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Isaac Morehouse


Isaac Morehouse is the CEO of Crash, the career launch platform, and the founder of Praxis, a startup apprenticeship program. Isaac is dedicated to the relentless pursuit of freedom. He’s written some books, done some podcasting, and is always experimenting with self-directed living and learning.

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The Two Great Secrets of Higher Education


  1. Tuition is paid for one reason: to buy a signal.
  2. That signal is not worth the investment compared to what you can create elsewhere.

These two great secrets are known to almost nobody.  A few people know secret number one, but falsely conclude that the signal is still the best option.

A small but growing number of people partially understand what’s behind secret number two, but because they do not grasp that the product universities sell is a signal, they compare only alternative social and learning experiences to universities, not alternative ways of creating a signal.

The combined understanding of both of these secrets will completely revolutionize the way people think about and engage in education, career preparation, work, and life.

The Signal Secret

  1. Tuition is paid for one reason: to buy a signal.

A small number of economists and thinkers have identified that higher education is valued because of its signalling power.  That is, the college experience does not form people into more valuable or learned individuals capable of doing good work, but it sorts people into groups and attaches degrees to those who were already capable.

Signals are not bad things.  They are very valuable.  Employers need a way to narrow the pool of applicants and weed out the least likely to succeed.  There is a correlation between completing college and being a better worker on average.  But there is no causation.

Harvard doesn’t make you more likely to succeed.  The type of person who gets accepted into Harvard is already more likely to succeed.

Almost everyone objects to calling the product universities sell a signal.  They claim it’s a big bundle of goods.  It’s a social experience.  It’s a network.  It’s knowledge.

It is indeed a bundle of these things and many more, but these are all fringe benefits.  None of them are the core product being purchased.  When you pay to get your oil changed and the waiting room has coffee and magazines it’s a nice perk, but it’s clearly not the service you are purchasing.  If the auto garage didn’t have these comforts you might still go, but if they only sold coffee and magazines without oil changes, you wouldn’t.

College is the same.  Whatever other activities and benefits students may derive from their experience, none of them are the reason they are paying to be there.  They are paying for the signal, period.

It’s easy to prove this point.  List every other element of the higher education bundle.  Sports, parties, talks with professors, lectures, books, living with other young people, etc.  Now ask which of these would be possible if you never paid tuition?  All of them.  Move to a college town, sit in on classes, join clubs, go to events, read books, and live the college life to your heart’s content.

When you take away the credential at the end, it becomes clear how easy it is to get all the other aspects of college for free or very low cost, and often better.

This is also evidenced by the fact that everyone is happy when class is cancelled.  What other good do people pay for upfront and then cheer when it’s not delivered?  It’s because the classroom lectures and tests are not the good being purchased.  They are an additional cost that must be borne in order to get the real product, which is the piece of official paper.  The signal.

Young people may or may not enjoy some or all elements of the college experience.  But the reason they go and pay is because, in their minds, they have to.  They have to to get the signal, because without the signal you can’t get a decent job or be seen as a decent human being, so the prevailing narrative goes.

The signal is the product.  Until that is understood, no amount of tweaking or reforming or innovating any of the other parts of the higher education bundle will matter.

And it turns out, you don’t need the signal college sells after all.

The Alternatives Secret

  1. That signal is not worth the investment compared to what you can create elsewhere.

Everyone is thrilled to show you charts and graphs and statistics about the correlation between degrees and earnings.  None of that matters.

It doesn’t matter because aggregates are not individuals and because data can never show causation.

What happens to the average of some aggregate does not determine what course of action is most beneficial for an individual.  The average Ferrari owner earns a lot more than the average Honda owner.  No one assumes this means buying a Ferrari is a great way to improve your earning potential.

To the individual, the question is not whether college is a good investment for all young people on average.  The question is whether you can build a better signal with less than four plus years and five plus figures.  Turns out, that’s a pretty low bar.

The degree signals that you are probably a little above average for someone your age.  Maybe not even that as degrees proliferate.  This means if you are average or below average in ability, creativity, or work ethic, the degree signal may help you get a better job than you could without it.  (Though it won’t help you keep it.)

If you are above average in ability, creativity, or work ethic the degree signal sells you short.  It makes you blend in with all the lower quality people coming out of the same institution.  (Not only that, the college experience itself tends to foster habits that make you less able, creative, and hardworking.)

Young people today have at their fingertips tools to create signals far more powerful than generic institutional credentials.  Consider the impact of a tailored website that demonstrates the value you have created?  Better yet, a website or product that demonstrates to a company the value you will create for them?

Consider the value of working alongside a successful entrepreneur or industry leader for free or low pay for a year or two and parlaying that into a full-time gig?  Companies hate the searching and hiring process.  They’d always rather promote someone within who has a proven track record of value creation.  Compare the cost of low wages for a year or two to the cost of no wages and huge debt for four.

Businesses need value-creating employees.  They use degrees as an early proxy to eliminate some chunk of applicants (though even this practice is declining for big and small companies alike), but they only use them in absence of a better, clearer, more powerful signal.  When one exists, it trumps the academic credential.  When you realize all they want is proof of ability to create value, the world begins to open up.  How many ways are there to prove that you can?

It’s not only about getting hired.  Professors are quick to tell you that wages are not the only thing that matters when it comes to happiness and success in life.  They are correct.  Yet chasing the degree as the only signal often leaves people with debt that requires a relatively high wage to service, thus cutting off options and opportunities to explore and experiment.

Not least of these explorations is the wonderful and growing world of entrepreneurship.  It’s easier and cheaper than ever to create your own product or launch your own venture.  It’s also more and more valuable.  Machines and software can do rote tasks.  Humans' greatest value add is creative problem solving and innovation.

The ability to freelance for a living, launch a micro business, or create a major enterprise is expanding every day.  There is no benefit to the degree signal in the world of entrepreneurship.  There are no HR departments wading through resumes looking for checklists.  Here, in fact, the college experience can be more of a detriment than a benefit.  It tends to restrict the imagination to known methods, restrict your network to same-aged people, restrict your financial flexibility and risk-taking, and cut into many of the easiest years for trying something bold when the cost of failure is lowest.

A 20-year-old who launched a KickStarter campaign, built an app, created a website, apprenticed for a small business owner, read 50 books, or even just has an amazing online presence signals more value creation potential than a 22-year-old with a BA and a 3.7 GPA.  Yes, you can supplement the college experience with these other things, but classes and obligations (not only time but financial and parental) get in the way of fully unleashing your independent signal-creating potential.

The Real Revolution

The real revolution in higher education will not come from better delivery mechanisms for lectures, or new platforms to sell the same signal.  It won’t be disrupted by online versions of the brick and mortar establishment.

The real revolution will look as varied as the people participating in it.  It will begin when people understand the two secrets of higher education.  When it is realized that college is selling a signal and that signalling your ability to create value can be done far better in myriad other ways, the world will bloom with alternative methods of getting young people from where they are to where they want to be.

Instead of 16, 17, and 18-year-olds stressing about how to get into colleges, they should focus their energy on how to begin building a better signal.  Instead of 19, 20, and 21-year-olds stressing about majors and minors and GPA’s, they should focus their energy on creating value and building a way to prove it.

What are you signalling?

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Want more?  Check out Praxis, a one-year apprenticeship + professional development + coaching educational experience for young people who want more than college.

Episode 57: Thaddeus Russell on the Launch of Renegade University


Thaddeus Russell comes back to the show to talk about his upcoming project called Renegade University.  RU will be a combination of online lectures, readings and interactive seminars based on his book A Renegade History of the United States and an attitude of individualism and free inquiry.

We also talked about where Thaddeus sees renegades today and how culture changes over time so that black market activities become legal and accepted. We cover his upcoming book that deals with US interventionism abroad and the blowback that ensued, as well as the vastness of pop culture influence, along with what he thinks is wrong with modern universities and current protests over racism and diversity.

Check out more about Thaddeus and the Renegade University at thaddeusrussell.com

This episode sponsored by Praxis and the Foundation for Economic Education.

Apply to Praxis now!

Check out FEE seminars to learn about economics and entrepreneurship this summer!

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

 

 

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Primitive is romantic

Until no WiFi

 

Let Your Kids Suffer


I'm convinced one of the best things a parent can do is let their kids suffer.  It's also one of the hardest.

I don't mean suffer from imposed deprivations, scolding, withholding of affection, or physical illness.  I mean suffering from the things that are inevitable parts of life and without which no happiness can come.

Mastering a skill.  Learning social dynamics.  Resolving conflict.  Choosing between two good (or two bad) options.  Discovering who you really are and how you fit in with the world around you.  These all involve some level of suffering, sometimes a great deal.  Yet none of them can successfully happen if a parent swoops in to circumvent the hardship inherent in the process.

When your kids are fighting with other kids, or getting hurt feelings over misunderstandings, or in agony over inability to achieve a digital or physical feat it can be brutal to observe.  Every fiber of your parental being wants to intervene and stop the struggle.  Maybe at least offer to buy them a food they really like to ease the pain a bit.  But such interventions rob kids of the growth that comes from learning to adapt and discover their own unique method of achieving their goals and finding happiness.

Even boredom can be hard to watch a child suffer through.  But if we rush in to entertain them and ease their boredom with reams of suggestions and exhortations we short-circuit their process of learning to be interested and interesting.

One of the best parenting tips I have stumbled on, and one I remind myself daily, is simply to do less parenting and let my kids do more living.  Even when it's not all rainbows for them.

The Economic Argument Against Immigration is Pretty Gross


The economic argument against immigration is especially disgusting.

You might think cultural arguments about keeping a country "pure" or safety arguments claiming all immigrants are criminals are more offensive.  But let's examine what the economic argument against immigration really means.

The idea of forcibly preventing individuals from crossing a border in order to give an economic advantage to those on the other side of the line is barbaric when you ponder it.  Immigration restriction for the purpose of "protecting jobs" really means the violent prevention of people born in certain places from trying to earn a living.

Imagine you want a certain job.  So does your neighbor.  Would you slash his tires to keep him from getting to the interview?  Would you build a wall around his house preventing him from leaving because he might compete with you in the market?  Would you shoot him if he tried to scale it for the chance of landing the job?

If you knew a person living in horrible conditions, whose children may well die of an entirely preventable disease, and they just need a decent job to be able to afford better environs for their family, would you feel proud for sending armed thugs to follow that person around and ensure they never left their crappy neighborhood to apply for jobs elsewhere?  Even if it meant grinding poverty and possible sickness and death for the family?  Would you cheer and say, "Yeah!  I'm protecting my job opportunities!"

If you support immigration restrictions that's exactly what you're doing.

Economies are best served with open competition.  No one thinks forcibly shutting down competitors or collaborators is a good move or morally permissible...unless those competitors and collaborators happened to be born in certain places.

Can you think of more blatantly bigoted behavior?  The belief that certain individuals should be violently prevented from even trying to get certain jobs or live in certain places based purely on the piece of land on which they happened to be born is no less reprehensible than Jim Crow, Apartheid, or any of the other universally condemned forms of legal economic oppression.

Leave aside the fact that immigration restrictions are bad for the economy as a whole, and that far more people in the restrictive country are harmed by being unable to hire or buy from vast swaths of humanity.  Even if it were true that immigration restrictions made native born citizens better off they would be no less disturbing and morally bankrupt.

If I paid armed agents to keep every potential competitor for jobs or customers under house arrest you wouldn't forgive me if I could prove that the practice helped me economically.  You'd call me a cold-hearted psychopath.  Even if border patrols gave you an edge by keeping some potential competition behind barbed wire it wouldn't make your advocacy of them honorable.  "Hey look, I can get ahead by keeping this poor person from trying!" is not the cry of an honorable person.  "People who weren't born where I was shouldn't be allowed to apply for jobs!" isn't a belief to boast about.

All arguments against the free and peaceful movement of people are bad.  Arguing it's to protect your economic interests reveals a level of moral bankruptcy that is truly unsettling.

Isaac Morehouse


Isaac Morehouse is the founder and CEO of Praxis, a startup apprenticeship program making degrees irrelevant for careers. Isaac is dedicated to the relentless pursuit of freedom. He’s written some books, done some podcasting, and is always experimenting with self-directed living and learning.

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