Peter Thiel is a maverick of the modern libertarian-right. He founded PayPal with the idea that it could compete as a standalone international currency. He bet heavily against the housing market before its collapse. And he now funds futurist ventures like seasteading and longevity research.
As Apple once said of entrepreneurs like Thiel, “You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them.” And, unfortunately for the incumbent-apologists of academia, Thiel, the “philosopher CEO,” turned to education with NRO’s Matthew Shaffer last month, saying, in part:
“Education is a bubble in a classic sense. To call something a bubble, it must be overpriced and there must be an intense belief in it. Housing was a classic bubble, as were tech stocks in the ’90s, because they were both very overvalued, but there was an incredibly widespread belief that almost could not be questioned — you had to own a house in 2005, and you had to be in an equity-market index fund in 1999.
I recall reading about Thiel a few years ago, during the height of the housing bubble, being asked in an interview why he (a billionaire, remember) was renting his California home. It was just too over-valued, he said. When it comes to education, then, perhaps it’s no surprise that Thiel has launched a series of fellowships, awarding teenagers $100,000 to drop out of college and pursue their start-up ventures.
Certainly both homes and education command intense, and nearly religious, belief in their soundness as long term investments without regard to cost, quality, and the time value of money. But the housing and education bubbles are different in at least one critical aspect, which I’ll highlight in a moment.
But first, from from the New York Times:
“The whole thing is kind of scary, for somebody like me who’s paying for college myself,” said Ms. Murphy, who plans to be a teacher. “I turn 20 tomorrow, I’m already in debt, and if tuition goes up again next year, I’ll be in an even worse position.” …
At the University of South Carolina, budget cuts have already pushed tuition to $9,786, more than double what it was a decade ago and well above both the national and regional averages.
Ms. Murphy will spend at least her first few productive years paying down her loans. But her decision to spend on higher education is not simply due to the “intense belief” of which Peter Thiel warns. It’s not due to personal degree mania. She’s getting a degree because the “market” — distorted as it might be — demands it.
Middle States Association, for instance, requires accredited schools to hire only college graduates. And schools that seek eligibility for many private and public grants need that accreditation. Steve Jobs couldn’t teach at a such a school. That’s a rather alarming thing.
While education seems likely to be a bubble because of intense demand, its high price, and dubious claims of universal value, groups like Middle States might be unintentionally compounding the problem with overly aggressive baseline requirements.
My company only hires BA's, prefferably MBA's. it's the rules. I got in before this went into effect. I have no college education and looking for a job without one is rough to say the least. My son will not be without a degree.
Reply to this commentLinkReport AbuseTommysr1's post stimulates (pardon the expression) me to repeat something I have floated before: a large tax on employers, based on the level of degrees they require for employees. This is based on the concept that it is the employer who demands the education, rather than the employee, and thus the employer should pay the gubmint according to what it claims it needs.
Of course, employers would rapidly decrease their degree demands, in order to evade the tax. Good. Then, there would (hopefully) be a reduction in the credentialism market. Good.
On a very slightly related note, I recall reading a court decision pertaining to review of an EEOC ruling. This was quite some time ago. I believe it was Louisiana. A black man, who had worked for years as a Stationary Engineer (a form of plant maintenance), had lost his job when his plant shut down. He applied for the same job at another plant in his area. The job was publicly advertised, and called for a high school diploma. The man did not have a high school diploma, so his application was refused. He contacted the EEOC, which supported his contention that the requirement for a high school diploma was discriminatory (disparate impact without business necessity). The court agreed. It seems that in that place and time, most working stationary engineers were black, and most did not have a high school diploma. The nature of the job had not changed. Therefore there was no business necessity. But among those who were qualified to work at that job and who did have the diploma, most were white.
Sadly, it took a disparate impact case to point out the obvious: creeping credentialism, even at the level.
In the case of Tommysr1, it may be that the current requirement for degrees is no more than age discrimination in disguise: Older workers have less education than younger ones, in the same job, even if the nature of the job has not changed. Of course, the employer will always argue that the nature of the job HAS changed. That's where my idea of the employer tax comes in: You need it now, when you didn't need it before, O Corporation? So, pay for the supply, and stop complaining, because you say that it's essential.
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