From the Economist: “America’s universities lost their way badly in the era of easy money. If they do not find it again, they may go the way of GM.”
Source link: http://blog.mises.org/13782/the-skinny-on-american-academia/
The Skinny on American Academia
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You do not need the financial acumen of Gary North to realize that $100,000 in tuition for a degree that gives you a .5 probability of making $40,000 per year is a bad investment. Not to mention the moral rot so prevalent on most any campus today.
Two major problems with universities today:
1. Teaching subject that have no value to the employment market.
2. Treating universities like a 4+ year long “experience”, not a facility of higher education.
It’s these two factors that absorb the vast bulk of a university’s budget, along with a bloated administrative group. Open a course catalog and you can tick off page after page of non-value added classes and entire degree programs. Think of degrees in “Education” or Art History or [Instert your Favorte Minority Here] Studies. Hell, even Law is a waste if you think about it. Then universities offer large volumes of clubs and activities that have little bearing to the quality of education yet are paid for by all the students through fees on top of tuition. This is before the healthy boost of subsidy money. Nearly every sports program beyond a handful of football and basketball teams is a net money loser to the university and are subsidized through tuitions.
Then there’s the advertising push, that somehow EVERYONE needs a degree in SOMETHING. Few people in life absolutely need a college education. How much college course work does a customer service representative for a cellphone company need? How many classes in The History of Women does a person need to successfully weld piping? What degree is required to work at the perfume counter at Macy’s? Then this advertising push if funded through subsidized government loans, dramatically driving up the demand on an organization that has an effective State sponsored monopoly.
After looking through my alma mater’s financial reports with a red pen in hand, crossing out everything that had nothing to do with education and crossing out all the expenses that didn’t have any value in the business world, I managed to cut out about 72% of the entire budget. And the only reason I couldn’t go further was becuase of the large amount of capital depreciation that still remains on the books due to entire facilities being constructed to house the waste.
Don’t forget GenEd and Perspective classes even for the valuable learning majors, in the name of being “well-rounded.” I suspect this is another way to subsidize crappy majors.
Spot on that most people who get college degrees don’t need them. However, I disagree with the idea that the only valuable classes are ones imparting some sort of vocational knowledge (I assume from your comment that things like engineering and accounting, but probably not things like history and sociology, pass your test). A real liberal arts education is a valuable thing if it actually impacts the mind of one receiving it, even if it doesn’t directly help get the toilet drain unclogged back home. By “real” liberal arts education, I mean a course of study that leaves the student familiar with major ideas and thinkers and able competently to perform logical reasoning. A bonus result would be working familiarity with languages the student does not speak natively, but which figure prominently in the areas of his dealings.
A university is not just B-school. A student who has gained the ability to reason and to apply reasoning skills to any subject put before her is much better suited to operate in a business setting than a student with 124 hours of management and marketing classes. The first can handle problems that don’t fit formula the grad student taught in small group session. The second is lost as soon as anything deviates from the script.
As an aside, the state has no business paying for any of this. Even Milton Friedman’s argument for state-funded liberal arts education in “Capitalism and Freedom” (of which he manages to truly support neither) cannot provide a justifiable reason why the state should steal money from some folks to pay for another group of folks to read Virgil and learn calculus.
Surely these need not be problems in a free market economy? If I want to pay for being taught a subject that has no value to the employment market, that’s my lookout, surely! Ditto, with “problem” #2.
That other people are subsidising this is, I’d agree, a problem.
On one level, I would tend to disagree with the “Economist”. As long as higher education continues to be greatly subsidized by government, thus limiting the cost impact on consumers, there will be a strong incentive for colleges and universities to continue to dramatically raise prices. And yes, GM did go bankrupt, but was then bailed out by the federal government, with the company required to make only minor reductions to its costs.
Your last line cynicism is piercing. I think many scholars and steely-eyed observers of the environment still don’t recognize how deep rooted is the establishment, and how powerfully robust is its armor. The steel mesh is not just a couple of profs and college trustees who keep the con job operational.
A long time frustration is to hear, even on this site, the school marm warning with waving finger before my nose, “This is not all fun and games, Mister. You just wait and see. You will be one sorry young man…. You’ll see.. You will.”
Yuh, sure. The educational establishments are just shaking in their boots. Pffft.
You nailed it, Dennis.
When something is subsidized by government, it means that most of us are paying for something that a small fraction use. Add to the mix federal students loans and grants, reduced entrance requirements to fill the majors, and ever-increasing regulatory demands (1% of the cost of a new building must be for art), and you have a recipe for soaring costs to all.
Well, it is unusual for me to disagree with so many comments here on Mises, but there it is. Of course, I agree that government has no business being involved with education (or anything else) but I strongly disagree with the notion that college need be more ‘employment directed’ or seen as an investment, other than an investment in development and happiness. There is more to life than your job, and, as we know, the unexamined life is not worth living. For what it’s worth (see my LRC article on the topic) I oppose the liberal curriculum while supporting a liberal education. I believe the ideal college is more a place of discovery than one with a fixed set of requirements, and I believe that majors are far too heavy nowadays. I also believe that it is government which has screwed up the universities by creating a bureaucratic credential-driven society, which meant the universities had to follow suit.
“I strongly disagree with the notion that college need be more ‘employment directed’ or seen as an investment, other than an investment in development and happiness.”
It’s an admirable set of values, JAK. But I went through a liberal arts curriculum. What it leads to, unless you have advantages of birth, is the realization that you’re now still unemployable, only on a higher level.
Disagree.
What it leads to is precisely what’s stated — development and happiness.
I suspect you most certainly leveraged and cultivated those years into many life-experience-returns.
You’re just not recognizing it.
Oh, absolutely. That’s what I leveraged my education into, a richer life-experience. It’s just that that’s not what I went to school for. I went to be able to select a professional career and arrive at the bottom rung well prepared. And what I didn’t know at the time was that a liberal arts school was not the place to do that. Not unless your career of choice was teaching.
So I left school quite early– and had a richer life experience anyway.
Yes, the degree has become a proxy for actual skill. In anything connected with government work, a degree is more important than literally years of experience actually doing the work. This is basically just another licensing scam.
Guard: There’s actually another explanation for the degree requirement. If your job involves being a desk jockey, able to sit for long periods of time while cranking out work that largely occurs inside your brain, they want to cull the herd for those individuals who have a proven track record. That is, people with at least a BA in something.
As for the content of the work, if you have any basic intelligence you can probably pick it up on the job. And if it’s more advanced, your employer will send you to specialized courses at the company’s expense. What they wanted to find out when they asked for your degree was whether you knew how to think.
Re licensing, it’s hardly a scam. It’s an assurance that someone passes basic standards in their profession. We read all the time about problems that occur in unlicensed day care centers or even from unlicensed hair dressers. Take a ride in an unlicensed cab and you’ll see what I’m talking about. Or have an unlicensed accountant do your taxes.
“[licensing is] an assurance that someone passes basic standards in their profession.”
It’s also protectionism. And I’ve had haircuts (good ones) from unlicensed people, and rode in car pools in the DC area that sprang up spontaneously to take advantage of the car pool lanes. Should those car pools be illegalized? Should people not be allowed to drive strangers to the Metro station?
And degrees are used as an easy form of culling the herd, as you say, but they also serve as a barrier to entry, just like guilds did of old. Two of the best computer programmers I have ever worked with did not have 4 year degrees. They could program circles around most, but could still not get a job at most large IT shops, because the HR morons there require 4 year degrees.
I learned that the Internet can give a huge liberal arts education if one has the will. (Practically) free access and organization improving each day makes it a good platform.
I think it is that GM has gone the way of the public universities, rather than the other way around. Can’t exist without the subsidy. I can only imagine how poor the quality of GM cars will soon be. How long before the government uses protectionism to favor them, at the expense of the consumers. Already, are the recent quality concerns about Toyota’s products an example of the government going after its competitors in the automobile industry?
“I can only imagine how poor the quality of GM cars will soon be.”
And the quality wasn’t all that before. Like the old adage says “If you like laws or sausages (or cars), you should not know too much about how they are made.” *grin*
I’ve always driven GMs, but my next car will be a Ford.
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