Megan McArdle At Bloomberg: ‘Why Education And Healthcare Cost So Much’

Full piece here.

McArdle responds to Ezra Klein:

‘Right now, elite institutions compete to exclude as many kids as possible, a process that allows them to cherry-pick better inputs (students), and therefore charge more tuition for producing their output (graduates with a valuable diploma).

Outside the elite, many schools don’t cherry-pick, but take all comers; they compete on volume, trying to get as many students as possible, even if that means selling worthless degrees to students who are unlikely to complete the program. These two strategies are direct tradeoffs: The best way to maximize volume is to give up on affluent kids with the social resources and preparation to deploy a college degree most effectively; the best way to compete on quality is to get kids who barely need the degree to succeed, which means being as exclusive as possible.’

There is a guild system in place, as well, and one of accreditation.

Comments are worth a read.  On a common progressive assumption:

‘If the demand for a good is inelastic, the free market cannot possibly provide that good “fairly”.   Therefore — government needs to step in and fix that market.’

Also, in higher ed, there have been all sorts of new administrators to ensure ‘other goals.’  Those other goals, while worthy, simply may not achieve their desired outcomes.

From the comments:

‘Really?  You’ve never heard of “Affirmative Action”?  Because I promise you the average black student admitted to Harvard had far worse grades and SAT scores than does the average white student, let alone the average Asian student.’

Thomas Sowell argued that affirmative action can pluck smart, ambitious black students out of middling schools, place them in an entirely different culture, and suddenly in over their heads at Harvard with the best of the best.   This can be a very inefficient way to address historical circumstances and to develop minds.

He also argues that this creates fewer job opportunities on the low end of the market by twisting incentives for businesses to hire overqualified black candidates.  In the long-rung, perhaps this is more likely to produce a rather elite, small black upper-middle class, but can harm, in many cases, the people it’s most designed to help, which is most black folks.


As a non-economist, I’m still trying to figure out what’s going on in higher ed. Any thoughts and comments are welcome.

From The American Conservative Blog:  The false promise of MOOC’s (Massive Open Online Courses). Reihan Salam At Reuters: ‘Online Education Can Be Good Or Cheap, But Not Both’

Analagous to old media? What to change and what to keepFrom The Arnoldian Project: ‘Architecture, Campus, And Learning To Become’

Should you get a college degree, probably, but you also probably shouldn’t lose sight of why you’re going and divorce yourself entirely from the cost:  Gene Expression On Charles Murray: Does College Really Pay Off?…Charles Murray In The New Criterion: The Age Of Educational Romanticism

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