This post has unsurprisingly created a bit of a kerfuffle on the internet: Peter Thiel: We’re in a Bubble and it’s Not the Internet. It’s Higher Education.
The bubble that has taken the place of housing is the higher education bubble. “A true bubble is when something is overvalued and intensely believed,” he says. “Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus.”
Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe. The excesses of both were always excused by a core national belief that no matter what happens in the world, these were the best investments you could make. Housing prices would always go up, and you will always make more money if you are college educated.
But Thiel’s issues with education run even deeper. He thinks it’s fundamentally wrong for a society to pin people’s best hope for a better life on something that is by definition exclusionary. “If Harvard were really the best education, if it makes that much of a difference, why not franchise it so more people can attend? Why not create 100 Harvard affiliates?” he says. “It’s something about the scarcity and the status. In education your value depends on other people failing. Whenever Darwinism is invoked it’s usually a justification for doing something mean. It’s a way to ignore that people are falling through the cracks, because you pretend that if they could just go to Harvard, they’d be fine. Maybe that’s not true.”
That hints at another interesting distinction between the housing bubble and the education bubble: Class. The housing bubble was mostly a middle-class phenomenon. Even as much of the nation was wrapped up in it, there was a counter narrative on programs like CNBC and in papers like the Wall Street Journal pooh-poohing the dumb people buying all those condos in Florida. But with education, there’s barely any counter-narrative at all, because it is rooted in the most elite echelons of the upper class.
There are plenty of interesting aspects this article (you should read the whole thing!). And I have seen it reprinted many times already…I have started to see some rebuttals too. Unfortunately the majority of these replies have spent too much time is ad hominem attacks upon Mr. Thiel’s character (CEO of PayPal, deeply invested in Facebook…), and he also (famously) predicted some of the digital bubbles collapse in the late 90’s. Then again there is the argument that he has little standing to present these sorts of arguments (i.e. he is not an academic). Suffice to say that I have not taken the time to link any of those articles…
Here is an article which has some validity…The premise that there is an education bubble is not directly challenged, so much as some of the subsequent ideas Mr. Thiel advances (such as his ‘taking on’ 20 undergraduates from college to create an alternative to college curricula…seemingly for entrepreneurs…). The interesting thing about this article is that it contains short pieces advancing the value of a college education, where all of the authors are deans of engineering schools…
I feel as if the specter of the science-humanities curricula fight has found some new ground…at least in that conflation ( and possibly confutation)of engineering school deans and Mr. Thiel…
Ironically, I suspect that all of them would agree that a solid foundation in engineering, math, and the sciences is different from an Ivy League business degree…
Friends Don’t Let Friends Take Education Advice from Peter Thiel
http://techcrunch.com/2011/04/12/friends-don%E2%80%99t-let-friends-take-education-advice-from-peter-thiel
The message Thiel is sending to the world with his fellowship, which rewards students for dropping out of school, is wrong. The best path to success is not to drop out of college; it is to complete it. Yes, I know that Thiel is targeting exceptional students and is rallying against elite, expensive education. But as the title of Sarah Lacy’s piece shows, as does the controversy it has generated, the message that is getting out is that all “higher education” isn’t cost justified—for any student.
Stanford School of Engineering dean, Jim Plummer:
If universities, today, are not providing the kind of life skills that will serve their students well (a point I would debate), then universities should change what they are doing. In today’s world, universities need to be held accountable for providing real value for the investment students or their parents make. In talking with very successful people in business and other fields, many of them attribute their success at least partially to skills they learned at their university. These skills were not always learned in the classroom. For many young people the years between 18 and 22 are their first experience away from home and they learn a lot about life from their university experience. I believe for most, what they learn is a cost effective investment.
Finally I have a bit more of some similar ‘red meat’ regarding the feelings and thoughts of some regarding a traditional college education (and what may be its questionable value):
I went To a Top School and It Was A Waste
http://www.businessinsider.com/peter-thiel-20-under-20-2011-4
Thiel draws the following comparisons between the real estate bubble and higher education:
A consumption decision masqueraded as an investment decision. Building that megamansion with a pool and gold bathroom fixtures really isn’t an investment. College is often a four-year party rather than a real investment in education and the future. This thesis isn’t new: Norwegian economist Thorstein Veblen wrote in 1899 that higher education was a form of conspicuous consumption.
A kernel of truth transformed into a dogma whose every critic is shouted down. "House prices only go up!" "We must invest in education to win the future!"
The latest bubble?
http://www.economist.com/blogs/schumpeter/2011/04/higher_education?fsrc=scn%2Ftw%2Fte%2Fbl%2Fanewbubble
On September 2nd 2010 I wrote a mischievous column ("Declining by degree") likening America’s universities to its car companies in about 1950: on top of the world and about to take an almighty fall. Since then I have heard the argument dismissed and denounced by the presidents of Harvard, Princeton and New York University. John Sexton, NYU’s affable president, even likened me to a member of the tea party, for which there is no more damning condemnation in academic circles.
Mr. Thiel believes that higher education fills all the criteria for a bubble: tuition costs are too high, debt loads are too onerous, and there is mounting evidence that the rewards are over-rated. Add to this the fact that politicians are doing everything they can to expand the supply of higher education (reasoning that the "jobs of the future" require college degrees), much as they did everything that they could to expand the supply of "affordable" housing, and it is hard to see how we can escape disaster.
Paul Krugman has pointed out that, contrary to popular wisdom, expounded relentlessly by the OECD among other august bodies, technological progress may reduce the demand for high-end jobs, not just low-end jobs. Computer software is now employed to perform tasks that used to require armies of lawyers, engineers or highly educated workers.
The belief that education is becoming ever more important rests on the plausible-sounding notion that advances in technology increase job opportunities for those who work with information — loosely speaking, that computers help those who work with their minds, while hurting those who work with their hands.
Some years ago, however, the economists David Autor, Frank Levy and Richard Murnane argued that this was the wrong way to think about it. Computers, they pointed out, excel at routine tasks, “cognitive and manual tasks that can be accomplished by following explicit rules.” Therefore, any routine task — a category that includes many white-collar, non-manual jobs — is in the firing line. Conversely, jobs that can’t be carried out by following explicit rules — a category that includes many kinds of manual labor, from truck drivers to janitors — will tend to grow even in the face of technological progress.
And here’s the thing: Most of the manual labor still being done in our economy seems to be of the kind that’s hard to automate. Notably, with production workers in manufacturing down to about 6 percent of US employment, there aren’t many assembly-line jobs left to lose. Meanwhile, quite a lot of white-collar work currently carried out by well-educated, relatively well-paid workers may soon be computerized. Roombas are cute, but robot janitors are a long way off; computerized legal research and computer-aided medical diagnosis are already here.
