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Posted by: Doug Henwood | August 11, 2011

Chomsky cites LBO

In a recent talk he gave in Canada (Public Education Under Massive Corporate Assault), Noam Chomsky cites my LBO piece on the costs of college, and how easy it would be to make higher ed free in the USA:

Now that’s one important way to implement the policy of indoctrination of the young. People who are in a debt trap have very few options. Now that is true of social control generally; that is also a regular feature of international policy — those of you who study the IMF and the World Bank and others are well aware. As the Mexico-California example illustrates, the reasons for conscious destruction of the greatest public education system in the world are not economic. Economist Doug Henwood points out that it would be quite easy to make higher education completely free. In the U.S., it accounts for less than 2 percent of gross domestic product. The personal share of about 1 percent of gross domestic product is a third of the income of the richest 10,000 households. That’s the same as three months of Pentagon spending. It’s less than four months of wasted administrative costs of the privatized healthcare system, which is an international scandal.

It’s about twice the per capita cost of comparable countries, has some of the worst outcomes, and in fact it’s the basis for the famous deficit. If the U.S. had the same kind of healthcare system as other industrial countries, not only would there be no deficit, but there would be a surplus. However, to introduce these facts into an electoral campaign would be suicidally insane, Henwood points out. Now he’s correct. In a democracy where elections are essentially bought by concentrations of private capital, it doesn’t matter what the public wants. The public has actually been in favor of that for a long of time, but they are irrelevant in a properly run democracy.

Yup. And thanks for the mention, Noam!

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Responses

  1. Dear Mr. Henwood,

    I’m curious about how you computed that education costs as much as “four months of what we waste on administrative costs by not having a single-payer health care finance system”?

    To do this, I think one would need to know how much is spent in administrative costs in the privatized healthcare system and in a single payer system over four months and then subtract them. One would then compare the result to the cost of US higher education over one year. Where did you find the numbers necessary for the calculation? If you quoted another source rather than calculate this yourself, which source were you quoting?

    If possible, I’d also appreciate it if you’d show me the details behind this assertion, too: “The personal share, about 1% of GDP, is a third of the income of the richest 10,000 households in the U.S., or three months of Pentagon spending.”

    I became interested in your article after reading about it in Noam Chomsky’s partial talk transcript on Alternet. I agree with many of the things he’s said after many hours over a couple of years of checking his references in a university library and on the internet. I’m in favor of free public education and and a public healthcare system. I would like to repeat confidently what you’ve written. Would you show me how you calculated this?

    Thank you!

  2. The estimates of administrative costs are from work by Himmelstein & Woolhandler, eg http://www.pnhp.org/publications/nejmadmin.pdf.

    Income figures come from the CBO and Piketty/Saez. The Pentagon spending comes from the national income accounts.


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