This is clearest when you consider one Law School's plan to deal with decreases in state funding -- eliminate students. How does that make sense? The funding is tied to number of students and all the State seems to care about is money it spends, not the number educated or the quality of that education. It all works, depending on the elasticity of demand and raising tuition for the remaining students. In public utility terms this is simply passing on the costs. The managers of the utility (administration and faculty) don't feel a thing (except for possible decreased future pay raises) while the cost is shifted from the state to admitted students and, in a sense, to those who will not be admitted who otherwise would be.
As I have often written, publicly subsidized legal education -- especially in some fields -- puzzles me. What is the public good rationale for asking taxpayers to pay for the legal education of others? (How about more special ed. teachers instead or at least a required year or two of post graduate public service oriented practice?) And, even if that subsidy does take place, why is it related to GPAs and LSAT scores as opposed to need. Given those doubts, this turn to privatization should please me.
But something seems to be missing in the equation. Jim Chen's blog made me realize what it is. Budget cuts can result in one of two reactions or a combination. One is belt tightening. In that sense those who tighten are part of the broader community of those generally affected by the economy. Or it can result in scrambling to avoid feeling the squeeze. In this is the path taken, at the very least a Law School planning to apply the same level of funding to far fewer students should have a plan to enrich the lives of the remaining students. If this does not happen, ironically, the result of a budget cut may be even greater waste.