[ExI] What Would an Ideal College Look Like? A Lot Like This...

Dave Sill sparge at gmail.com
Tue Oct 22 13:47:02 UTC 2013

On Mon, Oct 21, 2013 at 10:02 PM, Michael LaTorra <mlatorra at gmail.com> wrote:
> I read the article and went to the website of that college. It does look
> like a very good school. But it falls short of being ideal, because it is
> unaffordable. Most students can't afford spending over $40,000 per year.

Yep. Charles Hugh Smith has a lot to say about traditional higher
education. From http://www.oftwominds.com/Nearly-Free-University.html

"Let’s start with what is self-evident about the basic structure of
higher education:

1. As my colleague Mark Gallmeier noted in the Foreword, higher
education is a legacy system based on the scarcity of recorded
knowledge (printed and other media) and informed lectures. Both
recorded knowledge and informed lectures are now essentially free and
readily available. This is the material basis of the alternative
system outlined in this book, the Nearly Free University (NFU), whose
core is an open-enrollment, universally accessible, individually
accredited curriculum designed for the emerging economy and the
individual student.

2. The current higher education model is a factory composed of
broadcast lectures and mass-distributed reading/coursework/tests. The
student moves down the assembly line, attending the same lectures as
other students, reading the same materials and taking the same tests.
When the student receives a passing grade in a quasi-arbitrary number
of courses, he or she is issued a diploma.

This factory model of education is fundamentally unchanged from the
era of World War II, when the government expanded higher education
from its traditional elitist function to serve the nation’s war
production. While factories churned out war materiel with low-skill
labor, behind the scenes the war effort demanded a vast increase in
engineering and scientific skills. This began the transformation into
a knowledge-based economy. The difference between an industrial
economy that requires massive numbers of low-skill factory workers and
a knowledge-based (often referred to a post-industrial) economy is the
knowledge of its workers.

The factory model is obsolete in an era where a variety of nearly-free
instructional materials and methodologies enable the student to select
the most appropriate approach for his aptitudes and needs.

3. In terms of its financial structure, higher education is a
cartel-like system that limits its product (accredited instruction)
and restricts its output (credentials, diplomas). (A cartel is an
organization of nominally competing enterprises that fixes prices and
production to benefit its members. Cartels may be formal, such as the
Organization of Oil Exporting Nations (OPEC) or informal like the
higher education cartel. Informal cartels often rely on government
regulations to restrict competitors’ entry into their market and on
government spending or loans to fund their operations. To mask the
uncompetitive nature of their cartel, they devote enormous resources
to public relations.)

The cartel’s basic mechanism of maintaining non-competitive pricing is
to enforce an artificial scarcity of credentials. The cartel’s control
of a product that is in high demand (college diploma) frees it from
outside competition and free-market price discovery, enabling it to
charge customers (students) an extraordinary premium for a product
whose value is entirely scarcity-based.

This is the very definition of a rent-seeking cartel, a cartel that
extracts premiums solely on the basis of an artificial scarcity. By
their very nature, rent-seeking cartels are exploitive and parasitic,
drawing resources from those who can least afford to pay high premiums
and misallocating capital that could have been invested in productive
social investments. The term rents in this context means that the
cartel collects a premium without providing any corresponding
additional value. The rentier class includes landed aristocracy, who
collect rents while adding no value to the production of their tenant

4. Since the higher education cartel is the sole provider of
accreditation (college diplomas), it is unaccountable for its failure
to prepare its customers (students) for productive employment in the
emerging economy. If a diploma is portrayed as essential, students
must pay the cartel even if the cartel’s product (education) is
ineffective and obsolete.

5. The four-year college system is profoundly disconnected from the
economy. That the cartel’s product has little practical application is
not considered a factor in the value of the product (diploma), whose
primary purpose is to act as a higher education passport that enables
passage to a more expansive territory of employment.

6. The present system of higher education is unaffordable for all but
the wealthy. The cartel’s solution to its high prices, $1 trillion in
student loan debt (exceeding both credit card debt and vehicle loans),
is a crushing burden on both individuals and society at large.

7. The higher education cartel is an intrinsically elitist force, as
its survival as a rent-seeking cartel is based on limiting what is now
essentially free: knowledge and instruction. In other words, the
higher education cartel charges an extraordinary premium for a free

8. The only way the Higher Education cartel can continue to charge a
premium for nearly-free products is to actively mystify its product
(by attributing secular sanctity and civic value to its diplomas) and
promote an artificial value for this product using public relations
and political lobbying. In other words, the higher education cartel
operates on the same principles as other informal cartels: it depends
on the state to fund its operations, and it uses public relations to
mask its cartel structure and systemic failure to fulfill its original


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