Sloppy thinking at Harvard

Greg Mankiw reports:

"There is no such thing as a free lunch" is as good a slogan as any I know. Whenever I hear someone propose a reform and suggest that it does not involve any costs, my first reaction is to think that they aren't being honest. Life is full of hard tradeoffs. If you think otherwise, you probably haven't thought enough.

I see some students being lulled into free lunch thinking when discussing raising wages of low-income workers at Harvard. Even putting aside any possible adverse side effects of above-equilibrium wages, advocates of higher wages need to confront the real question of limited resources. If Harvard is to raise wages above the going market levels, the money to pay those wages has to come from somewhere, such as higher tuition, less financial aid, or fewer faculty. Saying "Harvard has a large endowment" is not an answer--the endowment represents future spending on items the university values.

If Harvard students can't get it, what hope is there for mere mortals?

by datacharmer | Friday, May 11, 2007
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