Costly Lessons and a Problem that is Getting Worse, not Better

Dr. Richard Vedder is one of the finest economists in America. More specifically, he is an economic historian, a respected academic, and an important contributor to the dialogue on higher education in our country. In the most recent issue of National Review he wrote a crucially important article on the utter disaster that is our under-graduate education system (unfortunately, it is only available online to subscribers of the magazine). A few points need to be made …

Dr. Vedder begins by pointing out that the only other area in American society that have seen the kind of price inflation that college tuition has seen over the last generation is, well, health care. It is no coincidence to this economist that the only two areas that successfully separate the person paying the bill from the person receiving the good or service are the two areas with the highest price inflation. Neither the consumer nor the producer pays the bills, leaving resources to be allocated ever so inefficiently. College universities are “non-profit institutions”, begging them to add to this inefficiency. They have no profit motive to cut costs, and no profit motive to increase revenues. Shockingly, the only criteria available for how well they are doing comes from the U.S. News and World Report, which bases its analysis on how many “customers” they turn away (the alleged selectivity of who gets into various university programs).

Administratively, Vedder frets about the ambiguity as to who it is who runs our universities. Is it the trustees? Administrators? Faculty? Students? Alumni? Donors? (all candidates Vedder wonders out loud about). It would seem to be a problem to a rational person that the average GPA has risen from a 2.5 to a 3.2 in the last generation (do college graduates seem that much smarter to you?). Vedder laments, as any person with any sensory skills whatsoever would, the culture that actually defines today’s academic life: a life completely focused on partying, booze, and sex. This epidemic is not limited to a few hot cities like Tucson, AZ and San Diego, CA, but permeates every major college from Harvard down to Humboldt State. The Presidents are toothless to do anything about it.

Most shockingly, Vedder indicts the “research” capabilities of today’s academic instituions, wondering why 22,000 new articles of Shakespeare have been submitted since 1980 alone. “Are there that many new and insightful thoughts to be had about the Bard?” Economic growth is suffering as a result of our subsidization of this half-ass research; it is not being stimulated.

Vedder’s proposals and solutions include common sense ideas that will absolutely have to be considered, and soon. We need to reduce the federal student loan programs, and allow a market system to work. Develop vocational competence programs – like the CPA exam – and allow students who want to learn a specific niche field to do just that (without the burden of a Sociology 101 class). More than any time in academic history, the benefits of a higher education right now are being shown to be utterly worthless. Allow the private market to change this, and quit cultivating a system that is doing far more harm than good.

I could not agree more with Vedder on every point he makes. If we want to advance a massive system that perfects the art of shooting tequila and participating in abundant one-night-stands, we have that down; the status quo should continue. And if we want to continue disillusioning young people by telling them that the liberal arts education we are pillaging them or the taxpayers or their parents for (in terms of cost) will actually prepare them for a professional career, we seem to have that down pretty well too. If, however, the goal is to study the masters, prepare young people for life in the real world, and to see a generation of balanced young people tap into the resources and tools they need to truly excel, we have a lot of work to do.

Let’s stop by getting the federal government out of this mess. I know this will not solve it all. But it is never, ever a bad place to start.