/* ---- Google Analytics Code Below */

Thursday, December 08, 2011

Higher Education Bubble

I have been hearing this term used more and more.  It has a Wikipedia entry.  I am still old school on this, but can see some of the symptoms.   It is likely better to focus education better than it has been done before.
Posted by at
Labels: ,

1 comment:

Mark Montgomery said...

Hi Franz,

Interesting wiki entry-- a bit confused. My definition of a bubble is pretty simple-- whether the foundational economic engine is sustainable, or not. In attempting to forecast duration one must consider many issues-- ability of market manipulation certainly to include politics to keep revenue sources flowing in. In this case it does appear to be a classic policy driven economic bubble very much like housing, with tax incentives, monetary policy, and many other national and local subsidies that mask market reality.

Despite all manner of manipulated subsidy for students for high priced education, all programs that come to mind still depend on the student attending, and are almost completely dependent on subsidies, some of which are not sustainable.

Most of the market manipulation has been in the form of a guild that attempts to require this form of education for employment. While the currently employed level of those with at least a BA is about half of those without, new graduates face a much different reality and in numbers I've seen--all stats are only partially credible on unemployment in my view--perhaps 3 or 4x higher. The question then is whether the guild is strong enough to continue to thrive. Many centuries old now so history is in its favor, but technology and economic trends are not. I think it depends on political manipulation--we'll see.

The relevant question for me is whether higher education should be required, subsidized, or even encouraged, and if so--why and how. I think life long learning absolutely should be encouraged, and I do personally believe that physical engagement particularly with other intelligent students who can challenge each other is a benefit, but a university setting is not at all the only option today. Indeed, many of the most intelligent, highest qualified and successful people in history were self-learners and not products of academia.

Our current system requiring degrees for many professions is a severe form of prejudice in my view--much like discrimination due to color of skin. By allowing and encouraging self-accreditation, we enable perpetuation of a protectionist guild, remove competition that would keep costs in line with economic reality, and perhaps most importantly prevent viable innovations from emerging. But then that's the point of guilds--primarily protection for the members. We should never confuse protectionism with serving society, business, or economy. It may or may not-- case, time, and environment specific -- in a myriad of complex ways both it seems.

What troubles me frankly is that as technology was emerging that would improve efficiency and delivery of higher education, and as state economies were deteriorating, publicly funded and subsidized higher education institutions continued to build the physical plant and increase overhead costs at precisely the time they should have been downsizing. In that regard it did very much remind me of the housing bubble--empire builders know how to build empires, not necessarily affordable housing, students with knowledge meeting future needs, or sustainable economies. Given the fiscal situation of mature economies, it's obviously time to reform higher education. While far from perfect, I think Germany's model is far superior now to the U.S. as it is focused on strategic competitiveness. .02--MM

8:42 AM

Post a Comment

Subscribe to: Post Comments (Atom)