The Education Zoo

As someone who has spent a great deal of time in higher education both as a student and a professor, I heartily agree with Bill Bonner’s recent piece Misguided by Higher Education. It should be read by all with children nearing college age as well as recent college graduates, especially some of the Occupy Wall Street crowd. Regarding the latter, it may make them even more angry to understand how government education “exploited” them.

The article is full of valuable observations so that I recommend a full reading. Here in excerpt that should intrigue:

… what is real capitalism? It is what we’ve seen in the computer/Internet industry over the last 20 years. This was a new industry. It had not yet been tamed by the government. Regulations were few. There were no large, entrenched companies to block start-ups. There were no lobbyists to curry favor from the politicians. There were no subsidies…and no barriers. It was young, dynamic, chaotic…and very prone to blow-ups.

The whole industry blew up in January 2000. Mistakes were not bailed out. They were corrected. Money moved from weak hands to strong ones. Many companies failed. The companies that survived, and prospered…went on to glory. Amazon. Google. Microsoft. Apple.

And who was behind these new companies? College drop-outs, computer nerds, products of teenage mothers and broken marriages

Mr. Bonner (and many others) question the notion that college is for everyone:

… the typical young person would be better off getting out in to the real world and learning as much as possible from working, than he would by staying in school. After all, that’s how almost all the world’s great geniuses, inventors, scholars, and entrepreneurs learned. It has only been in the last 100 years that public education has been ubiquitous…and only in the last half a century that ordinary people felt they should go to college. But as more people went to college, the less dynamic…less creative…and less productive the US economy became.

A colleague of Mr. Bonner, Gary Gibson, leaves little doubt how he feels:

An unhealthy cultural myth has flourished that says everyone must go to college and get an advanced degree, even if it’s something for which there is virtually zero market demand. Meanwhile, below-market interest rates and government-backed loans have lured a couple generations of Americans down the road to higher education.

Even if college were free, these people would have enormous opportunity costs, losing four or five years where they could have been gaining real skills. But it is not, which makes the commitment even more foolish. Many leave college hopelessly in debt and hopelessly without skills and clueless. There is little hope of recovering the resources they squandered. Many begin life with a huge debt burden that they must battle, some for decades.

The cost goes beyond that incurred by the kids as Mr. Bonner points out:

The education industry has been corrupted by too much easy money. It is now zombified. Sclerotic. And parasitic. It now subtracts value. It takes valuable resources…not the least of which are the minds and bodies of people at their most energetic stage in life…and squanders them, making us all poorer.

A phrase used by Mr. Bonner to describe all industries in which government intervenes and regulates is worth remembering. It explains why these industries zombify:

A zoo economy keeps the old animals alive as long as possible.