By now, many readers of The Dartmouth might be tired of my diatribes against the occasional columns by Dean of the Tucker Foundation Scott Brown. However, as he continues shamelessly to disseminate dangerously ignorant views, I have decided once again to attack him -- this time for his latest column, "The Failure of Higher Education" [The Dartmouth, Feb. 20]. In this piece, he deplores the state of higher education that continues to be exclusive to the rich, and advocates stronger government support, so that more of the poor can enter universities.
Brown's argument makes sense only if students, in fact, acquire productive skills in universities. Unfortunately, evidence overwhelmingly supports the contention that little, if any, human capital is built in such environments. One's degree, say, from Dartmouth, in reality, only signals one's ability as a potential laborer -- a vital signal for employers who seek out the best in a labor market marred by imperfect information. This theory is consistent with the observation that some of the most popular majors at Dartmouth are English, history and political science, which contribute little to one's productivity.
A number of papers illustrate how universities are for signaling rather than learning skills. For instance, a drastic difference exists in the rates of return to education for university graduates and those who drop out a year prior to their graduation. If human capital is built in universities, then the rates of return should be proportional to years invested in education. Buttressing the signaling model is the fact that a university degree has a lasting impact on one's income potential. This reflects the power of the signal as an instrument that effectively finds the able laborers for the long haul.
As Brown claims, the skyrocketing expense of university tuition is indeed a serious problem, but he is wrong for blaming the lack of public investment. This problem is fueled by what economist William Baumol called the "cost disease," which characterizes an economy with a highly productive manufacturing sector, on one hand, and a tremendously unproductive service sector, on the other. In such an economy, productivity gains in the manufacturing sector tend to pull up not only the wages within its own sector, but also in the unproductive service sector, where wages should ideally be suppressed. Universities, which exist in the service sector, have been some of the most inefficient institutions in the advanced world. After all, no significant transformation has taken place in the classroom since the days of the first universities in the 11th and 12th centuries. The ever-efficient manufacturing sector, however, has resulted in unjustifiable salaries for administrators and professors.
The only countermeasure against rising costs of university education is productivity improvement, which can be brought about by, among other methods, containing university enrollment, so that scholars can concentrate on research. It would be a grave mistake to distort the signaling effect of a university degree by subsidizing the poor's college financing because such a policy would exacerbate costly inefficiencies. Brown must realize that the poor tend to send fewer children to universities than the rich not because they cannot afford their education, but because the poor, lacking educational resources, tend to have less able children than the rich. The rich, and thus the able, can incur the cost of the signal provided by university education because it can be recouped by future earnings. On the other hand, the poor, and thus the unable, who cannot earn enough to justify purchasing the signal, would be better off receiving technical training, not "liberal learning," to build their human capital.
For the poor, then, primary and secondary schooling is critical. Again, the issue is not about further funding for public education; the United States spends more per student than anywhere except Switzerland. Yet, the Third International Mathematics and Science Study -- the most comprehensive international comparative study of basic skills among 13-year-olds from 41 participating countries -- shows that U.S. youths rank 28th and 17th in math and science, respectively. It seems taxpayers' money is lost in the abysmal bureaucratic maze -- spending earmarked for administrative staffs constitutes 24.6 percent of the American total national education budget, far above 15 percent in Japan, whose students easily outperform their American counterparts.
Pulling America out of its sorry state of learning does not entail "redistribution of opportunity" for mass university education, especially since most of the top schools offer need-blind admissions and meet their students' needs. On the contrary, universities should restore the aristocratic sense of higher education. Otherwise, Thornstein Veblen's fear would be realized -- universities controlled by high school teachers disguising themselves as professors. We must preserve higher education for the rich, slash red tape in public education for the poor and desist bringing more incompetent students to places like Dartmouth.
