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The Times Smiles and Sneers at Carl Barney, Ayn Rand, and Private Colleges

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A recent New York Times article titled “An Ayn Rand Acolyte Selling Students a Self-Made Dream” discusses private-college mogul Carl Barney’s business successes and philanthropic ventures, and does so with less hostility than one might expect.

The article is worth reading for a few nuggets of wisdom from Mr. Barney, a peek at his principled approach to cultural change, some history about his hugely successful career, and an illustration of his positive attitude toward life. Here’s a taste:

In Mr. Barney’s view, both [political] parties are leading the country in the wrong direction. “Politics is not going to solve the problem,” he said, settling into the third-floor lounge of his Alpine-styled boutique hotel. That is why he directs his multimillion-dollar contributions not to political candidates or super PACs—but to spreading Ayn Rand’s thinking around the globe. . . . “I’m not an altruist, I’m not a do-gooder,” Mr. Barney said. “But I would like to have others experience the understanding and the benefits that I’ve had from philosophy.”

If rationality, hard work and self-interest are fundamental Randian values, so is the pursuit of happiness. And that is what led Mr. Barney to rise early that day—only to have to wait at the front of the ski lift line. Standing there, he mentions to the lift operator his intent to be first down the run.

“You look like you’re first in a lot of things,” the lift operator replies.

Soon enough, Mr. Barney is gliding down the mountain [on a trail named “Success”], listening on his earbuds to a favorite Broadway tune, “One Day More,” from “Les Misérables,” with its call to the masses to man the barricades.

I love that image.

However, other parts of the article cannot go without reproach. The author, Patricia Cohen, writes:

[Mr. Barney] credits Rand’s brand of antigovernment libertarianism [sic], hard-nosed rationality and unapologetic self-interest with helping him realize his own American dream—an achievement he sells to the students at his schools. But his inspiring story is not without contradictions.

Mr. Barney, who opposes government-backed loans and grants on principle, has made his fortune in a business that is almost wholly dependent on them. His students borrow heavily to pay for their studies in hope of replicating Mr. Barney’s up-by-the-bootstraps success, but often find themselves dropping out and burdened with loans. And while he invokes a rigorous Rand-inspired ethical code of fair dealing, he is in an industry with a history pockmarked by fraud and abuse.

Where to begin?

First, to criticize a private college for accepting students’ funds that come from government loans and grants is almost as absurd as criticizing a private supermarket for accepting customers’ funds that come from government welfare programs. And that, in turn, is almost as absurd as an anti-capitalist reporter using the fruits of capitalism—such as her computer, the Internet, and the fossil fuels that run them—while trying to make a principled capitalist look hypocritical.

As to the facts that some “students borrow heavily to pay for their studies in hope of replicating Mr. Barney’s up-by-the-bootstraps success” and that some drop out and are “burdened” with loans—so? What is the implication supposed to be here? Should a successful supermarket owner be held responsible if some of his customers don’t make the same choices he does or match his nutritional success? If he is svelte due to a healthy diet, yet some of his customers are obese because they consume only pizza and cola, is that somehow his fault? Or is Ms. Cohen implying that there is something wrong with borrowing money to achieve one’s goals? Or something wrong with dropping out of college if one determines that it’s not in one’s best interest to continue? Bill Gates, Steve Jobs, Frank Lloyd Wright, and countless other businessmen and successful people would be surprised to hear that taking loans or quitting college are necessarily bad ideas.

Ms. Cohen and the Times really ought to think at least a few millimeters ahead before they hit “publish.”

As for Ms. Cohen’s claim that Mr. Barney “is in an industry with a history pockmarked by fraud and abuse,” could the irony be richer? Not that tu quoque is an argument, but is there an industry with a history more pockmarked by fraud and abuse than the media industry—especially the New York Times?

Please.

Of course fraud and abuse in any industry and to any extent is morally unacceptable. But the fact that Mr. Barney’s industry has some bad apples in it doesn’t make him or his schools one of them. Again, journalists really ought to think a few steps ahead, and maybe read a basic logic text, before posting their material publicly.

Toward the end of her piece, Ms. Cohen writes:

The problem is not just a few bad apples, said A. J. Angulo, a history professor and the author of “Diploma Mills: How For-Profit Colleges Stiffed Students, Taxpayers and the American Dream.” Mr. Angulo says, “We’re really talking about a few good apples.” That was the conclusion of a 2012 Senate investigation, the latest in a series of congressional and independent inquiries into for-profit schools’ advertising, job placement and graduation rates, and recruitment strategies that date to the 1980s.

Nonsense. The 2012 Senate investigation and the congressional and (allegedly) independent inquiries into the private-sector college industry were a concerted effort to destroy good schools for being good schools. The investigations and hearings were motivated by hatred of capitalism, hatred of the profit motive, and hatred of the value and successes of private-sector colleges.

Anyone interested in (a) the enormous value that private-sector colleges and universities are for many students, (b) the facts surrounding the few bad apples in the industry, and (c) how the government used those few bad apples as a pretext to launch a completely dishonest and unjust assault—including fraud, collusion, and defamation—against private-sector colleges and men such as Mr. Barney, can find all of this and more in my article “The Government’s Assault on Private-Sector Colleges and Universities.” (See also Mike LaFerrara’s follow-up piece, “The Government’s Renewed Assault on Private-Sector Colleges.”)

Here’s an indication of the vital truths surveyed in my lengthy piece on the subject:

It is true that the government issues billions of dollars annually in federal grants and loans to students who choose to attend career colleges. It is also true that in a fully moral, fully rights-respecting society this would not be the case, because in such a society the government would not be involved in education or grants or lending at all; the government would do only one thing: protect individual rights by banning force and fraud from social relationships. But given the lay of the land today—including the fact that the government has granted itself a monopoly on the issuance of student loans—for students to spend government-issued grants and loans at career colleges rather than at traditional schools or community colleges is perfectly moral and properly legal. (As we’ll see, it is even arguably preferable.)

Existing laws and regulations provide the government with enormous advantages over private lenders. The government acquires its funds by taxing citizens, borrowing at below-market rates, or printing money; insures its loans on the backs of taxpayers; and ultimately uses the Internal Revenue Service as its collection agency. Private lenders, in contrast, must borrow their funds at market rates, insure their loans at market rates, and outsource collections at market rates. These coerced differences (among others) make it impossible for private lenders to compete with the government in providing student loans.

This fact makes private-sector colleges and universities dependent on their students having access to federally funded loans. If the government were to forbid students from receiving government loans for use at career colleges, taxpayer funds would be spent even less equitably, increasing the amount of funds flowing to state-owned and nonprofit schools and starving the postsecondary private sector of students who otherwise would choose to attend career colleges.

Given the government’s legally enforced monopoly on low-price, taxpayer-funded student loans, the government cannot morally exclude students of private-sector universities and colleges from receiving these funds. . . .

Read the full (government-scandal-packed) article here. And be sure to share it with anyone you think might be interested—especially anyone who tries to denigrate the private-sector college industry or the good men and women who run or work in private-sector colleges.

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