A Review of Charles Hugh Smith's Book The Nearly Free Univeristy & a Look at the Soaring Costs of Everything - Mike Swanson (2/21/2014)
We live in a time of changes. It's a time of transition and sometimes it's hard to believe the way things are. I went to university back in the 1990's and left with a Masters Degree in history. I was talking to someone a few weeks ago and they were telling me about their kids going to college now and how much it costs. I couldn't believe how much tuition has gone up since I went. It costs almost three times as much.
I don't see how anyone can afford it. Kids are leaving school now not with just a degree but essentially a college debt so large that it is the size of a good sized house. They are leaving with what is essentially a mortgage that they will have to pay off over the next ten or twenty years. When I went to college some upper middle class families could afford to pay the whole thing, but now the expenses are so high that it would take a millionaire family to be able to send their children to school and not saddle them with debt.
The situation is so bad that it might be smart for most young people not to go to college. It makes no sense to go to a four year university to become a teacher making thirty to forty thousand a year now burdened with debt a load. At first I wondered why the costs went up, but this seems to be just another symptom of our society.
We live in a country in which increasing bureaucratization and centralization are causing the costs of everything to go up - and are literally helping to destroy what is left of the middle class. The Wall Street bailouts are just one example. The banks were claimed to be "too big to fail" so the whole nation had to be pay off their debts with a trillion dollar bailout and now what is an ongoing Federal Reserve QE money printing operation that will lead to inflation and eventually another crash to the system and leg down for the living standards of the masses.
I don't have to tell you that health care costs are going up - and the United States for what it spends on health care actually provides the least efficient health care system in the first world. Oh and don't get me started on the trillion dollar military budget that blows money on useless wonder weapons that have no use in the "war on terror." We have an NSA spy agency that rips apart the Bill of Rights in the name of "safety" and cannot stop the Boston bombing scumbags even though they were warned to watch them by Russia and they watch over every move all of us make. I know every single banking transaction and email I send is intercepted by the government. And so is yours. Congress could hold hearings and make reforms to make the spy system sensible, but most Representatives are too afraid to buck the Congressional leadership that holds their campaign money purse strings.
Changes happen like this slowly though so you do not notice them until one day you look up and wonder what happened. That's how I felt reading Charles Hugh Smith's new book The Nearly Free University & The Emerging University. He has a habit of writing great books and did it again.
It was a timely read for me after this conversation I had over the costs of college. Smith's book is really two books in one. The last half of it provides one of the best accounts I've ever read on the big picture when it comes to our economy and the reasons why it has been disintegrating. In Smith's view the two forces of government centralization and corporate monopoly have worked together over the past few decades to the benefit of each other. For a long time they also benefited most of us, by contributing to debt driven economic growth. But they have grown increasingly inefficient until they now are both a disaster.
The simplest symptom of this - and the most alarming - is that Smith points out how the entire system has been fueled by debt - and the growth of debt. But now each new debt dollar that is being created is contributing less and less to creating real economic growth - and in fact may no longer even be doing that. It means we are reaching some sort of end game.
But that's not something to be scared of if you accept it and adjust to it. Big changes have occurred in the United States and in human history before. We don't have slavery in the country anymore. We don't have children working in coal mines and textile plants. Smith talks about the "emerging economy" he sees coming and will give you hope if you read his book.
But the crux of his new book is the education system. When it comes to colleges and universities he sees the same mess of centralization, inefficiency, and higher costs that plague so much of our economy now. And it's a serious situation. The Federal government owns Direct Federal loans to students. The size of those loans have exploded in value from $93 billion in 2007 to $560 billion in early 2013. That's just incredible. Non-Federal student loans total $500 billion so we're talking over a trillion dollars in student debt is floating around the financial system.
Of course schooling doesn't have to be that expensive at all and there used be a time when not many people went to college. College was only the domain of a tiny elite. Even few people who were in professions that we now think of as requiring education beyond an undergraduate degree didn't go to school. If you read a lot of history books you'll find that many people who were lawyers before World War II "read" for the bar exam. They just studied for it themselves and took the test. It's what Abraham Lincoln did and Huey Long too.
About ten years ago I did the same thing to get a certificate that I could be a registered financial adviser. I never used it and it has probably expired by now, but it just shows you that there are many things you can do - and could be done - without having to go to a university and sit in classes for four years.
We are now seeing the explosion of online classes, called MOOC's, that are being run by universities. Sometimes they call it "distance learning." I was talking to a police officer I know who is taking criminal justice courses online. I went and looked at what he is paying though and was surprised that it wasn't much cheaper for him to take the classes online than it would be if he physically took them at the school. They added a bunch of nonsense fees to his bill. It's a big university running it. But what if in the future someone runs a cheaper and more efficient system like this?
It should be cheaper! There is no reason his classes should be as expensive as they are, but universities have created a cartel monopoly moat with the system of accreditation. Smith shows how holes are going to emerge in this system that will spark the rise of different ways of learning that will be cheaper and more efficient. It will bring the rise of what he calls the "Nearly Free University."
I'm 38 years old and see people who are below 30 as being a part of a "lost generation" due to the current economic malaise. They go to school and graduate unable to get a job and now saddled with what amounts to a home mortgage without a home. Sometimes they move back in with their parents. Other times they go into the military or in some other segment of government pay such as teaching or end up becoming a cog in the "national security" war state bureaucracy. Few end up with jobs in the private sector unless it is in health care and nursing.
The economy is not going to get better anytime soon, but it will in time, and once it does there will be a new type of economy and new industries that drive it. Will new systems of education and learning be a part of it? Smith's book suggests yes and provides a lot of food to thought for all of us about what younger people should do to really prepare for the future and acts as a wake-up call for us to look at the world around us and see how it has changed and adapt to where it is going ourselves.
This is a good book. It's available on Amazon right here
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