dr Daniel Sutter: The Fraud Industry

I support free markets and economic freedom. But do all markets make society better? The college cheating industry offers a challenge. An internet search quickly reveals the plentiful help available.

Companies and freelancers write papers and even offer money-back guarantees. If you upload images of exam questions to a phone, answers can be provided. Entire classes and degree programs can be enrolled.

As a professor, I could easily moralize about cheating. But let’s look at the economics. There is a market for scams because some college students are willing to pay for help. Specifically, they will pay enough to persuade people who are able, for example, to write good term papers, to do so. Compensation must also compensate for guilt for involvement in wrongdoing.

Fraud clearly predates the internet, but now significantly enables this market. Students can easily connect with providers. Services may pay for ads to appear in Internet searches. And authors use the Internet to quickly research topics. Students demand individually written work due to plagiarism detection software. Software can now easily identify content taken from the Internet. Paper writing services routinely include plagiarism reports to assure customers of the original content.

Further examining the supply and demand sides of the market raises concerns about higher education. On the supply side, many writers are (apparently) graduates of colleges in the United States, Canada, or the United Kingdom. (Poorly written papers seem to be common among the cheapest service providers.) Unemployed English graduate honors offer many testimonials from fraudulent industrial workers.

Some higher education critics argue that we have too many college graduates. Their evidence is often ambiguous. That the fraudulent industry can hire people capable of researching good papers and writing on tight deadlines for about $10 a page speaks volumes about the job opportunities of at least some college grads.

On the demand side, the main question is why cheating works. Teachers warn scammers they are only cheating themselves. There is some truth in that statement. Cheating allows students to complete an assignment or class without learning the material.

Does that really help? Suppose someone cheats their way through truck driving school. How are they supposed to get and keep a job if they can’t pull in and drive a truck? Considering this, why pay for truck driving school tuition and then pay for cheating? The requirements of the jobs should limit the demand for fraud.

Cheating is more likely in classes unrelated to the jobs the students are looking for. College curricula contain required courses that have little direct relevance to a major, such as chemistry for aspiring bankers. The shortening of the bachelor’s degree by eliminating unrelated compulsory courses is intended to mitigate fraud.

College and graduate requirements are imposed by professional licensing to reduce the number of practitioners. Professional license is a state permit to work legally in a field and has grown tremendously in the United States.

Such closing requirements are particularly vulnerable to fraud; Employers don’t care if applicants lack irrelevant knowledge. What are the consequences of the fraudulent industry? The willingness of some to cheat requires professors and universities to incur costs to control and deter cheating.

The cost corresponds to the cost to businesses of shoplifting and employee theft. We could enjoy a higher standard of living if nobody was willing to cheat (or steal). Cheating also reduces the value of grades and degrees.

This is often said to be unfair to students studying and earning their grades. But for business, cheating makes grades and degrees less effective in identifying strong students for employers. This is particularly costly when employers cannot quickly identify unqualified applicants, unlike in the case of truck driving.

Fraud appears to be similar to other “victimless” crimes such as illicit drug use. But that’s not right. The contract students have with colleges prohibits academic misconduct. Cheating is a breach of contract, not just consuming an unpopular product.

People will supply what others are willing to buy. But contracts are a foundation of economic freedom, and enforcing contracts is a fundamental responsibility of government. Protecting economic liberty does not require tolerating the fraudulent industry.

Daniel Sutter is the Charles G. Koch Professor of Economics at the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are those of the author and do not necessarily reflect the views of Troy University.

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