Grounds for Protection

Understanding Trade Policy Through a Campus Lens

Most colleges offer on-site dining options, and at the very least a campus café. Since food service is not something academics typically specialize in, most universities contract with an outside vendor. So, let’s say a vendor establishes a café called Campus Perk. The café is convenient, adds to campus appeal, and provides employment opportunities. Under a formal concession agreement, Campus Perk pays the university a percentage of its revenue in exchange for the exclusive right to operate on campus—a tidy arrangement that benefits both parties.

On occasion, however, some students find the lines too long or the prices too high, and have discovered the appeal of wandering into town for their coffee. Over time, the student purchases elevate the town’s profile and entice new cafés to open, creating a small but thriving off-campus coffee culture.

The university, however, is not pleased. Administrators begin to wonder why students don’t support campus dining services. Meanwhile, Campus Perk grows frustrated by its inability to compete with off-campus options and begins considering closing the campus café altogether. Administrators are alarmed. Despite the fact that students clearly benefit from a greater variety of beverage options when making purchases in town, the university deems Campus Perk worth protecting. The argument being that some students would lose their on-campus barista jobs, parents of prospective students touring the grounds might question the absence of noteworthy amenities like a campus café, and perhaps most pressingly, the university would lose its concession revenue.

So, the administration devises a plan. Leveraging the university president’s influence with the local town council, a new policy is established: any time a student makes a beverage purchase off-campus, a portion of the sale must be paid to the university. And students, upon returning through the campus gate, must verify their purchase of an outside beverage so that the university can keep track. The justification offered is straightforward, if self-serving: without the university, there would be no student customers for the town to serve in the first place.

Café owners, to account for the portion of their profit now going to the university, increase their prices on student purchases, making off-campus coffee effectively more expensive. The price increase, however, doesn’t apply to other community members; and to compound the matter, when students from rival universities visit town for competitions or events, they face no such charge—the town cafés serve them freely and without penalty.

From the ivory tower, the administration is confident in its reasoning. The new rule generates new revenue while at the same time saving Campus Perk. But for students, off-campus coffee options are now less welcoming and more costly.

Moreover, local businesses that had once embraced the student community—hiring them, sponsoring campus events, donating to student organizations—begin to pull back, unwilling to be caught up in the university’s increasingly insular politics. And some of the town cafés, frustrated by the university’s interference in what had been a mutually beneficial relationship, quietly stopped accepting university students as customers. They made clear, too, that students from that campus were no longer at the top of their hiring lists. What had once been a warm and productive relationship between town and gown is now fraying at the seams.

The new policy has also imposed practical costs that no one anticipated. The university now stations monitors at campus entrances to inspect incoming cups of coffee. The cost for staffing these stations creates an uptick in university spending, and the cumbersome arrangement results in any coffee becoming cold by the time receipts and cup inspections are complete.

Savvy students, of course, find workarounds. They leave their student IDs in their dorm rooms when heading into town, and many have taken to pouring their off-campus coffee into old Campus Perk cups before crossing back onto campus grounds. Over time, people adapt. But no one is happy, except the administrators and Campus Perk staff—but even that becomes questionable.

Free from the university’s reach, the local cafés continue to compete, innovate, and improve. New brewing methods emerge. Healthier options appear on the menu. Price points span a wider range. The cafés have largely given up on cultivating loyalty among students from that particular university—but they welcome visitors from rival schools with open arms whenever tournaments, performances, or academic competitions bring them through. And word travels fast among prospective students. As the coffee policy becomes more widely known—shared in campus review forums, mentioned at open houses, whispered among high school seniors weighing their options—the university’s appeal quietly begins to erode. Applicants who had once been drawn to the campus now raise eyebrows at the policy. Some chose schools in towns where the relationship between campus and community felt more welcoming and alive. Enrollment figures, once a point of institutional pride, begin to soften. The administration had set out to protect the campus experience, but in doing so had made the campus a less desirable place to be. Moreover, any revenue that was accrued by the off-campus coffee charge slows to a trickle as town cafés decide that the sale to students is simply not worth it. And as for Campus Perk, devoid of competition, it stagnates, and students find the service to be poor and the coffee to be unappealing. When these students visit other campuses for events and competitions, they wonder why their options are so limited, and they resent the administrators. The irony is not lost on anyone—except those in charge.

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The analogy, by this point, should be clear. The university is the United States. The administration is the White House. Campus Perk represents domestic producers. Campus Perk baristas represent domestic jobs. Parents of prospective students touring the grounds represent investment opportunities. The concession revenue that would be lost if Campus Perk closed represents tax dollars. The fee imposed on off-campus coffee represents tariffs. The town cafés represent foreign producers. And the entire scenario is a parable of trade protectionism in action.

The consequences are worth naming plainly. Protectionism limits consumer choice and forces people to pay more for less. It insulates domestic producers from the competitive pressure that drives improvement, giving them little reason to innovate or lower prices. It generates costly enforcement mechanisms that would otherwise be unnecessary. It provokes retaliation from trading partners, corroding relationships that were once mutually beneficial. It gradually cedes the ground of innovation to foreign competitors, who continue to advance while the protected domestic market stands still. And perhaps most insidiously, it damages a nation’s reputation as an open, dynamic, and welcoming place—deterring the foreign students, skilled workers, and investors whose presence and participation make an economy stronger.

But there is a deeper cost that often goes unacknowledged: protectionism freezes the economy in place, propping up what exists at the expense of what could be. The economist Joseph Schumpeter called this phenomenon creative destruction—the idea that in a healthy, competitive market, older and less efficient businesses naturally give way to newer, better ones, and that this process, however disruptive in the short term, is the engine of long-run prosperity.

By shielding the campus café from competition, the university didn’t just make coffee more expensive—it prevented something better from taking its place. Had market forces been allowed to work, that campus space might well have been claimed by a sober social lounge: the kind of zero-proof cocktail bar and gathering spot that has become one of the defining hospitality trends of the moment, driven by a generation of college-age consumers who are increasingly choosing not to drink. A space where students could unwind over inventive craft non-alcoholic cocktails and beers, socialize, and actually linger—something Campus Perk’s grab-and-go counter was never designed to offer. Not everyone would have welcomed the change, of course. Some faculty, accustomed to their morning routine and the familiarity of the campus café, would have grumbled. But for the baristas who once earned modest wages pulling espresso shots, the transition might well have represented a step forward—higher tips, a more creative role, and the satisfaction of crafting novel concoctions for an enthusiastic and curious crowd. That is precisely Schumpeter’s point: creative destruction is rarely tidy, and it rarely pleases everyone, but it tends to generate opportunities that are richer than the ones it leaves behind.

If the goal is a dynamic, competitive economy, the prescription is not protection—it is the confidence to let markets evolve, and the wisdom to keep our trading relationships intact.

Dr. Kimberlee Josephson is an associate professor of business at Lebanon Valley College and serves as an adjunct research fellow with the Consumer Choice Center. She teaches courses on global sustainability, international marketing, and workplace diversity; and her research and op-eds have appeared in various outlets. Follow her on X and LinkedIn.