Tuesday, June 30, 2009

Long Live The Revolution!

At least in America some folks are prepared to shoot at one of the modern world's most sacred cows.

Let's try a thought experiment here: suppose a bank were encouraging youngsters to borrow tens of thousands of pounds to invest in a scheme that supposedly offered them high returns three years down the line. That, right there, would be enough to get even the living dead at the Financial Services Authority (aka Found Sleeping Again) on the war path.

But now imagine that the supposed returns were inflated by a small minority of investors who got very high returns, far out of range of what the median investor would expect. That would have the FSA calling in air strikes, even before it was pointed out that 90 % of the time you could tell in advance who would - and who wouldn't - make the money, yet our hypothetical bank's marketing literature delibratly obscured this point.

By that point, only public execution could suffice, yet all our bank would be doing is behaving like the average university. The supposed premiums quoted for a university education are garbage. Take away graduates who do go on to make great money, but only becuase of the very specific circumstances of their professions, like docters and lawyers, since they are outliers by definition, and can't tell us anything about the 'average graduate'. Ditto, those who by temprement and skills would be guaranteed to succeed in almost any circumstances, like physics geeks. Equally, factor out of the 'non-graduate' population those who can't, or won't, take any kind of employment. Correct for the fact that degree-educated employees used to be lot scarcer than they are today. Add up the interest on tens of thousands of pounds of debt and the money and experience lost through three years spent in Wacademia and what are you left with? Good evidence that the average degree course is the most overrated product in Britain today.

No comments: