Neoliberalism, Tuition Hikes, and the “Coupon State”

The never-quite-quiescent debate between neoliberals and the traditional left is active again. I know it irks Matt Yglesias to no end, but I don’t find these discussions gratuitous. Easy to dismiss as inside baseball, they also delineate real differences that have real consequences for the viability and efficacy of a left project.

The latest skirmish was prompted by the release of a paper authored by Mike Konczal, an exceptional wonk at the Roosevelt Institute who cares about more than just crunching numbers. Konczal’s latest is about the “coupon state” versus public provisioning—or, if you like, neoliberal versus liberal/ social democratic approaches to the welfare state.

Predictably, the report is fantastic, and it includes this chart, which nicely encapsulates Konczal’s arguments:

One gap in the chart, in my view: Public provisioning of social goods should be employed when possible because it avoids commodifying those goods. This isn’t feasible in some cases—food stamps come to mind—but decommodification should be the left’s default position. For instance: Even if we allow that charter schools can under certain (often unmet) conditions be desirable, profit-making operators should be verboten.

As the case of higher education shows, providing social goods up front is often better than subsidizing on the back end:

Since the 1970s the government has created several voucher mechanisms to fund access to private colleges and universities, including Pell Grants, government-subsidized student loans and tax-subsidized savings vehicles. Meanwhile, public funding is being lowered and tuition raised at the equivalent public option, state public colleges and universities.10

There’s a set of arguments stating that private institutions of higher education largely capture these vouchers by raising tuition in order to compensate for the extra demand vouchers produce.11 If this logic is flipped, directly reducing the price of a college degree through public education will also reduce the tuition costs at the private institutions, as they are forced to reduce margins in order to compete. So in these instances, money spent on providing cheaper public options will amplify their effect throughout the market, while money spent through vouchers is simply captured by incumbent institutions and prices rise across the board.

I agree entirely with Konczal. The conservatives and libertarians response to ballooning tuition has been their go-to—deregulate and further privatize. The neoliberal response has been increasing Pell Grants and making student loans more favorable to debtors. More effective would be directly attacking tuition hikes via increased appropriations. And if states aren’t willing to adequately support their public universities, the federal government should. (This is another instance in which Bhaskar Sunkara and Peter Frase’s solution of federalization is a wise idea.)

I would say it’s perplexing that more liberals don’t advocate this kind of approach, but the lacuna mirrors others in the higher education conversation. When national Democrats talk about making college more affordable, they’re talking about more federal grants and loans. This approach doesn’t engender affordability, however, but higher tuition and more student debt.

For their part, conservatives and libertarians are given to justifying tuition hikes with jeremiads against bloated administration. Cut the fat, and tuition wouldn’t have to jump. And they’re right: bureaucratic largesse is a problem. It’s just a problem of little importance compared to the widescale privatization of our public universities. More federal grants and loans to pay for ever-escalating tuition won’t solve this. The remedy is simple: send federal money to states to depress tuition costs, and prevent the continued erosion of the universal right to education.

Shawn Gude

Shawn Gude is a writer, graduate student, activist, and assistant editor at Jacobin. His intellectual influences include Chantal Mouffe, Michael Harrington, and Ella Baker. Contact him at or on Twitter @shawngude.


  1. Good stuff. Konczal is typically very good. I don’t have anything substantive to throw in, but wish Konczal’s idea were more influential in Dem policy.

  2. As an ardent supporter of vouchers, it seems kind of odd to say this, but I don’t entirely disagree. I’d rather more funding go to state schools directly rather than backdoor ways to state and (particularly!) private schools.

    That being said, it probably wouldn’t take long drilling down on this issue to find strong disagreement. (At some point, we need to take a harder look at who we are sending to college and who we are not, if cost isn’t going to be the filter.) (And cost should not be the filter.)

    • That said, if fewer people are going to go to college as a result of taking that harder look, an economy that increasingly asks for a degree to do much more than flip burgers is gonna pose a problem…

      • I think you’re confusing cause and effect here. It’s not that college education is actually necessary for most jobs that officially require it; it’s that due to the normalization of college, lack of a diploma is correlated with undesirable characteristics. Back in the days when college was more exclusive, the correlation was much weaker, and so employers would consider high school graduates for jobs which today they would only offer to college graduates. If college became more exclusive again, there wouldn’t be enough college graduates to fill those jobs.

        I think that selection bias is a hugely underappreciated reason for the divergence of wages between high school and college graduates, and especially for the decline in average wages of workers without high school diplomas.

  3. “Democratic choices as citizens
    encourage accountability, voice,
    transparency, rules and claims
    through reasoning that goes
    beyond the self.”

    Ha Ha Ha Ha Ha.

    Oh wait, you’re serious? Let me laugh even harder.


  4. How would one ensure increased appropriations are used for tuition relief? I’m sure you don’t have much in common with Cato’s Neal McCluskey, but I think he has a good point when he talks about the arms race in higher education. Many public institutions are focused on building the biggest and best recreational facilities or dorms with frivolous amenities. Would you threaten to cut off aid to schools who don’t meet tuition benchmarks?

    • I don’t disagree that an “arms race” is partially responsible for rising tuition, but it’s not the principal reason. That said, I wouldn’t be opposed to setting tuition benchmarks.

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