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Hampden-Sydney is a liberal arts college appropriately located in Hampden-Sydney, VA. Of its annual matriculates, a not insubstantial portion won’t be there four years later.

In his most recent column, George Will wrote of how the “college wage premium” is more and more a yesterday concept. It all raises a question: was the past premium a function of knowledge attained by college attendees, or something else. Hampden-Sydney, once again a liberal arts college, suggests it was something else.

To see why, look back to the 1970s and 80s when college graduates could command a very real premium for a piece of paper. Figure that Apple floated its shares to the public in 1980, while Microsoft did in 1986. Both companies rate mention as evidence of just how much the real world of business was changing, and by extension, the nature of work. Nine years after Microsoft, Netscape floated its shares, thus ushering in the internet boom.

It’s a reminder that business doesn’t wait for academia, and it doesn’t precisely because stasis in business is the path to obsolescence. While Apple, Microsoft, Netscape and others like them (Amazon went public in 1997) were inventing all-new commercial futures, colleges and universities were teaching the past. This doesn’t insult the colleges and universities. An entrepreneurial venture by its very name is a rejection of most accepted wisdom, but at the same time what rejects accepted business wisdom is wholly rejected by the existing business establishment. If established businesses with actual skin in the game can’t see the future, how can we expect college professors to?

It’s a reasonable question, but it’s also one that arguably misses the point. More than academics would like to admit, the value of a college degree was never in the education. See above. The very dynamism that has forever defined American commerce has always rendered the “preparing-students-for-the-future” aspect of college a bit of a grift. As a rule, they’re at best teaching for the economy of yesterday. Except that it didn’t matter, and realistically doesn’t. Hampden-Sydney shows us why.

Indeed, it’s easily forgotten that the difficulties faced by matriculates at Hampden-Sydney to this day were formerly the norm. Freshmen of the past were routinely told in cavernous auditoriums to look to their left and right to see who would not be wearing cap n’ gown four years later. Is it any wonder the past premium placed on a college degree? Not really when it’s remembered how much more difficult it once was to graduate from college.

Will describes today’s college student as a “customer,” and with good reason. He also cites student debt of more than $1.7 trillion, which surely explains “customer.” Now that students are backed by a government backed by the world’s most productive people, college is logically more about serving students, as opposed to scaring them into the library. This reality devalues the college degree twice: for one, what was formerly a difficult academic attainment is now a breeze, and then what was once a challenging financial attainment is similarly a breeze.

Based on that, it’s arguably less surprising that per Will the supply of PhDs far exceeds demand for same. What’s true for PhDs could be said for JDs and MBAs. If students are customers with enormous amounts of money in their pockets, the search for what distinguishes the individual will continue. The growing number of academic distinctions next to a name is a manifestation of this truth. Which is too bad.

It’s too bad because it was never about the education in the first place owing to the economic dynamism that has routinely destroyed the existing nature of work in favor of much better ways of earning a living. The only difference is that what formerly set worthy hires apart (a college degree that signaled actual achievement) no longer does.

It’s a reminder that the worst thing government did to the college degree wasn’t to make it more expensive via student loans (soaring tuition costs beginning in kindergarten reject the notion as is), but actually in making it cheap. By making the financing of a degree as simple as filling out a form, the feds devalued the financial sacrifices (working one’s way through school) formerly made to earn a degree, and in making the student a valued “customer,” they similarly devalued the academic challenges required to secure a degree.  

John Tamny is editor of RealClearMarkets, Vice President at FreedomWorks, a senior fellow at the Market Institute, and a senior economic adviser to Applied Finance Advisors (www.appliedfinance.com). His latest book is The Money Confusion: How Illiteracy About Currencies and Inflation Sets the Stage For the Crypto Revolution.

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