The price of a free lunch

casey.given.online

Let’s take a trip down memory lane. You’re a high school senior sitting in economics class with just about anything but markets on your mind. Indeed, your malignant case of senioritis has infected your brain to the extent that it contains little more than cravings to graduate, schemes to get lucky at prom and inflated fantasies about college. Suddenly, your usually drab teacher breaks your distracted daydreaming by enthusiastically uttering a most unusual adage, “There’s no such thing as a free lunch!”

This scene, played out in thousands of classrooms across the country, is the doing of the late, great economist Milton Friedman. Although he was not the originator of the phrase, the Nobel prize winner popularized it in the 1970’s through his numerous books, lectures and television programs to instill in students an understanding of one of the most fundamental economic principles: Nothing is free. Rather, every good or service we receive is always being paid by someone somewhere. Even if that someone is not you per se, it simply means that the costs are being incurred by someone else. If only Friedman were a professor at Berkeley!

Indeed, the free lunch fallacy can be found unfolding all around our campus and in the most egregious of manners. The most recent example is the administration’s deal with Adobe to provide students with their popular Creative Suite software for “free.” Consequentially, thousands of Photoshop enthusiasts like myself excitedly downloaded the software earlier this month to start creating Lolcats and whatever else us college kids do. Unfortunately, our thrill was falsely premised on the illusion that we were not incurring any costs in the transaction. To the contrary, we did pay on that sad September day, to the tune of $500,000!

Granted, it may be technically true that the funds for this dubious deal came from the campus’s Operational Excellence program and not directly from students themselves. However, this is merely accounting trickery. In reality, that half million could have been directed to better ends like paying salaries, maintaining facilities, or — dare I say — reducing tuition. Indeed, the opportunity cost is maddening!

Certainly the quantity may be small in the grand scheme of things. However, marginality does not excuse foolishness. Especially with the current budget cuts, it is irresponsible for our administrators to be diverting funds away from educational purposes, leaving behind a void that will only be filled by tuition. Students should not be indirectly paying for a product they had no say in buying and could easily pirate on DC++!

Unfortunately, the Adobe example is by no means the only instance of the free lunch fallacy infecting our campus. If you log into Bear Facts, you’ll see that the poison pervades many aspects of student life. Under the “Registration” tab, you’ll discover that your “free” AC Transit Class Pass actually costs $136 per school year. Granted, some frequent riders are getting their money’s worth. However, the cost is not worth it for many students like myself who take the 51B about once a week to bring groceries back from Trader Joe’s (cheapest beer in town, folks). After all, at $2.10 per fare, one needs 65 rides for the pass to be worthwhile.

Yet, the transit charge is just the tip of the iceberg. Below the surface is a $506.50 per year Berkeley Campus Fee that is allocated to several services, each sharing the free lunch illusion. Of this amount, $55 goes to an ASUC fee, $109 to the Tang Center (excluding the Student Health Insurance Plan) and a whopping $239 to the Recreational Sports Facility (composed of Intramural Sports, Recreational Sports and Life Safety fees). That’s right, those unathletic nerds out there like myself are subsidizing some gym rat’s workout to the tune of $239, regardless of whether you have an RSF membership! Friedman is truly turning in his grave!

Alas, I’ll get off my fiscally conservative high horse. Certainly all of these services are convenient for students to take advantage of, and I am by no means advocating the abolition of any of them. However, the fact remains that many students are being fooled into believing they are receiving a free lunch. In reality, they are paying indirectly through hidden fees for services that many of them do not even utilize. Only about 21,000 students have RSF memberships and another 21,000 enroll in SHIP. That’s about 59 percent of the student population, meaning that the remaining 41 percent or so are subsidizing the costs for the rest. It’s like wealth redistribution, except we’re all poor college students.

If only the campus were more transparent about who’s paying what, the free lunch illusion would vanish, and a more informed conversation about student fees could emerge. So, students of UC Berkeley unite! You have nothing to lose but your chains of unnecessary fees!