Education and Charity

So in the comments to my previous post, Pillar of the Stoat asks for a charitable version of the Robin Hanson post I mocked to Grobstein's chagrin.

I can't do it for medicine - I just don't see how one can see medicine (with the possible exception of cosmetic surgery) as wasteful signaling - but I can do it for education.

The basic idea here is that you don't really learn that much in college. And, especially, you don't learn that much more at a place like Amherst College than you do at the University of Massachusetts. The difference is that an Amherst kid has been approved by the Amherst College admissions department, and the UMass kid (probably) has not. So even if you get into both schools, and even if you will learn substantially the same amount at either institution, you might be better off at Amherst College simply because the degree signals to the world that you were elite enough (in whatever way) to get admitted to Amherst College.

So then there's some kind of complex game where:

1. Schools compete for top students with financial aid, good facilities, good faculty, etc. A lot of this stuff is a waste of money in that it doesn't contribute to educational outcomes and it isn't priced in the market - it's a windfall to elite students.

2. Students compete to get into elite schools, defined as schools that can afford to be especially selective about admissions.

3. Alumni/ae contribute financially so as to maintain the value of their degree and to give their children a boost in admissions.

All of this involves huge diversion of resources to what is essentially bullshit, given that you could achieve the same quality of education for much, much less money. It's all individually rational and socially wasteful. Which is quite an indictment of the free market, by the way, but let's not think dark thoughts tonight.

And of course, given the existence of financial aid, community college, etc., anyone who doesn't get a higher education is automatically suspect. We could very well be in a bad equilibrium in which everyone is required to at least try to get a college education, however ill-suited he/she is.

There is a counter-argument, along the lines that college is hugely valuable for the elite and not horribly costly for everyone else, that as society grows richer we should devote more resources to not-strictly-cost-justified pursuits like widespread higher education, that colleges are valuable centers for subsidization of research and other academic pursuits, etc. I don't really buy it, but it's certainly a respectable argument.

Anyway this should give us pause about the non-profit status (and thus implicit government subsidy) of elite colleges.