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It's all about the rents, part one million and two


Heh. Great catch by credit slips. George Mason University, whose Mercatus Center hosted the recent panel about interchange I was on as well as the research of Todd Zywicki about interchange, research that found that “Merchants’ efforts to cabin these [interchange] fees would harm not only consumers but also the merchants themselves”, is no longer accepting Visa cards for tuition because the interchange is too high.

To repeat, George Mason University is no longer accepting Visa cards for tuition because the interchange is too high.

If ever there called for radical campus activism from the right at GMU, this is it. I like the idea of libertarians at GMU, egged on by their professors, chaining themselves to administrative offices, refusing to leave the premises until the administration acknowledges that in a perfect world with a perfect market in a closed loop with networks properties economic theory tells us it can’t matter to anyone what the interchange rate is, so the administration must accept Visa’s demands no matter what it is cause the rate doesn’t even matter. Students would disrupt administration meetings by standing up and reading Ronald Coase’s The Problem of Social Cost. Someone would give a passionate speech, Mario Savio style, that sometimes you have to pour 2%+ and rising of the dollar amount of all purchases upon the gears and upon the wheels, upon the levers, upon all the apparatus of our payment system, and you’ve got to make sure merchants have no power to price discriminate.

Seriously though, GMU is lucky to be in a privileged position to opt-out, thus giving them some negotiating power over their fees. For most businesses, having to take credit cards as the 21st century payment is just how the economy works.

But we're not so privileged. We have to laboriously remove the mandibles, the probosci, and the blood funnels of the rentiers from our bodies and lives, rent by rent by rent. If you haven't shifted your money to a local bank or a credit union, why not do it now? You haven't eaten at chain lately, have you? Why not stop that and encourage growers and cooks who are local? If you haven't tossed your brain-damaging teebee, are you at least watching for free? Or Tivo-ing out all the advertisements? And so and so forth.

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