You Know You Only Used To Get Juiced In It

-- By AlexKonik - 03 Jun 2012

Always Go to College

There are few things that remain unquestionably true in American life. One, Americans are special in the world. Two, your kids will have a higher standard of living than you. Three, number two is only true if they go to college.

Without doubt, K-12 education is very important. It certainly benefits students. In 13 short years nearly all Americans are transformed from walking and talking little monsters into actual citizens. They can read, do basic math, dissect a frog, and have a basic contextual knowledge of human history and how government functions. The benefits to society likely even overshadow the benefits to the individual. When everyone can read a stop sign, goods can flow by truck.

This type of good calls for government provision or subsidy. Like ubiquitous road, mail, and internet access, the total societal gain is not captured by the price offered for these items.

The Creed

This reasoning can extend beyond its support. America is captured with a creed that a college education is your ticket up. Investment in education, no matter the school, your area of study, whether you are truly interested, or how hard you will work, is worth the cost. You should not consider whether to go to school; you should consider where to go. This belief may have been true, ironically, when attending college was a signal of luxury and truly privileged status; attendance promised unique status and opportunities. Today it is just as true but for another reason. The signal has been diluted: lacking a degree serves instead to bar one from a large segment of the most gainful employment. This is not because of the skills learned in college. It is because "colleges are part of the American institution; everybody respects them. They're very rich and influential, but they have nothing to do with survival. Everybody knows that." (Bob Dylan, responding to questions about dropping out of college). The assumption of college attendance is the product of an accreditation arms race that has exceeded its functional purpose. It has become a creed that blurs the line between luxury and investment in human capital, and it cheapens both.

The Alternative

College does serve some functions that are important. First, it is a great way of investing in human capital. Learning a skill or profession may be a wise investment decision, depending on the value of the knowledge and the cost of tuition and foregone opportunities. Second, it can be a luxury good for the academically interested or a 4-year summer camp for the rich. Third, like primary education, it socializes and informs citizens, providing externalities for which the cost is not discounted. This third function warrants government subsidy, but it is as successfully achieved in other ways. Many European countries promote service in a program like AmeriCorps? . A young person could actually contribute to society and earn rather than spend money while acquiring the same socialization (any many of the knowledge) benefits. When asked to name a better use of four years than college, Dylan replied: "Well, you could hang around in Italy; you could go to Mexico; you could become a dishwasher; you could even go to Arkansas . . . Everybody thinks that you have to bang your head against the wall, but it's silly when you really think about it." After all, "out of all the people who just lay around and ask 'Why?', how many do you figure really want to know?"

The luxury angle is certainly legitimate. The wealthy may want to read Heidegger and drink at fraternity parties. This is not an investment; it is a vacation. As Dylan said, “I certainly wouldn't advise somebody not to go to college; I just wouldn't pay his way through college.”

The Sliver of Truth

College as an investment, though, is the sliver of truth shouldering the American creed. In a world of the economist’s assumptions this purpose would not warrant subsidy. Unsurprisingly, the assumptions fail and there are consequently many good reasons for the government to subsidize undergraduate educations. Foremost is that college has, as lamented above, become a prerequisite for most gainful employment for cultural reasons. Facing a total bar, people must go. The poor are at a particular disadvantage because education is not collaterizable the way a house is. Without assurance of repayment, the poor will face rates that will keep promising investments from capitalizing. A government loan program can spread risk and write defaults off as the cost of operating a system that provides net social gain.

If It Isn't a Luxury, You May Be the Commodity

This justification for subsidy is lost once one reaches graduate or professional school. By then both the student and investor have (or have no excuse to lack) adequate information about future prospects to make an informed investment. Subsidies here are pure market distortion, and we should not lament the recent abandonment of Stafford Loan subsidies to graduate students. The loans disguised the price of advanced education and incentivized over-investment in training that was not worth its actual cost.

The Reconciliation

Appreciating the abandonment of government subsidy for education is a violation of our creed. Because it discourages contemplation on whether one’s education is a luxury or an investment, the creed disguises the legitimate reasons for education in a shroud of false reverence and necessity. Hopefully, your J.D. is both an investment and a luxury. Thinking of it in these terms, and not the unquestioned next step after a B.A. in a bad economy, should focus your decision on whether to go to school and what to do with your degree.

When we are happy that the subsidy is cut, we must collide head-on with those "Who despise their jobs, their destinies / Speak jealously of them that are free / Cultivate their flowers to be / Nothing more than something they invest in."

(997 words)

(I would like to continue working on this paper, but please prioritize my first paper ahead of this for edits.)