In a discussion of an Annie Lowrey piece on whether college students are overpaying for their BAs, Matt Yglesias suggests that elite colleges are essentially like summer camps. I am very sympathetic to this view. Briefly,
I think Annie is mischaracterizing the Thiel view (unintentionally — Sarah Lacy’s take on Thiel emphasizes clarity over nuance) when she writes:
Famed entrepreneur Peter Thiel, for instance, insists that just about every degree is worth little more than the paper it is printed on: Schooling is not education, he says, and ambitious kids should drop out and skip forward to the workplace.
Thiel’s view is that education is seen as an insurance good. He would argue that most degrees are overpriced, but Annie overstates the case here, presumably as a flourish. As for the case for dropping out, he is, as Annie suggests, engaging in a very selective intervention: the idea is to attack the prestige of higher education at its most prestigious, to take elite institutions down a peg. The reason, as I understand it, is that this will have a beneficial cascade effect. Elite higher education institutions hoard prestige, as they traffic in exclusivity. One could imagine another world — a better world — in which the best institutions, i.e., those that do the best job of imparting economically valuable skills and (perhaps) pleasurable, engaging experiences, actually try to scale up, as a for-profit speed-up might.
Moreover, I think that Thiel would be open to ambitious kids taking time out and pursuing a systematic course of self-education, among many other things. Later, Annie writes:
It could be that Thiel is right, that college students, en masse, are overpaying for their educations. But it seems more likely that some college students attending certain types of schools are overpaying. If you want to be an aerospace engineer and have the chops to get into Caltech, the quality of the education, contacts, and fellow students on offer might really be worth $200,000 to you. A diploma from the school practically guarantees a good salary.
I am pretty sure that Thiel would endorse Annie’s revised view, recognizing that engineers at Caltech are getting a degree that is worth more than the paper it’s printed on, and perhaps as much as effective tuition or even the underlying cost. To make the case that Thiel is overreaching, Annie is suggesting that he’s making a very extreme claim, when in fact he’s advancing a claim not that far off from Annie’s own claim.
What he has argued, however, is that education is many things: there is an investment component, smaller than we’ve been led to believe by the higher education lobby; there is an insurance component, which is central to understanding the psychology behind the intense belief in the value of higher education; and there is a consumption component, a theme Matt focuses on:
I went to Camp Winnebago when I was a kid and it was great! But it’s not cheap. I assume the alumni of an institution that disproportionately serves a client base of high-income Jewish families earn a substantial “wage premium” and I made friends and connection there and I definitely learned new skills and information. Nobody, however, would be so naive as to suggest that the Winnebago wage premium is attributable to the archery, canoeing, and campcraft lessons I got. Which isn’t to say that the education “didn’t work” or I didn’t learn anything. I really am quite good at starting campfires. These just don’t happen to be economically valuable skills.
Then, of course, there is the fact that Matt learned to be sociable, and to form a network of other young people from similar backgrounds.
Elite higher education will survive for the reasons Paul Krugman describes in “White Collars Turn Blue“:
Eventually, of course, the eroding payoff to higher education created a crisis in the education industry itself. Why should a student put herself through four years of college and several years of postgraduate work in order to acquire academic credentials with hardly any monetary value? These days jobs that require only six or twelve months of vocational training — paranursing, carpentry, household maintenance (a profession that has taken over much of the housework that used to be done by unpaid spouses), and so on — pay nearly as much as one can expect to earn with a master’s degree, and more than one can expect to earn with a Ph.D.. And so enrollment in colleges and universities has dropped almost two-thirds since its turn-of-the-century peak. Many institutions of higher education could not survive this harsher environment. The famous universities mostly did manage to cope, but only by changing their character and reverting to an older role. Today a place like Harvard is, as it was in the 19th century, more of a social institution than a scholarly one — a place for the children of the wealthy to refine their social graces and make friends with others of the same class. [Emphasis added]
Here are a few questions: Should we be spending nearly as much time as we do obsessing over elite schools? And should we spend taxpayer resources subsidizing them? Are students overpaying for the modal higher education experience, which is decidedly not like that of the budding aerospace engineer at Caltech? You can guess my answers to these questions.