You Know You Only Used To Get Juiced In It

-- By AlexKonik - 03 Jun 2012

When In Doubt, Get a Degree

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 have more educational credentials than you.

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 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 one learns. 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

Advanced education 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 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 or 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

Education 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 off defaults 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."

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

Comments

I think this great Alex. Their is a clear trunk of an argument with many branches coming out which you explore nicely. I like the way you wove Bob Dylan into each section of the paper. I suggest deleting the word 'college' from your articulation of the creed. I think the creed of our society is that education (all possible levels of education, not just college education) is the ticket up. The more degrees one can amass the better. Especially because later your argument seems to be more focused on graduate school loans, stating the creed in terms of education (without the restriction of college) would be clearer.

-- SkylarPolansky 05 Jun 2012

Thanks for the comment Skylar. I think your suggestion is spot on, and I noticed that this is a point where I lose some clarity while I was outlining. I went through a few iterations trying to fix it but haven't arrived quite there yet. The very first iteration had me launching the same attack against undergrad subsidies, but it was hard to take that as seriously. I made a few language tweeks based on your suggestion; I wonder whether I need to make a more structural change? Thanks for reading!

I do think it could use some structural changes. I suppose my main complaint is that the thesis is a bit lost in the forest. From my interpretation, it seems that your thesis is: Government subsidies are alright for undergraduate education, but they're stupid for graduate school. Is this right? I think my confusion comes from the fact that you don't really talk about graduate school until your 5th section, and you seem to go off into tangents about AmeriCorps? , education as a luxury, etc. I think these points, while interesting, could either be worked into the essay in a better fashion or, in some cases, deleted. A clearer thesis and a devotion to ensuring that every word written relates back to that thesis in some way could prove helpful.

Personally, I'm not sure if I agree with you that government subsidies for graduate school are automatically a bad idea. Yes, removing government subsidies for graduate school disincentivizes those from going to grad school who shouldn't be going in the first place. But it ends up being a much larger disincentive to poor people, mostly minorities, who will bear the brunt of a subsidy cut. People in graduate school - lawyers, doctors, businessmen - end up being the leaders and upper class of society, and by shutting poor minorities out of those paths, we continue to perpetuate a world run by white people for white people. Perhaps subsidies could be given more effectively, but I think helping poor minorities break into the upper echelon of society is just the kind of social good for which government subsidies are appropriate.

-- JaredMiller - 27 Jun 2012