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Even if universities re‐​open in the fall, will higher education snap back to normal?

While universities debate whether to re‐​open on schedule for the fall semester, it’s expected that hundreds of colleges that were in financial distress will shutter their doors. While that might seem like obvious evidence of decline in higher education, economist Bryan Caplan suggests otherwise. In his controversial book, The Case Against Education, he argues that higher ed does relatively little, well, ‘ed.’ COVID-19 might just help expose the systemic failures of higher education in America.

Could COVID-19 help us rethink how we do higher education? What was wrong with higher education before the pandemic that we could fix now? How is higher education just a signaling mechanism to employers?

Further Reading:



00:04 Paul Matzko: Welcome back to Building Tomorrow, a show about what a freer and fairer future could look like. Last episode, I talked with Kerry McDonald about the pandemic induced mass national experiment and homeschooling and how much of that we could expect to stick once life returns to something approximating normal. But I think the education sector that I’ve seen the most dire predictions about, it’s not primary or secondary ed, it’s higher ed. There’s still a great amount of uncertainty about whether universities will even reopen in the fall, and that’s putting immense pressure on hundreds of colleges in poor financial shape to reopen regardless, although whether or not students will show up, even if they do, remains an open question. The spectre of accelerated college closures and even thousands of laid off faculty has folks questioning the future of higher ed in America. But what if those closures might actually be a good thing for the state of higher ed? That’s the controversial position of our guest today.

01:06 Paul Matzko: If you’re looking for a provocative take on higher education, you need look no further than Bryan Caplan. Bryan’s an economist at George Mason University, the affiliate scholar at Cato and the Mercatus Center and the author of “The Case Against Education: Why the Education System Is a Waste of Time and Money”. It’s always nice when an author doesn’t beat around the bush with their book title. Welcome to the show, Bryan.

01:30 Bryan Caplan: Thank you so much for having me.

01:32 Paul Matzko: Now, we’ll get to your predictions about COVID-19 here in a bit. But your book came out in 2018. What was wrong with higher education long before the pandemic hit and was that what you were responding to with this book?

01:46 Bryan Caplan: Right. So, I don’t even just say higher education, I say all education really. So, the problem that I see with education as it exists is that students spend an enormous amount of time studying material that they will never need to know in real life, material that they quickly forget in any case, and this is a problem I see from a social point of view. So, it’s not that the education doesn’t get you a better job, it does, but I say the reason is not that you’re learning useful skills most of the time but rather that education is what we call a signalling method. It’s a way of impressing employers, showing that you’re better than the rest of the pack, and I say that’s most of what education is, is it’s a way for people to jump through a lot of meaningless hoops in order to end up at a nice job at the end.

02:29 Bryan Caplan: The catch though is that this only works for an individual. An individual can enrich himself by showing off without actually acquiring skills. But a society cannot get rich based upon everyone showing off, you’ve gotta actually acquire real skill. So, I say that the system is stable in general because it does work, selfishly speaking, but it’s not a good system because it’s such a waste of social resources and efforts.

02:53 Paul Matzko: Now this view of education as social signalling to future employers, that’s contrasted in the book with what you call human capital purism. What’s that?

03:04 Bryan Caplan: Yeah. So, human capital purism is a fancy name for a view that is in almost all education propaganda and it’s this: You go to school and they pour lots of great skills into you, and then you learn those skills. And then when you’re done, you take those skills and you offer them in the marketplace, and employers reward you because you are now skilled. This is a view that you get from teachers and parents but you also get it from most economists. Most economists realize, “Alright, well, that’s not the only possible story but still is the story that they like.”

03:34 Bryan Caplan: So, I think it leads us to why economists like the story so much. I really think it is because they like to think of the world as being functional and efficient, and working. And so when they see that the system works for the individual, they are very hasty to say it’s a good system overall even though, really, economists ought to know better.

03:54 Paul Matzko: So, puncture some holes in the human capital purist position for us.

04:00 Bryan Caplan: Right. So again, just to be clear, I do not say that people learn zero useful skills in school. Every now and then someone says, “Well, Bryan says no one ever learns any useful skills but some people learn reading, so Bryan’s wrong, I guess.” I’m aware of the teaching of reading, thank you very much. What I do say is if you, first of all, just take a look at the time that people spend on different subjects, a lot of the time is not spent on literacy or numeracy, or anything that students are likely to use in the future. So, we spend a lot of time on social studies, on art, on music, and this is material that hardly anyone will ever use in real life.

04:35 Bryan Caplan: Now, again, you could say, “Well, it’s useful for some other purposes,” but even there, and it should puzzle you, why does it matter in the labor market whether or not you went and learned social studies or history? Why would your employer actually care? And the signalling story can explain that and the regular one can’t.

04:52 Bryan Caplan: So, just besides this basic disconnect between what people study and what people actually do in real life, there are a lot of other very suspicious signs. So, one of my favorite one is just the way that students look for easy As. If you’re trying to learn skills, you don’t want the easy As, you want the teachers that pour a lot of skills into you, and yet students seem much more concerned with their grades than actually acquiring material. Or just another sign is think about how much material you have forgotten after the final exam and you’re not panicking about it like, “Oh my god, I forgot trigonometry. What’s gonna happen, what will become of me?” Instead, almost everyone feels like, “Well, I got my A on the final exam in trigonometry and now I never need to worry about it again,” and that’s what’s weird.

05:39 Paul Matzko: That is odd. Well, it’s this rat race where the hustle to get into colleges, get into the highest ranked most elite school that you can plausibly get in, to your rich school, but then once you’re in, find the most reliably easy classes.

05:55 Bryan Caplan: Yes, yes. Of course, with the proviso that you wanna do the easiest version of multivariate calculus you can. [chuckle] So, if it’s really obvious you did something easy for your transcript, that’s bad for you. But if you could have the appearance of having done incredibly demanding material but you found the easiest theory of relativity teacher on earth and got an A+ from them. That’s ideal.

06:19 Paul Matzko: Mm‐​hmm. ‘Cause you still need a particular set of courses for your imagined career.

06:25 Bryan Caplan: Yes. Yeah.

06:25 Paul Matzko: But within that, there’s some leeway, and you can see it showing up on the margins I suppose.

06:30 Bryan Caplan: Yeah, but a lot of it is get your foot in the door. My favorite slogan actually, to explain the book, didn’t make it in the book, so I thought of the slogan later. My favorite slogan is, school is not job training, it’s a passport to the real job training, which happens on the job. So I do actually like to nest it in three ways when I say, you know. First of all, what people learn in school, isn’t very relevant to the real world. Second of all, what people learn, they rarely remember. And then third of all, what they remember, they rarely apply, even when it is relevant. So there’s this whole literature in educational psychology called transfer of learning, where they just show that even when you abstractly know something that is relevant to a problem, the odds that you would really apply it, the odds that you would actually dust off the Pythagorean theorem when you’re trying to fit a door into a door frame, very low. And so, when you multiply these three different problems with education, you really see how little we’re accomplishing, intellectually, although, this doesn’t mean that you don’t wanna be there, because it is the system our society uses for rationing access to good jobs.

07:32 Paul Matzko: Now, you have a nice metaphor, that I think puts this in practical terms, which is… You’re attending a concert, and you have to make the decision whether or not to stand up to see what’s happening on the stage better. Could you flush that out for us?

07:46 Bryan Caplan: Yeah, sure. Alright, so everyone’s sitting down at a concert, and you wanna see better, what do you do? Obviously, you stand up. Therefore, if everyone stands up, everyone sees better, right? You’re wrong, alright?


07:56 Bryan Caplan: This is a logicians classic example of the fallacy of composition. And I say that the effect of education on your career is largely like that. If one more person gets another degree, that person likely gets a better job. But if the entire society gets an additional degree, the result is that employers jack up the requirements for not having your application thrown in the trash. There is a great phrase for this. So it’s something that’s called credential inflation. So, just like with regular inflation, one pile… Government prints off a pile of money and gives it to me, I’m rich. Government prints off a giant pile of money and gives it to everyone, just raises prices, and the change was not actually worthwhile for anybody. And I say the same thing goes with education. One more person gets a credential, great for them, but if we just start showering society with credentials, this does not enrich society.

08:48 Bryan Caplan: It would, of course, if you were learning useful job skills. You can enrich a society if people get more skills. But if all that you do is make people jump through more hoops, the result is just that people waste more years of their lives. Right? And what’s striking is that when researchers have tried to empirically measure how bad is this credential inflation… Most of the people doing it, by the way, are sociologists, not economists, ’cause economists are not into this idea that much. Only a few. But anyway, the usual result you get is something like 80% of the rise in years and of education since World War II boil down to this credential inflation, and only 20% looks like an up‐​scaling of the population.

09:29 Paul Matzko: Which is gonna make sense. I went and earned a PhD in History, but once upon a time, you read older history books written by well‐​regarded historians, it was not uncommon to find people with Master’s in History doing everything someone with a PhD in history does today. And that’s common, right? Like the PhD is the old MA, kind of.

09:50 Bryan Caplan: Yeah, absolutely. What’s funny is that the evidence of credential inflation is especially obvious in academia, because now there are so many PhDs that barely get you anywhere, and yet, academics still don’t like this idea, right? And what’s especially striking to me actually… So I… This is something else that I should’ve mentioned. Now, a lot… When you go and look at the data, a very large share of the payoff for education seems to come from graduation, from crossing these seemingly arbitrary finish lines, right? And if you’re learning. If you’re getting paid just for skills, this is weird, but if you’re getting paid for showing off this makes a lot of sense, because if our society says it’s really important to finish, the people that make the effort to finish thereby show that they are the kind of people who really care about the society’s definition of success. And again, it’s bizarre to me that academics, of all people, would be skeptical of this, because every person who’s ever supervised a dissertation leans on the student to get it done. So you gotta defend the dissertation. You gotta go through the hoops, or else this whole effort was for not.

10:54 Paul Matzko: Yeah, yeah. Whereas, if it was skill acquisition you would expect every additional year would increase your career opportunities and income. So, someone who finished… Who stopped ABD would have better opportunities than someone who stopped after one year. But it doesn’t matter nearly as much as you’d expect, yeah.

11:13 Bryan Caplan: Yeah. Of course, you’re always free to torture the facts in order to squeeze them into your theory. So you could say, “Well, just turns out that schools withhold all the useful information till senior year.”


11:24 Bryan Caplan: Right?

11:25 Paul Matzko: Yeah.

11:25 Bryan Caplan: So that is logically consistent with the facts, but it’s a joke, right?

11:29 Paul Matzko: Yeah. Yeah, yeah.

11:30 Bryan Caplan: Everyone’s who’s ever been in school knows that senior year is goof off year, not finally learn some useful job skills year.

11:35 Paul Matzko: Yeah, yeah. You would expect a smooth curve. And even if the senior year was slightly more valuable, you would expect the curve to be smoother than it is. And that… The other thing, I think that will naturally makes sense to those who have kids on the hunt for college application season, who… What is required on your transcript, or on your CV, resume, for a college application today, versus 20 years ago is light years different. You have that credential inflation in extracurriculars, the number of AP courses, etcetera. So we’re seeing that inflation, that credential inflation at every stage of the educational process it seems to me.

12:20 Bryan Caplan: Yeah, absolutely.

12:23 Paul Matzko: How do we get here? How in America, I know you’re an economist by trade, but while doing this book, you must have come across some explanation, some background history. How did the four‐​year liberal arts degree become the gold standard, the default expectation for the middle class, what’s responsible for that?

12:44 Bryan Caplan: There are a lot of things going on, especially you can go back over a century and you can see that education as it was then is actually very similar to how it is now. Only back then, the students probably were better, and so it was more realistic to think they could actually do the work. So a lot of what happens right now in colleges is that, professors begin with what they traditionally expected of college students, and then they just dumb it down to the point where the students can pass. But in terms of what happened, I’d say there’s multiple things at work. So the one that I talk about a lot is just government subsidies, government has done a lot to make college affordable, right? And of course, they’ve done a lot even to make high school affordable. So in earlier times, they might not have enough to pay for that. And so that’s one big factor, is just that government has made it cheap enough so that most people can do it, again through a combination of subsidies and loans and a lot of other things. And the cheaper it is, then the worse it looks if you don’t do it. So back when college was just a finishing school for rich kids, there was very little stigma against someone who didn’t go to college. But now you don’t go to college, “Well, why didn’t you?” and you could say, “Well we didn’t have the money,” but there’s a lot of ways you could have gotten the money together, scholarships, loans, everything else. So there’s that.

14:00 Bryan Caplan: Now, I don’t wanna say the government is the only reason ’cause definitely it’s not. Part of it is just the society’s gotten richer, and when you got more money then you are, have more resources to shower on your kids, so there’s that. Then, I think there has just been a general transformation of attitudes. Although that I tend to think of as not being that much of an independent variable, so the thought experiment that I like to offer is this one. Imagine that it just became completely understood that college provided zero economic or career benefit. Alright, how much would attendance fall? My story is, it would fall a lot immediately, maybe it would fall by 25%, 30–40-50%. But there is enough of a social expectation that a lot of people keep doing it for a while. But I think that would tend to unravel pretty quickly, because there’d be too many successful people skipping, and then the stigma goes down and more people do it, the stigma goes down further. So I say that in over the course of say, 10 years, if the full economic benefit of college went away, then I think that attendance would probably fall 75%, and it really would go back to just being a country club for rich kids. And of course these markets too would probably go with the scholarships and so on. So I think that’s what’s going on.

15:22 Paul Matzko: Now the bit about showering money on kids reminded me, I interviewed Alex Tabarrok about his book ‘Why are the prices so damn high?’ a little while back, and he blames tuition inflation, Higher Ed, on Baumol’s cost disease. Do you agree?

15:36 Bryan Caplan: So I don’t think that Alex is entirely wrong, but I think that he really over‐​states, and in particular, he’s not doing the right thought experiment. So I say the right thought experiment is, what would have happened to the cost of these inputs if demand had been much lower? So basically you say, “Oh so if government goes and pours a lot of money on any things, this pumps up demand for the inputs and then it’s going to look like the inputs explain the price when say actually it’s better to say that if the government were to do the thought experiment of what would have happened if government money went away.” So I did have an extended argument with him about this, and of course, you can ask him, but I just didn’t think that his answer to the question of what would the price of college be if there were… Or like, what would spending be if government didn’t spend anything? And sometimes he seemed to talk as if private spending would match, would make up the difference one for one. Now, Alex is way too good of an economist to actually think that, so I don’t know what his real answer is.

16:37 Paul Matzko: Yeah, I wish I could have been the fly on the wall for that conversation, that sounds fun.

16:42 Bryan Caplan: Yup. You’re just reminding me of how much I miss Alex, ’cause I haven’t seen him in two months. Normally I see him every day and interrupt his work, but now…

16:50 Paul Matzko: Now you don’t have that, yeah COVID-19.

16:53 Bryan Caplan: And showing up here. I miss you, Alex, if you’re listening, miss you brother.


16:57 Paul Matzko: I’ll let him know if he’s not. Now you do mention in the book, so it’s not all doom and gloom, and you’re not anti‐​education, and that’s clear if you actually give the book a good faith reading. But you…

17:10 Bryan Caplan: What book?


17:10 Paul Matzko: That’s true, what’s that?

17:13 Bryan Caplan: Where else [17:14] ____ to be found?


17:18 Paul Matzko: Not on Twitter. I’ll tell you that, not on Twitter. So your alternatives though are government should stop subsidizing higher education. But you do have an admiration you express in there for vocational educational models of training, like in Germany for example. For our listeners who aren’t familiar with what that means, why do you think that, and what does that look like in practice?

17:46 Bryan Caplan: Yes, so it look likes in practice, is they have standardized testing when you’re around your early teens, and then if you get a low score on the standardized test, they encourage though do not require that you go to a technical school, where you learn… Where they train you to do a job, right? On the other end, if you get a high score, then you’re going to go to a something… Actually it’s much better than a traditional American high school in terms of how demanding it is, but that’s a pretty good idea. So think of it as, if you get a good score then you go to the equivalent of an American honors classes, and if you got a not‐​so‐​good score then you go to technical school where they still teach you academic subjects, but from the point of view of doing a job. So anyway, and that is of course a key part of how Germany leads the world in things like auto mechanics, the manufacture of automobiles, as they’ve got the whole industry training young apprentices to do this job to the German standard of quality.

18:49 Paul Matzko: Now, how does that avoid the signalling problem? Yes, vocational training is very focused on real skills that pipeline to jobs, but wouldn’t you expect signalling to show up even there, that there are different vocational training institutions which signal different things, they have different brands?

19:08 Bryan Caplan: Yeah, absolutely. So, signalling, you can’t not do. There’s always signalling. Whatever you do is signalling. But what you cannot do is have people signal by learning something they’re never gonna use again.

19:20 Paul Matzko: Yeah, okay. [chuckle]

19:22 Bryan Caplan: Really, it’s not an alternative between a system signalling without it. So, it’s hardly gonna be a system that teaches skills than one that doesn’t. So, technical education gives you signalling and skills and regular education gives you signalling without skills. So, the way that I’d like to think about it is just what is the ratio of the two, what is the mix, and I think it’s better from a social point of view, not necessarily selfishly but socially better, just dial up that skill share of what’s going on.

19:49 Paul Matzko: Now, this reminds me of something else. Your position that any given individual should go to higher ed, ’cause you’re not gonna change the system by yourself, that’s a bit of a suicide charge, but that society as a whole should pull back its idea about higher education as job training, etcetera. So, that kind of nuanced position there, individuals should go but society should pull back from subsidizing higher education, it kind of contradicts in a sense but agrees with two in some ways. Peter Thiel’s idea, his program to pay high school students to skip college. So there, he’s encouraging individuals to forgo higher education which… But yeah, I think he would agree with you that education is mostly social signalling and a waste of time. So, how do you paper over that difference? What’s your response to Thiel’s approach?

20:51 Bryan Caplan: Right. Well, of course, Thiel gives them a big bag of money, so that is your incentive to do something that otherwise wouldn’t be in your own self‐​interest. Of course, he also hand‐​picks people and they get this incredible signal of having been a Thiel fellow, so that can work just fine for a small number of highly motivated people but not so well for a…

21:11 Paul Matzko: Doesn’t scale, yeah.

21:13 Bryan Caplan: Yes. Now, by the way, so just to get even more nuanced, so the simple version is so that I say college is good for the individual, bad for society, but actually, I also say that if you look more closely, you’ll see there are a lot of people who currently go where it’s probably a bad idea even for them. Essentially, people that did very poorly in high school right now, they get a lot of pressure to go anyway and yet, we know from the data that their odds of successfully finishing college are vanishingly low. Really, if you’re just bad in math. If you were bad in math in high school, below the median, the odds that you’ll ever get any kind of a… That you ever finish any degree, much less a degree that’s likely to get you a good job is very low. So, I do say that for people like that, even selfishly, they’re making a mistake by going to college and they really should be looking into other options and their parents should be steering them in that direction instead of filling their kids’ heads with unrealistic expectations.

22:06 Paul Matzko: Like keeping up with the Joneses, and that doesn’t happen.

22:10 Bryan Caplan: Ultimately less. If you live next door to a kid that’s gonna be a professional basketball player and your kid is pretty good, should you keep up with the Joneses by telling your kid to put everything into basketball? Instead, you say, “Son, basketball is a great hobby and a great way to stay fit, and you can always do it but you’re never gonna be a professional basketball player, so don’t even think about it. This is a crazy idea. Stop.”


22:36 Paul Matzko: Yeah, it’s a great…

22:37 Bryan Caplan: Or the non‐​crushing version of that, however you wanna phrase it, but…

22:41 Paul Matzko: Yeah, I’m glad I’m not your kid right now. Sorry, Bryan. [chuckle]

[overlapping conversation]

22:45 Bryan Caplan: I’m afraid because they’re just so head in the clouds about what their prospects are.

22:50 Paul Matzko: Yeah, there is a certain kind of maniacal self‐​confidence. It’s tough too because there are quite a lot of high achievers. By definition, people who are high achieving, whether in basketball or in many other careers and venues, they are almost insanely self‐​confident. And if you ask them why they succeeded, that plays a key role. You almost have to be self‐​deceptively self… Now, of course, there is a survivorship bias or something where the ones who succeeded, yeah, they were self‐​confident but how about the ones who are confident and 99% who were confident yet failed and suffered because of that? But I think that’s the… We’re going up against human psychology here to some extent.

23:38 Bryan Caplan: Yeah, the question is if you’re advising people, should you throw fuel on the fire of human self‐​destructiveness or try to say, “Stop putting gasoline on that, it’s dangerous.”

23:51 Paul Matzko: Yeah, you’ve said… You’re a father yourself, you dedicate your book to your homeschooled children. Are they college age? How have you talked through the college decision with them?

24:03 Bryan Caplan: Yeah. So, my older sons wanna be college professors, so I have a great wealth of knowledge and advice to give them what I think is time‐​tested and very evidence‐​based. This is the easiest thing for me to advice them to do because I know what this occupation is like. But even then, I also… For me, the heart of homeschooling is tailoring the education to the child. So, you wanna find out what are the child’s aspirations, goals, what do they like and also what are their abilities. So, what are the odds they could actually succeed in doing what they’re doing. And for me, the heart of homeschooling is two parts. First of all, preparation for your future, even if you don’t like it. And secondly, enjoying your childhood. So, those two principles mean very different things for different kinds of people. So, for my older sons, this means saying, “Look, well, you may not love math but econ requires enormous mathematics, so we’re gonna do enormous amount of math.”

25:08 Bryan Caplan: And also, I said, “Look, you might not wanna learn a foreign language, you can’t get into a good college without learning a foreign language, so we gotta do this stuff, like it or not”. But then at same time, I also try to sift through electives and say, “Look, you don’t like art? Fine, we’ll never do art ’cause you don’t need art in real life. And you don’t like it, so forget it”. On the other hand, they love history. And so for that, not only did we pursue it even though I said, “Look, you don’t really need history in real life, you don’t even need it to be an economist”. I did add, “You do need to know a lot of history to be a good economist, but there’s plenty of bad economists who have great jobs, so just keep that in mind”. Yeah, so it’s something… They liked it a lot, and so we put a lot of time into that. And partly we’re signalling, but we’re all, just to say, “Hey look, we are the two kids in the country who finished the three History Advanced Placement tests by ninth grade”. I’m not actually sure, I know that there were only 10 kids in the whole country that did the European History test in 10th grade, or eighth grade rather, so I think…

26:08 Paul Matzko: Yeah, that’s a pretty good signal.

26:09 Bryan Caplan: Yeah, I think it is a good signal, but same time when we’re deciding which signals to send, try to find something that they really enjoyed and gave their lives meaning and history for them very much is that.

26:20 Paul Matzko: Well they also have, and you make this point in the book which is, a lot of these skills are only valuable if you want to teach them yourself someday. So history, I’m a historian, history is most valuable to someone who wants to be a history professor.

26:35 Bryan Caplan: Yes, yes. Yeah, of course.

26:36 Paul Matzko: In this case…

26:37 Bryan Caplan: Even they, of course, don’t really need to know a broad area of history because the way you get tenure is by maxing out your research in some narrow area, right? I remember I was talking to some history professors, “So what is taught in the first year of history PhD programs right now? Do you give them a survey of world history?” and these ones I talked to said, “God, no”. “So then, when do they learn world history?”. “Well, either on their own or never”.

27:04 Paul Matzko: Yeah, it’s true, it’s true. The amount of on‐​the‐​job‐​training you actually do as a History Graduate student, you… Hey, the tenure professor doesn’t wanna teach the big world history survey, so they slough if off on ABDs and you just… As long as you’re one lesson ahead of the other grads, you’re… But again, it doesn’t matter because undergrads aren’t learning history because they need to learn history for the future. They’re just checking the box looking for the easy Gen Ed credit, etcetera, right.

[overlapping conversation]

27:36 Bryan Caplan: To avoid despair, I try to teach to the students that are motivated. There almost always are a few, so don’t give up on humanity. But on the other hand, there’s a whole lot who are just as you described.

27:50 Paul Matzko: So let’s turn to higher education in the age of COVID-19. Depending on what you count, I think there’s like 4000–5000 colleges in the United States. A lot of them are already under severe financial pressure leading up ’til 2020. I mean declining student enrollment and so on. So with that landscape in place, what do you think the best and worst case scenarios for college education are after COVID-19 burns through?

28:22 Bryan Caplan: Right. So just to slightly amplify what you’re saying, the last time I looked at the data is the enrollment of 18–24-year-olds in traditional four‐​year colleges has continued to rise actually.

28:35 Paul Matzko: Has it? Okay.

28:36 Bryan Caplan: Yes. But you’re absolutely right that some colleges are in great trouble. Basically the colleges where I don’t understand why they existed in the first place. These are mediocre, expensive private colleges where… I don’t care what the decade is, why does anyone go there, I don’t understand, but obviously a lot of people do. Part of it is their parents went there, but they’re like, “Well then, why did their parents go there if it was just a mediocre private college that cost a lot of money? What’s the point?” So anyway, there are a bunch of colleges like that and a lot of them have indeed been in trouble and it’s plausible that COVID-19 will put quite a few more out of business. Although, even there, every time a college shuts, it’s huge news. It’s not like a restaurant shuts down. A lot more… They have much better survival probabilities than that.

29:26 Bryan Caplan: So anyway, what I would say is that it probably accelerates the trend, which is not the colleges in any way declining. It’s not. But rather, there’s a shift away from the expensive low prestige schools that shouldn’t really exist in the first place you might say, over towards places that are either more prestigious or that are just more affordable. In particular, like your standard State College systems. For most people, those really are their very best bet and yet there have been people that have burned through piles of money to send their kid to a school that is no more selective than the public school they could have gotten into and it costs five times as much.

30:06 Paul Matzko: Yeah, yeah, that makes sense. So we would see a consolidation in higher education that states schools and…

30:13 Bryan Caplan: Yeah, which is ongoing.

30:15 Paul Matzko: Yeah, yeah. You put yourself in the kind of an accelerationist camp rather than this being some truly unprecedented crisis.

30:23 Bryan Caplan: And I wouldn’t even put myself very firmly in that. I think the most likely scenario is that within a year, things are back to normal.

30:31 Paul Matzko: Oh really, okay.

30:32 Bryan Caplan: Yeah, or let me put it this way. Either they’re back to normal or it becomes the new normal where people are just willing to live normal lives again more or less. Mankind lived with diseases much worse than this for almost all of the history of civilization. Diseases this bad were just endemic for most of human history, we just live with them indefinitely. Even I remember back when measles and chicken pox were not weird things to get.

31:02 Paul Matzko: Yeah.

31:03 Bryan Caplan: Like me, I had some of these diseases back in the ‘70s. So those were rarely fatal, but still, we just gotten quite spoiled and the best way to get people to be less spoiled is to take away what was spoiling for a while and see how they adapt. I think people will just lose patience with this, especially since most people really are at super low risk. It’s dangerous, very heavily concentrated among the old and people with prior health problems.

31:32 Paul Matzko: Yeah, I’m sure the pressure for schools to reopen in the fall will just continue to grow.

31:38 Bryan Caplan: Yeah. And also people are so conformist. So I mean, right now there are a whole lot of families that are keeping their kids totally locked down in my area and probably all over the country, and yet I think it’s very likely that if school sent an email saying we’re re‐​opening schools next week that half of the parents would send their kids back because they’re conformist. And once people found out that half of the people were doing it, there’d be a bunch of more that would do it after, you know, in the next couple of weeks.

32:04 Paul Matzko: The counter argument against this would be all the data that’s been coming out showing that people started social distancing before the shutdown orders, right? They stopped going to restaurants, like the open table data and stuff, which I suppose you can still make a conformist argument there following what’s…

32:20 Bryan Caplan: Yeah. Yeah. Yes, absolutely conformist argument. Yes, very few people were doing this initially, I remember I was one of the first people wearing a mask on a plane, and people were looking at me like I had two heads.


32:32 Bryan Caplan: I walked onto a crowded transporter bus at Dulles with my mask and I think I was the only one on that entire thing with 100 people on it with a mask and people were scared… Were frightened of me back then, but a week later, I bet a lot of those people were doing that. But here’s the other thing, even when it is… People are doing it based on the individual choice, that doesn’t mean they don’t get fatigue, right? And I think that’s something that the law is actually doing a lot of right now is it’s not that it started the caution, it’s prolonging the caution past the point where people would throw in the towel, and you can actually see this when people border a state that opens up, people from surrounding states go into the state, right? Which I think shows very clearly that the law is binding in the states that are keeping it, not… Nowhere near perfectly, but still.

33:18 Paul Matzko: Now, back to social signalling and education a bit here. I live in New Jersey. I live right near Princeton University. A lot of Ivy League schools have followed with other higher education schools in doing, like hiring freezes. Some have laid off temporary faculty and staff, raised freezes and the like. Which… These are schools with very large endowments, the kinds of schools that could continue to stay open almost for decades, potentially, without doing these kinds of measures. And I… So I wonder what’s going on there in a signalling sense because like, wouldn’t there be a signalling deficit? Like if you’re an elite school wouldn’t you want to, in a sense, brag about the size of your financial resources, the size of your endowment by going against what other schools are doing? Like while other schools are no longer hiring faculty, we’re gonna bring on new faculty. While other schools are doing pay freezes, we’re gonna keep raising salaries. So why does the signalling encourage even elite schools with large endowments to respond in this way to the pandemic?

34:28 Bryan Caplan: Yes, so you might remember that old saying: “All politics is local politics”. Similarly I would say that a lot of signalling is local signalling. So, you know, people that are managing a university, sure they care about their overall image and what other schools say about them, but the thing that matters most for them is what other people at their own school are saying about them. They care a lot about what the board of governors, or board of visitors or whatever you call it, says about them. They care a lot about what the other administrators at their school say, right? And this works in multiple… In two directions. So one of them is if you’ve got a really good idea for making your school better, but it’s gonna make people at your own school mad, you tend not to do it, right? So like, I have long been saying we should go and fire, you know… Fire or… Push out people who don’t do research anymore, and have gotten to be… And are so old that they’re bad teachers, replace them with enthusiastic graduate students. But if I were a college president, I would realize this is gonna get my head chopped off probably.


35:28 Bryan Caplan: Like, “What am I getting out of this?” So why should I try doing that? It works that way when you got things to… When you’re improving things. But on the other hand, when there’s expectations of taking precautions, then again you probably just wanna go with the flow. So… I mean especially since these are non‐​profits. You’re running a for‐​profit business. You can get ahead by being the jerk that makes the hard choices that make the company rich. But if you are running Harvard, you don’t get there because you’re the master making hard choices, you get it ’cause your a master at going along to get along. As Larry Summers learned to his chagrin. Sure Larry knew but he was just being Larry who [36:05] ____.


36:06 Paul Matzko: So despite this, despite the kind of conformity here, do you still think all of this raises the relative value of an Ivy League degree versus a non‐​Ivy League degree?

36:18 Bryan Caplan: No, I tend to think it’s a little bit in the other direction because right now there actually are some students that wanna go to those very elite schools because they get this wonderful four‐​year educational experience, and those students now are going to be more likely to say: “I might as well just go to UVA”, right? So basically… Under normal circumstances, if you get into Princeton, UVA and you’re highly motivated, then it really makes sense to go to Princeton, because you get this really great intellectual experience or… You have access to it. You’re allowed to get it if you really wanted at Princeton. But now, Princeton really can’t offer that. Now this doesn’t mean that Princeton loses all of its shine, but at the margin, it is… I think it’s very likely making people that were weighing just isn’t really worth all this extra tuition to go to say, “Given that I won’t even be on campus, probably not”. And as long as the ones that are more likely to turn you down are the exceptional students, it does very slowly bring down the quality of the Princeton signal.

37:26 Paul Matzko: Hmm. Interesting.

37:28 Bryan Caplan: I mean I think it’s light and there’s…

37:28 Paul Matzko: Yeah.

37:29 Bryan Caplan: There’s a lot of inertia in these signals. You may have remembered… Let’s see, trying to remember. I think there was a survey along the lines of someone asked law professors to rate the Penn State Law School, and it turns out there is no such law school, but they had no trouble rating it. I mean I could be wrong on the exact school, but the general point is people… The school didn’t even exist. And still people rated it just based, “well, I guess Penn State. I’ll give it like a 55.”


38:00 Paul Matzko: That’s funny. Well, Princeton doesn’t famously have law school or med school, like they don’t do professional schools, so I could see that happening there too.

38:07 Bryan Caplan: Yeah, I think that even then, something where they ask people to rate the Princeton Law School, and then…

38:12 Paul Matzko: Yeah, yeah, people are like, “Oh, must be great.”

[overlapping conversation]

38:14 Bryan Caplan: Law professors would know it doesn’t exist. Whereas Penn State they would not know.

38:18 Paul Matzko: Yeah. Well Penn State didn’t and then they bought one at some point so you know… One of the consolidation. Yeah.

38:25 Bryan Caplan: This story is meant to be truthy, not true.

38:27 Paul Matzko: It’s good story though. It’s a good story. I believe it, I totally believe it. Now, on this point of blending the kind of signal and practical, I just saw a piece in the New York mag by Scott… About Scott Galloway, who’s the marketing professor, made a bunch of like, semi accurate predictions over the last couple of years about like WeWork. It’s decline and the like, but he just predicted that elite schools and big companies will forge partnerships, like Harvard x Facebook or iStanford, and that will transition to mostly remote university education. What do you think of that proposition? Galloway’s got some interest himself, because I think he’s invested in a remote learning kind of start‐​up. Does that seem believable to you?

39:15 Bryan Caplan: Slightly more believable than before but still, no way. So you know, here’s the thing. What is it that education signal? So the obvious answers are, well it shows you are smart but then it’s not just that, it also shows that you’re hard working enough to get through the program. But then there’s a third thing that you’re signalling in education, and that is just conformity. Just signalling that I understand what society expects of me, and I’m going to comply.

39:39 Paul Matzko: Right.

39:41 Bryan Caplan: And whenever you’re signalling conformity this builds in a lot of lock‐​in. Like why is the suit the right garment for business? There’s nothing in the structure of the universe that makes it so. It’s just so because you’re trying to show that you’re conforming to the social norm and if that was the norm of the past, then that was the norm… It was the norm of the past, it was the norm of the past before that and so on. Now, in the very long run these things do change, but they have a lot of staying power. And I think that very much goes for education. I remember, you know, over 10 years ago, I was talking with Alex Tabarrok and he was making predictions about online education, making big inroads and possibly, possibly costing us our jobs. And I probably just laughed in his face.


40:24 Bryan Caplan: One of my habits. But anyway, I said,” Look, Alex, when your son is ready to go to college, are you gonna let him go to an online school?” And Alex just blurted out like, “No son of mine.” Exactly. And because a lot of other parents will feel the same way, the best students are gonna tend to go to traditional schools, which means there will be a stigma against people to the online schools, which doesn’t mean that they won’t exist or that they won’t grow, but they’re going to grow slowly and they’re not going to do, they’re not going to be a really viable competitor to existing schools.

41:00 Bryan Caplan: And if you look at it, the online education has happened, normally the way that it works is that you take an online class at your college, which saves almost no money, when you think about it. So, if you could actually have a student simply not go to a physical college at all, that saves a lot of resources, but if you go to a regular school, and then one out of your classes you take from your dorm room, that saves almost nothing. And that’s the main kind of online education that’s going on, right? I mean on top of all of this. I think that testing any new idea during an emergency biases, people against it and for a long time. So you know like a lot of home schools are really excited about this. I don’t think this crisis is very good for homeschooling because you’re forcing it on people in desperate circumstances when they don’t feel ready and they’re not gonna come away generally thinking, “Oh it was great”.

41:47 Paul Matzko: Yeah, yeah, this is interesting in the conversation with Kari. There is some polling that she pointed to, which suggests that 50% of the folks say this is giving them a more bullish or more positive view of home‐​schooling. But you know it’s still open to the question is… What… Is what most folks are doing actually homeschooling or is it remote education, you know? You’re following a school curricula, you’re doing it yourself, you’re more of a proctor than a teacher. I don’t know, what do you think, as someone who homeschools, I’m sure you have co‐​workers or friends of the family who are in contact with who are being forced into remote education. Does it remind you of what you do as a homeschooling parent?

42:32 Bryan Caplan: I mean what I do is so unusual that, you know, very few other things remind me of it. So, I mean actually, I have actually doubled enrollment in my home school ’cause my younger kids were in regular school until two months ago.

42:44 Paul Matzko: Ah, okay.

42:45 Bryan Caplan: So you know, like, for them, it’s more of an emergency but I did… Was able to dust off some of the stuff that I had done earlier. Although, there I just needed to adapt it for kids with very different personalities. So you know like, younger kids… First of all, they’re just younger than I ever homeschooled before so their attention spans are slower, but they’re just less studious, and so I need to come up with something that works for them and also just try to find what electives interest them ’cause what their brothers liked, the younger ones often don’t like.

43:19 Paul Matzko: Yeah. Now back to this, you know, the… It’s been about a decade now, but it wasn’t that long ago when MOOCs, when massive open online courses were real high up in the hype cycle, that was gonna disrupt higher ed, etcetera, what you were describing Alex saying. That bubble’s popped to some extent. It feels dated to hear… You know, we’d feel dated to hear someone say that today. And I think part of that reading your book makes sense, which is the open aspect of it. The first O. Like when it’s open it removes a lot of the social signalling component, because anyone can do it. So where is the signal value if anyone can take this course? But even if you take the O out, so if it’s just a massive online course, why haven’t those boomed? I mean schools do have them. At Penn State, I actually taught one but they were still significantly less popular than in‐​person classes. So why haven’t we seen more of a transition to the MOC instead of the MOOC?

44:24 Bryan Caplan: Right. So a bunch of things going on. One thing… So when I was an undergraduate at Berkeley they had self‐​paced calculus and some other self paced classes. And these… This is really before there’s anything online. You just get a book and you do the problems then you come into a testing center, take the test. This was not popular and the main problem seemed to be that most people didn’t trust themselves and thought that if they did it that way they would get Fs. And out of the ones that did it, it was very common for them to get Fs, because people… A lot of people just procrastinate. So I did it, it was… Worked fine for me. But for most people they have the self knowledge to realize I’m just barely gonna be doing any work, if I’m just by myself somewhere.

45:04 Bryan Caplan: So I think that is one big part of it. You know, obviously, you can go and try tweaking the system in order to get around that, but it is a serious problem there. Other one, you know, people are just generally sociable, so they would rather see other people than just be by themselves. So there’s that. And then finally of course once you’re already on campus, then the marginal cost of going to a class is pretty low. And then, you know, finally some things that people are seeing in the last couple of months is that video conferencing still isn’t that great. Like, you know, the technology often doesn’t work and there’s sound distortion and you have to ask people to repeat things. So just in terms of the pure tech it’s still sub‐​par.

45:46 Bryan Caplan: But, you know, even in terms of being able to pick up on people’s body language and so on. I mean, for me, one of the main piece of advice that I always give to teachers is to look at the students’ faces instead of your notes. Look at their body language, see where they’re reacting, ask questions to find out whether or not the students understand what you’re saying. And that is a lot harder with online education. Of course, so many teachers pay so little attention to their students that they’re not losing much because they’re throwing away the important information all the time, but still there’s probably some slight adjustment in your behavior when every face in the classroom looks blank.

46:24 Paul Matzko: Now I’ll ask here in closing to some extent, that… So the pandemic it looks like it might depress college enrollment at least in this fall even if it bounces back in the spring or next year. The, you know, rising unemployment will likely depress tax revenue, put a crunch on state and local and federal budgets, potentially, which could lead to less state support for higher education. And as I was thinking about that, it kind of sounds like the virus read your book. I mean, it is a fan. I mean, this is an exogenous variable that could do the things you called for in your book, even though obviously you prefer that it was not a virus responsible for it. Do you think on that higher education post‐​pandemic is going to improve because of this or get worse?

47:18 Bryan Caplan: Yeah, so I think they’ll probably be a little bit less, but the education that goes on will be the same or worse. So that’s my general view. By the way, of course, this is another example of how you don’t want your idea to be tested in the middle of an emergency. Because then you get blamed for all the emergency conditions, you know? It’s not the fault of my book that there’s a lot of disease going on in pork processing plants, but nevertheless.

47:41 Paul Matzko: No, it is Bryan.


47:44 Bryan Caplan: Nevertheless, people very well might associate the unavailability of pork ribs with my stuff and that’s not fair but… So… I always want my ideas to be tried when everything is awesome. And then…

48:00 Paul Matzko: Yeah, that’s right.


48:01 Paul Matzko: We have extra pork and it’s because of Bryan. Yes.

48:03 Bryan Caplan: Yeah.

48:04 Paul Matzko: Yeah, well this was the same thing when there was the government shut down a few years back. And there was a bacterial outbreak. Some sort of, you know, food poisoning outbreak with I think Romaine lettuce. And everyone said, “Aha! Libertarians, that’s what happens. You get what you want. No government and you have people dying from food poisoning.” It was like, “Hey, come on guys, It’s not… This is not a fair testing situation of, you know.” So I feel your pain there. So maybe after some… This is just off the top of my head here, but do you have something you would say to young college bound folks who thought they were gonna be heading to college in the fall, they’re uncertain about what they should do, they’re worried about the potential for internships, fellowships this summer, worried about whether or not their school will be open in the fall? What kind of advice would you give to someone in that situation?

49:08 Bryan Caplan: I think the first thing that I would say is, remember that while this may seem like the most important thing in the world forever, right now, it’s only the most important thing in the world for a while. And this is a big life choice that’s going to reverberate for many decades. So don’t put too much weight on this. So I think I would say if you were right on the edge then maybe think about revising your behavior, but otherwise stay the course. So, you know, the kind of thing that I would recommend thinking about is if you got into Princeton or UVA and you were right on the edge now probably due to UVA, because yes, you’re gonna save a lot of money and you just are getting a lot less out of the Princeton experience now than you would have. Although, still eventually Princeton will reopen and you’ll be on campus and you’ll get a better signal.

49:51 Bryan Caplan: So keep that in mind. But again, if you were right on the edge, sitting on the fence then do the cheaper thing. And again, of course if your family’s having financial trouble. So that’s an extra reason to do the cheaper thing. Let’s see… Other advice. I mean… Probably the main thing is when people say that there’s gonna be a totally new world after this, don’t believe them. Things went… Got back to normal after World War II. Things got back to normal after there was massive nuclear weapons proliferation. At the time you might say no one will wanna live in a city when there’s a nuclear arsenal but that didn’t happen. So… And be skeptical of the “this time it’s different” crowd. Of course, once in a blue moon they’re right, but nevertheless you should not base your life upon that.

50:37 Bryan Caplan: And then more generally, just look… Instead of watching news, which is delivered by people who are generally totally enumerate, go… And if you’re able to go to college, go to statistical websites and read statistical information about what’s really going on. So, particularly we find is that young people are very low risk and so the idea that you should be hiding right now makes very little sense. If your parents are paranoid about it, you might want a humour them, but on the other hand, there’s a limit to how much you should humour, even your parents. So if you wanna read The Case Against Education, it’s available very cheap on Amazon. And of course you could do it by Kindle but Amazon is great and they’re continuing to deliver physical books with no problems as far as I can see.

51:24 Bryan Caplan: So I would strongly recommend that you try it out there. And I just wanna say, been a great pleasure to be here on this podcast. Right now, I feel so alone in the world that it’s a great pleasure just to reach out and talk to people because isolation sucks.

51:44 Paul Matzko: I hope you found Bryan’s argument as intriguing as I did. The post‐​COVID future of college education in America might just be a little more about actual education and a little bit less about social signalling. In any case, if you’re finally getting tired of playing Animal Crossing, be sure to check out his book and give it the old college try. And as always, until next time, be well.

52:10 Paul Matzko: This episode of Building Tomorrow was produced by Landry Ayres for lib​er​tar​i​an​ism​.org. If you’d like to learn more about Libertarianism, check out our online encyclopedia or subscribe to one of our half dozen podcasts.