Is College Worth the Money? Not If You Understand the Business

As you grow up you start to realize that things aren’t what they seem. Organizations, in particular, are not what they pretend to be.  And just like evolutionary biology can give incredible insights into why humans behave in certain ways (like why is it that girls seem to be MOST attracted to you when other girls are showing interest) business model analysis can show you some crazy things about how the world works.

Take for instance, our most esteemed institution: college.  Is college worth the money?

College is a business

College is not there to give you an education.  They are there to extract as much money from your pockets as possible.  How to they do that? They sell credentials (disguised as education).

It’s a complicated deception

1)  Colleges promote a cultural myth about the value of college.  They tie “getting an education” to enrolling in their institution, just like AXE ties getting laid to using their deodorant. 2)  Colleges build a monopolistic market on “education” by selling this myth both to students AND to employers.  This myth inflates the demand for college, since employers demand the credentialing, which allows for increased prices due to a lack of price sensitivity (has any adult in your life told you it WASN’T worth taking out a 100K loan for college? 3)  While you’re in school, the college also makes sure you have a ton of fun and associate yourself with the undying college community.  It’s not so much about building relationships with your classmates (who graduate and move on) as it is building a relationship with the football team (who will be there forever). 4)  Upon graduation they hand you a degree and a GPA.  Your GPA says nothing about education or the amount of positive impact you are likely to make on the world.  Your GPA signifies one thing: how quickly you can learn and adapt to the rules of an arbitrary game.  Your GPA, university name, and major comprise your “credential score.”  Again, nothing here about education. 5)  You graduate and realize you’ve just taken one long, generic interview.  You’ve learned some, but far less than you should have given the 4 years and $160,000 you spent. 6)  Employers bid on you based on the attractiveness of your credential score.  You take the highest paying offer because you are hopelessly in debt after your 4-year interview. 7)  The university follows you around forever, bleeding you for donations If you really want an education, take Will Hunting’s advice (3:25):

Universities do not want to provide a valuable, cost efficient education.  They do not want to teach you to learn for yourself.  They want you reliant on their real product: credentials.  And they don’t want to teach you to make your own damn credentials.  They want you to come back in 2 years for an MBA.

Why are the credentials important?

Because companies care about them.  And because students care about getting jobs.

Companies aren’t buying what you learned in college, thats secondary.  They are paying for the admissions filter.  They know you don’t get into Wharton without being able to buckle down and do shittons of work that doesn’t interest you.  They know you don’t make it out without a hunger for money and the willingness to work 90 hour weeks to accrue as much of it as possible.

Banks like that.  That’s why they outsource their onboarding to Wharton.

Notice, there are no good entrepreneurial programs in established universities.  NONE.  The old model is built on you going and being offered a job, not inventing one for yourself.

A true entrepreneurship program, not like the bullshit classes they have taught by teachers who have never actually started a business, would require a different model.  Like Thiel’s 20 under 20, which in exchange for education and networking opportunities gets ol Petey first crack at investing in hot startups.

Anything you get for free

Think for instance: Facebook, TV programs, Google, the news, any non-pay website ever

Whats going on?  Advertisers are paying content creators for access to their audience.

AKA, advertisers buy your attention.

This is the model for basically the entire internet.  Same goes for TV shows, the Olympics, your $79 Kindle.  There is real no artistic imperative, these platforms evolve as they must in a market economy.  Their evolutionary fitness is judged by how well they can extract money from advertisers.  And those advertiser’s fitness is judged by how well they can extract money from you.

What does it mean?

It means that Facebook doesn’t care about you connecting with your friends.  And TV shows don’t REALLY care if you’re entertained.  The benefit to you, whether its forming connections or simple entertainment, is secondary.  A means to an end (advertiser dollars).  As soon as they can find a way to make you watch, click, or engage without entertaining you (and they have) they’ll stick with that.

News is worth calling out here.  Newsmen are not there to make sure you have a complete and informed worldview.  They are there to court your attention and sell it to advertisers.

Read “Manufacturing Consent” and “Trust me, I’m Lying” to have any illusions you might have about the journalistic objectivity shattered.

Oil companies

Oil companies are not energy companies.  They do not care about powering your home.  They care about you buying what they have to sell.  And what they have to sell is $27 trillion dollars of fossil fuel.

Bill McKibben points it out perfectly.

If you told Exxon or Lukoil that, in order to avoid wrecking the climate, they couldn’t pump out their reserves, the value of their companies would plummet. John Fullerton, a former managing director at JP Morgan who now runs the Capital Institute, calculates that at today’s market value, those 2,795 gigatons of carbon emissions are worth about $27 trillion. Which is to say, if you paid attention to the scientists and kept 80 percent of it underground, you’d be writing off $20 trillion in assets.

http://www.rollingstone.com/politics/news/global-warmings-terrifying-new-math-20120719

How much influence can $27 trillion buy?  More than a gigaton – A fuckton.

If you found this type of post interesting, let me know and I’ll post part 2.  Next on the chopping block is healthcare, nightclubs, books vs. TV, and the world at large.  Or tell me you hated it.  As long as we’re talking!

5 thoughts on “Is College Worth the Money? Not If You Understand the Business

  1. Good points, Charlie. It is funny major universities don’t really push entrepreneurism, mostly smaller niche schools like Babson. Love what Peter Thiel is doing.

    1. Haha, never heard of Babson, but just discovered their mascot is the Babson Beaver so I dig 🙂 I wish Thiel would stake Kickass Academy!

  2. wow dude I actually enjoyed this. I’m glad someone shares the same view about modern schooling and business as me. Being inside this system for so long, you realize that none of it is actually there to help you.

    It sucks that SO many people have been conditioned to believe that it’s some kind of right-of-passage into adulthood. I swear I don’t hear the end of it from my family.

    Dropped out 25k in debt and I’m glad.

    It’s really despicable how these schools charge out the ass for EVERYTHING under the guise that this is supposed to somehow be good for you in the end.

    Anyway, cool site and good post. You should talk more about this stuff, a lot of people have a very unrealistic view of these systems.

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