exposition of a Theory of Public Expenditure," Review of Economics and Statistics (November 1955): 350.[Back]

  5. See John G. Head, Public Goods and Public Welfare (Durham, North Carolina: Duke University Press, 1974), Chapter 3.[Back]

  6. Montana University System budget data from the Office of the Commissioner of Higher Education; state data U of Montana's BBER.[Back]

  7. Whose funding, like that of the public universities, is increasingly made possible by "user-fees."[Back]

  8. Even much of the work done by engineers, not to mention mathematicians, has limited potential economic impact. A great percentage of the technical work carried out at universities has been funded by the federal government, in fact, largely as a contribution to the nation's defense, which is an unquestioned public good.[Back]

  9. I am indebted here as elsewhere to the insightful suggestions of our amiable editor.[Back]

  10. Apparently about a third of working adults now pay no federal income tax. The best examples of "public goods" on Samuelson's characterization, strategic weapons systems among them, also require some flexibility with regard to what counts as "consumption"![Back]

  11. How we make a case for national parks, and more especially for wilderness areas, along these lines is a story for another day, but it can be done.[Back]

  12. Two facts have to be kept in mind in this connection. One is that there are no options to the university system in Montana; the nearest private university for those in western and central Montana is Gonzaga of Spokane, WA, an average of about 350 miles away, while for those in eastern Montana the universities in Minnesota are closest. The other is that the per capita income here is comparatively low, a fact about which we cannot be very proud. It follows from both of these facts that maintaining the promise of democracy in the state, as well as promoting desperately needed economic development, requires spending a larger, not smaller share of government money on higher education than in most states.[Back]

  13. Or met a parent of one of my students who didn't feel the same way.[Back]

  14. The College Board's Trends in College Pricing 2001.[Back]

  15. In part because of the social dimensions of what I do. Many of my students are still among the first in their families to graduate from a university, and the joy they feel in living the American and democratic dream so deeply is palpable.[Back]

  16. James Allard, Lorna Brittan, Julie Hitchcock, Robert Rydell, Lynda Sexson, Bradley Snow, Paul Trout, and Richard Walton have all been kind enough to read an earlier version of this piece and in every case to make helpful comments on it.[Back]

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