Trevor Burrus: Welcome to Free Thoughts. I’m Trevor Burrus.

Aaron Powell: And I’m Aaron Powell.

Trevor Burrus: Joining us today is Bryan Caplan, Professor of Economics at George Mason University. His latest book is The Case Against Education: Why the Education System Is a Waste of Time and Money. Welcome to Free Thoughts, Brian.

Bryan Caplan: Very glad to be here.

Trevor Burrus: So the book has obviously a very provocative title, especially coming from a highly educated professor. So why are you against education?

Bryan Caplan: Well, [00:00:30] I see myself as a whistleblower. I’ve been in school continuously for over 40 years. I’ve seen an enormous amount of waste in taxpayer money and I think it’s up to me at least to let taxpayers know that they’re getting ripped off.

Trevor Burrus: That’s one way of looking at it, but you’re not-

Aaron Powell: Pretty straightforward.

Trevor Burrus: You’re for education, but it’s about the education system.

Bryan Caplan: So, yes and no. So of course I do focus on education as it actually exists. I do also go after the idea that’s it a great idea to try to enlighten everybody, even [00:01:00] people who are totally apathetic and don’t have any interest in the stuff. So I would say that the idea that it’s a good idea just to enrich everyone by having them learn stuff, whether they like it or not. I’m against that too.

Aaron Powell: So then can you I guess give what exactly you mean by education in this case then? It sounds like you’re describing kind of the more class … so we’re going to read history and literature and learn physics and so on. Do you mean that or you just mean any sort [00:01:30] of skill or knowledge acquisition?

Bryan Caplan: [inaudible 00:01:34] I was deliberately vague about that because I don’t like to have arguments about words. I just use words in the way that they’re commonly used, so when I say ‘education’ most people primarily have in mind formal education, although there’s also a penumbra of things that are kind of like that and I criticize those too. Yeah, most of my focus is on the education system, formal education, although even the idea of informal education is something that it’s a good idea to ram down everybody’s throats. [00:02:00] I do take that on too.

Trevor Burrus: Education though, is a public good, isn’t it?

Bryan Caplan: That’s the kind of thing where you have to actually go and look at the data to find out whether it’s a public good or not. The main thing that I say is actually it’s much more like a public bad, where individuals acting selfishly tend to get too much education rather than too little, which is the hallmark of a classic public good.
The reason that I say is that most of the path from education doesn’t come from acquiring [00:02:30] skills. It mostly comes from getting certified, from having an institution say, “This person is a grade-A worker. Let’s put some stickers on his forehead,” and then the key interesting thing about that is that if everyone has a bunch of stickers on their forehead, then to get a good job, you need to have even more stickers than other people, which leads to one of the primary features of the modern labor market, which is massive credential inflation.
It’s very hard to get a job even as, maybe a waiter, without a degree that would have made no sense to someone 70 years ago. So now, it’s [00:03:00] very common for college graduates to be waiters or bartenders. Seventy years ago, this wouldn’t have been so. It’s not like there’s been an increase in the cognitive skill required to be a waiter. The real story is just that when a ton of people have degrees, then if you want to compete, you need to have a bunch of degrees too.

Aaron Powell: So then, do your students not learn anything?

Bryan Caplan: So the answer is that my students … On the day of the final exam, at least a lot of my students have learned a lot of stuff; however, stuff that they’ll probably never going to know again unless they become professors.
[00:03:30] Then, out of those students, the fraction that actually remember the material a couple of years later, I think that’s really low. Then even if they ever were in a position where they might apply what I taught them, the problem is people are really bad at that.
So there’s a whole lot of experimental educational psychology that just tries to see how good are people at applying what they’ve learned in one context, that totally different context, when there isn’t anyone to go and say, “Use the information you learned on problem one to solve problem two.”
If you don’t have that kind of guidance, [00:04:00] then what educational psychologists say is most people, even who remember the material, just won’t think to access it when opportunity presents itself.

Trevor Burrus: But they learn how to read and think about problems-

Bryan Caplan: Yeah. [crosstalk 00:04:13]. Of course. [crosstalk 00:04:15]

Trevor Burrus: Is it like mental gymnastics or like some sort of mental muscle … Even if you don’t remember the exact meaning of something you taught in class like supply and demand and how to negotiate and solve prices and stuff, you are better at thinking maybe [00:04:30] when you leave than when you went in.

Bryan Caplan: Right. So just to back up a little bit, so I absolutely agree that some of the stuff that people learn in school is very useful. So literacy and numeracy, primarily, and then depending upon what your job is, you might actually use engineering or computer science or even English or history; however, this idea that if you’ve forgotten everything that you were officially taught, there’s still some residual learning that’s not measured and it’s there somewhere.
This idea’s [00:05:00] has been studied empirically for over a century now by people who really want to find something. In this educational psychology, there’s a whole field that they call ‘transfer of learning’ that plays a crucial role in their arguments. The main thing they find is that you just can’t find it.
This is very little sign that people actually learn general thinking skills and especially that if you’re trying to teach them one thing, that they pick up something else. The real story is more that people don’t even really learn what you try to teach them. So if they don’t [00:05:30] even really learn much of what they’re officially tested on, it’s something you’re constantly trying to teach them, the amount that they learn of other things is just minuscule.
Now again, if you say, “But some people do know how to think. How did that happen?” Well, you know, this is all based upon statistical analysis, so there could still be a very rare number of people who learn how to think and they’re just so uncommon that they don’t show up in the data, which is, I think, a reasonable story.

Aaron Powell: Is there value though, in simply the exposure? So let’s set aside [00:06:00] elementary school level. We’re talking high school and then on into college that you … Having this stuff crammed down your throat as you said, introduces people to new things and so new ways of living or new career paths that they would not have necessarily been aware of. So I went to college thinking that I was interested in one thing but the exposure to the ideas and the various topics that I had to take as core requirements and whatever else, led me down a new path that I would not have ended up on otherwise.

Bryan Caplan: [00:06:30] Yeah. I call this the ‘tasting menu idea of school,’ and as an ideal, I think it’s great. So if young kids could really be exposed to a wide variety of different plausible life paths and then they could find out of each one through experience and then get some ideas about what they might to do with their lives, that’ll be great, but if you look at actual education, it’s very different from that.
In K-12, basically you’re exposed to this ossified list of maybe eight options, almost none of which are realistic. Say, “Oh, I could be a poet. [00:07:00] I could be a novelist. I could be a professional athlete, a historian.” These are all fields that you expose people to, but once they’re exposed, it’s like, “Well, where do you go from there?
There’s almost no jobs in these areas other than to teach the very subject, certainly for music, acting, if you had drama. All these areas are ones where you’re just giving people a sampling of something where it’s just pie in the sky. The odds that anyone will actually ever do it is very slim. Then you get in college, college is the same way where you study a bunch of subjects, most of which have … there are no relation to any plausible [00:07:30] career path.
What’s very striking is you take a look at somebody like the psychology major. Every year, we graduate more psychology undergraduates than there are working psychologists in the country, so it’s just not the kind of thing … it’s the kind of thing where you kind of give people this false idea that they might be able to do it, when most of them never will.
Now I remember when I was entering at Cato many years ago, Karl Hess, Jr. came and talked about his educational experience he had … that his dad, Karl Hess, Sr. set up. Basically what [00:08:00] his dad did is said, “All right, so I want my son to learn about a bunch of different options.” So his dad called up like 26 friends in 26 different industries and said, “Can my son come and work for you for two weeks?” And filled up a whole year for his son to go and explore.
Here, he was exposed to 26 different things that actually are happening, that are realistic for him. That would be a great idea, but to go and defend the existing education system only for exposing people to a bunch of options, saying like … It’s really is a pretty short list of options that we’ve just been repeating for centuries, [00:08:30] unfortunately.

Aaron Powell: Is there a divide in the way that we think about education and … or I guess there is a divide in the way we think about education and I wonder how that divide plays out in this thesis because on the one hand there’s the education as job training. It’s to provide you with the skills to go out into the world and find a lucrative career, and so we get the push … This is where we get a lot of the push for … we need lots of STEM programs in our high schools and colleges.
[00:09:00] Then, on the other side is the education as enrichment, as kind of building up a body of knowledge or at least an exposure to a body of knowledge that form kind of the basis of our shared humanity and our cultural history, which isn’t necessarily about job training and there are, as you said, very few jobs in those kinds of fields. Are both of those equally bad from your perspective? Should we be focusing [00:09:30] more on one than the other?

Bryan Caplan: So here’s what I say: education and job training, given how unhappy most people are in school, if you can say, “Yeah. Well, you’re unhappy, but you’re going to get some useful training and just suffer through it and then you’ll have a better future.” At least that argument’s coherent.
Most of my skepticism about the second story about building appreciation of ideas and cultures just almost no one acquires this appreciation. In fact, there’s probably a good number of people who are turned off to ideas and cultures just because they have such a horrible experience in [00:10:00] school.
In terms of this conflict, it’s very common for people to say, “Well sure, you’re an economist and economists have this very narrow bean counting views, their focus of this job training view,” but even if you go and actually look at surveys of students and ask them, “Why are you in school? What are you doing?”
By far, the normal answer is the economist’s answer, “I’m here to go and get a better job and make more money, and there’s no way I’d be here if it weren’t for those prospects being dangled in front of me.” So I say in terms of what most students are in school [00:10:30] for, I think it really is for this career preparation or at least for opening doors to the career that they want to do.
So in terms of how we’re doing that, I think education does a fine job of opening doors, just this bad job of actually training people for those jobs, and again say, why does it really matter which is which? Like say, selfishly speaking, it doesn’t really matter.
So whether you open the door, whether you improve yourself, doesn’t really make any difference, but from the point of view of taxpayers, it makes all the difference in the world [00:11:00] because if what taxpayers are paying for is to improve workers, then when those workers go out into the world, they produce more stuff and enrich the world more than they would have. On the other hand, if you’re just opening doors, well everyone can’t have the doors open for them.
If the doors were open to everyone, then they’re open to no one really, then you just need to have … add another inner door to go and weed out people … the enormous mass of people who made it through the outer door, so that’s again, what I’m talking about with credential inflation about [00:11:30] how as education has spread, the main result isn’t that everybody’s got a really great job, but the main result is you just need a lot of degrees just to get a mediocre job.

Aaron Powell: I’m curious. Do those answers stay the same over time? So you may ask the students who are in it right now, what they’re in it right now for and they say, “Well, because I want to get a job,” but if you go back to those people when they’re in their 60s or older and say, “What do you think you got out of your education, like would you have done it … [00:12:00] if you had to do it over again, would you and what did you find valuable?” Do they give that same answer? Do they say it was job training, or do they say, “No. I got something else out of it?”

Bryan Caplan: That’s a great question. So as far as I know, that survey’s never been done. It’s just too hard to actually manage. It’s easy to go and survey students when they’re in school. Hard to go and survey them when they’re out of school. I think you’re probably right that older people are more likely to go and endorse this grandiose story about how they were improved as human beings and learned to appreciate ideas and culture.
[00:12:30] That’s where I really do think it’s important to go and just say, “All right. So tell me what books you read this year. Tell me what movies you saw this year.” What you will find is even people that you think of as well-educated, have very low-brow taste, are not, in fact interested in … in terms of the way they allocate their time and ideas and culture, of course with a few rare exceptions, like people who listen this podcast, you guys are great, but again, if you think about most of your classmates, the idea that you would be listening to this podcast is like, “Well, why? When I could [00:13:00] go and just watch late-night television or watch sports, or whatever? This is what normal people actually choose to spend with their time, whether they’re 20 or 60.”
One of the main themes in my book actually, is to be very careful when people give you answer that sounds like people want to hear it. In the book, I have a section on what’s called ‘social desirability bias.’ This is what psychologists’ name for the very human trait of wanting to say and believe [00:13:30] things that sound good and make you seem like a nice person.
When you’re 60 and someone says, “Well, what did you really get out of it?” They’re like, “Oh, I got this great appreciation. It made me a human being,” blah, blah, blah, blah, blah. Again, it’s important, then to go and look at behavior and see is there a gap between what people say and what people do and there totally is a world of difference between what people say, which is what people want to hear and what they do, which is what they actually like.

Trevor Burrus: Now, I want to just clarify … We’ve touched on it a bunch of different ways, but [00:14:00] in terms of clarifying the exact debate that your book wades into, and Aaron kind of mentioned it too, but the debate is kind of a human capital theory of education versus the signaling theory of education and that’s been going on for a while, correct?

Bryan Caplan: Yes and no, actually. So in terms of … just to back up. There’s two main stories about why education raises earnings that social scientists tell-

Trevor Burrus: [00:14:30] Which is does, right? I mean, that’s actually true.

Bryan Caplan: Yeah, which is does and the human capital story says, “Look, school is a skill factory. You go in there. They pour skill into you and then you are better and you produce the extra earnings that you get after graduation. The signaling model says, “No, no, no. Different story.” What’s really going on is you go there, you jump through a bunch of hoops and if you do well, they put stickers on your forehead saying, “Grade A worker.”
Then, once again, the labor market treats you better. All right. Now, in a sense, you’re right. This debate has been going on since the ’70s, but [00:15:00] really the main debate is just in terms of pure theory. So like Michael Spence won a Nobel Prize for his work on the signaling model of education, so in terms of just the pure math of what’s going on, there’s been a lot of give and take over the last 40, 45 years.
In terms of empirical work, in terms of saying which model actually fits the world, human capital has always had the upper hand by a lot and continues to have the upper hand. Again, that’s really why I wrote the book because I think that [00:15:30] it does not deserve to have the upper hand.
There’s an enormous mass of evidence from many different disciplines that are all very supportive of signaling and very hard for the human capital model to explain. I don’t want the signaling model just to be stuck in this ghetto of high theory even it’s a ghetto with Nobel Prize winners in it. I think that it’s something that we should take seriously as a description of the way actual education actually works.

Trevor Burrus: To be clear, you say several times throughout the book that you’re not making the claim that there is no human capital gained from [00:16:00] education-

Bryan Caplan: Of course not. That would be crazy. So yeah, literacy, numeracy are generally taught in school and there’s … so computer science, people learn that in school and you use that on the job, so yeah. There’s plenty of stuff that people do learn in school that is useful to them one day, but I still say it’s a small minority of the time that people spend in school and it’s a small minority of the explanation for the rewards that you get in the labor market.

Aaron Powell: How much though, of what we learn in school after, say in elementary school you learn how to read and you [00:16:30] also learn some math and that continues on in middle school and high school, but how much then of the other stuff that we do, so the history and the social studies and all of the stuff you do as part of a general arts and sciences curriculum at the undergraduate level is just reinforcing that literacy and numeracy that at some point it’s not enough to just know how to read words, but you have to be able to learn how to read complicated things and pull the ideas out of them and the way you do that is by [00:17:00] studying complex topics in written form and similar with math so that that stuff … If we took those things away, we would lose a degree of the literacy and numeracy.

Bryan Caplan: Yeah, so in the book I try to ballpark how much of that stuff could really be going on because the main big fact to know is that your description of what people are learning in K-12 is optimistic even for college graduates. So like the fraction of even college graduates [00:17:30] who can read a complex text and pull much out of it, that’s maybe like the top quarter to a third of college graduates could actually be even decent at tasks like that.
So for people who finish high school and then start college like hardly anyone actually ever gets to that level. Like a more a general point of just reinforcing … just to get basic literacy and numeracy, which so many American adults still don’t have … In some of [00:18:00] the best studies of adults, maybe about a third of adult Americans are only semi-literate and numerate and can barely do things like consult a TV guide and figure out the time that things on, can barely fill out a registered mail form correctly, things like this.
So there is a probably some marginal improvement there. It’s just not a very good way to actually improve the skills that people have, like you really want to go and focus on exactly the kinds of tasks that you expect to be doing. So one of the big [00:18:30] lessons of educational psychology is that people need to practice the very thing they’re going to do.
Going and teaching them something that’s very different from or much harder than what they really need to do generally just leads to some improvement in that task, but not much in what they really need to actually learn. If you really want to get people reading better, better to just give them basic texts and work your way up from there and not give them something, like have them read Thoreau and try to analyze it, which most people will never do.

Aaron Powell: [00:19:00] So when you say most people will never do, there’s an underlying sense this might be kind of … There’s almost a determinism here, so I wanted to ask about that because are you saying that when … So when we say that say only a third of college graduates can read and comprehend complex tasks, is that because the tools, the way that we’re going about educating students up through college to get them to read complex texts are not [00:19:30] well thought out, not very powerful, could be better or are you saying that there’s just the majority of people will never be capable of doing this? Like no matter how good our training was, no matter how much time we put in, they’re just never going to be at this level, cognitively or whatever else.

Bryan Caplan: Yeah, so I’d it’s a mixture of the two. I remember when I talking to psychologist Steve [inaudible 00:19:58] and I was asking him is there any known cognitive tasks [00:20:00] where people can’t be trained to do better or practice doesn’t work. He has an encyclopedic knowledge of the discipline, thought about it for a couple of minutes, said, “No. There’s no known task where practice does not improve performance.”
So yeah. I’m very confident that you can improve people’s performance in anything. At the same time however, there are many people where the amount of practice they would need would be 10 or 20 years. So there is that, that it would just be highly [00:20:30] impractical to actually do it. Again, it’s not that it’s totally impossible, but it’s just that it’s not realistic.

Trevor Burrus: But that seems like a lot of people would be quite offended by saying we’re give up on some of these people and just assume they’re not going to read or care about Shakespeare or understand certain things or think about bigger ideas later in life. That seems kind of A, elitist and B, just so inegalitarian that it would offend sensibilities of most Americans.

Bryan Caplan: [00:21:00] You’re probably right on that. Of course, it maybe that they would be happy to do what I say if I just rebranding it, so … Here’s the way that I think about all of my work. My strength is getting to the bottom things and saying it very clearly. Other people may have the strength of marketing it in a way that it becomes palatable.
I don’t know. On the elitism point, which is more elitist to say that some people are never going to appreciate Shakespeare or to say that everyone ought to appreciate Shakespeare? [00:21:30] To me, there’s an elitist ring to both of them. They’re two incompatible views, so I would be inclined just to say that people think that it’s not worth living unless you savor Shakespeare.
Why not just call them the elitist, and then complain about that? The other thing is just that this offense has a very high cost because there are a lot of kids who just hate school, they find it super boring, and if we have a system where everyone gets prepared for college, [00:22:00] even though it’s totally unrealistic to think to that they’re going to succeed in college, then you wind up wasting an opportunity to teach them something else.
This is why I have a chapter in the book on vocational education and how great it is, especially for kids who just don’t like school and people who’d rather go and learn how to do something practical. Again, from the point of view of society, wouldn’t it be far better …
Even to train someone to be a good McDonald’s worker than for them to end up in jail, which is again is where a lot of American kids who [00:22:30] just don’t like school end up, so they’re pressured to go and study stuff that is of no interest to them. Then they’re told that they’re not good at it, which they’re finally they just drop out and then at a very high rate of turning to crime. Wouldn’t it better if from a much earlier age from when they were 13 or 14, just train them to do any job at all so that they are part of the workforce and they’re independent, self-supporting adults?

Trevor Burrus: I understand … I think that there’s a term for the sort of, I guess, this in the signaling model and other situations where [00:23:00] you can have a destructive equilibrium in the classic cases, standing up at the concert where if people in the front row stand up, then everyone else will stand up and no one can see any better and there’s a first mover problem where no one can sit down and make everyone else sit down, a collective action issue.
Of course, that could go on for a while. You could have people then bring boxes to stand on and everyone has to stand on boxes and eventually everyone could standing on 100 boxes. If you’re the guy there saying, ” [00:23:30] Hey guys. We could just take away all of our boxes and not have to spend money on the boxes and still see in the same way, that would generally be a good thing.”
Now that makes sense in that concert example, but it seems really hard that … to imagine how if this is sort of what is education is doing is say, “Okay. We all got Bachelor’s degrees, so it’s like a box we’re standing on and then we got to get Master’s degrees even to be a waiter,” it seems like it would not as stable and persistent as it has been for so long [00:24:00] that no one could come along and say, “Hey guys. This is a little bit crazy,” especially when there’s profit in it.
I mean if you were here saying, “I’ve discovered that the steel industry raised a hundred billion dollars a year or something like that, most … a trillion or however much the education system is wasting, most economists would say, “You’re probably wrong because the steel industry would figure that out and they have a lot of incentive to figure that out, and,” so why isn’t that happening in education?

Bryan Caplan: Right. So two [00:24:30] things. First of all, there’s almost a trillion dollars in government subsidies on this side of the status quo, so the current system has not passed the market test, not by any stretch of the imagination. So all they really need for my story to be right is that governments will go and throw bad money after good endlessly, with like decade after decade. My first book, The Myth of the Rational Voter argues this is totally reasonable because it …
Voting is not like being a shareholder in a … like in the steel industry or being a manager in the steel industry. It’s [00:25:00] not like being a shopper. If there’s a product that’s junk, there’s this toenail fungus cream that doesn’t work, if you’re an individual shopper, you just don’t buy it. Even if everyone else insists that it works, you’ve saved your money, but if you vote on what’s the best toenail fungus cream and most people disagree with you, there’s no real gain to you of being the naysayer or trying to change it.
Just remembering all the government subsidies in favor of the status quo, that’s one big part of it. Then on top of it, the other thing is one of the big things that education [00:25:30] signals is conformity, saying, “Look. I understand the norms of this society. I comply with them. I don’t rock the boat. I go along with things.” If that’s one of the things that you’re signaling, then I say there’s an inherent lock in there because if someone comes up with a really new, imaginative way to signal conformity, what have they really signaled?
They signaled non-conformity. So I say this is a catch 22, so I think there is something special about things like education where government support aside, just like you don’t want to be [00:26:00] the person, or you don’t want to be the parent of the person that goes and starts signaling things a weird way because the world holds it against you.

Aaron Powell: How much of it is also less from the side of conformity or incentives not to change things, but just that in this country, the people who tend to set the policy, be in a position to make decisions about these kinds of issues, the ones who would have [00:26:30] to lead that charge, also tend to be the kind of people who did get something out of their education or did find it valuable or did like it and so they …
People seem to just assume that everyone else is like them, so I would do college again in a second and in fact would probably would spend the rest of my life taking classes if I didn’t have to earn a paycheck, but I’m weird in that way, but [00:27:00] there’s a tendency for people in my position to kind of assume everyone else is like us.

Bryan Caplan: Right. So your general point that people tend to think that everybody’s like them is right and I think that’s a lot of why professors are so gung ho on education is they had good experiences and they think everybody else is having them. I don’t think that’s quite so true in the business world.
I think there’s a lot of people who just thought that school was a joke and they just gamed the system in order to get the credentials and now they look back and say, “That was really silly.” [00:27:30] There’s probably some tendency for people who are involved with hiring to have been relatively good students and so they may have some halo effect for them.
Again, I would say that this is a case where what Trevor was saying makes sense where if it really were the case that there’s a lot of qualified people that you could get for lower wages if you just go and hire people without credentials. If that really were a viable business strategy, I do think it would be happening right now.
So in my mind, the main thing to explain is why [00:28:00] it is that it’s not profitable to go and be more open-minded and what I say is that … Since one of the things education is signaling is conformity, you don’t want to get these open-minded people who are talented but didn’t go and do regular credentials. You’re worried this person won’t be a good worker. They’re going to rock the boat.

Trevor Burrus: Does the signaling model … does it do enough to explain why at least … I’m not an education policy analyst, but from the little I know about say the Western world, the OECD world, that the [00:28:30] education system is generally the same at least in the things that we’re talking about. You take a bunch of useless classes from five years old and you continue to take useless classes and all this stuff.
It seems that why would it be … I know Germany and stuff a little bit differences, but if that’s generally true, why isn’t there a country out there just breaking the mold and destroying everyone in cost-effective education systems and effective worker job placement [00:29:00] strategies?

Bryan Caplan: You know, there are big differences in the amount of GDP the different countries spend on education and … Again, important to remember … So like imagine if you’re spending 6% of GDP in education, and then you manage to cut it down to three, is that going to give you a dramatic change in the standard of living in that country?
Like 3% might not even be noticed all that much, but again of course it still adds up to many hundreds of millions of dollars, so you’d still be super wasteful, nevertheless. In terms of why we don’t see that much variation [inaudible 00:29:30] [00:29:30] remembering so they’re all supported by their governments, like every single country there’s heavy government support for education so there’s very little individual advantage in trying to do something else.
Why is it the taxpayers in at least one country don’t say, “Hey, this is our money. Don’t wast our money.” If that question’s on your mind, I would say it should be actually be very general. So again, if you think that there’s a lot of government waste everywhere, then you might wonder why don’t taxpayers open up to it or notice [00:30:00] it.
Again, I say in my book, The Myth of the Rational Voter, my first one I say, “Look, like voters … Like there’s very little … In fact basically zero in individual incentive for a voter to look at the world calmly and realistically.” Instead, people vote based on wishful thinking and education will transform our society and it’s great in every way. That’s the kind of wishful thinking that resonates with human nature all over the world.
As for why that is, there’s human universals. There’s like think of the children. Makes a lot of evolutionary [00:30:30] sense that kind of rhetoric would touch human hearts all over the planet, so I think it makes a lot of sense. Same thing with love of country and we have to stand you up to enemies and all of these political slogans that are often false, but nevertheless are endlessly appealing and are a great way for a politician to get power and all this stuff is out there.

Aaron Powell: How much from an employer’s perspective does education, especially credentialed education function [00:31:00] almost like a minor league in sports that I don’t have … If I have a job opening and I’ve hired a fair number of people in my time at Cato, you get hundreds of resumes sometimes, even more and you’ve got to go through and so the things that you look for, aside from just basic ability to write a grammatical cover letter and so on is … well experience, but for people who don’t [00:31:30] have work experience, they can’t have work experience to draw on, so you can’t use that to see what are they capable of?
How long have they been employed in different places? Were they a good employee, so they lasted a while or not? So college just serves another way to get there. College may not have taught them anything, but I know that if they made it through, they possess a basic ability to do work, to stick with things, to [00:32:00] show up on time, to complete projects and so even if they’re not necessarily getting anything out of it, I don’t want … or switching to a system where it’s just, as you said, the kind of bright, unschooled person, there may be those out there, but they’re awfully hard to find and it’s a higher risk because I don’t have that kind of baseline metric I can use to judge just the fundamental competence.

Bryan Caplan: Right. That all makes perfect sense. If fact, that’s been pretty much my argument, [00:32:30] but say if we went back to 1945, when only that only 25% of students finished high school. Back then you could use the high school degree to do same thing that you now use the college degree to do. So that’s where Trevor’s analogy of standing at the concert and getting more and more boxes is exactly beyond point that of course, when everybody else has degrees, then you’re going to get passed over, you don’t have one.
Does it make sense for government to pour money onto the system to improve access if the main effect is just that you need more degrees [00:33:00] than ever in order to even get someone to take a good look at you. So, again remember, all of these government subsidies does make life easier for employers in a way, but it’s always important to ask the boss the odd question, which is, “Well what would have instead?”
What I say is if we didn’t have the system what we haven’t said would be a lot more apprenticeships, a lot more on-the-job learning. There’s so many other possible ways that we might be certifying worker quality, but your mechanism is exactly right, especially [00:33:30] to get your foot in the door because one common objection to the signaling story is just that once you’re hired, employers will find out whether you’re worthwhile and they’ll flush you.
They’ll fire you in a few months if you’re not any good. Even if that’s true, you’re not going to be observed for three months until you get hired in the first place. If people throw away the applications for anyone who doesn’t have a college degree, then of course you’re going to get one. It’s super valuable to get your foot in the door, if that’s the only way you can ever even get considered based upon your merits.

Trevor Burrus: [00:34:00] It still strikes me as incredibly odd in that 20 dollar bill lying on the sidewalk problem that employers could open up their applications and have a test or have an IQ test or have some sort of other test and say, “We’re willing to take anyone, even if you’ve never gone to college if you go through these three hours tests and we’ve figured … ” Your point is well-taken, it just [00:34:30] seems like there’s this 20 dollar bill-

Bryan Caplan: It all depends on just how big the pool of qualified but uncredentialed people is. So if half the people that you’re throwing away would be good for the job, then yeah, there’s a 20 bill on the sidewalk an employers are going to profit if they become more [inaudible 00:34:44], but if you’re down to a world where only five or ten percent of the people you’re throwing away would have been worthwhile, in that case it makes a lot of sense to say, “Well to be … to judge people in more fairly or more individually, we’d have to spend five times as much time in hiring and that’s really expensive and distracting [00:35:00] to people who create a lot.”
Now the question of why not just substitute standardized tests? There is a view that I attack in the book that IQ testing for employment is illegal in the United States. I kind of believed it myself until I actually looked at the facts and said, “No it’s … ” While there are some court cases that put up some hindrances to that, they’re not very effective and the cost of … and the expected legal cost of giving IQ tests to hire is very small.
[00:35:30] Maybe if you’re a very high profile company, you might have trouble getting away with it, but almost any mid-size employer could use IQ tests if they wanted to use them for hiring. So my story about why IQ tests are not being used much for widely, they are used to some extent, but just not that often is that if you were to go and start hiring high IQ people without credentials, the problem is that you would get the people who have high IQs, but either they’re lazy or they’re non-conformists.
So, either the people don’t work very hard or they’re just defiant and difficult [00:36:00] and I know a lot of people like that, actually. People who are really smart but I would never hire them because I know their personality. Generally they are the less … my less-credentialed friends. I love them, but I don’t want to hire them.

Aaron Powell: Are there industries that are moving in this direction or better at it? Like I’m thinking specifically of the technology and startup scene, which seems to place less emphasis on having that Stanford computer science degree and more on just being a really good coder.

Bryan Caplan: So there’s a lot of rhetoric [00:36:30] to this effect, although my view is that when you actually go and try to get beyond anecdotes statistics, if anything, the IT is more credentialist than it was 30 years ago. The story that I’ve heard from insiders is like this: Back in the 70s and 80s, if you could program, no one cared whether you dropped out of high school and there was a big enough pool of good programmers who had dropped out of high school or at least hadn’t gone to college that it was foolish in those days to be so snobby and say, “We’re not going to consider you,” [00:37:00] but now the fraction of good coders who didn’t is actually quite low, so it’s once again, it actually makes more sense now to be finicky and snobby and saying, “We’re not going to really worry about those people.”
Now I have asked about … I’ve made some friends at Google and I said, “Well, I heard that sometimes you hire someone who just wins a coding contest, even regardless of their credentials.” They’re like, “Yeah, yeah. That’s true.” So, how good do you have to be to get in to hired by Google without an actual degree, just by winning [00:37:30] a contest? Again, this is all just off the record.
This is not closely verified, but the story that I’ve heard from insiders is, “Yeah. Maybe we can hire five people a year who don’t have formal credentials, but won contests.” Then I said, “How many people do you hire a year who didn’t win contests but have awesome credentials?” They’re like, “Yeah. A thousand. Thousands.” So you have to be way better to get in through these back doors, although it does happen.

Trevor Burrus: I want to ask you a question about a quote, just [00:38:00] one line you had in the book, “Fifty years ago, college was a full-time job.” You said that it was very, very different in terms of how much effort and things it required. Why would that have changed in that way, do you think?

Bryan Caplan: Yeah. That’s a great question. So I think a big part of it is just that as the number of kids that are going to college has increased, again the actual academic interest and preparation of these kids is so low, that you have [00:38:30] to sort of make it easier in order to give them any help. So there’s that. Like if you’re a professor, you don’t want to fail half your class, so if you start lowering standards a lot, then it’s very automatic that you just start making it easier so that people can hack it.
So I think that’s a big part of it. Something else is just to look at it from the professor’s point of view. So to me, what’s really amazing is that professors don’t just give all A’s, because it makes your life easier. There’s almost no pressure [00:39:00] from higher ups in administration to not do that. Really the main constraint, the main thing that stops professors from just saying, “A’s for everyone,” is their own academic conscience and just thinking I could not as a decent economist go and give A’s to kids who can’t even draw supply and demand correctly.
Also, in a way, in terms of the self-interest of the people actually that hold the power, what’s puzzling to me is that college isn’t even easier. So again, back in the old days when the students … where there’s better students and more motivated, then [00:39:30] when you’re making this trade off between, “Well, what does my conscience allow and what makes my life easier?” Those days you actually assigned a lot of work. Nowadays, it’s very tempting just to cut corners and most professors give into those temptations.
I agree, it is a bit puzzling from a signaling point of view how easy college is and Blogger Noah Smith has said, “This is why signaling can’t be true.” I said, “Well, to understand how easy something is, you just have to look at the completion rate.”
Like if only 40% of full- [00:40:00] time college students finish their degree on time, then clearly for 60% of people, this counts as hard. It may be very puzzling as to why they find it so hard because you say, “Can’t you just find some really easy major and just do the bare minimum and that’s it?” You can lower standards a lot and still there’s a lot of people who struggle to get over them or at least like they struggle to get out of bed or to bother to go to the exam.

Trevor Burrus: Is that the number, 40%?

Bryan Caplan: Yeah. So 40% is a good number for the share of full-time students [00:40:30] who finish in four years. If you go up to five years, then it’s like 55%, six years is like 60%. There’s a little bit of an issue with transfer students, so you may need to bump the numbers up a little bit to take that into account.

Trevor Burrus: So if we’re going to try and start fixing this, what do we do? It seems like there’s some problems we would have if we had a free market education to begin with. One would be that maybe 14 year olds don’t [00:41:00] really know enough to invest in their own future if they’re taking loans and things like this or maybe people won’t want to invest in their future if they’re going to a bank and saying, “I’d like to go to school.”
We break the whole education [inaudible 00:41:14] so 14 year olds can do a bunch of different things, but do they want to do that? Maybe forcing them to do these things, being the state is something we should doing just because they would rather just play Xbox all day.

Bryan Caplan: In the book I talk about my actual realistic policy proposals and then I go into my [00:41:30] radical libertarian mode just briefly just to say in a section called “What I really think,” so again, the main thing I’m pushing in just cutting spending. So spending less in order to encourage fewer people to do regular school at all levels.
Now in terms of what would libertopia be like? Imagine a world where government knew there’s a separation of school and state and government doesn’t have any role at all. Of course the main people that will be involved in the lives of teens like libertopia today are their parents. So [00:42:00] their parents are unlikely to say, “I’m going to support you while you go and play Xbox all this time.”
Their parents are going to be concerned about getting their kids to go ahead and prepare them for their future. So again, realistically, it’s going to be parents that are going to be footing most of the bill, especially for younger kids. Like the kids with very responsible parents or kids who don’t … or kids who just don’t … Like orphans or things like that, there again in libertopia, the answer is always, “Well, there’s going to be private charities, scholarships, that kind of thing.”
Again, worth pointing out [00:42:30] that … Even say, like in the 1930s or 40s, it would still very common for people in their mid teens to self-supporting workers, so I think that is a much better world to have one where 15 year olds actually can afford … they have a job and can pay their rent and take care of themselves. I think also in terms of you’re preparing for life in a free society, I think there’s a great value in teaching people from an early age that the market is a place where they can independently sustain themselves.
[00:43:00] So I’ve always had the view that … [inaudible 00:43:03] the view that the worst thing about The Great Depression for Libertarians was just teaching a whole generation of people that you can doing everything right and yet still not be able to take care of yourselves.

Aaron Powell: How do we then deal in such a system with, I don’t know, call it ‘the diamonds in the rough’ or the stories that you hear of the kid who grew up poor and was really bad in school early on [00:43:30] and then discovered that one teacher who turned them on to something and they went on the Julliard and to be … a fantastic career as a musician or they discovered these kind of soft talents that aren’t the trade school things and that everyone …
If we just kind of cut people off at the beginning and say, “We’re not going to expose you to all those skills,” how are we going to find those kids who have the capacity who have the capacity [00:44:00] to do so much more or do we just have to say, “Well, you know. We’re going to lose some of them, but it’s better overall.”

Bryan Caplan: Yeah. So the big point I would make is always, so like, “What would happen instead?” So if people started their lives at a much earlier age, how would the whole world be different? Right now there are tons of people who never get to realize their dreams because they have to finish college to even get a chance. In a system where education levels are all lower, I think there’s going to be a lot more learning by doing, a lot [00:44:30] more chances for someone to just try and show what they’re able to do.
So it’s always worth remembering what have we lost with the current system? We’ve lost is a chance for a 15 year old to just go and become an apprentice and learn by doing. We tend to think, “Well, if they were any good, they would have gone to college.” Probably there’s plenty of people that would have been good on job that just don’t like college. So on average, college graduates are better, but the averages don’t describe everybody, so we’ve lost so many opportunities right now with the current system.
[00:45:00] Then, does the current system also create some opportunities? Yes. My best friend at Princeton grew up in a log cabin in Poconos and then they built it with their bare hands, or I guess with saws, but they built a log cabin in the winter in the mountains. They were that poor and he’s my best friend at Princeton, so the system was great for him, but you should always do the thought experiment of how would opportunity in general be affected not would one person that I know be worse off in a different system.

Trevor Burrus: So in the final calculus [00:45:30] of the book, you … I mean, the book is incredibly empirical and it’s excellent and you deal with all of the counter arguments and everything that we’ve been talking about here, but in the final calculus, how much of education is signaling and how much is human capital? Then, how much money are we wasting, do you think?

Bryan Caplan: Yeah, so my preferred number is 80% of education is signaling and then I’d say [00:46:00] roughly that is a pretty good estimate of the share of it that we’re wasting. So it would be about 700 billion dollars a year. That’s billion with a B, so I think that’s a very fair number from the taxpayer’s point of view.

Trevor Burrus: That’s about the US military budget, which is what Trump asked for, which is … and you bring it up in the book, the … wouldn’t it be great if the army was to hold a bake sale to buy a bomb bumper sticker kind of thing? It was like, well actually we spend way more than that on the education [00:46:30] system than the military, which is the part of the point that that money could be used for a lot of things that are valuable.

Bryan Caplan: I’m not pro-military myself, but still worth pointing out that we do spend more on education than on the military, so when act like the education system is starved, that it’s demented …

Trevor Burrus: Does it seem to you now … With some of these came up where maybe I see anecdotally, at least, an increasing skepticism of college as a lot of these discussions are becoming [00:47:00] more common and the idea of creating different apprenticeships and ways of verifying … because signaling is important. Verifying that you can do things, but also having more human capital, it seems that we might have more technologies to do that and improve education going forward, so do you think that the tide is kind of turning in some sense against education, just more and more all the time? We can’t add another [00:47:30] layer to … We went from high school to college, to college, now you got to go to grad school, but there’s not going to be grad, grad school. You can’t add another and people are going to have to grow up and start working-

Aaron Powell: You stay on your parents insurance until you’re 45-

Trevor Burrus: Yeah. Exactly. So, is this the time to kind of … that things might start shifting? Not all of it because, as you said, it’s so popular just spending money on kids, but start shifting in a positive direction?

Bryan Caplan: Very marginally, maybe. I don’t expect any big change. Of course, I would love it if my [00:48:00] book became a huge best seller and changed the way that everyone on earth thinks about education, but realistically, that’s not going to happen. Also, there’s a lot of resentment against education, but not the kind of resentment that’s going to lead people to vote for a guy who says, “I’m going to cut the education budget by 10%.” So that still seems really weird and again, [inaudible 00:48:20] a lot of people that seems like surrendered.
No, no, no. Don’t cut spending. Improve it, even though, of course people are going to try to improve the spending and improve education from since the beginning of the system. It’s just [00:48:30] that, again, the idea of the real problem is not so much the kind of education that we’re giving, but just the total level is way too high. That’s a very hard idea for people to accept. So I don’t think that there’s going to be any big change. I actually have a bet saying that the fraction of the recent high school graduates that will be in college is not going to do down by more than a marginal amount.
In the book, I talk quite a bit about online education and whether that’s going to change the system. I don’t think so. I am, primarily just because right now if you have a kid that could [00:49:00] go do well in a regular college and then he says, “Well, I could, but I’m just going to go an online college.” Normal parent’s reaction is, “No! No! Don’t! You’ll be shooting yourself in the foot,” because right now, we still have the view of the people doing the online education are people who have some issue with doing the real way.
Right now, I think online education is actually great for learning, but in terms of the signal you send still seems to be subpar. As long as that’s what perceptions are [00:49:30] like, then they will be self-reinforcing. On Wednesday, when I’m speaking at Cato, the respondent’s going to Kevin Carey and he … Like his work, The End of College, talks quite a bit about well we … first when online education first came along, we thought it was going to be like Napster was to bring the whole system down and that didn’t happen, and now we’re focusing on credentialing because that seems so important. Again, there’s the problem of coming up with credentials that people consider to be as good as regular ones is hard if the people that want to do something different [00:50:00] or really are just to take the easy way out.

Aaron Powell: So there’s a long history of libertarians talking about education. Some of it pretty reasonable, some of it pretty fringe and weird. Within that spectrum of libertarian views on the topic, where do you fit? How do your views compare to those of other libertarians?

Bryan Caplan: Right, so I would think of myself as much more on the radical wing, at least in terms of, I say we should cut education spending and [00:50:30] it isn’t by a lot. Now, you might use … Most libertarians that work in education don’t want to say that. It’s just a very uncomfortable and awkward position to take and instead they want to focus more on things like how vouchers will go on to improve the quality of the education system, get parental choice.
Again, those vouchers are still being paid for by taxpayers. In my mind, this is a lot like a debate about government subsidies for football stadiums. I think of the better libertarian view is cut the subsidies. The government should not be going and [00:51:00] picking winners and trying to force feed this industry. I think a lot of other libertarians are more like saying, “Look, we need to go and figure out a way to get better stadiums with our money or maybe we subcontract the constructions of the stadiums.
Again, which all may be an improvement, but doesn’t really get to the heart of the matter, which is there’s a huge waste of taxpayer money and there’s no really good argument for why it is that the government should be going and taking taxpayer money and subsidizing this industry instead of just letting people spend their own money in their own way.

Aaron Powell: [00:51:30] Free Thoughts is produced by Tess Terrible. If you enjoyed today’s show, please rate and review us on iTunes. If you’d like to learn more libertarianism, find us on the web at www.libertarianism.org.