New post at Policy Shop. Excerpt:
The debates about free higher education are fertile ground for the operation of the zero illusion. Mike Konczal, for instance, has long been pushing the idea that free public higher education is a goal worth striving for because a free public option would drive down tuition in other institutions as well. The argument is that direct subsidies of these public institutions will force other institutions competing for students to bring down their prices. There is some disagreement as to whether that would actually happen given the nature of the higher education market, but even if you grant the idea, the question remains: why stop at 0?
If cutting tuition to $0 brings down the prices of competing institutions, then cutting prices to -$1, -$100, or -$100,000 should do so to an even greater extent (i.e. paying attending students those sums). It would seem then that the public-option-competition theory of free higher education actually supports going well below free.