The argument that higher education funding stimulates economic growth because more people are getting into the workplace and earning more money, thereby spending more money was kicked on January 14, 2009, at a Cato Institute event by George Leef, Vice President for Research at the John William Pope Center for Higher Education Policy, Barmak Nassirian, the Associate Executive Director, External Relations, at the American Association of Collegiate Registrars and Admissions Officers, and Neal McCluskey, the Associate Director, Center for Educational Freedom, at the Cato Institute. The moderator was Doug Lederman, the editor of Inside Higher Ed.
Leef argues that higher education is not what it used to be, and students, on average, are not prepared and/or do not care about getting a liberal education. He holds that because employers use degrees “as a screening device;” people who are unprepared for college, and could possibly make more money if they do not go, are going and not doing well and thereby not making more money. He argues that the standard of a college degree needs to be removed so more high school graduates do not feel pressured to go to college rather than join the workforce right off. He argues that America is pushing all students to go to college because they feel like they are falling behind in the race to have the most college graduates. He said, “This isn’t a race, and we don’t have to be first.” He argues that coming in first in the international “race” for better education does not solve economic problems. He says, “I think there’s only a very weak connection between higher education and economic growth…Economic growth is one of those happy by-products of the spontaneous order of a free society. It occurs to the maximum extent when people are at liberty to pursue their own goals and desires, including working, saving, investing, innovating, forming businesses, acquiring resources, and, of course, learning.”
Neal McCluskey argues that “What [we need] to focus on…is…what have we actually spent, what’s the reality of what we spent, what do we get for it—because that’s really the key.”
He holds that this so-called “investment” is not worth what people like to believe it is. He does believe that “people need education, and education does drive economic growth, but you can go beyond spending what’s necessary to spending too much.” He uses as an example four different schools with exorbitant spending. Each showed that either they had too much money to spend, or they were not spending the money wisely. He argues that one point needing serious consideration is where the money to fund higher education is coming from.
Nassirian was “mostly confused” after listening to his colleagues speak. After listening to him speak, so was the audience. He “certainly agree[s] with the general observation…that hyperbolic claims tend to be made on behalf of greater public investment in higher ed. Is that a true statement? Absolutely. Is there a higher education etablishment that tends to push for more funding all the time, even if it’s not particularly productive? Yeah, that’s true, too.” At one point, he was not even sure what the topic was. He claims that the other speakers were not making sound arguments with regards to the topic: “I don’t want to make a hyperbolic claim that it is a panacea to invest in education, but I find it, frankly, in need of a much more robust, much more focused, and theoretically coherent argument, if the proposition being debated here is ‘does public investment in higher ed result in economic growth?’.” Emphasizing the obvious, he says, “To make the case that having a more industrious, more capable, better trained population—in the abstract—does not tightly correlate with economic development, I think you have to be living in a different world than the one I occupy, here on earth.” To back up this point, Nassirian points out that governments are inefficient, but funding is inefficient. Finishing off his rambling discussion, he says in response to a question about deficit spending on higher education that it is the government’s “moral obligation to equip the next generation of working stiffs who are going to pay this bill to do so with incomes other than filling slurpies at 7-Eleven,” even though there is a trillion-dollar deficit that continues to build.