The way most people value education is wrong. In this post, I argue that the "useless" and "impractical" humanities degrees are actually some of the most valuable for our society. They are a public benefit to everyone, even if the person with that degree never earns any money from it. Therefore, society should pay the cost of higher education.
One of the most important concepts in economics related to politics is the concept of externalities. The basic idea is that an exchange can have hidden costs which are paid by 3rd parties, often without even realizing it. The most common example is air pollution. If you buy cheap electricity from a coal plant, you can save money and the coal plant makes a profit, but everyone around suffers from the air pollution of the burning coal. This paper estimates the external costs of coal as "damages range from 0.8 to 5.6 times value added." In other words, the coal industry costs society as much as 5 times more than its profits! The coal companies are earning money, but they're incredibly destructive to everyone else. As I've said before, renewable energy is already cheaper than coal, if you look closely at the real costs.
Coal is an industry with negative externalities, but there are other industries which have positive externalities. Any nonprofits will (in theory) externalize all their benefits. A highway or railroad allows travel, without which many cities wouldn’t even exist. Farmers typically get paid very little, but without them everyone else would starve to death. These are all examples of industries which benefit the rest of society more than they benefit themselves.
In the same way, education should be thought of as an industry with positive externalities. Most people agree with this concept for public K-12 schools, but they balk at the idea of publically funding all secondary education. They say, "College tuition should be paid by college students! If they can’t afford it, they can take out loans." What’s the problem?
The problem is that the cost of a college education keeps increasing at a tremendous speed. The average student loan debt at graduation is now $25,000, and six-figure debts are not uncommon. The cost of education is rising far more quickly than inflation, even faster than healthcare. Taking out six figures of debt for a degree might actually be reasonable if it gets you a high paying job. The problem is that so many students these days are taking out large amount of debt, and then getting stuck in low-paying jobs, if they can even find a job. And since they are legally not allowed to discharge student loan debt through bankruptcy, this debt will weigh them down for their entire lives. It's terrible.
Many people look at this situation, and understandably start to wonder if it's still a good idea for every young person to go to college. The poster boy for this is Peter Thiel, who is actually giving out scholarships to young people who don't go to college. More commonly, we hear people deriding the value of a humanities degree. Philosophy, sociology, and race/gender studies are the most common targets. And, admittedly, there are no jobs that explicitly require these degrees, except for (extremely rare) positions as a college professor. So does that mean that these degrees are a waste of time and money? Ryan Swift does a good job of presenting this sort of argument:
To put another way, after shelling out four years of over-inflated tuition, devoting the time and energy, and struggling to live with little or no earnings while in college, as much as 40 percent of college-educated workers make less than the top 25 percent of high school graduates. Hmm. If you’re a wunderkind in high school, or have a valuable skill, maybe college isn’t the best route...
My fear is that instead of changing our formal education paradigm, we’re simply digging in and moving the target. The master’s is becoming the new bachelor’s, which will only exacerbate all of the discussed trends. The answer is not more formal education, financed by the government. Children should be encouraged to go to trade schools, learn marketable skills as children (computer programming whiz perhaps), be entrepreneurial, and take alternate routes then just going into debt to get formally educated.
If the only thing we pay attention to is how much college grads make compared to high school grads, and the interest they have to pay on student debt, then he's right. Many college graduates, especially those with degrees in the humanities, would make more money if they went straight into the work force after high school, or took only a quick trade school course. The finances simply don't add up for humanities degrees. Humanities departments usually answer that they teach broad, general skills like writing and critical thinking that can be used in any job. There's some truth to that, but it seems to dodge the real question- is the actual content of the courses valuable?. It seems like an excuse for the fact that no one will ever pay you anything for the actual knowledge that you learn from humanities courses.
The correct way to see the value of the humanities is as a positive externality, a public good, which produces more value for the rest of society than for the people getting the degrees. It's true that it's very hard to find jobs that pay for knowledge of the humanities- but that's the problem with our economic system, not with the humanities! I, for one, am very glad to live in a society with advanced knowledge of, say, sociology. It's interesting, and it has improved society quite a lot over the long term.
If you don't think that humanities can improve society, consider this: we live in a democracy. All the important decisions in our society come from a democratic process (or at least, they're supposed to...), and therefore we all benefit from having voters that are more educated. It's a very good thing that we have so many political science majors who can educate their friends about the political system works, not to mention history majors to study what happened in the past, and literature majors to examine our society through fiction.
Or how about film studies? That's a "useless major" if there ever was one! And yet, the average American watches over 4 hours of television each day. Television and movies are a huge part of our lives! By all means, let's study it! I always enjoy talking to people that have studied film about their major, especially if they can give me good recommendations on things to watch. Admittedly, it's hard to quantify this as a dollar figure, but if we had more film studies majors, I'll bet that we'd have more Arrested Development and less Jersey Shore.
So I say we need more humanities degrees! Subsidize them- they're a public benefit, with a positive externality. A degree in something like finance or petroleum engineering will pay for itself, even if the student has to go deeply in debt. But a humanities major should not have to do the same, because it's highly unlikely that a humanities degree would lead to such a high-paying job. Not that's impossible for humanities majors to get high paying jobs, but the degree itself doesn't lead them there directly. We should value education for more than simply how many dollars it brings that person in their career. Education is a public good, and it should be funded as such.