Other than “misunderstanding America’s divorce laws,” I cannot think of any more expensive widely shared misunderstanding than “misunderstanding higher education.” The higher the degree, the greater the misunderstanding.
My views on earning a bachelor’s degree for pennies on the dollar are posted here.
Recently, I was sent a question regarding a career decision. It came from a man who described his situation as follows:
Age: 23, location: Seattle; occupation: account executive for medical supply sales company; annual income: $40—50k; wife of 4 months, 20, homemaker, pregnant with first child due in September; net worth: zero; debt: $3500 credit card debt, $60k student loan debt.
He is not typical. First, his income is probably 100% higher than a typical recent college graduate’s income. Second, his level of college-related debt is three times higher.
He is in sales. This is why he has a high income. But the unique skills that he possesses he possessed years ago: sales skills. He did not gain these skills in college, where he was taught by salary-drawing bureaucrats who may not make any more money at age 50 than he does at age 23.
Had he been aware of my college strategy, he would have had his B.A. degree by age 20, and he would not owe a dime. He would have paid for his college education with the income he earned by working part-time at McDonald’s. My strategy involves paying no more than $11 per day. But nobody told him or his parents that there was a better way.
THE COST OF GRADUATE SCHOOL
People rarely count the full cost of making career-altering decisions. They may think they are counting the cost, but they don’t know really how to do this.
Here are a series of questions to get answered before you even apply to graduate school.
Do I have a clear career goal for age 30? Age 40? Age 65?
Does this career goal unquestionably mandate a specific degree above the B.A.?
Will any employer finance all or part of this degree program at night school if I go on salary immediately?
If not, can I finance myself by attending night school or by distance learning?
Which will cost me less money: (1) I attend school full time and work part-time, or (2) I work full time and earn the degree part time? (Time value of money vs. money value of time.)
If the degree is not required,
Why am I considering staying out of the job market for another two to five years?
What will this cost me in forfeited money income after taxes?
How much money would I have at age 65 if I were to invest 30% of this forfeited income at 6% per annum in a Roth IRA?
This dollars-and-cents assessment does not include costs imposed on spouses, or on oneself for not marrying younger. These may be the highest costs of all.
OCCUPATION VS. CALLING
I return to this theme over and over.
Calling: “The most important thing you can do in which you would be most difficult to replace.”
Occupation: “Whatever you do to finance your calling.”
Only a few callings are occupations. Teaching can be a calling-occupation. But I know people who have spent their careers teaching in tax-funded schools who are prohibited by law from teaching what they really believe about God, man, ethics, cause and effect, and the future. They have sold their birthrights for a mess of pottage. They have abandoned their callings for the sake of their occupation. This is always a bad decision.
If you cannot locate anyone to pay you to pursue your calling, or not pay you much, then you must make a trade-off in time: calling vs. occupation.
If you decide to make this trade-off, you probably will not get rich. To get rich in most cases involves starting your own business and working 12×6 for twenty or thirty years in that business. Unless your business is your calling, great success in your business will cost you your calling.
Let me give you an example of someone who achieved both:
George Grote. In the mid-nineteenth century, he was a banker at the family firm: Grote, Prescott & Co. He began writing at age 25. He never stopped. He wrote on political issues initially. Then he began writing his “History of Greece,” which I have in four small-type volumes, but is more readable in the 12-volume set that my father-in-law owned. This project took Grote over 11 years. He also wrote three volumes on Socrates and Plato. He is not remembered for his banking skills. He understood this at the time.
So, when you look at earning an advanced degree, think to yourself: “Is this required for my occupation or my calling?”
CERTIFICATION AND CARTELIZATION
In most cases, a degree is required only for your occupation. This is true mainly of occupations that are regulated by the government: CPA, lawyer, physician, dentist, etc. This is because there is a cartel operating. The cartel exists through government intervention, which restricts supply.
Cartels break down over time. The longer an employment cartel operates, the more the supply of certified members increases. Why? Because the cartels get the government to establish standards — designed by the cartel’s academic committee — to license degree-granting institutions.
Then the government extends its power over the cartel by authorizing one or more of its tax-funded universities the authority to create degree-granting graduate programs that offer cartel-approved training. The cartel can hardly bite the hand that feeds it: the state. It therefore accepts this intrusion into its certification problem, which is in fact a deliberate restriction of the supply of competing professionals.
The tax-funded university then changes the rules governing the cartel’s initial strategy. The goal of professors is to increase the number of students. They get paid by the number of students taught. So, the degree-granting institutions flood the cartel with newly certified candidates. The supply increases, so wages fall.
This happened to the Ph.D. degree in 1969. It then happened in the legal profession and the medical profession. Lawyers are a dime a dozen these days. Physicians are more expensive: a dime a half dozen. I can walk into a local clinic and pay $50 for treatment. I mean this literally: walk. There is a walk-in clinic a couple of blocks away. There is another one a few blocks from that one.
[Actually, I can’t walk in and pay $50. That’s because I am a ward of the state. I am on Medicare. I am not legally allowed to pay $50. The clinic has to put up with a co-payment system. I pay $25, and it bills Medicare for the rest. Then it waits. And waits. And waits.]
Wal-Mart is considering renting space to walk-in clinics, just as it rents space to optometrists. Guess where patients of these clinics are likely to purchase their prescriptions? Right next door to where they order their eyeglasses.
If you seek certification rather than education in higher education, expect to see your rate of return to fall. There are now few effective limits on the supply of new competitors. The tax-funded degree-granting programs are cranking out your future competitors.
EDUCATION, NOT CERTIFICATION
“But,” some bright young person objects, “I’m not in this for certification. I just want an education.” Ah, purity of motive! That, plus $5, will buy you a cup of coffee at Starbucks.
I refer such idealistic people to Good Will Hunting. My favorite scene in the movie is where he confronts a Harvard hot shot in a bar. The guy tries to impress him with his graduate school-level understanding of American history. Will blows him apart in the footnote competition. He then tells him that he has paid a fortune for an education that he could have received with a library card at the Boston public library.
The higher you go in formal education, the less you rely on teachers and classrooms. Once you make it beyond your written exams and qualify for the Ph.D. dissertation, you rarely see your advisor, and you never have to see anyone else on the faculty. You’re on your own. Sink or swim. Root hog or die.
The only logical justification for graduate school for education is this: you need a teacher to guide you. But if you are really ready to do significant work, why do you need this? What is your problem?
A person can obtain a course’s reading list on-line. Most professors post these on-line. If not, write to the departments in the major universities and ask for a copy of the department’s recommended reading list for the M.A. degree. If one of them wants to charge you postage, mail back a check for whatever the secretary asks.
Next, write to the senior men in your chosen field, university by university. Ask for their recommended reading lists. Ask also for each man’s list of published materials. Nobody from outside the academic world ever pays attention to these people. Most of them will cooperate.
You now have lots of reading lists. You also have free interlibrary loan privileges at your local public library. You have Amazon, with its used book options.
Why do you need a university? If all you want is a good education, the only excuse for attending a university is that you need academic hand-holding. Read a hundred books in your field, and you won’t need hand-holding.
If you need a structured environment to learn — tests, deadlines, grades — then you are not ready for graduate school. You are too immature academically.
WRITE YOUR WAY IN
If you are not good enough to write your way into your calling, then you need to read more. Then you need to write more.
Start a blog. It’s free. Start here.
You can create a website after you have mastered blogging.
Begin with posting book reviews. Then, after a hundred or two hundred published book reviews, start writing annotated bibliographies.
Once you have put a large number of reviews on-line, start specializing in one topic. Create another blog site. Keep up to date with whatever is going on inside this field. Do handy summaries of the latest publications.
Save readers time. People want to save time. They want others to do their leg work for them. Word will get out if you’re any good.
Then write a book. It need not be creative. It can merely introduce newcomers to a field. Post it on your blog site for free in PDF format.
Make copies available in printed format by using Print on Demand technology. If you can get sales, a third-party publisher may pick it up.
The book becomes a calling card in your career plan.
Then write another. Write enough books in a field, and you will establish your reputation. Even self-published books are impressive to a prospective employer.
Add CD-ROMs, screencasts on YouTube, and DVDs.
This was how I made my reputation. I started writing for The Freeman magazine and a dozen other magazines to put myself through graduate school. My Freeman articles got me my first full-time job: at the Foundation for Economic Education, which published The Freeman.
My Ph.D. degree got me nothing. I never had a single job offer based on my degree. I even wrote my way into the one full-time academic job I ever had. It was in a different field from my degree.
If you need certification, try to get your employer to pay for it. If you can’t do this, then get certified by distance learning. If that’s not possible, then consider grad school. But be prepared: you will be giving up years of irreplaceable time for a degree that will fall in value steadily because of the oversupply of candidates that tax-funded education inevitably produces.
If you need education for your calling, imitate Will Hunting. Get a library card.
Copyright © 2007 LewRockwell.com