An interview between Justin Spittler and Doug Casey
To figure out one of today’s most troubling trends – the fast-rising cost of a college education – Justin Spittler spoke with legendary speculator and contrarian Doug Casey.
Doug has been saying for years that going to college is somewhere between foolish and idiotic for the average person… starting with an appearance on the Phil Donahue Show in November 1980. Read on for his thoughts on education today…
Justin: My sister recently told me that her financial adviser suggested she start setting aside $500 to $1,000 a month to pay for her son’s college education. That’s because a four-year college education is apparently going to cost between $400,000 and $500,000 18 years from now.
Her adviser clearly arrived at this figure based on how fast college tuition costs have been rising, which is about 6% per year. But you have to wonder if the cost can keep rising at this rate. It seems to me that no one will go to college if it’s going to cost a half-million bucks.
What do you make of this trend?
Doug: My advice to your sister is to get a new financial adviser. I fear that she’s relying on a complete imbecile. She should fire him immediately, and for a number of reasons.
Number one is his assumption that the trend of higher college costs is going to continue to a totally unaffordable level. In fact, the cost/benefit ratio of going to college is already so out of whack that the whole system has to change radically. A college degree, even now, is of only marginal value; most everybody has one. And things that everybody has are devalued.
You’re quite correct that colleges and universities today are dead ducks as businesses. Unless you’re going to learn a trade, like doctoring or lawyering, or you’re going for science, engineering, or math, where you need the formal discipline and where you need lab courses, it’s a total misallocation, even a waste of money to go to college today.
So I applaud the fact that all these colleges and universities are dead men walking, that they’re all going to go bankrupt. They are totally overrun and infested with cultural Marxists and progressives, militant leftists who are propagandizing kids with absolutely the wrong kind of values. It’s astonishing that parents are willing to pay even today’s prices to subject their kids to four years of indoctrination. I’m glad that they’re all going bankrupt.
Justin: But don’t you need a college education to get ahead in life?
Doug: It’s not necessary to go to college. You’re likely to be corrupted, and indebt yourself like an indentured servant for many years to come. The question is: Do you want an education, or do you just want a piece of paper that says you logged the time in a classroom? These are two different things. Getting an education is strictly a matter of motivation and self-discipline, not paying money to sit in a classroom. If you’ve got half a brain, you realize that you want the knowledge, not the diploma, and there’s no necessary correlation between them. Nobody can “give” you an education; it’s something you must gain for yourself.
Do you want an education, or do you just want a piece of paper that says you logged the time in a classroom?
Most top universities now have their courses online. You can get an education by listening to these courses. And even when you’re driving your car, you should be playing CDs by The Teaching Company. They have the best professors in the world giving command performance lectures. And you can hear them an unlimited number of times. This is much better than listening to some also-ran drone on, while you may have cut the class, or be half asleep, or not taking good notes.
Technology has changed the whole landscape of education. Its cost is approaching zero, not the stratosphere, as your sister’s adviser seems to think. If the kids insist on going to college and indenturing themselves, as well as cluttering their minds with irrelevancies and false data, then they should only consider, say, Harvard, or very few schools like it. At least there the prestige, and qualifications for admission, are so high that the connections they make may compensate for the many downsides.
And anyway, Ray Kurzweil’s right about the Singularity, in my opinion. And he’s upped the date to when it’s going to occur to 2029, which is only 12 years from now, at which point the whole world will have changed in ways that will change the nature of life itself. So forget about saving to send your kids to college; and that goes double for your grandkids.
Justin: My sister’s adviser also suggested that she and her husband set up a 529 plan, which is basically a tax-friendly way to save money for college. I asked her what would happen to the money if her son didn’t go to college. She said she could use the money to pay for her grandchildren’s college education.
But like you said, the world is going to be very different 12 years from now. Who knows what it’s going to look like 40 or 50 years from now?
Doug: Over the next generation, the world is going to change totally and unrecognizably from the way it is right now. Technological change is compounding at an exponential rate. It’s always been exponential, quite frankly. Ever since the invention of fire. But we’re now in its later stages; it’s like a Saturn rocket taking off, very slowly at first, but constantly accelerating.
Today’s educational paradigm makes as much sense as entering a Model T Ford in the 24 Hours of Le Mans.
It’s going to be fascinating and fantastic to watch what happens over the next 20 years. And relying on, and paying for, today’s educational paradigm makes as much sense as entering a Model T Ford in the 24 Hours of Le Mans.
Justin Spittler is the editor of the Casey Daily Dispatch, a daily letter with news, an overview of the market, and important investment themes. Subscribe for free here.
Doug Casey is a true contrarian investor. The founder of Casey Research and one of the most successful natural resource speculators in the world, Doug has also recently began publishing the High Ground series of books – thrilling and provoking stories about speculation, morality, and libertarian ideas.
He suggests that you give a copy of his novel, Speculator, to a young person who’s thinking (or should be thinking, anyway) about his or her education.