Counting the Cost Disease

For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish.’ Luke 14:28–29

As economists William J. Baumol and William G. Bowen studied the cross-elasticity of demand in the 1960s, they coined the term “Cost Disease” to describe the phenomenon of extraordinary inflation in sectors characterized by a combination of labor intensity and structurally constrained supply. Think things like healthcare, housing, childcare, and higher education.

These are the categories of household expense which for years now have outpaced even our best-conceived and -supplied personal savings and investment strategies.

Now come Samuel Hammond, Daniel Takash, and Steven M. Teles of the Niskasen Center, writing in Volume VI, Number 1 of the public policy journal American Affairs of “Cost Disease Socialism,” the tendency of citizens of democratic societies to push these inescapably rising costs onto the governments that serve them. This trend toward Cost Disease Socialism is exacerbated by a growing fondness of policymakers for Modern Monetary Theory (MMT), the school of economic thought in which “deficits don’t matter” because governments can always print more money. To wit, at what point does the perpetual extension of the federal student loan repayment freeze (such as was announced by the government again just this week) simply become debt forgiveness or “free college”?

In the meantime, institutions of higher education play a shell game with their own economics, quickly moving their walnuts over the peas of rising costs, the Monopoly® money of guaranteed student loans, discount schemes, and financial “aid”. It is a strategy, according to the Niskasen scholars, that has motivated most schools to appeal to the children of the upper-middle class and to students from outside the U.S.

And be slow to regard innovation and technology as any kind of panacea. Many mostly online colleges turn out to be little more than swindlery of students’ and parents’ wealth exchanged for no reciprocal contribution of productivity, computer cookies trayed up via algorithms to magnetize otherwise easily available federal money.

Students are certainly not the beneficiaries of this runaway inflation and the revenue it generates, and astonishingly, neither are their teachers. The Niskasen scholars write, “Where American higher education really does stand out is the huge sums of money we devote to the system’s administrative costs, and the much lower intensity with which we use the university’s physical plant.” Bricks, Mortar, and Bureaucrats! (My exclamatory emphasis added.)

“We Teach Students.”

President Joe Rigney regularly reminds us here of this simple construction of subject and predicate. “We teach students.” No other remit. No other enterprise. No other entanglements. By God’s grace we have gathered a world-class faculty of teachers, and likewise a student body. Our administrative costs are as lean as a bone. Our “physical plant” is the unadorned simplicity of unused Sunday School rooms, Monday–Friday. Our tuition is “unusually affordable,” about $7,000 per year. Yes, only $7,000 per year.

We take no government money. We move no shells. We confuse no one with discounts. What you see is what you get. If we waste at all, it is never by design and always with most serious contrition.

It does, however, cost us about $17,000 a year to “teach” each “student”. So then, how do we do it? How do we thrive in a larger educational village ravished by cost-disease? We do so by sticking to the knitting of “We Teach Students” and by remaining lean and intentionally small, even “micro” at the level of higher education in conceptually the same way that contrarian, “not going to take it any more” endeavors like Acton Academy, Great Hearts, Prenda, and Nevada Action for Schools are doing at the K–12 level.

And we do so depending on our Sovereign God to stir the hearts of his saints such that their love for him becomes so abundant that it overflows to the benefit of our simple task: “We Teach Students,” and virtually nothing else. Every full-time student receives an annual Serious Joy Scholarship of $10,000, such that they can receive a Bible-saturated, academically rigorous education then launch immediately into adulthood, vocation, and gospel ministry without student loan debt. Nearly every philanthropic dollar we receive is taped to the backs of these students to enable a student loan debt-free education.

When Jesus asked whether we would take the time to “count the cost,” he spoke of course of the cost of discipleship, a cost Dietrich Bonhoffer once defined as “Come and die.” The Lord wasn’t talking about the workaday estimation of household expenses, but of eternal salvation and life. Still, like all of his parables and teachings, his words can be a wakeup call to all those who have responsibilities, parental or professional, for teaching the rising generation. Can we finish? Will we be mocked? Do we care?

At this writing, there are still 97 scholarships to be fully funded for the school year already in progress. Would you please pray whether or not you may be called to contribute again, make a gift for the very first time, or perhaps tell someone else you know who has a heart for students? Tell them about this bold and now-proven effort to stand athwart the world’s squanderous ways and help us deliver this highly valuable “Education in Serious Joy.”


Rick Segal is Vice President of Advancement
Lecturer of History and Political Philosophy





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