Tag: College

How Change Happens – Higher Ed. Edition

The current higher education model is flawed.  If we’re serious about changing it, first we need to get serious about understanding how social change happens.  Intentions and action are not enough to bring about desired ends.  We need an understanding of the causal relationships involved in order to effectively bring about change.

The great truth that flies in the face of civics textbooks and popular myth is that politics is not the source of social change.  It’s more like the last in a line of indicators of cultural shifts that have already occurred.  Politicians and the policies they create only change after the new approach is sufficiently beneficial to the right interests, and sufficiently tolerable to the public at large to help, or at least not harm, political careers.  Of course some politicians guess wrong and suffer accordingly, but by and large the political marketplace tends toward preservation of the status quo until a new direction is imperative for survival.

An entire, and entirely fascinating, branch of political economy called Public Choice Theory examines the incentives at work in the political marketplace in depth, and I highly encourage anyone attracted to political action to gain a working knowledge of this field.  It reveals, in short, that incentives baked into the democratic system create and perpetuate policies that are bad for the public at large, and good for particular concentrated interests.  What Public Choice has a difficult time accounting for is the role of changing beliefs.  There are countless policies that, based purely on the incentives of various interests, ought to be in place but are not, or vice versa.  Some things are simply out of bounds, no matter how much a particular group might benefit and be willing to lobby, because the general public finds them unacceptable.

Contrary to the seemingly ironclad rule of interest driven politics, public beliefs can and do change, and dramatically sometimes, putting parameters around the area within which political actors can ply their trade.  Slavery is a striking example.  At one point, it would’ve been hard to get elected, at least in some areas, if you publicly supported abolition.  Not too many decades later, it’s unthinkable to get elected anywhere if you’ve ever even joked about supporting slavery.  There is certainly a complex relationship between changing economic incentives and public beliefs, but it is undeniable that the about-face on the ethics of slavery was more than a mere shift in power among competing interests.  What most of the public found tolerable they now find reprehensible.

Our institutions are formed by incentives, and incentives are constrained by beliefs.  That makes the beliefs of the public the ultimate key to change.  Smaller changes might occur within the window of things already publicly acceptable, but major change requires a shift in that window.  How to change those beliefs?  There are two primary drivers, both of which feed each other; ideas and experiences.

Ideas are the raw data that form beliefs.  If you accept the idea that minimum wage laws make lower skilled individuals less employable, and you accept the idea that a society with fewer unemployed persons is desirable, then you will have the belief that minimum wage laws are bad.  If, on the other hand, you’ve never really thought about the economics behind minimum wage at all, but your low skilled neighbor lost his job when minimum wage increased, that experience might also cause you to believe minimum wage laws are bad.

I spent a good part of my life focusing entirely on disseminating ideas as a way of changing belief.  It was fulfilling and, I think, valuable work.  But it wasn’t until relatively recently that I began to understand the immense value of experience as a vital second prong when it comes to changing beliefs and the world.

Consider the difficulty of convincing your mother that the New York City taxi cartel is inefficient or immoral.  It requires a great deal of economic theory or philosophizing about rights and coercion.  Your mom might have other things she enjoys more than reading books on these subjects.  Even if you convince her, her newfound belief will probably barely register among things she cares about.  Sure, taxis aren’t the greatest.  So what?  She’s never had that bad an experience.  Even if a policy change to end the cartel were possible, your mom mighn’t pay any attention, or she may be concerned about what the new world without cartels would look like in practice.

Now consider recommending your mom use Uber on her next trip in to Manhattan.  She uses it, likes it, and becomes a regular customer.  She may be completely ignorant of the current cab cartel and the problems with it, but she’s now a believer in an alternative system.  If Uber comes under attack from vested interests, she’ll defend it.  If the chance to end the cartel comes up, she won’t fear because she already knows what the world looks like without it.  She can’t easily be convinced out of her experience.

It is for this reason that dictatorial countries not only ban literature that propagates new ideas, but also goods and services that compete with government monopolies and let people experience something better.  The Soviet Union feared blue jeans, jazz, and Marlboro cigarettes as much as free market textbooks.

If we want to break out of the educational rut it requires new ideas and new experiences.  We mustn’t only talk about new approaches, we must build alternatives.  The best part is, you don’t have to wait on anyone.  You can take your own path right now, and by so doing not only improve your life, but serve as an example to others of what’s possible outside the status quo.  Educational entrepreneurs, not just intellectuals, will change the hidebound approach to education.  It’s already happening.

While policymakers, pundits, professors, and provosts squabble about the future of higher education and jockey to secure their position, entrepreneurs are busy creating and delivering alternatives across the globe.  The educational consumer is enjoying new experiences and getting new ideas about education in the process.  The old guard can argue any which way they like, but at the end of the day they’ll have to prove more valuable to the learner than the myriad new options.  All the protections and advantages in the world can’t stop competition now.  Technology has helped break it wide open.

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Excerpted from The Future of School.

Your Student Debt is Unfair

You hear a lot of complaints about student debt, and how maddening it is to be $40,000 in the hole at age 23 and still not have a job that requires a degree.  The case for the unfairness of student loan debt is that these kids didn’t know better.  It’s kind of a pathetic excuse, but it’s often true.

12 years in an education system where you are constantly pummeled with the promises of higher education and the perils of any deviation will make you overvalue a degree.  You’ll never be warned about the cost, or how debt can limit your options.  You’ll only be told about the magic $1 million in lifetime earnings that is supposed to find you as soon as you find your major and graduate.  It’s a system. Obey it, and the statistics will magically bring you what they bring the average of the past aggregate, as long as your behavior correlates with theirs.

Starry eyed teens get grants, aid, scholarships, loans, and complete a bunch of paperwork with their parents to just get in to the best possible college they can based on rankings they’ve never really studied.  They get endless praise upon graduation and more upon heading off to college.  Finally, they’ve made it!  The rest of life will simply unfold successfully as if on autopilot.  What’s the worst that could happen now?  You’re getting a degree, so you’re set!  You’re on the right side of the data!

Young people get good enough grades, do some extracurriculars, and get the degree.  Once more they are celebrated.  Then, for perhaps the first time in 20 years, they leave the confines of a controlled environment shielded from the world of value creation and exchange.  No one is overly impressed with their ability to fit into the system.  People want to know what they bring to the table.  Can they crunch meaningful numbers without being assigned?  Can they sell?  Can they code?  Can they digest the complexities of markets and customers and make judgments on the fly about how to preempt problems?  Not really.  Those things take experience and context wholly lacking in most educational institutions.

So they struggle.  They don’t like what they do, or they can’t find work much better than what they could have gotten right out of high school.  It’s OK though, they have time to learn from the real world right?  Except they’ve got college debt to pay in addition to living expenses.  That awesome company they were going to volunteer for in order to gain skills?  Not so easy with the need to earn enough to make loan payments.

Grads are in a bind and they feel kind of ripped off.  They feel betrayed.  They feel lied to.  Where is that high school guidance counselor who pushed them to college?  Will she pay the bills?  Where are the parents who were so proud?  Will they want their kid to move back home?  It can be pretty rough.

So yes, it’s unfair.  But the worst possible way to respond and improve things is to say it’s unfair over and over.  Say it once, get it our of your system, move on.  The fairness doesn’t matter.  Sometimes you’ll act on bad information.  Sometimes you’ll have regrets.  Sometimes other people’s plans for you aren’t best and you’ll suffer for following them.  So what?  Talking about how sad or unfair it is does nothing for you but reduce the chances that you’ll actually make things better.

Yeah, you were led to believe this degree would pay for itself immediately and without difficulty.  Yeah, because you were handicapped by the system you were incapable of realizing for yourself what the decision to go into debt might mean and how it could play out.  That’s the past.  What will you do today?

The good news is, it’s not that big of a deal unless you let it be.  Laugh at it, roll up your sleeves, and reboot your expectations about the world while building every day.  Devise a payoff plan and a life improvement plan.  Lots of people have done it, so can you.  The past is past, you are where you are, and no amount of bitterness, protest, or hoping for some political savior to bail you out will do you good.  In fact, it might destroy you.

Oh, and if you have kids of your own someday, let them experience enough of the world outside the walls of schools so that they know better than to blindly follow the advice of authorities seeking to do them good.

Build a Better Signal

Why pay a university to do something you can do better yourself?

From Medium.

A college degree is a signal.

It’s a signal to the world of your value in the market. It conveys information about your ability, skill, and intelligence. There is a lot of noise in the world of work, and it’s hard to figure out who’s worth working with. A degree cuts through some of that noise and puts you in a smaller pool of competitors.

The thing is, this signal is not that valuable. It’s also very expensive.

Not long ago a degree may have been the best signal most people could get. There weren’t many ways to demonstrate your value to the market, so a degree was one of the better bets. Things have changed dramatically. Technology has opened up the world. The tools available to you now have lowered search and information costs, and you can create signals of your own that are far more powerful than a degree.

What’s Better?

A person with a strong GitHub profile has a signal that beats a degree. If you’ve launched a startup, even if it lasted only six months and ultimately failed, you’ve done something that sends a more powerful signal than a degree. If you’ve raised money, sold products, done freelance work, produced videos, run social media campaigns, mastered SEO or AdWords, built a website, designed logos, started a nonprofit, been published in a handful of outlets with good content, had valuable work experience, or even just have an amazing online presence via a personal website and/or excellent LinkedIn and social media profiles, you have a signal more valuable than most degrees.

If you are not very talented or ambitious and you are unable to do anything like the above, a degree might be the best signal you’re capable of getting. When you realize that all the other students half asleep around you in class will walk away with the same signal, it becomes clear that it doesn’t carry that much weight. It says, “I’m no worse than everyone else with a BA.” If getting a BA is a really hard task for you and building something better is overwhelming, the signaling power of a degree might be worth it. But if you are able and willing to do more — if you are above average and can excel in most environments, than you have in your power right now the ability to build a better signal than a degree.

You have at your fingertips tools that young work-seekers and employers a few decades ago didn’t. Never has it been easier and cheaper to start a business, offer freelance services, learn to code, show off your writing or artistic skills, and build a portfolio of value created.

Don’t Just Tell Them, Show Them

Consider the woman who created this website in an effort to get hired at AirBnB. Her resume listing her academic accomplishments and other common signals was lost in the noise. So she built a better signal.

AirBnB website beats a resume

The website is far more valuable than any degree or honor roll listing. AirBnB took notice, and I can guarantee that website alone has created more job offers and interest than she can handle. In fact, so entrenched is the degree-as-signal mindset that this woman’s effort went viral immediately. The competition among degree holders is fierce, while the competition among those who build a better signal is almost nonexistent.

There is nothing in her story that required a degree. If you want to work for a cool company, you can do something like this yourself right now regardless of educational status. Why settle for a dated, baseline signal that says you’re no worse than every other degree holder?

What Happens to College?

Here’s the interesting thing: The more young people begin to build better signals, the better college will become.

Fewer people will go because most students attend to purchase the signal and that only. But those who stay will be there for the best reasons. They’ll be there because they love the college experience, the lectures, the professors, and the rest of the bundle.

Losing all those customers who are just suffering through the courses to get the signal will hurt the bottom line of most universities. Some might go under entirely. But for those who care deeply about higher education in its best form, this will be a welcome change. Schools will get sharper and better as they face competition. Instead of contenting themselves with delivering mediocre product because they have consumers who feel captive to the need to get that degree, colleges will begin to become more accountable to the customers there to gain knowledge.

Professors — good ones at least — will love this change. Students in their classes will be the ones who actually want to be there for the value of the classroom experience itself. Severing the credential from the classroom will enhance the quality of both.

How Do I Do It?

Most young people don’t know how to take advantage of this new world where they can craft their own signal. They’ve spent years in a conveyor belt education system that has instilled in them a rule-following, paper accolade chasing mentality. They see degrees and grades as safe, as fallbacks that will magically keep them afloat in hard times. They overestimate the signaling power of paper and underestimate their ability to create product. Product beats paper in the world of signals.

Entrepreneurship is becoming more than just an activity that a tiny number of company founders engage in. We once shifted from farming to factories, then from factories to offices. Today a shift from corporate offices to remote workers, freelancers, intrapreneurs and entrepreneurs is happening fast. Those who learn to think entrepreneurially, whether or not they ever launch their own company, and see themselves as their own firm, regardless of where their paycheck comes from, will build the future.

It’s hard to internalize and act on the opportunity in this new world. That’s one of the main reasons behind Praxis, the entrepreneur education company I launched. We want to help you build a signal that is more valuable than a degree. We want to help you do it in one quarter the time and for zero cost. We want you to have fun and become excellent in the process. We want to help you use the tools available and create your own future.

That’s why we place participants with growing companies to get work experience. That’s why we help them create personal development projects, tangible skills training, portfolio projects, and personal websites.

Praxis is just one way to help young people take advantage of the opportunity to build a better signal. The options are limited only by your imagination. Find one that works for you.

Carpe Diem

The future is bright. You have in your hands the power to create your own brand, to broadcast it to the world, to demonstrate your ability to create value. You can built a better signal than the generic one in the hands of tens of millions of other young people.

What will it be?

Maybe You Should Drop Out of College

Originally published here.

What is college for?

If it’s a four year social experience, it seems really overpriced.  If it’s to gain knowledge, why not learn from better teachers and do it free online, and at coffee shops with friends?  If it’s to prepare you for a successful career, it’s the most absurd format imaginable: You are supposed to learn how to be successful in the marketplace through a system mostly sheltered from the marketplace, from people who mostly hate the marketplace and have chosen a career that protects them from it.

If we taught bike riding like we prep for careers, you’d spend twenty years reading about bikes without riding, until you graduate, at which point you’d be dropped off in the middle of the highway and be told, “Good luck!”

So what is college for?  For some specialized careers, it’s illegal to work without a degree (medicine, law, etc.), but most people get degrees in generic fields like business, communications, marketing, or political science.  Most people go to college to feel normal, and to signal to the world that they are normal.

The education system rewards obedience.  It rewards compliance.  It rewards following the rules, no matter how arbitrary and valueless they may be.  No one ever changed the world by obeying.

Alternatives change the world.  Alternatives to the status quo institutions that constrain and oppress.  It takes entrepreneurs to create alternatives.  Yet entrepreneurship is the very quality the education system is designed to beat out of you.

You go to college to signal to the status quo that you are no threat.  You did what you were supposed to.

It’s said that a degree signals to employers and the world that you are above average.  You are smart.  You are hard working.  You are driven.  You are worth investing in, or taking a chance on.  That may have been true at one time.  But look around you and consider your classmates.  Are they any of these things?  Would you clamor to hire them if you ran a business?  Yet all of them will walk away with a degree.

A degree signals that you are now 22 years old.  Congratulations, you’ve floated downstream.  No one acts impressed that you graduated high school, because everyone does, by doing little more than existing for 18 years.  College has become a mere extension of high school.  For most, it takes more work and effort to not go than to go.

So what’s the alternative to college?

Drop out.  Don’t get a degree, get an education.  Do something different with your life.  You were born an entrepreneur; a creative problem solver who overcomes through trial and error.  That’s been smothered by years of schooling.  What would happen if you broke free?

That’s why I launched Praxis.  I want to awaken your inner entrepreneur.  I want you to get out of the classroom and into the world.  I want you to learn by doing.  I want you to change the world.

I was tired of complaining about college.  How can we bring the cost down?  How can we improve the quality of instruction?  These questions accept the existing paradigm and try to tweak it.  The real question is how can young people get from where they are to a career and life that they love in the best way possible?

Four years and $150,000 dollars is nothing to sneeze at – the time even more than the money.  Is that really the best way?

Why not work with creators and innovators and learn what it’s like by doing? Why not get the best, most essential ideas and theories, delivered without cinder blocks and fluorescent lights? Why not gauge your success on the value of your working knowledge, and on what you can create, not the facts you can memorize?

Why not break the mold?

It’s scary.  It’s hard.  It’s painful.  But so is the status quo.  The difference is, the pain you endure for breaking the mold and creating something is a pain with great reward.  Even if you fail, what you learn and who you become is of immeasurable value.  Even the pain has some sweetness.  Contrast that to the monotonous pain you experience by following the rules.  There’s no reward.  There’s no prize at the end.  There’s no, “Congratulations.  You followed the rules.  You endured depravations and frustrations and shut up when told to shut up.  Here’s your Good Serf Award.”

Break the rules.  Do what makes you come alive.  Make the world better and freer by first freeing yourself.

Want to Make Better Decisions? Get Some Skin in the Game

If you follow sports you’ll notice something.  Vegas is better than the experts at predicting outcomes.  You could chalk this up to the wisdom of crowds, but this can’t be the only explanation, because in surveys and polls the crowd doesn’t do very well compared to Vegas either.

The reason Vegas is better on average than individual experts or surveyed masses is because people choose better when they have skin in the game.  It’s one of the reasons democracy is a bad way to determine the policies people want and grocery stores don’t survey their customers to decide how to stock their shelves.  When it’s free, people take different and dumber risks.

This is why my colleague and co-author Zak Slayback wrote recently that you should burn your backup plan.  It’s why some people get neck tattoos.  It’s why Bruce Wayne had to climb without the rope.

Even worse than having no skin in the game is having the opposite.  A cushion large enough to not only catch you if you try and fall, but one that can sustain you even if you don’t try at all.  Economists call this the moral hazard in the world of financial regulation.  When third parties insure against risk, people and institutions make worse decisions.  Think high risk home loans underwritten by banks who knew that taxpayers would be forced to bail them out if it went south.  It applies on the personal level too.  While it’s easy to call inheritors of wealth financially privileged, I think it’s often harder to discover and live a fulfilling life if you’ve got a huge trust fund.  If you don’t have to win, it’s hard to get the motivation to try.

All these examples might be too easy to agree with me on.  Let’s push a little farther.  I think college funds cause the same problem.  When parents put tens of thousands into an account that can only be used for college, young people will fall prey to the sunk cost fallacy and favor going to college much more than they would without that restricted money.  Once they do, they’ll take it less seriously.  As long as parents are satisfied with grades and activities, it doesn’t really matter.  The degree is perceived as free.  The opportunity cost is overlooked.  The diploma at the end is supposed to guarantee a job and an income, and these are supposed to pave the way to find fulfillment.  Plus, if you pick a major that is supposed to give you lots of career options, you get lulled into thinking you have infinite fallback plans.  Sure, you sat in classrooms or goofed around for the first 22 years of your life, but it’s all good. You’ve got that free degree so no matter what you do, you’re set.

Parents see college as an insurance plan against all problems.  They tend not to care much if you’re happy there or finding your groove or learning how the world works, as long as you get a degree.  Tell them you’re bored and restless and opting out to go start a business or pursue a career as an artist and risk giving them a coronary.  They feel more comfortable with you half-assing it through a moral hazard backed mediocrity.

Forget all that.  It’s your life.  Whatever you do, have skin in the game.  If you don’t or can’t in reality, imagine and live as if you did (a poor substitute, but better than nothing).  Find out the actual cost of your education.  Tally up how much of what kind of work it would take to pay for it yourself.  If it was all on you, would you pay and do it?  If not, why are you doing it now?  (Try the same with things like health care if you want a good shock and some insight into why the health care system is so screwed up.)  What are you willing to give up to get the things you want?  If what you think you’ll gain is less than what you’re willing to part with, why do it?

Are you willing to fail?  Are you so passionate about what you’re trying to do that you’ve got to try it out even if it doesn’t work?  What if the degree fails to bring you anything you want.  Will it have been worth it?  If not, why do it?  “Well, I’ve only got another two years, so I might as well have it under my belt.”  Really?  Compared to what?

If you are like most people and you don’t have any single passion or pursuit to throw yourself behind, no worries.  Go the opposite route.  Try a bunch of stuff and build a list of things you know you don’t love doing and want to avoid.  Avoid them.  Don’t do them because they’re low-risk or paid for by someone else.  That’s like the person who spends money they don’t have on clothes they don’t need because they were on sale.  A $100 pair of useless jeans marked down to $50 is not a savings, it’s a waste of $50.  Keep eliminating things that don’t bring you value and everything else is fair game.

I’m not saying it’s never a good idea to take something that someone is offering to pay for.  The point is to not overvalue the “free” part and undervalue the unseen costs.  Not only are there often strings and expectations and the cost of forgone opportunities, often valuable things offered for free aren’t even enjoyable or meaningful to you.  Don’t do them just because other people would call you crazy not to.  And don’t forget one of the biggest dangers of something someone else is paying for, which is the way it reduces your incentive to take it seriously and get the most out of it.

Look at the actions and activities in your life.  Do you have skin in the game?  The bigger and more important they are, the more you want to have skin in the game.  It’ll make you better and more likely to succeed in every way.

This is not an admonition to simply take more and bigger risks, or to alter your risk tolerance.  It’s an admonition to dig down deep and get to know yourself.  Discover your real risk tolerance.  Be honest about what you find, whether it’s more or less than you wish it was.  Make decisions for you, based on your unique assessment of the trade-offs involved.  Don’t suffer through things because, relative to everyone else’s opinion, they are low risk or a good deal or a safe backup plan.  Get some skin in the game.  The games you want to play.  On your terms.

Who is College for?

Slightly modified from the original publication on Thought Catalog.

It is commonly assumed that everyone who can should go to college. Sure, maybe a few super-brilliant techies or people with a crystal clear path can skip it and do well, but everyone else needs to go, just to be safe. This is completely backwards. Most people can do a lot better than college. There are really only a few groups for whom college is the best option.

The legally-bound
Sadly, a number of professions have lobbied to secure barriers to entry in order to keep out plucky young upstarts who might undercut monopoly pricing. If you know beyond a shadow of a doubt you want to work in one of these professions, you’ll need to get the magic paper. Just be careful not to let the paper do all the work. For the sake of your customers, try to get more than just the legally required credential. The most common jobs with degree requirements are lawyers, doctors, and CPAs. If that’s you, bite the bullet.

The well-to-do, insecure partier
College is a consumption good for some people. It’s a four (or five or six) year party covered by mom and dad. If you’ve got stacks of cash and your major goal for your early twenties is to chill at frat houses with a Solo cup, maybe you should go to college. Let me take that back. You see, you can move to a college town and party without enrolling. But if you’re really insecure and worried about not having official student status at parties, you’ll need to pay the piper. Tuition and sitting through classes are a small price for a well-off party junkie who can’t think of non-credentialing methods of having a good time. Go for it!

The parental pleaser
A lot of parents will be mad at you and ashamed to talk about you to their friends if you’re not in college. Luckily, most parents don’t care too much if you’re actually getting value out of the experience, as long as you’re enrolled and passing. If keeping mom and dad reasonably happy without challenging them to rethink what happiness means to you is your top priority, go to college. There’s nothing else with the same mystical power to elicit parental pride.

The college professor
If your dream is to be a professor, you’ve got to do your time. In fact, the entire education system top to bottom is optimized for the creation of professors. Every other profession to emerge from 20+ years of institutional education requires a deschooling process, because only academia plays by the same rules and incentives as the school system. All other industries are remarkably different, what with their accountability to customers and emphasis on value creation. If the system is your first love, and doing research and teaching within its walls your sole dream, do it. You can be an intellectual without a degree, but not a university-sanctioned professor.

The bureaucrat
Government isn’t known for rewarding merit, but it’s great at rewarding rule-following and form-filing. If you dream of reviewing building permits or vehicle registration documents, you’ll need a degree of some kind. The nice thing in this field is that the things you’ll do in school are pretty similar to what you’ll do at work. Comply and complain about the non-compliant. As an added perk, you really can’t be fired for being rude to everyone once you’re in.

The frightened 9-5er
If security sits atop your personal hierarchy of needs, and working for a big corporation with a massive HR department that specializes in sameness and risk-avoidance sounds like the life you’ve been waiting for, go to college. It’s changing, and a little faster than you’d probably like, but most big companies still filter out non-degreed applicants for entry level jobs that require a heavy dose of repetitive process-oriented labor. You’ll be competing with machines and software, but for the time being, there’s still a slot for you.

Everyone else
If you don’t fit into one of these categories, college may still provide some value, but it should in no way be considered the default option. There are myriad ways to tailor your own learning experience or gain skills, knowledge, and a network to discover and do what makes you come alive. College should be treated as one option among many, and no more or less valuable or open to scrutiny and cost-benefit analysis.

Episode 11: “I Dropped Out of an Elite University and I Couldn’t Be Happier”

Zak Slayback was on scholarship at an Ivy League school.

Derek Magill was on the Dean’s list at a top tier university.

They both dropped out, and they’re both glad they did.  Zak and Derek join me to discuss their experiences and offer thoughts on the university system and what dissatisfied students can do.

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

5 Signs You Might Be Too Good for College

From the Praxis blog.

There is a common myth that only Steve Jobs-like geniuses and cheese puff eating flunkies should opt out of college.  For college to be a poor fit, you’ve either gotta be sitting on the next billion dollar startup idea or sitting on your mom’s couch.  This is nonsense.  There is a large and growing group of smart, hard-working young people who are way too good for the rigmarole and time-wasting conformity of even elite colleges.  I’ve met lots of them.

These are what I call “blue collar entrepreneurs”.  They’re quick, curious, eager, and in-touch with their core values and goals.  They want to learn about themselves and the world and won’t wait for permission.  These are the people for whom college is the biggest waste.

The mediocre, the minimum acceptable regurgitators, and the mildly enthusiastic are those who get the most value from college.  After all, their degree signals that they are about as good as all the other degree holders; average.  But the most ambitious young people gain little from such a signal.  In fact, a degree that lumps them in with all other degree holders undersells them.  They’re too good for college, and they have the power to send a much more valuable signal outside of the one-size-fits-all system.  They can create a better credential than the off-the-shelf version that takes four years and six figures.

“There’s no question that increased formal credentials can give you an advantage. The question is, is it the best advantage you can buy with the amount of money and time you’re going to spend?” –Michael Ellsberg

How to know if you’re too good for college?  Here are five signs to look for…

1) Your classmates frighten you.

You look around the classroom and it dawns on you: these people will walk out of here with the same credential as you.  All this time and money just to buy a degree that says, “Hey, I’m at least as good as the snoring sleeper next to me in Psych 101″.  Not only that, but your future accountant, doctor, marketing director, or editor might be sitting in that classroom.  You read the essay they turned in last week.  It wasn’t pretty.  If it’s clear this education isn’t preparing them for the world and the thought of them living and working as adults gives you a start, you might consider separating yourself from the crowd.

2) You feel a little annoyed being treated like a burden instead of a customer.

You might begin to feel most of your professors don’t see you as a customer, but a hindrance they’d like to get out of the way with minimal interaction and deviation.  Sure, there are always some good profs, but how many of them act annoyed at a teaching load of a few classes per semester, or give minimal and inconvenient office hours, or don’t seem to care if their lectures are boring, or get angry when you challenge their ideology or assumptions, or shame students on Facebook for asking questions about the syllabus?  You’re the customer and are right to wish to be treated as such.  You can always take your business and walk.

3) You learned more about how government functions from watching ‘The Wire’ than an entire year of political science classes.

The cat’s out of the bag.  Pandora’s box is open.  Whatever metaphor you use, the university is not the font of wisdom it once was.  Books have always been there for the curious, but with online courses, podcasts, audiobooks, eBooks, streaming videos, and social networks, you might find yourself eagerly consuming information relevant to you everywhere but the classroom.  The learning method at universities is older than the wheel, and it’s a crap-shoot whether you’ll get a decent teacher.  If you get your learn on outside of the graded conveyor belt already, why keep taxing yourself with class?

4) Your degree is the least impressive part of your resume.

If you’ve already done a lot of things, or you’re capable of doing a lot of things, that are rarer and more interesting than getting a BA, why get one?  If you’ve started a business, worked for a year or longer at a good company, traveled the world on your own steam and your own dime, built a website, written some articles, sold products, learned a foreign or programming language, or any number of interesting things, those will be more valuable on your resume and in building your network and reputation than a generic degree.  Ask yourself what you’d want an employee to bring to the table if you owned a business.  Can you get those things right now, without school?

5) You’re happy when class is cancelled.

What an odd thing that students pay up front for a university education and then get excited when the service is not provided.  What other product is treated this way?  If classes are a distraction from running student clubs or newspapers, working, blogging, hobbies, startups, or other things that make you come alive, why not get it out of the way?  The idea of a degree as a fallback is pretty weak.  It’s not going to magically lift you out of poverty or aimlessness.  You’ve got to do that yourself.  Why not start now with all your energy and not have nagging classes and exams hanging over your head?

If you see yourself in these signs, you might be too good for college.  Jump off the conveyor belt and create your own path.  Fortune favors the bold, so break free.

If you know you’re worth more than college but you’re not quite sure how to plot your own path and discover what makes you come alive, we can help.  That’s what Praxis was created for. Contact us or Apply today!

The Three Places to Get Drugs

I was listening to the Tim Ferriss Podcast yesterday where he interviewed James Fadiman about psychedelics.  Fadiman was talking about LSD and made an offhand remark that caught my ear.  He said LSD, like almost all other drugs, is very hard to get except in three places where it’s abundant.

Schools, universities, and prisons.

There is a lot to consider in this anecdote.  These three institutions have several things in common that distinguish them from others.  They are almost always funded at least in large part through tax dollars.  They are managed at least indirectly by governments, and subject to elected officials and un-elected bureaucrats in their day to day operations.  They are seen by most members of the public as absolute necessities in any civilized society.  Because they’re seen as necessary they get far less scrutiny than institutions seen as optional.

The vast majority of those in these institutions are not there by free and conscious choice.  It may seem extreme to claim this of universities, but if you spend time questioning college students you’ll find that most don’t really know why they’re there and haven’t ever considered another path.  They’re there because the cumulative force of parents, public opinion, and perceived career safety close off all other options.  Even if they have choice, they do not think they have choice.  They are not freely choosing to be there the way someone chooses to attend a baseball game or join a country club.

These institutions tend to place a higher priority on stopping drug use than other institutions in society, yet they get more of it.  Prison is the starkest example (although schools are not far off) with absolute borders and armed agents 24/7.  Still a drug trade cannot be suppressed.  Perhaps when all other forms of individuality and rebellion are suppressed, whatever subversive activity one can get away with will emerge.

There is something delicious about the irony of these institutions being the best sources for banned substances.  There is also something sad.  What it reveals about human nature is at least a little bit inspiring.  A refusal to fully submit, and a desire to find escape, even if only in the mind.  What it reveals about the institutions and society is at least a little depressing.

 

Things We Do To Our Children

I joined Albert Lu on The Economy Podcast to talk about things we do to our children.  We discussed whether and to what extent a parent can know what’s good for a child and force them to do things for their own good, from sports to music lessons and beyond.  We also discussed the lack of student-directed learning from grade school all the way through college and the problems it creates.

Listen to the episode here.  I’m on first and then author Richard Maybury on the same topic.

5 Reasons to Rethink College

Originally published on Thought Catalog.

Everyone knows you have to go to college to be successful.  Sometimes everyone is wrong.  Here are five reasons to rethink college as the best path to a fulfilling career and life.

1) It’s expensive.

Here’s a chart showing college debt and earnings for degree holders.

Guess what?  It doesn’t matter.  Charts and graphs and studies like this can’t help you make your decision about college for two reasons:  Because data can never show causality and aggregates are not individuals.

When it comes to causality, it’s pretty unclear college is doing the work.  Yes, degree holders on average earn more money than those without degrees.  People in Florida on average are older than people in the rest of the country.  Does Florida magically speed the aging process?  Degrees don’t magically make people more productive workers either.

College is a sorting mechanism more than it is a forming mechanism.  The types of people who get into and complete college are the kind who would command higher salaries anyway.  Some studies have followed people who attended Ivy League schools and others accepted to those schools but who chose lower ranked schools instead.  There wasn’t a difference in lifetime earnings.  In other words, Ivy League caliber people don’t need an Ivy League education to have high earnings.

As for aggregates and individuals, consider the following question: Are pickup trucks a good idea for 18-25 year olds?  Are they worth the cost?  How many studies would it take to prove it?  It’s obviously a dumb question.  There is no one answer for all 18-25 year olds.  Aggregate cost/benefit analyses for all 18-25 year olds buying pickup trucks won’t mean much to you in your highly personalized experience.  It’s just as ridiculous to come up with a single answer to questions about whether college is worth it for young people.

Data can’t do the work of deciding.  The only answer that matters is whether a particular path is worth it for you.  What do you want to get?  What are the possible ways of getting it?  What do they cost?  The cost is not just money but time, foregone opportunities, etc.  Whatever your decision, know why you’re doing it.  Which brings me to…

2) Most people don’t know why they’re doing it.

I ask high school students if they plan to go to college.  They all say yes.  When I ask “why” I have never heard anything but some variation on,

“Because I have to”, or, “To get a job”.

Then I ask what kind of job they want.  Crickets.  They don’t have any idea.

That’s perfectly fine – most teenagers don’t know and probably can’t know what they’ll be doing in ten or twenty years – but it’s pretty odd considering their entire reason for going to college is to get something about which they know nothing, including whether or not a degree will help them.

So the formula is, “I want X.  I have no idea what X is or what’s required to get it.  Therefore I’ll spend four years and tens of thousands of dollars on college.”  Maybe logic classes aren’t taught in high schools.

College may be a necessary or valuable way for you to get what you want out of life.  Then again maybe not.  The point is, you need to do some exploring and experimenting to find out.  You won’t know if your calling in life is marketing by sitting in a classroom and reading about it.  Spend some time around people who do it and see what it’s like.  If you love it, do you need a degree to do it?

The cultural narrative on college is, “Buy it!  Buy it!  No amount of cost or debt should factor into your decision, because it’s always worth it!”.  That’s a terrible way to make sound decisions about anything.  Remember the last time everyone was saying, “Buy! Buy! The price can only ever go up!”? (Housing bubble anyone…)

But maybe you’re going to college just for fun, which leads me to…

3) Most don’t enjoy it (and the parts they do enjoy can be had for free).

Parents and students tell me all the time that they’re unhappy with college.  Do you know what the number one complaint is?  Surprisingly, it’s not how much it costs.  It’s how much it sucks.

The number of young people who are bored in class and disappointed with the caliber of professors and students is staggering.  Students feel disengaged.  The part they like least about college is attending class and official duties.

If you sent a visitor from another planet to a typical college class and asked them to observe and report back to you what they thought they were witnessing they’d probably guess by the pained, dreary looks and lack of engagement it was some kind of penal colony or experiment where the students are being paid huge sums to endure fluorescently lit torment.  Nope, you tell them, these people are actually paying thousands to sit in the squeaky chairs and Snapchat their friends with a distracting TA in the background.

The things they love the most – parties, socialization, late night conversations, football games – can all be had without paying tuition.  Heck, if you really love a particular class or professor, I bet you can sneak into her class without registering and take it anyway.  I’ve never seen professors checking who’s current on tuition before the lecture.  They’d be thrilled to have someone in the class who was actually interested!

So why do people go?  Most don’t do it to stand out from the crowd, but to be normal; to blend in.  In that sense, it works.  But that might not be such a good thing…

4) It’s one size fits all in a world that demands customization.

Sure, there are lots of different majors and classes, but the approach is almost exactly the same in every case.  Follow rules, meet arbitrary deadlines with arbitrary assignments that will be glanced at by TA’s, passively listen to lectures and memorize answers you never need to know (because, you know, Google exists now).  

Chances are the job you’ll have in ten or twenty years doesn’t even exist yet.  That means the most valuable life and career skills are the very ones the classroom setting isn’t conducive for.  Adaptability, entrepreneurial thinking, creative problem solving, networking with people who can help you, etc.  In the classroom setting entrepreneurship is called cheating and networking is called missing class.

You can’t rely on your university to be your brand.  You are your own company, “Me, Inc.”, and you have to develop valuable skills and knowledge and find ways to communicate them to others.

The good news is, things you’ll really need to succeed are available in myriad forms, most much cheaper than the university.  Get a job.  Get a bunch of jobs.  Travel.  Talk to a lot of people.  Read.  Take online courses.  Write.  Figure out what you enjoy and practice it.  Work your butt off.  Anyone can graduate college.  It takes a lot more work to list what you want to gain and find the best way to get it.  Customize your life.  Don’t assume a degree can do this for you, because…

5) It doesn’t signal much anymore.

I overheard a classmate in college talking about how hard the test was (it wasn’t) and how many girls he wooed the previous night (he didn’t) and how hung-over he was (he was).  Right then and there I had an epiphany: He, like everyone else in the classroom, would probably graduate from this place.  Like me, they’d go on the job market and have the same degree.  Suddenly I felt the market value of my impending accomplishment plummet.

Let’s be real.  The only reason people keep paying so much for college is for the signal a degree sends to employers.  Sure, the other parts of the college bundle are great, but they can all be had in other, better and cheaper ways.  It’s the signal that keeps people buying.  But that signal is weakening and the value declining.

I talk to a lot of business owners.  They don’t care much about degrees anymore.  They want experience, proof of work ethic, and ability to quickly and coherently answer an email (only about seven people under the age of 25 have this ability).  College is the new high school.  Everyone does it, so it doesn’t make anyone stand out.  In fact, not going to college and having a damn good reason why might stand out a lot more.

Top venture capital firm Andreessen Horwitz specifically looks for entrepreneurs who were college dropouts, because it’s a good sign they are courageous and confident in their idea.  Google is one among many businesses to recently remove degrees from job requirements.

Get experience, gain confidence, learn what you like and don’t like, work hard, build skills, knowledge, and a network around your interests and goals.

College is one option among many.  Don’t do it just because everyone else does.  Those are the same people who bought a bunch of Beanie Babies as a retirement fund because everyone else was.

How to Keep the Young and Poor from Succeeding

Let’s face it. I’m not that young anymore. I’m also not poor anymore, and I live a comfortable middle-class American life. Most older, better-off middle-classers like me got where we are through the dynamic market process. The trouble is, now that we’re doing pretty well, that same dynamic process is a threat. I don’t want some young whippersnapper or poor immigrant to outwork me. What if they succeed faster than I do? What if they create more value than I can, and so outcompete me for a job?

Take heart, well-heeled middle-agers. I have a plan. My scheme for keeping younger and poorer people from succeeding—and possibly making us have to work harder to stay on top—is two-pronged: We’ve got to affect both supply and demand.

We need to restrict the supply of economic opportunities. We need to make those opportunities more costly and thus out of the reach of many young and poor. We also need to suppress the demand for jobs and entrepreneurial ventures. We need to make it more beneficial to stay out of the market than to participate in it.

Let’s get to some specifics.

Restrict the supply of opportunities

The biggest advantages young and poor people have over us are very low opportunity costs and a low-cost lifestyle. This means they don’t have to give up much to work a job, and they don’t need to earn much to cover their expenses. Because of these major advantages, they can work for very low wages, and thus become attractive for employers to hire and train. At low wages, they’ll always find work, and worse yet, they’ll be constantly learning and improving—adding to their stock of human capital.

The obvious solution is to make it illegal to work for low wages. Working for free is absolutely out of the question. If young and poor people could simply offer to work for little or no pay, they’d soon be gaining valuable skills and competing with us for jobs! Let’s cut that first rung off the ladder, lest they climb over us some day.

Young and inexperienced workers don’t have a lot of expertise. They make mistakes. Of course, if they’re allowed to participate in the trial-and-error process of the market, the incentives will soon drive them to develop expertise and be reliable suppliers of goods and services. That would be a travesty for us. We need to keep them unskilled and unreliable. The solution is to create a labyrinthine web of licenses and regulations that make it illegal for anyone but experts to sell goods or offer services. Since we’ve already banned working for low wages or apprenticing for free, it will be almost impossible for these novices to learn from a seasoned expert until they gain the necessary skill. We can make it even harder by adding lots of fees and costly training sessions to obtain licenses.

There needn’t be just one law making low wages illegal or just one licensing and regulatory regime. We need a wide variety of complex and ever-changing barriers. High taxes on productivity and profit, union dues and demands, work restrictions, rigid job categories, seniority bias, massive credential requirements, health and safety rules to cripple upstarts, consumer protection laws to hamper smaller producers, no access to capital or ability to stay in line with the law without costly lawyers and accountants, etc., etc., ad nauseam.

My recommendations are myriad, but they all boil down to a simple principle: Do anything we can to make economic opportunities more costly and rare. This reserves most of said opportunities for us.

Now for the second prong.

Reward non-participation

We don’t want to seem callous and cold toward those less comfortably situated. Indeed, we harbor no ill will toward the young and poor. We just don’t want them to compete with or catch us.

Since we care—and especially because we want people to believe that we care—we can’t be all “stick.” We need some “carrot,” too. It’s not enough to restrict the supply of opportunities, because some people will break the rules or work around them. We also need to suppress demand by offering some sweet incentives for young workers to stay unproductive and uncompetitive. We need to make non-participation in the market more attractive than participation.

First, I recommend a strict policy of forced education for the first few decades of life. We’ve already discussed making it illegal for the young to work or the poor to work for low wages. But we also need to make it mandatory that they do something else, and something that won’t make them more likely to compete with us now or later. We should create giant institutions where we send them all day to follow rules and do what they’re told without question. We don’t want them becoming innovative, or pursuing passions and interests that they might become experts in and thus supplant us in the market. They must only learn what the bureaucrats who run the system tell them to. (Oh, and the people who run the system should only be those who don’t really know much about competing in the market, because we wouldn’t want them passing on such knowledge.)

We can’t just make school mandatory. Many would still play hooky if it cost too much. We also need to hide the cost by paying for the whole thing through taxes and borrowing. We need to subsidize it so much that alternatives can’t compete. We need to weave a narrative about its glory so that no one wants to opt out.

But 18 years isn’t enough. We need to keep these young, hungry individuals out of our way as long as possible. I say we artificially lower the cost of otherwise very expensive degree programs and advanced studies. We can guarantee low-interest loans, throw a lot of grants and subsidies around, and always, always parrot powerful propaganda about the inestimable value of classroom learning. Let’s make the most attractive option—socially and economically—the one that keeps them from the commercial world as long as possible.

The longer we can make the education process, the better for us. Defer, defer, defer the time at which young people start entering the productive sector. The more loans they take on in the process, the better. Maybe they’ll even get married, get a nice house (we can incentivize the buying of expensive consumer goods via debt as well!), and have kids. All of these things are good because they take away one of the major advantages the young have in the workforce—their low cost of living and hence ability to bid for lower starting wages. We want them saddled with so much debt that they have to earn high wages to get by, and thus have to compete with workers who are a lot more experienced for those higher wage jobs. We need them coming out of college looking for salaries that don’t comport with their skill levels. This increases the odds that older workers like us will win.

We’ll need to address those too old or too poor for school as well. We need basic income guarantees, food stamps, and all manner of welfare to cover the costs of low-income life such that no part-time entry-level job could pay quite as much. Again, we need to make not working worth more than working.

The best part

Here’s the best part: By the time these young and poor find themselves unable to compete, with costly lifestyles and loans to maintain and little skill or experience, they’ll be older. They’ll join our ranks. They’ll lobby for even harsher restrictions on those even less experienced and less well-off than they are. They’ll demand to get the low-skill jobs they’re qualified for, but demand the pay be raised to high-skill wages. They’ll make the list of degrees and credentials they’ve accumulated the new barrier to entry to artificially raise their market value. They’ll help us perpetuate the very policies that caused their plight!

As with the first prong, these are but a few examples. Ideally a massive and shifting bundle of incentives to not enter the market as a producer can be put together: education mandates and subsidies, tax incentives to spend rather than save and to purchase education rather than other goods or business tools, housing and healthcare as long as you don’t work, and rewards for any activity that makes one less likely to try to compete with us in the market.

These policies will subtly turn the attention of nearly everyone away from value creation, innovation, and serving customers—all of which might threaten our dormancy. It will turn everyone’s attention and energy to fighting over the details of these policies and programs, to who gets which slice of the artificially limited pie and at whose expense. Some of us can really take advantage by running for political office and dividing up the warring interests we’ve created by promising them more restrictions and subsidies.

Above all, with both prongs of this strategy, we need a narrative that calls these policies noble, compassionate, and wise. We need them to be perceived as humanitarian aid to the young and poor, not as ways to keep them from succeeding. We need to make these programs universal values in themselves—regardless of the outcomes they produce. Who could oppose better wages? Who could oppose more education? Who could oppose more loans for homes or college? Who could oppose work rules and consumer safety regulations? Middle-aged, middle-class people certainly won’t, if we know what’s good for us.

We cannot abide an America in which plucky newcomers outperform us at every turn. Join me in securing our future.

Originally published in The Freeman.

6 Tips When Deciding Whether to Finish College

From the Praxis Blog

A lot of bright young people are unhappy in college.  They hate wasting money.  They hate wasting time.  They hate the fact that what they’re getting in return is of so little value in preparing them for career and life.

Many of these young people are resigned to push themselves through that one final semester, or year, or two years.  Sure, it sucks.  But they’ve come so far, it seems the sensible thing is to soldier through the drudgery and finish before pursuing things they are really passionate about.  At least then they’ll walk away with something, right?

Not so fast.

Here are six things to consider if you don’t love college but think you need to finish anyway.

1. Don’t fall for the sunk cost fallacy.  It’s gone.  It can never be recovered.  You will never get back the money or time you’ve put in.

This fallacy plagues everyone from investors to gamblers to your friend who makes you wait in an hour long line to see a mediocre movie because, “We’ve already waited half an hour and I don’t want that to be for nothing!”

I hate to break it to your friend, but it was for nothing.  Past expenditures that can’t be recovered shouldn’t factor in to decisions about the present and future.  It doesn’t matter that you sunk three and a half years and 50 grand into college.  What matters is whether the next six months and ten grand is better spent on college than all other alternatives.  Remove yourself from your prior experience.  If you had never spent any time or money on college and someone offered to put you through lectures for a year if you paid upwards of five figures, would that be your ideal way to spend those resources?  If not, don’t.

Quitting doesn’t make it all for nothing, it makes it all for whatever it is you’ve gained up to this point. If that wasn’t worth it, why would the next semester or year be?  Looking only ahead and not behind, what gets you closer to the kind of experiences and life you will enjoy?

2. Don’t see college as a single, unified product.  College comes as a bundle of goods; knowledge, a social experience, parties, football games, a signal that you’re a normal person, a degree, etc.  Unbundle it.

What parts do you really value?  If it’s knowledge gained from good lectures and discussions, ask yourself if that component can be had better or cheaper elsewhere.  If it’s the social experience, ask them same.  Do you really need four years and six figures to have a good time and meet new friends?  Can football games only be enjoyed if you have student loans?  Is a degree really the most effective and direct route to a career you love?

Consider the individual units of time, money, and energy you put in and get out.  Perhaps it was valuable for the first few semesters before you really knew yourself.  Rather than assuming you have to either take the whole bundle or leave it, take those valuable units, be thankful for them, and when the value ceases, move on to the next best use of the next unit of time, money, and passion.  Economists call this thinking at the margin.  I call it good sense.

3. Don’t let your past control your future. So you once thought your dream was to be a doctor, argue before the Supreme Court, or walk down the aisle in a cap and gown with an MBA.  Now that you’re in the thick of it, it doesn’t move you.  It bores you.  It tires you.  You don’t see the point in all the monotony.  But you’ve always been known as the gal who’s heart was set on that path.  To change course would make everyone think something was terribly wrong. So what.

It’s hard to be really honest with yourself about what makes you come alive.  It’s painful too, as what you wish you were and what you used to be pass away.  The only thing worse is living your present the way your past self wanted, rather than the way your present self needs.  It sucks to be a slave to anything.  Being a slave to your past personality is one of the worst forms.  Break the chains and do what gets you going today.

4. Don’t assume staying the course is a virtue. If you’re being punked by Ashton Kutcher, it’s best to figure it out and quit whatever embarrassing thing you’re doing.  Persistence is a great virtue; unless you’re persisting to drive in the wrong direction, take the wrong medicine, or cut the wrong sequence of wires while defusing a bomb.

Recognizing a fools errand takes insight.  Dropping out for something better takes courage.  If it ain’t right, don’t keep at it.

5. Don’t be a slave to your resume. It’s not that important anyway.

Sure, a college degree it still carries some psychological weight, but not much in a stack of resumes.  Titles, degrees, letters after your name and other accolades seem very important when you’re young and inexperienced in the professional world.  It’s because you have no other metric for success.  The education you’ve experienced for most of your life is all about gold stars and letter grades and honor rolls and GPA.  The market is nothing like that.  It cares about value.  Do you have it?  Can you prove it?

Resumes matter on occasion, but really only after you’ve got a foot in the door through your network, experience, and reputation as a hard worker.  Is college equipping you with those things?

What your resume lacks in degrees it can more than make up for in content.  It’s really impressive when someone is self-aware enough to know college wasn’t working, and bold enough to head for greener pastures.  It stands out from the crowd and opens the way for you to tell your story.  Plus, you can say, “I took the Mark Zuckerberg/Steve Jobs/Bill Gates/Larry Ellison route.”

An employer who writes off your great reputation, smarts, communication skills, and stellar work ethic, just because you don’t have a degree, is probably not someone you want to work with anyway.

6. Don’t forget opportunity cost.  You need to weigh the costs of finishing college.  You’ve got it.  Ignore sunk costs, think at the margin, and all that other stuff I’ve been saying.  Yeah, yeah.  You get out your calculator to add up the dollars, or if you’re more sophisticated, days and dollars.  But you’re ignoring the biggest cost: you.

You are scarce.  You can only be in one place, doing one thing, at one time.  That means for every choice you make there are countless other things you are unable to choose.  The cost of one decision is more than the money paid; it’s the value of the next best alternative.  Once again to the economists, who call this your opportunity cost.

If you’re considering that final fifteen grand for your senior year, you need to add to that the value of your next best option.  Maybe you could work and earn $20,000.  In that case, the cost of the final year is really $35,000.  Make a difference?  You bet.

It’s not just money prices.  Value is subjective.  Maybe you value experience and mentorship, or travel and new cultures, more than the $20,000 job.  You have to give it up to finish school.  Is it worth the price?

When you consider sacrificing four or more prime years of your youth, and being bound to one geographical location for most of that time, college starts to cost a lot more than tuition.  For half the cost and in half the time, you might be able to visit ten countries, start a business, earn some money, and learn computer programming.  That’s just scratching the surface.

Bottom line: Don’t stay in college just because you’re close to the end.  Look ahead rather than behind, figure out what fans your flame, weigh the costs and benefits of every alternative, and do what’s best for you.  Try Praxis for starters.

Don’t Go to College

Good friend and collaborator T.K. Coleman invited me on his show, “Conversations with FiFi & T.K.” to talk about Praxis and why traditional education doesn’t cut it any more.  We had a great conversation and I got to field some good questions about the Praxis idea.  Made me all the more excited for the start of our first class in February!  Hope you enjoy the interview.

A Law Colleges Love

I’ve often wondered why so many people go to college instead of learning on the job by offering to work for free for a company they like.  Turns out, it’s not that easy to work for free.  In most cases, it’s illegal.

Consider the absurdity of this setup.  Young people are supposed to do something to enhance their earning potential.  Without any knowledge or experience, they do not produce enough value to be worth hiring in most promising career areas.  So they’ve got to do something to gain skills.  Since they’re not worth paying, and it’s illegal to have unpaid workers, they can’t get on the job experience.

It’s supposed to be illegal to have unpaid workers because we wouldn’t want poor, unskilled people being taken advantage of.  Instead, they’re directed to college, where not only do they not earn money, they must borrow tens of thousands just for the privilege of not being paid.  They have limited choice as to what skills they learn, as a huge number of courses and credits are required in areas of little interest to them.  It takes at least three or four years to finish.

When they do finish, it’s often the case that they are only a little more valuable to employers than they were before – and much of that is a product of them being four years older and more mature, not any particular knowledge gained.  Most of the needed skills still must be learned on the job.  Most graduates have no idea what kind of job appeals to them or what they excel at, because they spent time in classrooms, not at workplaces trying different things out.

There are, of course, complicated work-arounds.  Non-profits and degree granting institutions can setup legal unpaid internships in some cases, and some businesses can do certain types of apprenticeships, on the condition that they create no value.

Let me repeat that: as long as unpaid apprentices do not help the business in any way – better yet if they destroy value – it’s possible to have one.  You think I’m joking, but read this language, pasted directly from the SBA website where they list the guidelines for a legal, unpaid apprenticeship.  This is number four in a list of six criteria:

“The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded”

We want young people to learn how to create value, but certainly not by actually creating it!  We want businesses to create wealth, but not if trainees do it!

You reap what you sow.