Tuesday, March 26, 2013

The Collapse of the Value of a College Education

College education has become expensive and nearly useless. Got that? Price up, quality down. No surprise, when government gets involved. Even WSJ seems to get this (partially). In a recent article, they write:
By some measures, nearly half of employed college graduates are in jobs that don't traditionally require a college degree.
Unfortunately, WSJ seems to blame this on robots:
Ia paper released Monday by the National Bureau of Economic Research, a team of Canadian economists argues that the U.S. faces a longer-term problem. 
They found that unlike the 1990s, when companies needed hundreds of thousands of skilled workers to develop, build and install high-tech systems—everything from corporate intranets to manufacturing robots—demand for such skills has fallen in recent years, even as young people continued to flock to programs that taught them.
If it was simply a case of robots replacing workers in certain jobs, this would mean that there would be productivity gains for the economy overall, beginning and end of story. But, it is not as though we live in paradise where goods and services are so plentiful that none of us has to work. Something else is going on

The problem is that a college education for the most part does not  increase the value of a potential worker for an employer (aside from accounting and engineering degrees). The college system is far from a free market profit oriented system. Almost 100% of colleges take money from government or accept students who receive government loans. This results in colleges being required to meet government guidelines which have dramatically dumb downed the system.

The Chinese government has created 60 million vacant apartments through its central planning policies, while the U.S. government through its intervention in the education system has created tens of millions of college graduates with vacant minds.

College for most is really a waste of time, unless you want that accounting or engineering degree, or you are really sharp, can get into an Ivy League school and have a strong enough mind that you won't be corrupted by the system. In this latter category, I suspect no more than 1 in 500,000 could pull it off. Tom Woods did it, but few others. I can think of many more that were swallowed up by the system and now spend their time justifying some intervention in the economy.

If you are interested in studying Austrian economics, just go to the Mises Institute web site and absorb that material. Studying under Professor Walter Block at Loyola University New Orleans or Richard Ebeling at Northwood University are outlier options, but that is about it. For most who want to advance, they are much better off reading James Altucher than going to college.

5 comments:

  1. "They found that unlike the 1990s, when companies needed hundreds of thousands of skilled workers to develop, build and install high-tech systems—everything from corporate intranets to manufacturing robots—demand for such skills has fallen in recent years, even as young people continued to flock to programs that taught them."

    Since I have no intention of subscribing to WSJ, I have to take what you quoted. Nowhere does this blame the problem on robots. It's saying that the jobs related to creating and installing robots have fallen in number (used as an example).

    That aside, you are absolutely correct about college and public education in general. Public education is antiquated. After college, when you need training in a technical field, you often go to an intense one or two week class and learn pretty much what you'd learn in a semester of college.

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  2. Thanks for making me feel bad on my birthday Bob. I only owe a cool $200,000 for private liberal arts and law school education. However, but for law school I never would've done a paper on accounting fraud and the GSEs. The research lead me to learn of the boom/bust cycle, the powers behind the financial system, and ultimately Austrian economics. It would have been nice to learn all this despite incurring this debt, but this is the way it went. Anyways, hopefully some job prospects on the horizon, and I can always hang the shingle with nothing to lose. But keep up the good work Mr. Wenzel. Hopefully the SHTF will be delayed for some more years to come.

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  3. Interested students could also come to Grove City College (GCC) where they could study under Herbener and Ritenour. At GCC the entire curriculum is rooted in Misesian Praxeology. Required reading includes Ritenour's FOUNDATIONS OF ECONOMICS for Principles of Microeconomics, Principles of Macroeconomics, and Foundations of Economics; Sections of Rothbard's MAN, ECONOMY, AND STATE in Intermediate Microeconomics; Rothbard's THE MYSTERY OF BANKING in Money and Banking, Rothbard's POWER AND MARKET in Public Finance, Sections from Mises' HUMAN ACTION in Foundations of Economics, Huerta de Soto's MONEY, BANK CREDIT, AND ECONOMIC CYCLES in Intermediate Macroeconomics, Hoppe's A THEORY OF SOCIALISM AND CAPITALISM in Comparative Economic Systems, Holcombe's edited GREAT AUSTRIAN ECONOMISTS in Austrian Economics; and various supplemental articles by Roger Garrison, Jeffrey Herbener, Guido Hulsmann, and Joseph T. Salerno, and Rothbard just to name a few. Grove City College also hosts the annual Austrian Student Scholars Conference.

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  4. There's "education" and then there's """""education""""""......

    http://captaincapitalism.blogspot.se/2013/03/1300-for-class-in-chicana-lesbian.html

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  5. I understand your cynicism, but then there are some very good colleges. As a matter of fact, I know one.... Centennial College in Toronto.

    The curriculum is designed in manner that focuses on providing pragmatic knowledge to the students and hence giving them the much desired competitive-edge.

    And most importantly it is not money laundering institute.... :)

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