Student visas are the primary jumping-off point for most high-skilled immigration to the United States. Immigrants study at America’s elite universities and then find jobs here when they graduate—largely through the post-graduate employment authorization program called Optional Practical Training. Despite the importance of these visas, the State Department rejected an unprecedented 35 percent of student visa applicants in 2022.

Student visas are known as F‑1 visas. Figure 1 shows the F‑1 student visa denial rate compared to the visa denial rate for all other nonimmigrant (i.e. temporary) visa applicants. As it shows, student visas usually have a similar rejection rate to other nonimmigrant visa applicants. But in 2021 and 2022, student visas have been denied at double the rate of all other applicants. The student visa denial rate has increased from a low of 15 percent in 2014 to 35 percent in 2022.

In 2022, consular officers denied a record 220,676 student visas. As Figure 2 shows, more visas were denied in 2022 than were issued in 2003 and 2004. The staggering number of denials occurred even as the number of issuances remained far below the peak year of 2015. Even 2015 had far fewer denials than 2022. It now appears that the higher denial rates, which shot up in 2016, may have dissuaded some applicants from applying, and the absolute number of total student visa applicants has declined, and visa issuances have declined 36 percent from 2015 to 2022.

It is important to understand that before a student can even apply for a visa they must already be accepted into a government-approved university. This means that the U.S. Department of State turned down 220,676 students who would have likely paid roughly $30,000 per year or $6.6 billion per year in tuition and living expenses. Over four years, that number rises to $26.4 billion in lost economic benefits to the United States.

The State Department does not separately delineate the reasons for student visa denials but nearly all nonimmigrant visa denials are for failing to prove “nonimmigrant intent” (that is, the desire not to move to the United States permanently). Applicants need to show sufficient ties to their home country that would impel them to return to their home country when their reasons for visiting have ended.

The nonimmigrant intent subjective standard can be enforced in a variety of ways. Consular officers are supposed to only consider someone’s “present intent” not considering how their intention might change if opportunities arise in the United States to stay legally. In practice, there is very little consistency in application.

The unprecedented denials occurred even though the State Department officials in Washington, D.C. attempted to return to a lower standard of evidence for students that existed before Trump. The Foreign Affairs Manual now states that students “should be looked at differently” because “typically, students lack the strong economic and social ties of more established visa applicants, and they plan longer stays in the United States.” It concludes that “the natural circumstances of being a student do not disqualify the applicant.” This change occurred in September 2021 before the start of fiscal year 2022.

The State Department hasn’t disclosed the denial rate by nationality in 2022, but the rise and fall of Chinese students is the most important trend in student visa policy in recent years (Figure 3). Another ground for denial—which is far less frequent but affects mainly students from China—is a Trump presidential proclamation that bars visas for people who studied at any university that works with the Chinese military on any level. This order—which is retroactively applied to students who studied at such universities before the order was issued—was the basis for about 2,000 visa denials in 2021. The number for 2022 is not available yet, but while that is a lot of denials in absolute terms, it would only explain 1 percent of total student visa denials in 2022.

What may explain the sudden increase in denials is the sudden increase in issuances for Indian students. After major delays during the pandemic, Indian consulates issued an unprecedented 115,115 student visas, by far the highest total for India ever. But according to data obtained by researchers via Freedom of Information Act requests, before the pandemic, U.S. consulates in India are far more likely to deny students than U.S. consulates in China. This means that the surge in processing in India, combined with fewer Chinese applicants, has likely caused a large increase in the worldwide average denial rate for students.

Indians accounted for a record 28 percent of all visa issuances in 2022, so their higher rate of denial affected the worldwide average more. U.S. consulates in India adopted a policy during the pandemic of not re-interviewing denied student visa applicants so they could go through applicants faster, which would have further inflated the refusal rate. But the bigger issue may be how consular affairs in India handles visa interviews. The head of the consular affairs division in India is Don Heflin. Heflin explained how student visa interviews work in India in an interview in April 2022:

Bring [bank statements] just in case the vice consul asks, but we are looking at this less than we used to. We know Indian families usually find a way [to pay].… Mostly it’s about explaining why this school and this curriculum makes sense to you. It’s what in American English we call the Elevator Pitch. You’ll have a minute and a half to tell us why this [school] makes sense to you. Don’t walk up and recite something from memory about the campus, the student body, and how old the school is.… Listen, I have a lot of Indian friends. I know that your father may have told you where you were going to go to school and what you were going to study. That’s fine. Tell us what he told you. Show us that it makes sense for you.

None of this information has anything to do with the legal requirements for a student visa. This absurd method of adjudicating student visas explains why India has a much higher than average student visa refusal rate even though Indian students are extremely successful in the United States.

The United States should not pass on tens of billions of dollars in economic activity from these students just because they memorized their “elevator pitch” on why they want to study computer science in Kansas. It’s totally irrelevant. The State Department should investigate the practices of its consulates in India and require them to implement the law as written.

Gene therapy researchers recently reported an encouraging development that can bring new hope to people at risk for cardiovascular disease. But how long will Americans have to wait before they can use it?

CRISPR (Clustered Regularly Interspaced Short Palindromic Repeats) is a gene editing technology that holds great promise for curing disease. Put simply, a compound is injected into a patient to alter a gene in the DNA and halt a disease process. One version of CRISPR-based therapy is called “base editing,” which involves swapping out a single letter on the DNA molecule.

Verve Therapeutics is a Cambridge, MA-based start-up biotech company that has devised a way to use base editing to turn off the PCSK9 gene, which lowers LDL—“bad cholesterol”—a significant driver of cardiovascular disease. And it turns off the gene without changing the DNA. If this works as a “one-and-done” treatment to lower LDL, it can reduce the need for people to take long-term medication for the problem.

Most people currently take statin drugs to lower LDL. But statins don’t work for everyone, and some have intolerable side effects. Researchers have developed two FDA-approved PCSK9 gene inhibitor drugs that turn off the gene. But they must be injected, patients must take them regularly, and they are extremely expensive.

Verve Therapeutics injects nanoparticles into patients to turn off the PCSK9 gene. A preclinical trial on monkeys resulted in a 70 percent reduction in LDL cholesterol levels after just two weeks, with levels remaining low after a two-year follow-up. Because of this exciting development, Phase 1 trials on humans have been approved and are underway in New Zealand and the U.K. Alas, not so fast in the U.S. Last November, the Food and Drug Administration decided to put the clinical trial on hold, requesting that Verve provide the agency with much more data and modify the trial protocol.

If Verve’s breakthrough therapy eventually gets approved in New Zealand and the U.K., why shouldn’t Americans also be free to choose the treatment?

As Michael F. Cannon and I suggest here:

[A]t a minimum Congress should eliminate the FDA’s ability to restrict truthful speech by manufacturers about their products and allow American consumers to purchase drugs that have won approval from designated certification agencies, including foreign regulatory bodies. According to one study, recognizing drug approvals by regulatory bodies in Canada and Europe between 2000 and 2010 would have given U.S. consumers quicker access to 37 “novel” drugs for which “no other FDA‐​approved prescription medicine had the same mechanism of action,” including 10 drugs treating mostly orphan diseases “for which no alternative therapy was available in the USA.” Such recognition would have allowed U.S. consumers to access those drugs a median of 13.6 months earlier.

In a blog post last November, I pointed out how Switzerland, Australia, the European Union, and Israel don’t block their residents from using medical devices and drugs approved in other developed countries. Some lawmakers call this policy reform “reciprocity.” 

With rising health care and pharmaceutical costs gaining increased attention from lawmakers across the political spectrum, it is time that they seriously consider this intermediate step toward respect for patient autonomy and freedom of choice in health care.

As more people have become aware of the risks of central bank digital currencies (CBDCs), more people have become confused between CBDCs provided by the government and cryptocurrencies provided by the market. It’s understandable that the two ideas may be confusing at first glance, but the reality is that CBDCs and cryptocurrencies are near opposites.

CBDC vs Crypto 101

To begin, what is a central bank digital currency, or CBDC? As the name suggests, it would be a digital currency provided by the government. It is a direct liability of the central bank. In the United States, a CBDC would be a digital form of the U.S. dollar. But make no mistake, a CBDC is not “just a different form of money.” A CBDC would fundamentally differ from existing money because it would establish a direct line between citizens and the federal government—a sort of digital tether.

Norbert Michel and I have explained at length how this fundamental change would endanger financial privacy, freedom, markets, and security. And all of which would occur with little to no unique benefit gained by the adoption of a CBDC.

On the other hand, a cryptocurrency is a digital currency provided by private actors in the market. At its core, cryptocurrency offers a way to digitally store and exchange value in a manner secured through cryptography rather than the government or third parties.

To simplify the discussion, let’s focus on Bitcoin considering it is decentralized, open, and permissionless. Put simply, you don’t need the permission of the Federal Reserve, Congress, any company, or any individual to use Bitcoin. You’re free to choose whether you’d like to use it and how you’d like to use it. And in the same sense, there’s no group or individual to freeze or seize your funds. However, this freedom goes beyond using Bitcoin for spending or saving. You’re also free to step in to help maintain the inner workings of the system (a process known as mining).

Where a CBDC is the epitome of centralized money provided by the government, Bitcoin is the best modern example of decentralized money provided by the market (Table 1).

Members of Congress have already recognized that the distinction between CBDCs and cryptocurrencies is clear. Representative Warren Davidson (R‑OH) recently noted on the news that,

A lot of times people conflate something like Bitcoin or crypto with central bank digital currency[, but] it’s the exact opposite. Bitcoin doesn’t have a central authority at its heart—there’s no one to grant you permission. … There’s no central authority able to filter it or cancel it.

Likewise, at the Bitcoin Policy Summit in Washington D.C., Senator Ted Cruz (R‑TX) said,

We see China moving forward with the intention of using a CBDC to destroy all the value of Bitcoin—to destroy anonymity [and] to destroy decentralization. Their objective is precisely the opposite of a decentralized ledger system. They want a centralized ledger that the government has complete visibility into and complete control over.

In fact, despite leading the charge for a CBDC, even the White House recently recognized that the centralized nature of a CBDC “is somewhat ironic, given that this is different from an oft-cited founding principle of crypto assets like Bitcoin, whose purported aim was to create decentralized money without any trusted central authority.” In other words, it is ironic that in a time when people are figuring out how to decentralize money and technology writ large, governments are trying to centralize money more than ever before.

The Clash Between CBDCs and Cryptocurrency

It is also important to recognize that the rise of CBDCs has largely been a retaliation to cryptocurrencies. There were discussions of CBDCs for years, but these discussions really did not amount to much until the Facebook debacle. That is, CBDCs were pretty much an afterthought in the United States until Facebook announced its intention to create its own stablecoin: Libra (later rebranded as Diem). Although Libra never came to fruition, its announcement sent policymakers, legislatures, and central banks into a panic. In fact, Google trends data clearly shows that the interest in CBDCs skyrocketed shortly after the Libra announcement in the summer of 2019 (Figure 1).

It has been nearly four years since Facebook discussed the idea of introducing a cryptocurrency, but policymakers still regularly cite the occurrence in fear of what could have happened.

The rise of cryptocurrencies, however, did not just spur a rise in interest around CBDCs among policymakers. Not content with the idea of merely competing with cryptocurrencies, policymakers have also proposed (and often succeeded) in banning cryptocurrencies in tandem with launching CBDCs. China, India, and Nigeria offer clear examples of this trend. Even in the United States, Representative Jesús “Chuy” Garcia (D‑IL)—who would later cosponsor a bill to introduce a CBDC—proposed banning tech companies from creating cryptocurrencies. Later, Daleep Singh, former economic advisor to President Joe Biden, told Congress that a CBDC would be the single best step to crowd out cryptocurrencies.

Cryptocurrencies Are Not Without Fault

Now, to be clear, cryptocurrencies have their problems. Depending on the particular cryptocurrency and its associated blockchain, there can be a steep learning curve, mild to extreme price volatility, fees, and the like. In fact, policymakers like Senators Elizabeth Warren (D‑MA) and Roger Marshall (R‑KS) have even been actively trying to weaponize cryptocurrencies as a surveillance tool—like the U.S. government has previously done with the traditional financial system. And like the traditional financial system, not all cryptocurrencies are as decentralized as Bitcoin.

The important difference to take away is that people should be free to choose if they take part in both the benefits and the risks of cryptocurrency. In stark contrast to the government’s ever tightening and ever more restrictive monopoly on money, cryptocurrencies mark a new chapter in monetary freedom. CBDCs, on the other hand, appear to be an attempt to bring that chapter to a close.

Conclusion

It is easy to get lost when navigating a sea of acronyms and terms—especially when one is navigating uncharted waters. However, cryptocurrencies and CBDCs are effectively complete opposites in their design and should not be confused. In fact, recognizing this distinction is probably why Americans are more likely to oppose CBDCs after learning what they are and can do. As Congress contemplates legislation, it is critical that its members keep the distinctions between cryptocurrencies and CBDCs clear.

Foreign investment in low-tax countries complements U.S. production and expands global investment.

Low-tax countries are often derided for either attracting illusory corporate profits without changing true investment behavior or for attracting international investment to the detriment of usually higher-tax countries. However, research consistently finds that when multinational businesses invest abroad, they also increase investment at home.

For example, Mihir Desai, C. Fritz Foley, and James Hines find that “one dollar of additional foreign capital spending is associated with 3.5 dollars of additional domestic capital spending.” A more specific body of research shows that this complementarity of foreign and domestic investment is also true for investments in low-tax countries.

Ongoing efforts to limit access to tax havens through international minimum taxes and other new rules will have real costs to domestic U.S. investment and employment.

Tax Havens Boost Real Investment

Access to low-tax countries increases global economic activity, and cutting off access to tax havens undermines global and domestic investment.

A 2004 working paper by Desai, Foley, and Hines shows that corporate activity in low-tax countries “does not appear to divert activity from non-havens, as the estimates imply that firms establishing tax haven operations expand, rather than contract, their foreign activities in nearby” higher-tax countries. They conclude that “the ability of foreign investors to use tax havens in the same region has the beneficial effect of stimulating investment.”

Using a 2006 change to a tax exemption for income originating in U.S. territories, Juan Carlos Suárez Serrato shows that the effective tax increase reduced foreign and domestic investment with measurable effects on American workers’ well-being. Firms operating in Puerto Rico and exposed to the tax increase “reduced their global investment by 10%, increased their share of investment abroad by 12%, and reduced their US employment by 6.7%.” Areas of the United States that had more firms affected by the change “experienced relative decreases in income, wages, and home values, and these areas also became more reliant on government transfers.” Cutting off access to a popular low-tax jurisdiction reduced affiliated domestic economic activity.

Countries can also increase the cost of accessing low-tax countries by requiring new forms of tax reporting. These stricter regulations reduce domestic investment and make firms less likely to invest in new global opportunities. The introduction of country-by-country reports of more detailed geographic information on business, financial, and tax activities is estimated to have raised effective tax rates by between two percent to four percent on affected firms. Lisa De Simone and Marcel Olbert find that the effective tax increase made firms less sensitive to new investment opportunities, confirming a similar finding following a new U.S. reporting requirement in 2010. Following stricter transfer pricing rules that made it harder for multinationals to move profits to low-tax jurisdictions, firms decreased domestic investment but did not lower total global investment.

Complementary research shows that increased foreign employment is associated with increased domestic employment. Brian Kovak, Lindsay Oldenski, and Nicholas Sly use the implementation of bilateral tax treaties as an instrument to show that an increase in foreign affiliate employment drives a commensurate domestic employment increase 18 percent as large. The results hold in the aggregate, showing net employment gains from increased offshore activity.

Lowering domestic taxes on foreign-earned income also increases foreign investment without crowding out domestic investment. Following reforms in the U.K. that lowered taxes on foreign profits earned by domestic firms (moving from a worldwide to a territorial tax system), Li Liu finds that U.K. businesses increased foreign investment in low-tax countries by almost 17 percent, without offsetting reductions in domestic investment.

This body of research indicates that access to tax havens is like a tax cut on investment that increases investment everywhere, even in non-tax havens. Rather than a global scourge that just erodes the tax base of high-tax countries, low-tax countries help allocate global capital in the face of inefficient tax systems to the benefit of workers and investors around the world. Cutting off domestic business access to low-tax countries is a lose-lose; it hurts real foreign and domestic economic activity.

Washington, D.C.– Only 16% of Americans support the U.S. government adopting a Central Bank Digital Currency or “CBDC,” according to the new Cato Institute 2023 CBDC National Survey Report. The national survey of 2,000 Americans conducted by YouGov found that twice as many Americans—34%—oppose adopting a CBDC, while 49% don’t yet have an opinion. Nevertheless, the survey finds that Americans are more concerned about a CBDC’s risks than they are enthusiastic about its benefits.

The poll was conducted as officials at the Federal Reserve, the United States’ central bank, are considering whether the U.S. should adopt a central bank digital currency. While Americans regularly use digital dollars via credit cards, debit cards, etc, those dollars are a liability of the private commercial bank that issues them, like Bank of America or Wells Fargo. Conversely, a CBDC would be a liability of the government’s Federal Reserve, rather than a private bank. Thus, a CBDC would create a direct link between citizens and the government’s central bank.

When Americans learn of the potential benefits and risks of a CBDC they express stronger opinions about whether the U.S. should adopt one. Strong majorities of Americans would oppose adopting a CBDC if it meant that the government could control what people spend their money on (74%), that the government could monitor their spending (68%), that a CBDC would lead to the abolishment of all U.S. cash (68%), that a CBDC would attract cyberattacks (65%), that the government could charge a tax on those who don’t spend money during recessions (64%), or that the government could freeze the digital bank accounts of political protesters (59%). Americans were marginally opposed (52%) if a CBDC would cause some people to stop using private banks, resulting in some banks going out of business.

Americans express tepid support for a CBDC’s potential advantages. A plurality would support one if it reduced the risk of money laundering and fraud (42%) or if it meant that the government could ensure welfare payments were spent on their intended purpose (40%). Americans are about evenly supportive or opposed if a CBDC made instantaneous financial transactions possible (27% favor), made it easier for people without bank accounts to gain equitable access to the banking system (33% favor), or helped the Federal Reserve combat economic recessions (32% favor). In nearly each of these scenarios, about a quarter to a third of Americans still don’t have an opinion about a CBDC.

Both Republicans and Democrats are wary of CBDCs, but opposition is greater among Republicans. Before any benefits or costs are mentioned, a majority (53%) of Republicans oppose the government issuing a CBDC. On the other hand, a majority of Democrats (56%) are undecided and 22% oppose. Few Republicans (11%) and Democrats (22%) support adopting a CBDC. Additionally, strong majorities of both Democrats (71%) and Republicans (82%) would oppose a CBDC if the government could control what people spend their money on and when. Majorities of Democrats (61%) and Republicans (82%) would also oppose if the government could see what people buy with the digital currency.

Most Americans are more concerned about CBDC’s potential risks than enthusiastic about the benefits when considered together: 76% of Americans say the “government should not issue a central bank digital currency because it would potentially allow the government to monitor what people buy and potentially control how they spend their money.” About a quarter (24%) say that the “government should issue a central bank digital currency because it would reduce financial crime and other illegal activity and would increase access to the financial system.”

Nearly 8 in 10 Americans (78%) say they would not use a CBDC if one were offered, while 22% say they would. Some are more inclined to use a CBDC than others. Democrats (29%), Black Americans (39%), men (28%), and Americans under 35 (40%) were more likely than Republicans (16%), Hispanic (26%) or White Americans (18%), women (17%), and Americans over 55 (8%) to say they would use a CBDC.

Americans are satisfied with their own bank (89%) and trust private banks more than the government to “handle [their] money appropriately” (79%). Further, 85% of Americans would prefer to keep their money with a private bank rather than in an account operated by the Federal Reserve (15%).

The survey also found that a CBDC is about as popular as 1984-style in-home government surveillance cameras. Only 14% of Americans support the government installing surveillance cameras in every household “to reduce domestic violence, abuse, and other illegal activity.” But strikingly–a majority (53%) of Americans who support a CBDC also support the government installing in-home surveillance cameras to reduce abuse and other illegal activity. This suggests that some of the psychology behind support for a CBDC springs from an above average comfort level with trading some personal autonomy and privacy for societal order and security.

The topline questionnaire, full methodology, and report of the survey findings can be found here. If you would like to speak to Dr. Ekins on the poll’s results, please contact pr@​cato.​org or 202–789-5200.

Here we go again. David Leonhardt of the New York Times dredges up a poorly designed chart from 2017 that purported to show that there are very few “fiscally conservative, socially liberal” American voters. At the time Karl Smith pointed out some basic design flaws in the analysis. Emily Ekins noted that determining the number of liberal, conservative, libertarian, and populist/​communitarian/​statist voters depends very much on the definitions you start with and the issues you choose. She concludes: “The overwhelming body of literature, however, using a variety of different methods and different definitions, suggests that libertarians comprise about 10–20% of the population, but may range from 7–22%.”

The Gallup Poll has regularly used a two-question screen to divide voters into four ideological categories, and they typically found libertarians around the 20 percent mark.

Beginning in 2006 David Kirby and I used a three-question screen to identify libertarians, and we found that with that stricter definition “libertarians” constituted about 13 percent of the population and 15 percent of reported voters. And note that if we insisted on agreement with the liberal or conservative position on all three questions, the number of liberals and conservatives would likely be quite a bit lower than 25 percent.

It’s quite possible, of course, that the Trump Effect on Republican voters, not to mention the anti-Trump backlash among independent and Democratic voters would have significantly changed some of these pre-Trump, “normal” findings. 

We also commissioned Zogby International to ask our three American National Election Studies questions to 1,012 actual (reported) voters in the 2006 election. We asked half the sample, “Would you describe yourself as fiscally conservative and socially liberal?” — the very categorization Leonhardt used in his column. We asked the other half of the respondents, “Would you describe yourself as fiscally conservative and socially liberal, also known as libertarian?”

The results surprised us. Fully 59 percent of the respondents said “yes” to the first question. That is, by 59 to 27 percent, poll respondents said they would describe themselves as “fiscally conservative and socially liberal.”

The addition of the word “libertarian” clearly made the question more challenging. What surprised us was how small the drop‐​off was. A healthy 44 percent of respondents answered “yes” to that question, accepting a self‐​description as “libertarian.” We summed all that up in this handy graph:

Leonhardt and others may well be right that there are more “socially conservative, fiscally liberal” voters than “fiscally conservative, socially liberal.” Though the latter are better educated, more affluent, and more likely to vote. And in any case the numbers are a lot closer than Leonhardt and his befuddled chart would have you believe. Also, much depends on the questions you ask. Kirby and I used broad philosophical questions, as did Gallup, Pew, and ANES. But you can also use specific issues, as did a Washington Post poll. The combination “abolish Medicare” and “repeal all drug laws” would find a huge percentage of SCFL voters and very few FCSL or libertarianish voters. “Gay people should be able to get married” plus “the government spends too much money” will get you a lot of FCSL voters. Which one is closer to actual American policy conflicts?

There’s plenty of room for debate about how to analyze the ideological positions of American voters. But looking at the available data is a good place to start. 

This article appeared on Substack on May 30, 2023, and an earlier version appeared under Jacob Winter’s byline in the Harvard Undergraduate Law Review.

In a few weeks, the Supreme Court will announce its decision in two cases it heard last fall, one against Harvard and the other against the University of North Carolina. Both suits challenge race-based affirmative action in college admissions. In each case, a group called Students for Fair Admissions (SFFA) argues that the universities’ admissions policies unlawfully discriminate against Asian Americans.

The case against UNC rests on two issues. Under the Fourteenth Amendment’s Equal Protection Clause, states may not “deny to any person within [their] jurisdiction the equal protection of the laws.” SFFA claims that universities are adopting de facto quotas by prioritizing minority applicants over Asian Americans who have stronger academic records. Furthermore, under Title VI of the 1964 Civil Rights Act, no university receiving federal funds or student aid may discriminate based on race, color, or national origin. The case against Harvard, a private university, relies primarily on this second legal argument.

Perhaps the most well-known Supreme Court case addressing affirmative action is Regents of the University of California v. Bakke (1978). In the case, a white applicant who was twice rejected from the UC Davis School of Medicine challenged the constitutionality of the school’s racial quotas in admissions. The Court struck down the use of strict racial quotas, but ruled that the use of race as one of several criteria in university admissions is permissible under the Fourteenth Amendment and Title VI. The justices found that fostering diversity is a compelling state interest because it improves the quality of education. This unique ruling made the permissibility of race-based affirmative action a legal gray area and cemented it as one of the most contentious issues in American politics.

The Court’s ruling in today’s cases is unlikely to end or even calm this debate. If the Court bars any consideration of race, universities will likely use other factors associated with race, such as socioeconomic status or geographic location. There is already evidence of this. Passed in 1996, California Proposition 209 prohibits state government institutions, including public education, from considering race, sex, or ethnicity. The University of California system has switched to proxies for race, such as family income and neighborhood circumstances, to continue promoting “diversity and equal opportunity.”

If these practices become widespread, they will likely spur new lawsuits that challenge whether such practices are legal. Plus, history suggests that whenever the Court upholds the legality of race-based affirmative action, legal challenges will nonetheless continue. Furthermore, the Court’s ruling will inevitably enrage one side or the other, generating further polarization over the issue.

This cycle of never-ending debate raises the question of whether, these cases aside, a better policy path exists. The answer is that instead of banning or regulating affirmative action, federal and state governments should eliminate financial support of higher education.

If states do not operate universities, the Equal Protection Clause has no bearing, since it applies only to state governments, not private universities. Absent federal funding for higher education, via research grants or financial aid, Title VI of the Civil Rights Act is similarly irrelevant. Use of affirmative action would become a decision for private institutions using their own funds. Such decisions would answer only to the market for higher education. Universities would be driven to employ admissions policies that align with the preferences of most of their constituents and potential applicants. Otherwise, to remain competitive in the higher education market, they would be compelled to change their policies if enough of their constituents or potential applicants found them objectionable.

This perspective on the current debate will strike some as nonsensical, since many believe government support of higher education is essential to ensure widespread access and a skilled labor force. That argument is disputable but the subject of another piece. This article argues instead that, regardless of any downsides, elimination of government support would have important benefits.

Many people believe affirmative action is valuable because diversity enhances the quality of teaching and research. Others believe higher education should practice affirmative action as a partial remedy to past racial injustice. In a free society, it should not matter for government policy whether one agrees with those views; if private institutions wish to act on them without using government funding, they should be free to do so.

Evidence from the higher education market suggests that many universities and their faculty, students, and parents value affirmative action immensely, or at least view it as an insufficient reason to avoid these institutions. Universities began using affirmative action before government pressure to combat discrimination. Harvard and similar institutions are both among the strongest advocates of affirmative action and the schools in the greatest demand by applicants. Thus, eliminating government support of higher education respects the freedom of universities and their constituents.

Reasonable arguments may exist for government support of higher education, whether via state universities or federal funding. But a full assessment should recognize that if the government funds education, then it must take stands on divisive issues, with all the anger and polarization this entails. If all universities were privately funded, many would practice affirmative action while others might not. People would attend institutions consistent with their beliefs and the factors that matter most to them.

This approach is also far less likely to polarize the nation than a sweeping Supreme Court decision. Affirmative action critics might not be satisfied, but their tax dollars would not support the practice. Plus, they can avoid such institutions so long as enough other people share their views.

Implementing this approach would require discontinuing funds to private universities and privatizing public universities. Developing a strategy for implementation is beyond the scope of this article. However, it is clear that discontinuing funds to private universities would be politically and logistically easier than privatizing public universities (but certainly not easy). Governments could discontinue funds gradually and make clear to universities when funds will cease.

An alternative perspective, in the Harvard case, is that private universities could avoid restrictions on affirmative action by forgoing government funding, as a few schools have done. Alternatively, the federal government could withhold funds from institutions whose admissions policies do not satisfy Title VI, rather than barring private use of affirmative action. These approaches would have a similar effect as eliminating funds entirely, and may even be better since universities would choose their own paths. The government would avoid the perception that it is backing away from promised funding, and universities would gain greater agency. Regardless of which plan is best, it is clear that government funds must be separated from higher education.

What does this mean for the Harvard and UNC cases? It is unclear. Rather, these cases are a teaching moment: government intervention often provokes polarizing debate over the goals, structure, and limits of that intervention. This does not render all government intervention undesirable, but it raises the bar at which the government should intervene. This lesson should enter policy debates in higher education, and beyond.