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The Milton Friedman I Like

Allow me to join conservative chorus in wishing Milton Friedman (who died in 2006) a very happy 100th birthday.

I'm no great fan of the Friedman who persistently demonized government. But I admire the Friedman who thought imaginatively about how the non-rich could pay for college education. It was Friedman who came up with the idea for direct government loans to students at subsidized rates. That model worked pretty well for a long time. It's starting to show signs of age now, however, because tuition has become so expensive that even generously subsidized student loans are leaving young people burdened with a preposterous amount of debt. I've come to the conclusion that the government needs to impose price controls on tuition increases--and so, I think, has President Obama. (In a widely overlooked passage of his 2012 State of the Union address, Obama said to college administrators: "If you can’t stop tuition from going up, the funding you get from taxpayers will go down." Interestingly, this raised not a peep of protest.)

Friedman likely would have hated the price-controls idea. But another good way to address inequities arising from the cost problem (if not the cost problem itself) also comes from Friedman: income-contingent college loans. Basically, this was a tithe system that Friedman proposed for vocational education (which he considered less worthy of direct subsidy). Friedman proposed it in an essay that's better-remembered for proposing public school vouchers (a less-good idea, I think); he called it "equity investment in human beings." Friedman's idea was that the government would make this investment, but Yale tried it on its own in the 1970s at the prodding of the liberal economist James Tobin. The experiment failed because ... well, I explain it here. But it was a good idea, one worth trying again.