Is it true that lots of college education, formal learning, and lecture-driven knowledge leads to prosperity? Professors, pundits, politicians, and many philanthropists would have you think so. They blithely assume that education leads to economic growth and wealth, while actually the empirical evidence says the opposite: economic growth and wealth lead to education.
People are mistaking mere associations for causes. Because most rich countries are educated, they infer that education makes a country rich. This wishful thinking is easy to fall into because we consider education “good” for many reasons.
I am not saying that education is useless. It can serve noble aims like reducing inequality in a population, or allowing poor people to read good literature, or increasing the freedom of women. But one cannot accurately say it leads to economic growth or national wealth.
Economist Alison Wolf is among those who have debunked that claim. “The simple one-way relationship which so entrances our politicians and commentators—education spending in, economic growth out—simply doesn’t exist,” she reports after much study. Looking at countries like Egypt, she shows how giant leaps in education did not translate into productivity and GDP growth.
At the other end of the economic spectrum consider Switzerland. It is a place with a comparatively low level of formal education. Yet it enjoys a very high income and quality of life.
This is not to say that knowledge is unimportant. Practical knowledge is closely connected to economic progress. But the record shows that formal education is a poor transmitter of practical knowledge—which is much more often accumulated by doing things, on the job, out in the real world. It is academic, commoditized, organized education that needs to be viewed skeptically.
The illusion that formal lecture-style college instruction provides great contributions to national prosperity and success is a dire problem today. And it is directly connected to a corresponding depreciation of vocational training, traditional wisdom, trial-and-error learning, common sense, and the instincts of experienced practitioners and tinkerers. Those things really do translate directly into success and wealth, as I have shown in my books.
A false college mystique has allowed Ivy League universities to become the ultimate status symbol and desired good among the new U.S. and Asian upper classes. Harvard is like a Vuitton bag or Cartier watch. This produces a huge drag on middle-class parents, who have been shoveling an increased share of their labor and savings into fancy campuses and the hands of administrators, professors, counselors, real-estate developers, and other agents of higher ed. Government student loans and private gifts to colleges are also direct transfers to these rent extractors.
In a way it is a kind of racketeering. One needs a decent university “name” to get ahead in life. Yet we know that collectively, there is no evidence that mass university attendance advances society.
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