Popping the Higher Ed. Bubble, and Cleaning Up the BS.

A spate of recent commentary implies that America’s University System has made like “The Fonz” and jumped the shark. They point out that colleges and universities charge more and more money to produce graduates that know less and less. As a result, these graduates are unemployable and owe tens of thousands in non-dischargeable debt. The term “Higher Education Bubble” has gained a certain blogosphere popularity.

On the other side of the debate, some deny this, some wish it away. I think that the smarter thing to do is ask “So what?” Until we have a good answer to that question, we have no reason to bother asking why universities hire crank professor, thug athletes, and increasingly useless administrators. They do it for the same reason the local stray dog frequents the fire hydrant on down the lane.

“So what?” The question sounds like an off-hand smack-down. In this case, it’s intended as a probative question. Let’s say I don’t like the fact that I had to borrow a lot more than I was worth to get a degree in Applied Mathematics. First, I wasn’t crazy about borrowing more than I was worth to buy shelter for my family either. An unfortunate truth of economics is that the target consumer doesn’t really have to like buying things that he has to have in order to function. I doubt Mr. Gates and Mr. Ballmer received a cornucopia of thank you notes for the latest edition of MS Office.

Let’s say I chose not borrow money to fund the education I felt I needed. My current employer would still require 24 hours of college mathematics with a minimum of six hours of calculus as an entry-level requirement for my current career progression. Not borrowing that money back in the day would have prevented me from enjoying a lot of nice things right about now. Thus, neither the typical student in need of professional credentialing, nor the perspective employers care whether college has jumped the shark.

So colleges charge more and teach less than they did in some foregone Golden Age. But the economic realities of the situation currently imply that my kids spend too much money on diplomas so that they can get over the initial hurdle barring entry to professional class employment in America.

To remain even semi-stable, this equilibrium has to help someone. It does, as Matthew Shaffer explains in National Review’s Phi Beta Cons Blog.

Here’s why: Those of us who question the price and value of higher education don’t disagree that people with B.A.s do much better in life, especially in employment. We disagree about the source of that advantage: The B.A. may mostly correlate with and signal for, rather than impart important qualities.

Again we logically posit the question, “so what?” Schaffer provides further insight.

Since employers can no longer measure job applicants’ IQs nor put them through long apprenticeships, graduating college is the way job-searchers signal an intelligence and diligence that college itself may have contributed little toward. Employers are (to use a little economic jargon) partially outsourcing their employee search to colleges. This is a good deal for employers, because college costs them nothing,…

This explains why the colleges and universities can get away with giving four-year scholarships to athletes that have only read one book cover-to-cover since birth. It explains why they hire professors who describe the worst terrorist attack against Americans ever as “Chickens Coming Home to Roost.” Then there was the “Cold Fusion” fiasco at Utah University. Through it all, students still need sheepskins, so they have to just shut up and take it.

That is, until the corporations and employers which rely upon universities to serve as intellectual high-pass filters decide that it is time to clean up the BS. At that point, the entire business model employed by the university system comes open to attack. In 2008, Gary North authored an amusingly cranky article entitled “Walmart University.” A recent, more up-market suggestion was “Gates Wikipedia University.”

A feature both of these ideas had in common involved their reliance on digital technology to allow students to avoid the necessity of moving to a brick-and-mortar campus to receive instruction. They each planned taping lectures remotely, and thereby selecting for higher quality instruction than most universities that hire faculty full time. These subject-matter All-Star faculties could then be remunerated on a per-course basis with both fees and royalties each time an eager young scholar clicked play on his computer.

This would be violently fought by many fine and upstanding members of American society. From the textbook publishers, to the food service, to the 529 Investment Plans, to the NFL teams we root for every Sunday, the current university system spawns cartels against the interest of consumers the way some Climate Scientists accuse AGW of spawning large tornadoes. The first bulwark athwart changing our current status quo involves how universities get credentialed. When that fails, Phoenix University can always be slandered and handicapped by illustrious members of Congress.

As Richard Vedder pointed out on Chronicle.com,

Universities spend billions annually researching everything under the sun—but precious little on R & D into their own business, specifically into cheap ways to disseminate higher forms of knowledge.

Only anger on the part of the employers who use university degrees as a basic proxy for intellect and socialization will change this system. Protesting students and parents are no more effective than hamsters complaining about the steepness of their treadmill. The BS will be cleaned up when our producers and government agencies start noticing that nobody our colleges and universities produce can do their assigned jobs without long and costly on-the-job training.