College began across the country last week. Opportunists associated with the higher-education establishment took the occasion to engage in special pleading.
First was the leader of the organization most on the hook for higher ed, the federal government. Last year, the feds dished out $112 billion on student loans, an amount nicely equal to the combined endowments of all eight of the Ivy League universities plus Stanford. Grants to universities for research and other federal higher-ed handouts amounted to another $50 billion. The total is hard to measure, in that all sorts of federal agencies exist to funnel money to universities, from the Education and Energy and Defense Departments to the National Institutes of Health to the National Science Foundation to the National Endowments for the Humanities and the Arts.
President Obama rang in the new academic year with a threat. Unless colleges become more affordable, in particular unless their students stop taking out large (federally supported) loans, they will face the prospect of being ranked by the government in such a way as to shear them of funding.
The thinking is that with the federal government plowing so much cash into higher education, there is no reason for the institutions to refrain from cutting tuition and fees. Except that there is a reason. The more money that students have (via federal loans and so forth), the more the institutions can charge.
This verity is a commonplace, thanks to both simple logic and the labors of economist Richard Vedder over the years. Anyway, it is not clear that President Obama’s heart is in his college-cost curtailment scheme. The president also wants student-loan forgiveness for people who choose government careers—a benefit that cannot be broadly valuable unless student-loan balances are high.
The president is, at this point, familiar to the nation as a conventional statist. Sadder, more disappointing, was the performance in an op-ed last week by the leaders of the University of Oklahoma and William & Mary, the high-level government lifers David Boren and Robert Gates.
The piece made a number of historical claims. To start with, “A brief look back at history illustrates that as the price of higher education declined, the U.S. economy grew. In 1800, when the population of the U.S. was five million, there were only about 1,000 Americans enrolled in colleges. Nearly all of them were enrolled in small, expensive private institutions.”
Expensive? Private colleges were expensive in the old days? It is not clear that colleges generally charged tuition at all in 1800 (Harvard was subsidized by the state legislature), and by 1900 a place like the University of Pennsylvania could be had for $150 per year. That’s $3450 in today’s money, about the price of community college.
Bowen and Gates’s mercifully “brief look back at history” continued with this gem: “It is not a coincidence that our greatest period of economic growth came in the 20 years following the end of World War II. Real incomes of ordinary Americans almost doubled, while the percentage of the population going on to college increased fourfold.”
Our greatest period of economic growth would actually be the 1870s and 1880s, when real growth came in at 69% a decade as the government parked at 3% of GDP. 1945-65 growth remains a dozen points lower, with government even at its 1965 nadir gobbling up 29% of national output. The article was a festival not only of historical distortions, but invalid correlations.
Now how about this for a correlation of our own: the great era of American economic growth was the 125-year period ending in 1913: 4% per year. Since then we have mustered only 3.2% per year, and considerably less if you factor out government spending.
Up to the second decade of the 20th century, this nation was very marginally educated, in school at least. About 10% of the nation had a high-school diploma circa 1913. A major finding of the World War I draft of 1917-18 was that a large proportion of the nation’s young men were illiterate. Compulsory education, which had made some inroads before, then expanded its reach massively, such that by the 1930s and 1940s the whole nation was being pushed through high school. By the 1950s and 60s, it was on to college.
The correlation with economic growth? Negative. Brute fact stands in the way of associating mass education with economic growth. The pattern goes the other way.
It is not unreasonable to propose that this correlation is no accident. After all, in a nation without mass compulsory education, such as we basically had before a century ago, elements of the populace will be more determined to acquire the habits of learning and erudition on their own. In a nation with mass compulsory education, and with artificial pressures and inducements to attend college, the determination any individual might call forth to get education will be lessened. In the former circumstance, education is rarer (though abundant all the same) and good. In the latter, it common and shoddy, often to the point of uselessness, as well as absurdly time-consuming.
Without question, the high tide of American letters was the older period. Tom Wolfe recently said that the years 1893-1939 were the golden age of American literature, spanning Stephen Crane to John Steinbeck, and as any student of the topic knows, the only competition is the “American Renaissance” of the era of Hawthorne, Melville, and Poe in the antebellum years. Nobody would say that the quality of American literacy has done anything but decline over the last several generations, while perhaps—but only perhaps—the quantity has increased with mass compulsory education.
Talk about freakonomics. There is provisional reason to believe that should we dispense with government systems of and inducements to education, we can restore the foundation of good economic growth like we had in the past. If we continue to force and otherwise artificially incentivize young people to spend decades behind the desk, we will continue to deaden the life of the mind as we have now done throughout a long century of mass education.
