inamerrata

Apparently affirmative action is done in the US, at least in places, by reserving places at colleges for minority students; which has the effect of letting underqualified students take the place of qualified students. That’s the first point. The second is the thesis that currently intrigues me: that prices and markets are the best way of allocating scarce resources. We’ll assume it’s true, and consider the consequences.

The consequences in this case should be clear: that the scare resuorce of college places should be allocated by prices, not quotas, which further implies that the social goal of increasing the pool of educated and employed members of a given minority should be done by making it easier for them to afford attendance.

But is that alone sensible? Colleges aren’t a simple market in that sense — they tend to set a price that’s well below what they could charge, and then select for intelligent people (and then run out of money in general). I doubt that’s avoidable; a college that didn’t have a strong pool of smart and skilled students would probably be a much less effective school, independent of any changes in teaching.

It’s still possible to make a market out of that though — you simply set graduated prices. If you’re grades put you in the top 5%, then the cost of educating you is $20,000; if you’re in the next 5%, it’s $30,000; if you’re average it’s $100,000. The theory being that you then give a $60,000 scholarship to the students you want to affirmate, and let them apply to colleges on their merits, and then get treated equally with rich stupid white people, or whatever.

In Australia, the pricings are set up to be, effectively, $5000 for the top 30% or so, then $inf for everyone else. That is, no matter how effective you are, no matter how much you contribute to society in general, you don’t get an education unless your grades are good enough. And once they are, it just doesn’t matter at all, which could be argued to be a shame. Having a sliding scale, especially one that enriches the education sector, seems a more moral way of handling that, but, again, working out how the scale should slide seems difficult.

This is, of course, effectively recreating the proposed changes to university funding proposed in the budget, although naturally I’m inclined towards smooth curves than coarse step functions. Possibly a linear function, with just two variables to manipulate (basically, the fee for the top students — ie, your costs; and the rate at which fees increase for poorer students which affects your profits and “eliteness”) would be enough, although that seems too simple to my intuition.

The problem with all this is that without any idea how to work out the prices, I can’t draw any conclusions, so it’s all just castles in the sky. D’oh.