Sunday, June 17, 2012

Social Justice in the Free Market

First, read this story, then come back.

Awful, right? That's what I thought. How can an institution call itself a university and be this bigoted and closed-minded in 2012? This is a sad statement about where we are--where we still are--in this country. What a horrible story, I thought.

And then, I thought about it a bit more, and I realized it's actually a profoundly beautiful story.

It is beautiful, because it is the very essence of the free market at work. A business exists to make money. This is not evil. This is not greed. It is simply the function of a business, and it is a wonderful thing, a pillar of our freedom. Unlike government, a business cannot compel us to spend our money there. A business only survives by convincing us to spend our money there. Businesses that operate unethically, or do things that are repugnant to us, do not last. The free market punishes the unethical and the vile far more effectively than any government agency or regulation, and that is the mechanism that is at work here.

A business' brand is everything. Their brand is their reputation, and reputation is what keeps customers coming back for more. This is why McDonald's replaces your cold fries, or Walmart exchanges that sweater with the tear you didn't notice until you got it home--reputation. Do you keep going back to that restaurant you ate at a couple of times and it sucked? How about that store where you can never find any help? Of course not.

A university--when you get down to it--is just another kind of business. They have employees (faculty), a product (education), and customers (students). Education is big business. Every student brings in tens of thousands of dollars per year, and universities compete fiercely for those dollars. They hire the best professors (those with--again--a good reputation). They maintain competitive athletic programs. They offer a wide variety of student services, like health services, day care, and top-notch recreational facilities. The list goes on. A university is a business, and that business has to attract and maintain a customer base like any other.

Shorter University has implemented a policy so repugnant that over 80% of its employees (faculty) walked out. (Customers aren't the only ones with free choice in a free market. Customers vote with their dollars, employees vote with their feet.) A university can no more operate without faculty than a repair garage could operate without mechanics, so this poses a major problem.

Certainly, they will hire more professors. However, if the professors they had before didn't want to work for them because of this policy, new ones likely won't either. Thus, the university may not be able to hire the same quality of professors they need, nor in the numbers they need them. Think about it: people who are established and have a reputation for being great at what they do are sought after and have more options. They can choose not to work at Homophobia U. Shorter University will have to lower its aim, and take in professors who are willing to work for them--those with lesser reputations (perhaps those new to the profession) and fewer job prospects.

Like any business that can't attract quality talent, they will have to settle for what they can get. If  the replacement professors are not as capable, the university's academic reputation will take a hit, just as their administrative reputation has. In essence, their "brand," cultivated over their 139 years in existence, will be damaged. The combination of reaction to this offensive policy, as well as flagging reputation of the school resulting from too few professors or poor quality professors, will cause current and potential students to vote with their dollars and go elsewhere for their education. Shorter will be unable to attract new students, and start hemorrhaging existing ones.

No students equals no money. Soon, some programs will have to be cut. Some teachers and other staff will have to be laid off. Adherence to this asinine policy could sink this university--and rightly so. Shorter University has a choice: cling to their bigotry and severely, perhaps irreparably, damage their business, or issue a mea culpa, retract the policy and survive to be 140. It is their "greed" which will force them to change their behavior--not government, and not a sudden attack of social conscience--and it's a win-win for the consumer (student) and society--no government necessary.

And that, my friends, is a beautiful thing.

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