Bryan Caplan  

The Hack

Arnold Kling's Paradox of Thri... Why No Cheap Textbooks?...
Arnold makes an intriguing remark about education:
If college were truly a utilitarian good, all it would take to turn these edifice-complex campuses into ghost towns is a good hack for the accreditation process.
But he's skeptical because:
[A]t the high levels, college is a status good. Let me repeat that going to a top college today is like belonging to the right church in 1850 or the right country club in 1950. When you are supplying a status good, ostentatiously wasting money on buildings can increase demand.
Arnold is dangerously close to a variant on the signaling model of education - a model he's previously rejected because:
[I]t suggests that there is a huge unexploited profit opportunity for employers and employees who can come up with alternative signals. And yet nobody tries to set up a system for identifying and hiring smart high school graduates.
Notice that you can use Arnold's objection to the standard signaling model of education to attack Arnold's "status good" story: Why oh why hasn't anyone come up with alternative, low-cost ways to signal status?

A big part of my answer to Arnold, as I've said before, is that education doesn't just signal intelligence and conscientiousness; it's also signals another character trait employers pragmatically cherish: conformity.  This leaves us in a catch-22, because experimenting with new ways to signal conformity is a strong signal of... non-conformity!

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COMMENTS (10 to date)
Ryan Murphy writes:

It seems like Kling's model is actually *worse* than signaling. If it's pure status seeking, then it is all zero sum. If it is signaling, it serves a small social purpose by lowering search costs for businesses, right?

Fazal Majid writes:

Arnold is channeling his inner Veblen...

That said, "low-cost ways to signal status" are a contradiction in terms, since they would be easy to forge. Nobody is fooled by Ferrari keychains alone...

Joe writes:

Why not allowing high school grads to go to graduate and professional school?

Devil's Advocate writes:

Kling says it best about college degree value: "it also signals another character trait employers pragmatically cherish." That is, college degrees do not necessarily go to the smartest folks, they go to the folks who can put up with the most crap and still achieve a long-term goal.

Arnold Kling writes:

I ditto Fazal's point.

Glen S. McGhee writes:

"... all it would take to turn these edifice-complex campuses into ghost towns is a good hack for the accreditation process."

This shows how little Arnold understands the 1992 Program Integrity provisions of the Higher Education Act (HEA), the underlying legislation for Title IV.

If a "good hack" is what he is looking for, all he has to do is unplug Title IV. But this won't happen, right? Why?

Why? Because accreditation is a self-administered, peer-review system -- enforced by the very entities that fund it and set the standards that they will then collectively meet.

Some have even called it "country club" QA/QC.

We have seen these before -- guilds -- which Thomas Hobbs famously called "worms in the entrails of the common man".

Becky Hargrove writes:

The status seeking element of knowledge participation IS zero sum in the present. But only because a practical accreditation process does not yet exist at the everyday level, where people validate one another on knowledge that can be used in direct ways with one another. It is actually the lower system of validation that is not at all zero sum because it is the one with the ability not only to create new immediate wealth (through further participation with already existing ideas), but could also constantly increase through the access and use of knowledge wealth creation. With such an 'everyday' accreditation process, knowledge would have the same capacity to generate trickle down wealth that manufacturing and physical resource use have always enjoyed.

While the status seeking element of knowledge use appears static, it still would have the potential to increase in the aggregate (in the long run) if everyday, already existing knowledge could be increased exponentially at local levels. Not only that, the greater use of already existing knowledge would make it possible to harness further ideas at the status seeking levels, hence the potential for eventual growth in monetary wealth.

Mike Rulle writes:

It seems clear that the status linked to the very few schools which have it (maybe 10 or 15?) is also linked to the presumed intelligence of the people who attend. If high intelligence is lacking in a student (lets say a great football player at Stanford who otherwise would not get in), and people are aware of that, I think the status and credentialism drops significantly.

I have always been impressed more with high test scores as a sign of intelligence more so than a school a person attended. If that perception is true more generally, the credentialism of the school itself is redundant.

Having 3 children who have gone to excellent colleges, I believe they have value. But not 200k of value or anything close to that.

I disagree with the conformity comment as well---we all generally conform in some way. There is an alternative education opportunity---it just has not yet been perfected yet, but it is coming. College is 4 years of great fun---it is a very expensive consumer item.

But for education purposes it can be replicated at least for 1/3rd the price if not less. Link that to college or grad school level national "apptitude" tests (like Bar exams for example or CPA exams) and we will find the current model begin to weaken substantially.

Mike Rulle writes:

Per my previous post, M.I.T.x will begin offering an interactive online college program beginning this spring---for free. If one wants a "certificate" of completion there will be a slight fee.

For free from MIT-----thats a good start.

Chris Stucchio writes:

Arnold is wrong that no one is attempting to hire smart people regardless of degree. Here are two such attempts:

Many tech startups ignore college. At mine, I ask prospective employees for a github and I pretty much ignore resumes. Unless someone tells me about a school project during an interview, I'm unlikely to know if they went to school before I make a hiring decision.

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