Genius among insects

by on March 18, 2007 at 11:43 pm in Books, Education | Permalink

That is the praise given by one EconLog commentator to Bryan Caplan summarizing his next book

This will be a good popular book, but I don’t yet understand Bryan’s attack on education.  The private return to education has been rising for some while.  This premium can be usefully broken down into a training/learning component, consumption (college is fun), and a signaling or credentials component.  Note that only the latter of the three is wasteful; while signaling helps achieve a good sorting of workers to jobs, it also has a zero- or negative-sum component based on getting ahead of the other guy.

Now if the total premium to education is going up, I would expect that the signaling component is going up as well.  That means more educational waste, as Bryan is suggesting.  But I also expect that the training and consumption components of education are going up as well.  Those returns are not wasteful.  Why should we be surprised at more absolute waste in a growing market?

I think of parallels from culture.  The bigger the music market gets, the more people engage in (partially) wasteful competition to be the number one act.  But this does not mean we should be telling a chiding story about the music market as a whole.  There is also greater diversity of music and a higher quality supply in the eyes of consumers.  Furthermore the "wasteful race to the top" helps fund the infrastructure that produces the other benefits.

I view the contemporary higher education story as "more value" and "more waste" coming together.  Bryan will have an easy time pinpointing and mocking the waste, but can he deny the concomitant value?

Here is Arnold on Bryan.  Here is my post on why education is valuable, namely for acculturation.  I think Bryan’s own very constant personality misleads him.  He didn’t need to be acculturated very much into the world of learning, but most other people do.

Scott Scheule March 19, 2007 at 12:36 am

The genius line is probably an allusion to X-Men 2, when Magneto says something similar to the embittered young Pyro.

It may be ironic. Or not.

Dan Klein March 19, 2007 at 3:15 am

There is never a good reason to call schooling “education”, as opposed to calling it “schooling.”

will mcbride March 19, 2007 at 1:18 pm

I’m just not getting all the status bashing amongst you guys (Robin, Bryan,
and Tyler). So what if education is primarily about status? Just about
everything is, e.g. fashion, boob jobs, country clubs, etc. I see education
as just another club, but one that has some nice social benefits. Bryan
has focused soley (as far as I know) on the sorting benefits which accrue
to employers, but there’s a lot of other social networking which is
facilitated by knowing one another’s intellectual proclivities, background, etc..
And we can’t just carry around our favorite books to signal that.

I agree we should get rid of the subsidies, but let’s not do more than that.
If education is zero-sum, what is plastic surgery?

Here’s more on status and Veblen:

http://hereticatthegates.blogspot.com/2007/03/conspicuous-consumption-or-conspicuous.html

anon March 19, 2007 at 6:37 pm

The “signaling” theory of education does not stand up to serious scrutiny. Market competition among principals and agents will naturally lighten signals and make them as efficient as possible, given their informational content. It’s extremely implausible that the thousands of dollars and multiple years expense of a college education are purely dissipative and wasteful; clearly, the human capital component must be substantial.

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