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The Education Apocalypse: How It Happened and How to Survive It

Glenn Harlan Reynolds joins us to discuss the current state of America’s education system. What’s broken in schools and colleges today, and how can we fix it?

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What’s wrong with K-12 education? What about higher education? How can we rebuild American education from the ground up?

This week Glenn Harlan Reynolds joins us to talk about his new book, The Education Apocalypse: How It Happened and How to Survive It.

Transcript

Trevor Burrus: Welcome to Free Thoughts from Libertarianism.org and The Cato Institute. I’m Trevor Burrus, a research fellow at The Cato Institute’s Center for Constitutional Studies.

Aaron Ross Powell: I’m Aaron Ross Powell, editor of Libertarianism.org and a research fellow here at The Cato Institute.

Trevor Burrus: Joining us is Glenn Harlan Reynolds, the Beauchamp Brogan Distinguished Professor of Law at the University of Tennessee. He also blogs at the Instapundit site. Among other books, he’s the author of The Educational Apocalypse: How It Happened and How to Survive It. Welcome to Free Thoughts, Glenn.

Glenn Harlan Reynolds: Hi. Thanks for having me.

Trevor Burrus: I guess your book is about both K-12 and higher education. So it makes sense to start at the K through 12. But there’s of course a connection there, but I guess the first question is, in the very broad sense, K-12 education is not doing too well. So what’s going on there?

Glenn Harlan Reynolds: Well, it’s not doing too well because we’re in this sort of situation where – at the risk of sounding like Bernie Sanders, you can go into a drugstore and you can find 50 different kinds of deodorant and yet when you go looking for public schools, they’re basically all built on the same model.

One of the interesting things I talk about in the book is that public education in America was very consciously styled after the model of 19th century Prussia. Horace Mann who was a major figure and he was a great admirer of the Prussians and it was specifically designed – and again, quite explicitly. It wasn’t any sort of conspiracy or at least underhanded conspiracy. It was specifically designed to turn out obedient factory workers and soldiers and things like that. The school is kind of built on an industrial revolution line.

I mean you have all the desks lined up in rows, kind of like machines in a factory, and when you actually go from one class to another in a school, you’re kind of like being on an assembly line, being moved on down to the next station.

It was designed on that industrial model and to be fair, it was a great success in its time. I mean it elevated the lower class or the working class into the middle class and it did in fact produce good factory workers and good soldiers which was very useful in World War Two. But it’s kind of a dated model now and what’s worse, it’s not even that the schools have sort of stayed the same. They’ve actually gotten worse. They’re simply not as rigorous as they were 50 or 100 years ago.

So you’re actually learning less while you’re still quite constrained by this approach. The other side of it is there are now just a lot of alternatives. I mean one reason why you put all the kids in a room with a teacher a hundred years ago was because there was no other way to do it.

Now we have online schools and they’re quite useful. My daughter actually switched as I mentioned in the book from a regular public high school to online school and that allowed her to graduate a year early which allowed her to start college a year early and she thought it was pretty good. It was much more flexible.

I mean you don’t realize how under the thumb you are in the public schools, even to such things just like when you get up in the morning and when you have dinner and when you could go on vacation until you’re not under the thumb of the public schools anymore and then it’s like awesome.

Aaron Ross Powell: But there have always been alternative methods of education. I mean – my wife was until recently a public school teacher and also taught in private schools and she has talked about some of the odd – like there were the schools with no walls or all of the students were just kind of in one big room, but those didn’t seem to work very well and so maybe – I mean couldn’t the alternative narrative of this is we figured out what works and we know it seems to be what works because even most private schools operate on this model, right?

I mean most private schools, even the very good ones, the very prestigious ones are still students in their desks and going from class to class. So education is this big important thing that we don’t want to mess up and so we will let people innovate on the sides, but so far they haven’t really found anything that works better.

Glenn Harlan Reynolds: Well, I don’t know if that’s really true. Found anything that works better. I mean the current system is quite unsatisfactory to a lot of people. The reason why I use the term in the book of the “K-12 implosion” is that what you’re seeing in a lot of large public schools right now is such an exodus of students that they’re literally imploding. They’re having to lay off teachers. They’re closing school buildings and those people who could go to public school for free – I mean I’m trying to put the word “free” in quotes because of course it’s free in the sense that somebody else pays for it.

But still from an out-of-pocket basis, these parents could go for free and they’re still paying to put their kids into private school because they’re unhappy with what the public school had to offer.

Aaron Ross Powell: Well, sure. But you mentioned – so you said there are kind of two ways, two things going on here. There’s the atrophying of the model that we’re stuck with this model from Prussia, but then there’s also the declining quality and those are two – I mean we could imagine the model might work very well if it had high quality teachers giving rigorous lessons.

Trevor Burrus: More money, more teachers.

Aaron Ross Powell: So it might be the model’s problem or the model might be just fine and it’s that the quality of the education being taught via that model is going downhill. So can we tease those two out?

Glenn Harlan Reynolds: Well, actually, there are basically three things going on. I mean problem number one is that we have the Prussian model but it worked better when it was run by Prussians and we don’t have any of those.

You had your Prussian teachers who were full of authority and self-confidence and your Prussian students who knew they were supposed to listen to the teachers and then even when we ported it over to the United States in the 19th century, we – teachers had a lot of authority. Parents pressured children to do well in school and to behave well in school. Children knew that was expected of them and so you have all that going for it.

Now the quality has declined, so that’s one problem and then even as the quality is declining, the barriers to exiting the public system have really gone down. As recently as 20 years ago in most towns in America outside the big city, you didn’t have a lot of alternatives. You had a public school system and then typically you would have a private school that sort of – at least pretended to be sort of a tony prep school whether it really was tony or not. Then you had a Catholic school and those were your choices.

Trevor Burrus: The model here though, it also seems like the sort of old model and also the existence of 18 [0:06:45] [Phonetic] and then you bring in the higher educational level. It has also maybe constrained our view of what childhood and adolescence is supposed to be like and what you’re supposed to be doing in terms of work or school at different ages and then continuing that into the higher education. We have a very, very kind of I guess stilted idea of what growing up is like partially because of the school system.

Glenn Harlan Reynolds: Well, I think that’s right. It’s very interesting because if you look at history, we tended to treat adolescents as sort of junior adults and we didn’t – teenagerdom is a fairly recent invention and in fact we didn’t really start talking about teenagers until we had kids in school and we took kids who used to hang out with adults in adult settings, doing adult tasks where if you wanted to be respected, which everybody does, you are going to be respected by adults for being good at doing adult things.

Then we took all those kids and instead we segregated them into schools where they were around a bunch of other teenagers and you still want to be respected by the crowd you’re part of, but now your crowd is all people your own age. So you do the stuff that impresses people your own age and the problem with that is teenagers are idiots.

So the stuff that impresses teenagers is usually idiotic. So instead of being really good at bailing hay or fixing a plough or something like that that you might have done a hundred years before, you want to be good at drinking or dating or playing football or other things that are fundamentally more trivial but that appeal to your peer group.

Aaron Ross Powell: So doing the stupid stuff is bad and systems that encourage teenagers to behave even stupider than teenagers often behave is bad. But it seems like this is the result of positive trends, right? I mean so on the one hand, part of the reason that we can send our kids to school through those teenage years as opposed to putting them to work on the farm is because we’re all wealthier and so we don’t need them earning an income in order to feed the family and education is good. I mean most of us think the more education you can have – granted it can take time from other things but by and large education is a good thing to have.

At the same time our economy is shifting such that sure, you could as a – a 13-year-old, you could go right to work in a blacksmith shop or on the farm or whatever, but our economy has changed. So that now more education, more knowledge, more skill is necessary to pull off the kinds of jobs that give us this enriched world.

Trevor Burrus: Aaron is just trying to defend the fact that he had blue hair when he was a teenager. That’s what he’s trying to …

Aaron Ross Powell: That was in college.

Trevor Burrus: Oh, OK, OK. That was in college.

Aaron Ross Powell: But that’s – I mean we’ve extended teenagerhood well into undergrad at this point. But so is that – is the teenagers hanging out with teenagers and doing more stuff just kind of an unfortunate price we have to pay for the glories of a richer society?

Trevor Burrus: Well, I mean there are a couple of assumptions buried in it. I mean on one level it’s certainly true. We’re a lot richer than we used to be and a hundred years ago, as I say in the book, teenagers provided about a third of family income in a typical household. So you really needed them and [0:10:00] now they don’t.

We’re richer so that’s OK. But a couple of assumptions buried in that are number one, that the stuff that teenagers are doing in school is actually making them more valuable and more high functioning as adults and that’s not entirely clear. Well, and I will tell you a story. Slightly sanitized but since this is podcast, not radio, I don’t have to sanitize it.

Trevor Burrus: The FCC does not apply here, yes.

Glenn Harlan Reynolds: There you go. Of course not. So when my daughter was looking at switching from high school to online school, one of the things I said to her was I said, “Well, aren’t you worried that you’re going to miss the socialization in high school?”

She said, “OK, let me tell you about socialization. On my way to math class today, I walked by the band building and I saw –” I won’t name the female friend, giving a blow job to a male friend out behind the band room. She said, “That’s what I’m missing. How do you feel about that?” I was like, “OK, yeah.”

So the truth is, when you put a bunch of teenagers together in that setting, the damage that’s done by crowding them together may exceed whatever benefit they get educationally. The truth is you don’t learn that much in high school. I’m sorry but I just don’t believe that American high schools today turn out people who are really super well-fitted for the marketplace or for a democracy and the studies of what they know when they get out of high school suggest that they’re not learning much.

For that matter, I’m sure you’ve done a show on Academically Adrift on the studies of what people learn in college. But a lot of kids interestingly enough actually come out of college doing less than when they went in.

So yes, in theory, if you have a rich society, you can afford the capital investment of making your kids smarter and more knowledgeable and more competent and more capable even at the cost of keeping them out of the workforce for an extra 10 or more years. But the fact is it’s not so clear that’s what we’re actually doing.

Trevor Burrus: Shouldn’t we be just spending more though? I mean better teachers – making sure we have the right studies about what – how kids can learn the best and then put that into place with better teachers and more money and then we can fix this problem?

Glenn Harlan Reynolds: Well, we certainly tried the better teachers and more money approach for the last 50 or 60 years and the results suggest that it’s not producing.

Trevor Burrus: In the sense that we are spending more now?

Glenn Harlan Reynolds: Yeah. I’ve got a chart – charts don’t translate very well on radio but I’ve got a chart in the book that shows that what kids learn in school is basically flat and what we spend on them has increased exponentially over the last several decades.

So – and indeed we are almost at the top of the OECD in spending per student whereas we are most definitely not anywhere near the top of the OECD in results. So it’s on page – these charts are on page 74 – 73 and 74 of the book, if anybody wants to look them up.

So it’s not simply a case of shoveling money at them and of course there’s always the answer that it’s sort of like communism. It hasn’t worked before but that’s just because we haven’t done it right and in principle that is unanswerable. But in practice, if you’ve tried that many times and you haven’t done it right, maybe you need to try something different.

Trevor Burrus: What about teachers’ unions? Are they not helping either I imagine?

Glenn Harlan Reynolds: Teachers’ unions certainly don’t help. I mean – I’m a big fan of public choice economics. So it’s my belief that unions or no unions, the institutions are run mostly in the interest of the people who run them as opposed to their sensible mission.

But teachers’ unions certainly make that worse and one of the things you do sort of find is that there are just some good teachers and some bad teachers and it’s actually pretty hard to turn a bad teacher into a good teacher. So what you really want to do when you run a public or any school system is basically to get rid of the bad teachers and replace them with good teachers and the harder it is to replace people, the harder it is to do that.

Trevor Burrus: You discussed some of the possibilities of reform which I think is – one of the things you say is that you’re not – when you unleash the forces of innovation, there are many things you can’t really predict about what will happen, but you bring up some interesting things that could happen in K through 12 education to make us change this Prussian model. One of them is gamification which someone that plays video games I thought was particularly attractive. Can you talk a little bit about that?

Glenn Harlan Reynolds: Well, it’s interesting because one thing people say is that teenagers are just stupid and you just can’t teach them things because they just aren’t any good at learning things. So as I say in the book, there is a whole industry that’s really good at getting teenagers to learn all sorts of Archean information and really master it and be able to apply it successfully and that’s the video game industry.

If you play a video game, and you get further and further into it, you learn all kinds of things and you hone your skills and you come out much, much better at what you do than when you went in. That approach – it’s a huge multibillion dollar industry that makes more money than Hollywood. But it isn’t used very much in education. It has used some. There are some sort of lame educational games using K-12. Some of them aren’t too bad. The army actually has some games that it uses for training. In combat, they’re actually pretty good and there’s a lot of room left to be done there and I think you could do a lot of teaching that way.

The problem is that the people who are in charge of education don’t think much like the people who design video games and the people who design video games don’t think much like the people who are in charge of education and the two cultures don’t seem to merge very well.

Aaron Ross Powell: Something I’ve always wondered about gamification because I guess you could put me in the – somewhat of a skeptics camp.

Trevor Burrus: But you didn’t play that many video games.

Aaron Ross Powell: No, that actually is related to that is that – so yes, teenagers and kids are very good at picking up all of this really obscure information and learning it when it comes in the form of video games.

But we also – they’re also very good at doing that for non-video-game stuff. Like kids get super into Harry Potter, right? They read these books. They pour over these 700-page novels and learn the ins and outs of all the characters. We have huge communities around Star Trek where the knowledge of obscure things is astonishing. You have the same with Star Wars.

[Crosstalk]

Trevor Burrus: … Aaron loves Star Wars …

Aaron Ross Powell: Yeah, my knowledge of Star Wars is larger than is healthy. But the thing that all of these seem to have in common is not the gamification, right? Because these are all – there are documentary films and there are large history books and there are technical manuals that you could be learning stuff from – they aren’t all that different from these things that kids are memorizing. But the differences that the knowledge and those things is – I guess for a lack for a better word, imaginary or pretend.

So what I wonder is that – it seems like kids, teenagers, whatever, love soaking up knowledge about fake stuff. But if you were to gamify a book or a game about the American Civil War, I’m convinced it would have just as little of an impact as if you were to say, “Hey, you really like this Harry Potter. Well, why don’t you read this 700-page book about the …”

Trevor Burrus: The decline and fall of the Roman Empire.

Aaron Ross Powell: Or the British schooling system and learn those same sorts of details. Kids just aren’t going to be into it.

Glenn Harlan Reynolds: Well, actually – when I was in high school, I played war games which back in those antediluvian days were all done with paper and little pieces of cardboard you pushed around. But I learned a lot about the Civil War and World War Two and other wars from playing those.

So I wouldn’t rule that out completely. But one of the reasons I think why kids get into Harry Potter or whatever, which goes again to my earlier thesis, is that their friends care about it too, and by working on that stuff, they get some degree of pure respect or at least they hope they will. I’m not sure mastering a Star Trek trivia ever got anybody laid.

But it’s the hope that matters, not the actuality. So I think that – I think one of the things that those fictional worlds do is they give people a place to go that doesn’t seem like something that’s done to them. The truth is an awful lot of kids think that school looks like – feels like jail. If you have the experience as I’ve had of just driving through town driving past schools and then driving past prisons, they really often look a lot alike.

The school is, from the perspective of most kids, not something that you do. It is something that is done to you. I think the reason why they are more excited about things like Harry Potter or whatever is that they feel like that’s something that they do. If you have a teaching approach, it makes students feel like they’re doing something that they do. They learn a lot more.

Now of course some people are just lazy lumps and they won’t learn no matter what and the best thing for them may well be to shove them through a Prussian education factory where at least a modicum of basic knowledge gets drummed into their head whether they like it or not.

But once again, we live in Bernie Sanders’ world where there are 50 different kids of deodorants and people should be able to pick the approach that is most likely to work best for them and for their kids.

Trevor Burrus: Now, we have – we don’t have 50 different types of schools and the 50 different types of a deodorant thing in the public education context. But we take these children, put them through this Prussian model and then the next thing is college. We’re going to send them into higher education and create job – so they can learn about jobs of the future and [0:20:00] become great citizens and quote Plato and quipping Latin and all these great things, which of course obviously our college educated people are doing when they come out of college, correct?

Glenn Harlan Reynolds: Oh, yeah, they all learn Latin. I mean that’s sort of what – one of the things – libertarians undoubtedly encounter this where when you start talking about shrinking government, even a little bit, the response is always, “Oh, you want to get rid of roads and the police!” It’s sort of telling I think that when people want to defend government, they pick like these really sort of modest things the government has done forever as examples rather than the department of education or something.

The same thing is true. If you suggest that college is not really teaching people what they need to know, people often say, “Well, you just hate the liberal arts education. You don’t want people studying Plato and learning Latin.” Again the response is, well, most of them aren’t doing that now.

I mean if the purpose of college is to make sure that when students come out, they can conjugate Latin verbs, translate Caesar’s commentaries and talk about Plato’s dialogues, you know what? Then it’s a failure already because they’re not doing that for the most part.

Trevor Burrus: Well, have we figured out then what college is for? That seems to be a subtext of the section on the higher ed in your book and a lot of people will discuss …

Glenn Harlan Reynolds: I used to think that what college was for was actually to give people a place to drink a lot and have sex but now they’re even doing away with that. So it’s really hard to say.

Trevor Burrus: It could be – sometimes people say it’s the human capital element or the signaling element which is college – if it’s not teaching people, then what is it doing?

Glenn Harlan Reynolds: Well, there are basically three kinds of things you can get from going to college. One of them is you can actually learn useful skills that will make you a bigger contributor to the economy and the nation and thus able to make more money. So for example if you go in not knowing anything about electrical engineering and you come out with a degree in electrical engineering, your value has been increased substantially.

So that’s one thing you can get from college and plenty of people do get that and not just people who graduate in electrical engineering, but lots of things that produce a useful major. Even art history, which President Obama was making fun of, actually turns out people with a pretty good skill set who frequently wound up getting pretty good jobs.

But the second thing people go to college for is signaling which is to say even if you go to college and you in fact learn nothing useful, which happens to a surprisingly large number of people, according to some of the assessment tests, even then, just by getting in and surviving and graduating, you’ve actually told that employer some useful things. You said that you’re able to show up on time at least enough, to get along with other people at least well enough that you weren’t expelled.

Generally sort of to function in middle and upper middle class American milieus and the third thing you might get is networking where you make friends in college. You get to know people and that provides you with the opportunities and the future – that’s probably true or if you’re going to an elite school, but not necessarily if you’re – if you go to Eastern Kentucky University and you stayed in Eastern Kentucky, then that’s probably a pretty good network for you too.

The problem with these three things is from the standpoint of a larger society, only the first one creates any actual wealth. The signaling to employers or the networking, they just determine who gets benefits. They don’t actually create any new wealth for society. They’re just moving it around.

So it seems to me that if you want to help society with higher education, you should focus on increasing people’s value, the human capital and yet if you look at what colleges actually do, that doesn’t seem to be their primary goal.

Trevor Burrus: Has this changed a lot in the last 30 years or so, would you say? College in general and what people are …

Glenn Harlan Reynolds: Well, yeah, I mean a couple of things have happened. We had a huge run-up in capacity in higher education after World War Two because of the GI Bill. You can understand an awful lot of what’s going on in higher education ever since as basically trying to find ways to soak up that excess capacity once it was there because the GIs came in.

We hired a lot of professors, built a lot of new buildings and dorms, expanded capacity substantially and then as that started to taper off, we got draft deferments during Vietnam which encouraged a lot of people who otherwise wouldn’t have gone to college to go to college. Then about the time the Vietnam War winds down in the 70s, you get Pell Grants. They used to be called BEOG, Basic Educational Opportunity Grants. Pell Grants, you got guaranteed student loans. You got a lot of subsidies that sort of kept the warm bodies flowing in the higher education so that it wouldn’t have to retrench.

Now what we’re doing is we’re kind of in the stage where we’re starting to run out of other people’s money. The federal government and the states sort of reached their load of how much money they were willing to subsidize directly. We covered the gap for a number of years with student loans and exactly what you would expect to happen happen. Colleges raised tuition to absorb the subsidy. Student loans were expanded.

Trevor Burrus: One sec. When you said exactly what you expect to happen would happen, I’ve had conversations with people where they didn’t understand why you would expect that to happen. So can you explain how the student loan system helped increase the price of college?

Glenn Harlan Reynolds: Sure. I mean I guess people don’t expect it because they don’t think it through. But if you think it through, it’s pretty obvious. If I tell you, you can only go to college with the money you can earn working, waiting tables and over the summer, then colleges have a problem. They’re either going to have tuitions that people like that could afford or they won’t have very many students.

If I tell you, you can borrow $10,000 a year to go to college, then the colleges are immediately going to say, “Well, we could raise our tuition by $10,000 a year because you can borrow the money and come.” Then if I say you could borrow $50,000 a year to go to college, a lot of colleges are going to say, “Well, great. We can raise our tuition $50,000 a year.”

That’s pretty much a short version of exactly what has happened over the last several decades. The amount of money you could borrow under federal student loan programs was increased and as it went up – there has been a fair amount of actual empirical research on this to demonstrate that every time it went up, the college tuitions went up with it.

Trevor Burrus: That’s – yeah, it just follows pure economic truth. So what we have now is – would you call it a bubble?

Glenn Harlan Reynolds: Well, I do call it a bubble. I think it is and it’s a bubble that I think is beginning to show signs of bursting. For the last couple of years, what we’ve seen are schools actually having trouble filling seats, which never happened much before. We’ve seen price resistance from parents and students because yes, you can borrow the money and for a while financial advisers used to tell people, “Oh, student loan debt isn’t bad debt. It’s good debt.”

But as tuitions continued to rise, well, the payoff in terms of wages after graduation stayed pretty flat. People eventually started to notice that you have all these college graduates who are deep in debt and you can’t find a job or if they can find a job, it’s not a job sufficient to service the colossal debt they’ve got.

So there’s a good deal now of buyer resistance and the Obama administration is now talking about helping people with student loans who feel like they were lured into their higher education on false premises and they’re not limiting that to some of the for-profit schools that have closed although that’s how it’s being couched.

My own field of legal education, we’ve seen a number of applicants drop by about 50 percent and there are law schools closing and merging and rolling back faculty salaries for exactly the same reason. The tuitions have really gone up. The job prospects have actually gotten worse and students have noticed.

Aaron Ross Powell: I’m curious how this all plays in with the signaling model of education that we talked about earlier because if part of what needs to happen – and it sounds like – you’re saying this is what needs to happen are these alternative models need to come to the fore, right? We need to be more willing to embrace alternate ways to get an education, alternate models that if you couple that with a signaling thing though, it seems to raise kind of a first mover problem.

So this – take the law schools. I mean both Trevor and I attended law school. I am convinced that law school is a particularly ineffective way of learning to become an attorney. That at best, the first year of law school is valuable but the second and third year should likely be replaced with an apprenticeship and that most of what’s taught in the first year could be learned on your own.

But if I actually want to become an attorney, there is no way that I’m going to follow through on that. There’s no way I’m going to go to a law school that’s correspondence-based and then apprentice-based because there’s no way I will get a job because every single employer is saying, look, in order to become an attorney, you need to have gone through this first – this particular model of legal education. This is the same for graduate school for certain kinds of jobs or certain kinds of training for other sorts of jobs. Someone has got to be the first one to embrace these alternatives and that person is going to be unemployed.

Glenn Harlan Reynolds: Well, that is an issue in law and I should plug my colleague. Ben Barton has got a great book out on the legal profession from Oxford University Press called Glass Half Full where he talks about a lot of exactly these issues and the problem you have in law is the guilt has taken over.

I mean it’s an interesting matter of history that the requirement that you attend law school and later the requirement that law school would be a full three years and [0:30:00] the limitation on how much outside work you can do while you’re in law school were all things that were put in, in the first couple of decades in the 20th century pretty explicitly at the time to keep the Jews out. That was their goal.

There was a big flood of educated East European immigrants who were mostly Jewish who were getting into law and the powers that be didn’t like that. So they tried to make it as expensive and time-consuming to get through and become a lawyer as they could so as to limit their numbers and it worked for a while.

Trevor Burrus: Oh, yeah, they did a great job, to make sure there are no Jewish lawyers. You never see Jewish lawyers around, absolutely.

Glenn Harlan Reynolds: Well …

Trevor Burrus: I guess back there, yes.

Glenn Harlan Reynolds: It held back the time for a couple of decades and for a couple of decades in retrospect didn’t seem like a long time but for people who were being spared the competition, I think it was a plus.

So I think that if you wanted to improve education, one of the things you want to do is to approach the employer side and we’re actually – in law, we’re not seeing that yet although we are actually just beginning to see it. Lawyers are having their lunch eaten sort of at two ends. At the lower end, things like Rocket Lawyer and LegalZoom are killing them for a lot of low end clients who just want to organize an LLC or write a will.

Aaron Ross Powell: So what do those services do?

Glenn Harlan Reynolds: They’re basically – I mean their story is they’re just interactive legal forums. But if you go to LegalZoom or Rocket Lawyer’s site and you answer some questions and at the end you print out some papers and sign them and you’ve got a Nevada LLC or you’ve written a will that’s valid in your state, and lawyers make fun of those things but the truth is – as Ben Barton says in his book, he says every lawyer knows a lawyer who does worse work than those online services do.

So they’re not better than the best lawyers but they’re better than the worst lawyers and they’re usually probably good enough and they’re a lot cheaper. At the high end, your big law firms used to make a lot of their money by having first and second-year associates who didn’t really know how to be lawyers very much yet but were smart, who would be billed out at high rates for going through huge boxes of documents as part of discovery and litigation and things like that and that has been heavily automated now using databases and OCRs and keyword searches and such like that, so that one associate could do the work of 10. That has really hurt their bottom lines.

So the practice of law is being eaten up from either end by automation and also by some paraprofessional, paralegals and such who are in some areas beginning to be licensed to come in.

Trevor Burrus: But perhaps the story with law school – if we go back, because I think this is a continuous story starting with K through 12 education, which creates a model that probably doesn’t give enough job skills, give enough opportunities for students to do different things. Everyone thinks they have to go to college.

You have a huge bubble being – with the subsidies on the debt, everyone goes to college or a lot of people go to college. That’s the only possible way. They get English majors and they get psychology majors and other types. I was a philosophy major and of course all the philosophy factories had shut down when I got out of undergrad.

They come out of undergrad and they say, well, everyone went to – I don’t have as much separation now between me and other employable people because everyone went to college. So now I need to choose a graduate program and we have the same type of bubble occurring there. In law school I was chosen by many people who couldn’t cut it in med school, let’s say, to try and figure out how to go forward and make it in the world. So it’s a bubble that goes back to the K through 12 world.

Glenn Harlan Reynolds: Well, yeah, one of the smartest things law schools did in the late 80s actually was they took math off the LSAT. There used to be a math section on the LSAT and then the brilliant marketers at the law schools also – well, a lot of people are afraid of math. So all these college seniors who aren’t sure what they want to do and start looking around, they’re going to say, well, GMAT, too much math. MCAT, whoa, way too much math. GRE, that has got math. LSAT, no math! That’s what I’m going to do.

So voila – no, but you’re right. I mean we’ve reached a situation where a college degree today is what a high school diploma used to be which is sort of your basic punched entry ticket into the world of employment and a graduate degree like a law degree or MBA say is sort of the equivalent of a liberal arts BA from some decades ago which is to say – it now says you’re a little above the herd and that maybe you don’t have a lot of super special skills but you’re at least smarter than the average bear. But the problem is that the market for JDs or MBAs just isn’t what it used to be.

Trevor Burrus: Well, does that mean that – is this a bad thing or is this just a function of the increasing knowledge of the economy? Is this a product of government intervention in a program to not allow us to adjust well enough to a changing world?

Glenn Harlan Reynolds: Well, I think the latter is the answer. I mean, yes, it’s a bad thing. If we had a knowledge-heavy economy that said to get a good job, you have to go through this much schooling and then when you got out you got a good job, that would be one thing. What we have however is we do have a knowledge of the economy but we also have people going to school, running up a lot of debt and then not getting a good job when they get out.

The old joke is the difference between a Starbucks barista and a Starbucks barista who went to college is a hundred grand in student loan debt. That’s not a reason to go to college and yes, I think the rigidities and sort of perverse incentives that’s sort of all this government money sloshing around coupled with a lot of rules on who can enter professions and employers’ fear of using IQ tests and things like that for selecting employees has led to a lot of malinvestment and people invest a lot of money in a college education that ultimately doesn’t really produce value for them or for society.

The people who clean up are people like me. I mean the universities are like the lenders in the subprime bubble. They get their money upfront and then if somebody winds up stuck with a lot of debt they can’t pay off, it’s the federal government and the tax payers ultimately who wind up coming in to pick up the tab and of course the borrower gets screwed even worse with the student loans because unlike a subprime mortgage, you can’t bankrupt your way out of them.

Trevor Burrus: Is there a real possibility of a collapse along the lines of the subprime mortgage collapse happening in the student loan debt market?

Glenn Harlan Reynolds: Yes. I mean there are some signs now. I mean Sweet Briar College which is a fancy college in Virginia where rich women have gone forever is closing and that’s partly because it was single sex, but it was also partly because it turned out liberal arts grads who just didn’t see it as a good investment and it’s not the only place. There have been three or four liberal arts colleges in Virginia that closed just in the past couple of years and you see similar stuff elsewhere.

I think that all these universities are built on the assumption that there will be more customers coming along and that they can continue to raise tuition and some of them have run up a lot of debt in that expectation and if people just quit buying, they’re going to be in trouble. Indeed as I say, you’re seeing signs of that in higher ed generally and in the legal education world.

It’s no longer something that’s possibly happening. Everybody agrees our bubble has burst and the only question is whether it’s going to be as catastrophic as the collapse of dental schools back in the 80s.

Trevor Burrus: Well, what would you say to suggestions that the government should bail out student loan debt or forgive it in some way or do other things to ameliorate the student loan problem?

Glenn Harlan Reynolds: Well, I think it creates a sort of perverse incentive. I mean the truth is, a lot of people with a lot of student loan debt are kind of victims. Schools flat out lie and I don’t mean they paint a rosy picture. I mean they flat out lie about the employment of their graduates and what the graduates tend to earn and things like that.

So that you can make a pretty good argument that a lot of students were basically defrauded into investing money in education that was never going to pay off. I also don’t see any good excuse for having student loans not be dischargeable in bankruptcy and indeed what I would suggest – and interestingly, it’s some democrats in the senate most people are pushing this, not republicans.

I think that the institutions that issued the degrees should have some skin in the game and should be on the hook for some of that debt. So if you get your student loan debt discharged, the university should be on the hook for some percentage of it as an incentive not to take people’s money and send them out with degrees that won’t make it possible for them to pay off their loans.

Trevor Burrus: Well, what can we do in terms of making this more of a free market system? Because it seems like the government has heavily skewed this away from reality and when my parents went to college in the 60s, they could pay it out of pocket essentially or with a summer job. How would this work in a free market system? If we got some of the government control out, how would people go to college and pay for it?

Glenn Harlan Reynolds: If you got rid of government subsidies, you would find that schools would have to lower tuition or go out of business for the most part. I mean a few places – Harvard would still be Harvard because Harvard has enough money in its endowment that it really doesn’t need to charge anybody tuition if it doesn’t want to. Of course it wants to because they like the money because Harvard is Harvard.

But most schools would face a tough economic choice and they would have to lay off a lot of administrators. They would have to get rid of fancy – or at least cease building fancy student unions with rock climbing walls, which now everybody has and things like that and college would have – [0:40:00] actually ultimately go back to looking a lot like college looked 50 years ago which would be a somewhat more Spartan environment and somewhat lower pay for faculty and a lot fewer administrators on campus because that’s actually where the bulk of the excess money has gone is into flocks of administrators who eat up our substance.

That’s what college would look like. College where tuition is – revenues are 50 percent in real terms what they are now, would look a lot more like a college of several decades ago when revenues were 50 percent in real terms what they are now.

Aaron Ross Powell: How much slack is there in the college budgeting? I mean we – so we could – if we didn’t have the loans, then the amount that students would be willing to pay – if we didn’t have the subsidies, the amount students would be willing to pay would go down dramatically.

So, most colleges would not be able to get away with charging $30,000, $40,000, $50,000 a year in tuition. How many of them could make do without that money if tuition dropped to more reasonable levels? Because I mean there’s this dream, right? It’s like every child should have the opportunity to go to college but if we suddenly have far fewer colleges, there’s going to be – it’s going to be harder to get in, right? No matter what the price is.

There’s going to be longer lines, waiting lists. They will raise the standards necessary for entrance. So is there really room there? I mean we see colleges cutting costs all the time with things like hiring more adjunct professors who course hour for course hour make a tiny fraction of what tenured professors make.

Glenn Harlan Reynolds: Yeah. You notice they never hire adjunct administrators. The purpose of a college is supposed to be teaching and yet – and even research and yet when they come to cut budgets, they don’t cut out administrators. They cut out faculty and they take faculty, replace them with low paid adjuncts who don’t do research first.

Nobody ever said, “Well, our budget has got to be cut. So our deputy assistant director of student life is going to be farmed out for $2000 a year to an adjunct.” They just don’t and there was a pretty interesting study recently by the Goldwater Institute that said about 65 percent of the increase in college tuitions over the last several decades went into administration which just from somebody who walks around a college campus and sees all the buildings full of administrators seems about right to me.

Now how much slack is there? Howe much could they cut it? That’s a tough question because university accounting is on a par with Hollywood accounting but Bob Samuels who’s with the University of California has got a new book out. I don’t agree with his solution. He thinks public – higher education should be free and government-subsidized.

But he goes through a long discussion of how much it really cost schools to educate students versus how much they claim it cost them and suggests that in fact schools are spending a lot less money on actually teaching students and a lot more money on other stuff than they let on. That too seems right to me just based on my impressions.

Trevor Burrus: Will this help students when they approach going to college when they’re 18, look at it as a human capital thing? Because that’s what I would see as opposed to a consumption good. You have a great line in your book where you say a six-figure consumption item is well beyond the resources of college students.

Nobody would advise an 18-year-old to purchase a Ferrari on borrowed money after all. But if college education is a consumption item not an investment, then that’s basically what they’re doing and these colleges with rock climbing walls and amazing dorms and all these things, that is a consumption good element and if we got students to look more at that as a human capital element, maybe we would be better off in terms of participating in the increasingly dynamic world marketplace of ideas. Would you agree with that?

Glenn Harlan Reynolds: No. I mean I think that’s right. I think that college should be looked at as a human capital issue first and foremost. It should not be looked at as four to six years of recreation because honestly at age 18, you really can’t afford to spend four to six years on unproductive stuff. That’s an important part of your life.

The other side of it is it’s not just whether you go to college or not. I mean we often hear numbers like, oh, college graduates make a million dollars more than people who don’t go to college. Those numbers are kind of deceptive for two reasons.

One of them is that colleges aren’t just making you more valuable. They’re also sorting and the fact is people who graduate high school and go to college would make more money on average than people who graduate high school and don’t go to college even if they never went to college. They’re just smarter and more disciplined.

The second thing is that – and there was actually just an interesting study on this that came out last week that your choice of major makes a bigger difference in your lifetime earning than whether you go to college or not.

That makes sense when you think about it. I mean if you major in – I mean I keep saying electrical engineering but that’s a hard one. If you major in that, you’re definitely going to make a lot more money than if you major in say women’s studies which may actually reduce your employability because if I’m an employer and I see somebody has got a degree in women’s studies, I say, “Well, they didn’t learn anything and they will probably sue me.” So they’re not a very attractive employee.

So if you think of it as a human capital thing, you really need to say, “What am I, 18-year-old applicant, going to get out of my time at college that is going to make it worth all this money?”

Now 18-year-olds aren’t prone to thinking that way and colleges and their literature and the whole way the system is set up are designed to try to discourage them from thinking that way too much.

Trevor Burrus: So what should we do? Should we tell them all not to go to college and go and get a good tech degree or at least dissuade them? How do we shift …

Glenn Harlan Reynolds: Well, yeah, I mean too many people go to college and so if we change this and we got rid of government subsidies, then fewer people went to college, I don’t think that would be so terrible. In the pre-expansion days, the assumption in the 50s and 60s was that you had to be about one standard deviation above the mean in IQ to really benefit from college. That was about one-sixth of the population and that was how many people should go to college.

Now we say everybody should go to college. It’s just not clear that that’s true. If you go to college and you spend four, frequently six years, and you don’t get anything out of it, even if it’s free in the sense that somebody else has paid for it, you’ve wasted six years of your life. You don’t have that many years of your life and that’s a lot of them to throw away on something that’s fundamentally not productive. Sure, you may have fun in college. But you’re in your early 20s. You’re probably going to have fun whatever you’re doing.

Aaron Ross Powell: Let me bring this reform discussion back again full circle then to K through 12 because if – there’s a lot of people who are going to college who probably shouldn’t not just because they’re not going to succeed at it; but in not succeeding, they’re doing a disservice to themselves in terms of debt or years of their life that could have been spent building up a career or whatever.

That the reforms that we often talk about for K through 12 this – using different models, teaching kids different sorts of things, focusing on stuff that’s going to build up human capital. We’re going to have to just – we’re going to have to sort people into who should go to college and who shouldn’t when they graduate at 18 and are making decisions about what to do for the next year. We have to make those same sorts of decisions for kids and you talk about how 18-year-olds are maybe not best equipped to think about this sort of long term planning and they get lured into the glossy college brochures.

But a lot of parents maybe – because presumably they’re the ones who will be making the choice about what track to put their kids in, aren’t necessarily well-equipped to decide if my child when he or she is five and getting ready to enter the schooling system is going to be Yale-bound or technical-degree-bound or should just have a high school diploma.

So how do we – I mean all the reform starts at the beginning. Education starts at the beginning. So how do we fix all this? How do we let the market fix all this without ending up in a situation where from a very early age, we’re precluding opportunities?

Glenn Harlan Reynolds: Well, that’s a real concern and of course that’s one of the things that people who say we should just have free – higher education in the United States as they often point to systems like Germany’s and Germany in fact does track people pretty early out of college track or vocational track.

Both of their tracks are really good. But once you’re on one of those tracks, it’s pretty hard to switch to the other one and I’m not in favor of that kind of rigidity. I mean my own approach is first I will let people say, “What should we do about this?” First do no harm. An awful lot of the problems that we face in these areas are the result of government distortions.

So the first thing to do is to get rid of the government distortions and the second thing to do is to make sure that people have a lot of choices and then I think the market will tend to take care of it.

Now people will still make bad choices because what’s what people do. But I think that overall if you’ve got lots of different educational alternatives, they will compete with one another and people will find ways to figure out which one looks best for their kid. When you’ve got lots of job opportunities that perhaps require a certification exam or evidence of competence rather than just a college degree, a lot of people are going to say, you know, rather than spending six figures going to – it’s a six-figure cost to even go to a public university for four years.

I will instead get my Microsoft certification or whatever it is and take a job that way and I think that would be better and I would like to see things move in that direction rather than requiring people to go to college just because we’ve sort of fetishized this idea of college as a class marker rather than any sort of actual value.

Trevor Burrus: Thank you for listening. If you have any questions, you can find us on Twitter at FreeThoughtsPod. Free Thoughts is produced [0:50:00] by Evan Banks and Mark McDaniel. To learn more, find us on the web at www.Libertarianism.org.