Why Innovation Beats Politics in Reforming Higher Education

(The following article is adapted from a speech given on July 31 at the Pope Center’s Friedman Legacy Day event in Pinehurst, North Carolina.)

There is a powerful lesson in the emergence of companies like Uber for those who wish to reform higher education. All the focus tends to be on political and policy debates, but meanwhile innovators are busy working around the status quo without waiting for permission or consensus. 

Government granted monopolies are inefficient and unfair. The cartel structure of the taxi industry is a clear instance of the economic losses, higher prices, and lower quality that results. Policy wonks and would-be political reformers have been writing papers about this for decades.

All the arguments and efforts of reformers largely fell on deaf ears.

Then Uber came along. A startup completely outside of the political system and not interested in winning economic arguments or policy battles simply put a better experience into the hands of consumers. No academic or bureaucrat had to be convinced, and no politician had to fight union interests to pass a bill.

The status quo never saw it coming, and by the time they caught on, it was too late. Uber is here to stay.

This is a powerful case contrasting two approaches to changing backward institutions. Cab customers don’t care about economic arguments or cartel regulations. They just want to get from point A to point B. They may complain about the experience, but dissatisfaction won’t be enough to warrant hours spent educating, lobbying, or protesting.

The status quo persists because the regulatory regime concentrates the benefits on a few special interests while the costs are spread over millions of individuals with busy lives.

Uber, by providing an alternative experience directly to the consumers, made them the beneficiaries of a better system. Alternative experiences are a powerful force for change, even more feared by the status quo than critical ideas and theories. That’s why the Soviet Union banned not just free-market textbooks, but blue jeans, jazz, and Marlboro. When citizens experience the alternative, suddenly they are dissatisfied with the stagnant options on the table.

So what does innovation look like in higher education? How can alternative experiences be created to force academia to get in shape and better serve customers?

To answer this we need to first establish what the actual good being sold is. Taxis and Uber sell the same basic service, transportation from A to B. What are people buying from college?

Contrary to what many people—including professors—assume, students aren’t buying knowledge or skill. They’re not buying a network or even a social experience for the most part either.

To prove this you can simply ask why anyone would pay tuition. You can move to a college town, go to parties, hang around the campus bookstore and student union, and even sit in on classes and do assignments for free without enrolling.

The reason students don’t do this is because none of those experiences are the product they are purchasing. In fact, class is often seen as an additional cost that they must endure to get the product, which is why they are excited when it’s cancelled.

The product being bought is the credential. The credential drives the entire industry and is what causes millions to go deep into debt for an experience they often don’t love and admit doesn’t make them any more valuable in terms of tangible skills.

College credentials are valuable due to their signalling value. Your degree sends a signal to the world that you are, ostensibly, better than a similar person without the credential. This signal has some meaning; making it through college means you’re probably better than someone who lacked the intelligence or drive to do so–but it’s a shockingly low bar.

The proliferation of degreed people and the decline in ability among incoming freshman has turned college into little more than what high school once was.

I remember sitting in a classroom and having an epiphany as I overheard the hungover conversation of some classmates. Those people, I realized, were going to walk out of the university with the same credential as me. So all I was really buying was a piece of paper that said I’m no worse than that guy with his half-sober head on the desk.

Employers readily admit that degrees tell them little these days. Everyone seems to have one but few have relevant skills and experiences. Many, especially small businesses and startups, don’t even use it as a baseline anymore. Even those that still do require something more on top of it to signal who is really high quality.

Getting back to our Uber example, until the alternative was created and made accessible to consumers, no one was dissatisfied enough to demand taxi reform. Students today are in a similar place. A growing number are dissatisfied with the product.

The problem is that most students don’t become dissatisfied until they’re already in college and realize it’s not all that valuable. Or worse, they only realize that after they’ve graduated with a load of debt but little knowledge, skill, or ability to create value.

Most college students still believe that the credential it gives them is the one and only way to get from point A to point B. They thoughtlessly apply like New Yorkers used to hail cabs.  That’s where competition comes in. Today, it’s possible for young people to build their own signal that is more valuable than a degree.

No longer do you have to rely solely on an institution to vouch for you and open doors. You can let your product, your reputation, your individual ability and brand speak for themselves.

Consider the popular story of the woman who couldn’t get through the application process for the fast-growing tech startup AirBnB. She had a great degree, but so did all the other applicants. So she built a better signal. She researched the industry and built a basic website describing her take and how she’d add value to the company.

It turned into an internet sensation—infinitely more valuable than a generic resume listing a degree like everyone else.

LinkedIn pages, GitHub profiles for coders, personal websites, and modern communication tools make it easier than ever for young people to create value, build a network, and make it easily accessible and verifiable to the world. No longer are they confined to purchasing prefabricated credentials from large institutions.

Competition in higher education means competing ways to signal value to the world. The alternatives are limited only by imagination.

The force of government loans, grants, subsidies, and laws that artificially enhance the value of degrees, along with the force of the public religion that the college degree is the only way to a respectable, successful life, have made it hard for most to see the opportunity to create alternatives. Yet they are emerging.

Sometimes they emerge with great fanfare, like tech investor Peter Thiel’s fellowship program that pays kids under 20 $100,000 to dropout and start a company. Sometimes with less notice, like the many coding schools, online courses, and combination work/education/professional development programs.

As this proliferation of alternatives continues, it spells nothing but good for young people, employers, the economy, and yes even for some professors and universities. Really good schools that offer a truly valuable experience will thrive while colleges that function mostly as credential mills lose market share.

What’s left when the credential ceases to be the magic ticket is anyone’s guess, but we do know only those providing real value to the educational consumer will survive. That’s a good thing.

Episode 25: Lehla Eldridge on Unschooling in Italy

Author, illustrator, cafe owner, world traveler, and unschool mom Lehla Eldridge joins me to talk about raising kids in another country and taking big, adventurous leaps.

Lehla and her husband run the website unschoolingthekids.com and are the authors the book Unschooling: The 6 Keys to Our Children’s Future. They are both from England, but spent 15 years in South Africa working in the film industry then owning their own cafe and raising kids before eventually settling (for now) in Italy.

We discuss the challenges of making big life and career moves, how they discovered alternative education, and what it’s like unschooling three kids on a daily basis.

This and all episodes are available on SoundCloud, iTunes, and Stitcher.

Demanding Too Much of Unconventional Wisdom

We place very high demands on wisdom, ideas, or advice that bucks convention.  There is certainly some logic behind this, in that ideas widely held might be more likely to be useful, otherwise they wouldn’t be so popular.  Yet usefulness, longevity, and popularity certainly do not equal validity or truth.  An idea may be widely adopted because it is useful in making one less of a pariah, even if it is in fact false, or even evil.  The belief that bloodletting was the best cure for many illnesses was common.  So were beliefs in the necessity of slavery.

In other words, I think the logic that common ideas are more likely to be correct is only one small part of our reason for being less demanding of them compared to uncommon ideas.  Our desire to imitate others and be perceived as “normal” (even, sometimes, normal in misery) also drives us to demand far more of unconventional ideas than conventional ones.

One of the more popular demands made of unconventional ideas is that the believer in them must be rich, happy, and super successful.  If some unconventional idea about how to succeed in life is true, it goes, those who espouse it had better be rich and famous or else their lives are living testimony to the falsehood of their ideas.  Let’s just take an absurd example.  If you heard someone claim that planting all your dollar bills in the ground would cause them to grow into money trees you’d immediately look to see if this person was rich.  If not, you’d be ready to mock and dismiss the idea.

The unconventional idea of burying dollars in the ground is stupid for a lot of good reasons that are easy to discover.  But to argue against it because the person espousing it is not himself rich is not a very good reason or a sound approach.  Why not?  Let’s look at what would happen if we used the same standard to analyze conventional ideas.

It is widely accepted that eating healthy foods leads to a better life.  It’s common wisdom.  Again, whatever other good and bad arguments can be made to demonstrate the truth of this knowledge, one poor approach would be to demand that everyone making the claim themselves be fit and healthy.  If an overweight person claims that a healthy diet low in sugar is a key to health, most of us (wisely) do not dismiss it simply because the person does not exemplify the outcome they claim is likely.

There are several good reasons to not demand that the bearers of truth themselves exemplify it in order for us to believe.  Knowing and doing are two different things.  I may know full well that shooting 100 free throws a day will make me a good free throw shooter.  But I may not value free-throw percentages enough to make the necessary sacrifices to implement this bit of wisdom, even if I espouse it.  In addition to not having an intense enough desire to implement the idea given the costs involved, I may also have an upward limit on my own improvement.  No matter how many free-throws I shoot, I’m probably not going to be as good a shooter as Stephan Curry.  If I had lost both my arms in an accident, my free-throw shooting ability might be zero, yet that makes the piece of knowledge I hold about practice making one better no less true.

We overlook potentially powerful and valuable ideas when we dismiss (or accept) them based entirely on the lives lived by those who espouse them.  This is a poor standard of proof that would destroy all conventional wisdom if we applied it equally.  The life of the preacher doesn’t necessarily prove or disprove the validity of the sermon.  We’ve got to do more work and examine ideas for their logical validity, experimental validity in a wide variety of situations, and most of all their applicability and usefulness to our own lives.

Why Do We Have to Pick Sides?

Not long ago I was discussing the famous Sons of Liberty who sparked the events leading to the American Revolution.  We grow up hearing of their exploits as heroic, bold, and founded on the highest principles.  Yet there is an alternative account too.  If their deeds are described devoid of historical context they have all the attributes we would associate with terrorists.  It was violent, destructive, thuggish, and as fueled by hate as principle.

The traditional historian will tend to whitewash these historical figures and focus only on the ultimate outcome, an independent nation, and assume that because it exists it is good, and therefore whatever led to it was also good.  The radical revisionist will brand them as evil and by extension whatever their deeds may have helped to accomplish must be bad and the right thing would have been no revolution at all.

Something about the history of whatever political jurisdiction we grow up in makes us incredibly dumb when it comes to analyzing actions and individuals.  If your dysfunctional neighbors had a nasty divorce that you knew about only through the grapevine, would you immediately proclaim one side just and the other unjust?  You’d be smart enough and staid enough to stay out of it and understand that both sides are equally likely to be in the right, if there even is a right at all.  Yet people few centuries ago with whom we share little in common got into complex conflicts and we feel the need to come down hard for or against one side or the other.

Free yourself from the patriotic reading of history which demands good guys and bad guys.  You don’t need to pick sides.  You can admire or be repulsed by all sides in historical epochs, or simply admit ignorance and have no feelings whatsoever.  The need to find the “right” side always results in fact-bending and uncomfortable association.  It makes you dumber and less happy, as there is always some alternative version you feel the need to respond to or stamp out.

History is not a football game where your team either wins or loses based on what the textbooks say.  It’s a bunch of messy stuff that already happened, and who was more or less wrong or right has no bearing on your life today unless you let it.  Don’t shackle yourself to the deeds of dead strangers.  If you want to understand history, move beyond good and evil.

Episode 24: Thaddeus Russell on Renegades, Puritanism, and Pleasure

Historian and author of “A Renegade History of the United States” Thaddeus Russell joins me to discuss his work and the notion that the “renegades” might be the ones to thank for our freedom, not the puritanical political busybodies.

Russell’s work is anything but typical history.  It exposes the great moral reformers and champions of left and right as primarily power brokers who sought to control common impulses, and the renegades who resisted them – from slaves to prostitutes to poor immigrants – as the source of most of our social and political freedoms.

We discuss his life, his work, the main themes, how it’s been received, and what he’s working on next.  Thaddeus is certain to challenge some of your cherished notions!

This episode and all others are available on SoundCloud, iTunes, and Stitcher.

Against Life Plans

Life plans seem pretty daunting to me.  I know people who feel stressed and depressed because they don’t have a clear one.  There are incredibly rare people who know beyond the shadow of a doubt what they want to do in great detail.  If you are one of them, don’t let anything stop you.  For the rest of us, I suggest we drop the notion of a life plan altogether.

I often talk about why trying to find what you love is not the best idea.  How can you know with so many options?  It might not even exist yet.  Instead, I recommend making a list of what you know you don’t like.  Don’t do those things, and everything else is fair game and moving you closer to the things you love.

But it’s not just about narrowing down and finding the things you most enjoy.  It’s about enjoying the process.  Try a bunch of stuff.  But don’t waste time once you know for sure something makes you unhappy.  Not only do you want to drop it because it’s not likely to be your long term sweet spot, but also because it’s not fulfilling right now.

Every day do your best to avoid things that truly make you unhappy and crush your spirit.  Every day show up, create, work and do things that are fulfilling, even if (especially if) they are really hard work.  You don’t have to plan your life, but you should live it.  Fully alive.  Fully awake.

If you’re not in a spot where you’re enjoying life right now, why not?  Can you change it?  Not two or ten year from now, but today.  Every day get a little bit closer to only doing things you really enjoy.  You’ll end up with a life better than what you would plan if you could.

Be Patient, Keep Producing

I was listening to entrepreneur and social media maven Gary Vaynerchuk say that the most important thing for building an audience is patience when it occurred to me…

I’ve been writing pretty consistently for about eight years, and really consistently for three. I didn’t set out to build an audience and I write because I’m happy when I do, but I still get kicks out of seeing stuff I write get traction.

In July I had one post get 50k views and another get 70k. For the previous near-decade I don’t think I ever hit five figures with any post. This month’s views eclipse the view total for the first three years I wrote combined.

The point is this: if you show up every day and keep producing, there is no guarantee you’ll get quick traction. Keep doing it anyway. Do it for you. Then, possibly when least expected and for pieces you didn’t even imagine were great, something might click.

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