At Marginal Revolution, Tyler Cowen puts up a post titled Why does college cost so much?
This is a common right-wing meme, aimed at generating discontent with the intellectual class and used as an excuse to review all the normal libertarian ways of blaming any problem on government. And you can tell, because Tyler and his claque ignore the obvious facts about the market.
First, we know there is a huge market failure because statistics have always shown that the increases in lifetime earning AFTER a college education more than pays for the costs of the education. In an efficient market, the marginal cost of an extra degree should equal the marginal increase in lifetime earnings. That's why it is efficient for society to pay even for the education of the mentally challenged, if you view the expense of caring for them to be reduced by education. We probably should be spending significantly more on education because ignorance is the costly alternative.
Second, the assaults on the middle class and increased demand for highly educated workers have, if anything, made this market failure even larger by continuing to reward education with increased lifetime earnings.
Third, we expect the price to increase until it reaches what the market can bear. That's why private colleges charge such enormous and increasing tuitions.
Fourth, the education market suffers from other fundamental market failures which keep it dominated by non-profit institutions at almost all levels except nursery schools and trade schools worldwide. We've seen innumerable for-profit educational enterprises attempted and fail. It's not "barriers to entry" worldwide. And it's not "barriers to entry" in the USA: private non-profits are started successfully at all levels all the time. State universities, state colleges, and community colleges have enlarged tremendously.
While I often get something interesting out of Tyler's posts, I think of him as employed to keep feeding a steady stream of libertarian propaganda through his blog. Much of the time, all he has to do is point and his commenters complete the task for him. And that's what we see here.