We’re believers in free enterprise and the right to start a business, make a product and generate a profit by selling it for more than it costs to produce.
But I wonder if some important elements of American life simply aren’t suitable for producing a profit. Consider these four:
Education: I started thinking about this question last week after reading an Associated Press report on a decline in enrollment at for-profit colleges, a segment of higher education that had previously been the source of considerable growth.
Consider the prominent example of the University of Phoenix, where enrollment fell by 22 percent this year and by 70 percent since 2010.
And recently one of the largest for-profit companies, ITT Technical Institute, was forced to close 130 of its campuses, leaving its 35,000 students stranded and 8,000 people out of work. The industry as a whole has suffered from similar setbacks.
Various factors have contributed to the decline, but much of it is attributable to federal efforts to abolish unethical practices that are directly related to the profit motive.
New federal regulations prohibit for-profit colleges from paying bonuses to recruiters based on the number of students they enroll, a practice that resulted in over-promising, excessive borrowing and weak graduation rates.
When for-profit colleges can no longer employ the dubious practices that got Wells Fargo in trouble last week, their bottom lines suffer. Maybe education and profit-making were never a very good match to begin with.
Incarceration: In August the Obama administration announced that it will begin phasing out the use of for-profit prisons to house federal inmates. The announcement referenced a report from the Justice Department’s independent Inspector General, who documented safety and security problems at for-profit prisons. A deputy attorney general announced that such prisons provide fewer rehabilitation services, such as education and job training, which are, she said, “essential to reducing recidivism and improving public safety.”
But why would for-profit prisons bother to produce frills like these? The bottom line has no interest in looking beyond a prisoner’s release date or in concerning itself about society’s overall well-being. Unfortunately, putting people in prison is one of our society’s inevitable unseemly tasks, but it just doesn’t mesh with profit-making.
Health Care: It’s not important whether the “right” to health care is implied in the Constitution or not; nothing in the Constitution prevents us from awarding that right to every citizen, if we wish. And if we did, society, as a whole, would benefit enormously.
But how does profit-making fit into the worthy effort to ensure that all Americans are able to pursue happiness because they’re in reasonable health? It doesn’t. When it comes to health care, buying and selling are unlike any other element of American commerce. The product is mysterious, and the consumer has much less opportunity and capacity to make rational, cost-effective decisions about his purchases.
And often these decisions are matters of life and death. Why should this be a place where big companies make big profits?
Finally, the United States Postal Service: The USPS doesn’t fit readily with the three elements considered above, but it may be the first and best example of a national decision to produce an essential service with no thought for making a profit.
Let’s give Benjamin Franklin, the first Postmaster General, credit for envisioning a system that allows every citizen, rich and poor, to scribble an address on a piece of paper or package and have it delivered in a few days for a nominal fee — the same fee for everyone — to any other address in the United States.
With no interest in profit-making, this great democratizing system brought us together as a nation and is still at work today. And it serves as a fine reminder that our society has some things that it has to do and some things that it wants to do and that many of these things, by their natures, are not suitable places to make a dollar.