Economics and Government

Source: http://www.theatlantic.com/business/archive/2012/04/can-this-online-ivy-university-change-the-face-of-higher-education/255471/

            Here we are, 2012; the realities of post-recession economic stagnation (from the 2007-2009 recession) and lack of job availability loom in our minds. Throughout this spring semester, because I spend a lot of time at the college library, I have seen numerous tours for potential incoming students. American education mills (i.e. colleges) are nothing more than marketing machines, providing a nurturing environment for students. The schools serve as brokers to get educators and students together. They become our Alma Maters (Latin: “nurturing mothers”). We become byproducts of the goods and services provided to us (for hefty fees), as we are nurtured into independently thinking beings.

            Introduction to Business teaches of two terms: purple cow and pump & dump. Purple cow (a.k.a. the 5^th P of marketing) refers to whatever makes you (or your business) stand out from the competition. Pump & dump refers to making yourself (or business) better than actual wellness (which is illegal in the business sense). I like to use these terms when I discuss education matters with others. I refer to the pump-&-dump students as those who race through college, get good grades (i.e. those who cram and reproduce the information with expertise) then forget the information; after graduation, they don’t remember any of it (or their educations were blurs to them). This style of education is very Cartesian (after Rene Descartes, best known for being the father of modern philosophy) where one breaks something down to see how it works, but what is broken down no longer functions. Systems theory, conversely, is very purple cow; in other words, considering the whole (i.e. not possessing self-destructive tendencies for one’s education) is one’s best chance to overcoming the current economic problems (i.e. focus on yourself as a business, and attend to your own S.W.O.T. analysis). Your purple cow is your well-roundedness, academically. Your success is whatever value-added proposition you can offer to employers (including minimizing weaknesses, not just focusing on strengths).

            S.W.O.T. stands for strengths, weaknesses, opportunities and threats. Strengths are what you do well. Weaknesses are what you don’t do well. Opportunities are what you do to improve your strengths (or minimize the effects of threats and your weaknesses). Threats are things your competitors (e.g. fellow job seekers) do well that you cannot. Your purple cow is your competitor’s threat.

            I bring the aforementioned to light, because “PKajen” (of our class), in another thread, wrote “according to the book ‘Academically Adrift: Limited Learning on College Campuses’ 45% of college US college students exhibit no significant gains in learning after two years in college.” I believe the book brings to light the problem of the pump & dump phenomenon. We all do it; it’s the best way to earn good grades (i.e. what is required of us for scholarships, graduate school admissions, etc.).

            In the link at the top of this post, Ben Nelson (founder of the Minerva Project) is attempting to revolutionize the education process. The Department of Education (D.O.E.) (http://www2.ed.gov/about/offices/list/os/technology/implications-online-learning.pdf) refers to online learning extensively. In the D.O.E. document, The Ohio State University reports of academic gains made by students (and decreases in the school’s financial investments) from online learning. The Ohio State University enrolls over 2,500 students, each semester, for Introduction to Statistics. They have reported (offering 3 learning types) cost reductions, 4% reduction in student failure, withdrawals down 3% and 248 more successful completions (than traditional instruction). I think Ben Nelson is bastardizing the concept, and is a rather competent snake-oil salesman with such phrases as his school making “analytical, thinking machines” at a reduction of the cost of the elite Ivy-League schools. His model, from what I can tell, is very pump & dump / Cartesian.

            Economically, market failure may exist in the form of positive externalities. I cannot see education being a public good (because it can be excludable). I do not see asymmetric information, moral hazard and adverse selection being sources of market failure (for education). Monopoly / market failure might exist (if Ivy-League schools are only considered), but many other options exist for students; therefore, it doesn’t exist (as a source of market failure). Subsidies (e.g. Pell grants for undergraduate studies) exist for students. This is a means to correct for the externality. The unintended, non-market interdependence (i.e. externality) exists in the form of subsidies (between the exchange of tax payer and government) to benefit third-parties (i.e. qualifying students) to serve as a government investment to increase future tax-payer income (and subsequent national income / gross domestic product).