Education

by Mr. Cheap

In this post I’m trying to get my arms around some VERY BIG concepts. Feel free to comment and disagree, but please realize that with 1,000 words to work with I can’t cover every perspective to the depth I might otherwise wish to. I’ll also acknowledge my bias towards formal education:  I have 9 years of post secondary and am in the middle of a PhD program.

Most people believe that education, or at least knowledge, is a good thing. Even those who seem to embrace ignorance believe they have a commitment to knowledge, just of a different nature.

Gradations of Knowledge

In my opinion there is massive differences in the value of various pieces of knowledge. How to make penicillin is far more valuable than knowing who won the 1957 World Series. Bad knowledge is also possible:

  • Magic crystals are a better treatment for breast cancer than modern medicine
  • Killing people by suicide will get me 72 perpetual virgins in the afterlife
  • There are such things as high yielding and safe investments.

are all examples of dangerous nonsense. Believing this sort of thing can get you killed or ruin your life. An education that results in the belief of dangerous nonsense is harmful. Even those who peddle dangerous nonsense will argue that there are gradations of knowledge (and that the information they’re selling is of higher quality than what you’d get elsewhere).

How to select an education that will result in the greatest increase in the VALUE of knowledge is therefore key, rather than just blindly pursuing “education”. The paradox of this is that when you’re seeking the education, you inherently don’t possess the knowledge to evaluate it, which is how people get sucked into dangerous nonsense.

Experience

Luckily, we’re all constantly self-educating (learning) simply by surviving another day on the planet. I have an uncle who can look at a couple interacting and read if they’re romantically interested in one another or not. This really impressed me when I was in my early 20’s. Now I realize that if you date enough and live long enough people can read this sort of interpersonal interaction easier than reading a book. I’m amazed at how clueless high school students are about this (a girl will almost be drooling over a guy and he won’t realize it).

While I was writing this post, Firefox crashed on me and I lost 700 words. I’ve learned to save more often in the future when I’m working on posts.

Experience is a dear teacher, but fools will learn at no other.
Benjamin Franklin

The problem with learning by experience is that it takes a long time. The value of an education is to learn the lessons of other people’s experiences faster than it would be take to go through those experiences yourself. I can learn the results and importance of Mendel’s pea pod work without actually breeding 29,000 pea plants.

Limits to Formal Education

The economic value of formal education has been shown. This doesn’t mean all education is a good investment. Scam trade schools are a particularly odious way to waste people’s time and money. While established university and colleges are businesses more than they acknowledge (how many businesses solicit donations from previous customers?), they also have to provide value to continue getting students in the future.

In my opinion, there are two valid reasons for paying for an education: to increase earning power or because you’re passionately interested in the subject. A minimum amount of passion is needed to get through an education (and to work in that field). People who can find an education that accomplishes both for them are particularly fortunate.

I think it’s valid to go into debt for an education that increases your earning power, but that studying something you’re passionate about should be done with money you’ve already earned. I’d happily use money I’d saved to pay for a child’s liberal arts education if they understood the limited impact it would have on their earning (and the massive impact it would probably have on their life). I’d be reluctant to go into debt for this and would discourage any young people from doing so.

Just because something increases your earning power doesn’t mean paying any price is worthwhile. If it’s possible to get a comparable education at a local school while living at home instead of a far more expensive education living away from home, the local school would obviously have the higher return on investment. Contrasting the cost and expected return needs to be done carefully by the potential student.

Like any investment, it’s important to investigate what you’re buying (the school and program). One heuristic would be an inverse correlation between the quality of education and the amount of advertising (when have you seen an ad for Harvard Law or MIT Engineering?). Another would be an inverse correlation between the cost and the value.

Autodidacticism

I love autodidacts and, like many bloggers, am myself one in terms of personal finance (I’ve never taken a business course and have only taken one economics course). Certainly autodidacts can learn much faster than from experience as they read books on the subject and teach themselves. It’s a great hobby and very occasionally makes a massive contribution to a field of knowledge (sometimes a change that only an outsider would be capable of making). There are a number of problems with this form of self-education.

It’s possible to spend massive amounts of time on incorrect or irrelevant information. Cranks can construct an elaborate, impenetrable field with their own vocabulary and with sufficient persistence ignore advice that what they’re doing is a nonsensical waste of time. During the dot-com boom a number of startup were created around ideas that anyone with a computer science background could have shown to be NP-complete (and therefore there is no known way to efficiently determine a solution).

On the flip side, it’s also often the case that autodidacts move from one thing that’s interesting to the next, and avoid learning a complicated, but fundamental, part of the field that’s important to progress to higher level understanding. This is a more enjoyable form of learning, but naturally tends towards a broad, shallow understanding of the field (think Cliff Clavin). It would be a VERY rare person who would be capable to teaching themselves advanced mathematics without someone providing a curriculum to ensure they had mastered all prerequisites.

I continually get annoyed when I read a writer making the blanket statement that education is good. I would agree with the statement generally, but I think it is more nuanced than it is typically presented.

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{ 8 comments… read them below or add one }

1 Melanie Reformed Spender

Although many people do not put a liberal arts education to good use, that’s no reason to assume that it cannot increase your earning power. A liberal arts education can be the first step toward a career in law, education, publishing, or broadcasting for example. They key is having a plan and knowing your future field (is a bachelor required, is grad school, where are the jobs, etc.?).

Of my liberal arts classmates, the ones who haven’t managed to find good-paying jobs related to their field of study are the ones who had no idea why they were studying it to begin with.

2 Mr. Cheap

Melanie: Yes, I’d agree that it’s worthwhile to go into debt for a liberal arts education that was part of the path to a concrete goal that would increase earning power. I still might encourage a student, who wanted to study say Law, to consider doing a more practical program (which could also lead to law) in case they decide not to continue. I was thinking of students like your classmates with no idea why they were studying when I wrote that.

As you say, a plan and knowing your future field is key.

3 Tiny Potato

“Like any investment, it’s important to investigate what you’re buying ”

A great point, since many people view education as an investment. It’s very important for individuals looking to increase their earning potential (through further education) to talk to others who have completed the program before and employers about how desirable a particular program is.

Regarding the inverse correlation between cost and value, I’m starting to find that many professional certifications and associations are falling into the trap of becoming “money grabs” (and diluting the value of the certification). Perhaps that’s a topic for a future post?

4 Thicken My Wallet

Thanks for the link. I agree with you that the point is more nuanced than education is good. I always recoil when I read the “degrees that make you the most money” articles. You need to like what you are studying- there needs to be a connection between your heart and your head.

5 Sam

I agree with what you said about autodidacticism and the disadvantages you pointed out such as moving from one topic to the next, and skipping on what the fundamentals of the subject. I can relate with this, and sometimes end up thinking of getting a formal education in web design instead of just trying to learn things all on my own.

6 Robert

One problem that you ignore, like most people, is the difference between education and training. Melanie alluded to it, but I would like to clarify. Going to school, whether a trade school or university, as job training isn’t really an education (although it is an investment). It’s training, and it’s something that corporations appreciate because individuals subsidize their employee development. Education includes learning to think, to reason and to solve real problems, something that seems to be of diminishing focus in university. The liberal arts contain at least as much, if not more, real education than math and science degrees. Unfortunately, certain programs, such as the MBA, contain much disinformation in the form of false assumptions and “unreal” problem solving. If a person is truly interested in education (and not only training), there must be a certain level of autodidacticism, almost by definition. After all, education can’t be instilled from the outside, only developed internally.

7 youngandthrifty

“Education can’t be instilled from the outside, only developed internally”.

So true!

I agree that education is meant as an investment toward future returns. I personally would not go back to school for another post secondary degree that wasn’t relevant to advancement in my field. =)

8 David

Saw an ad for Harvard today on facebook. http://www.extension.harvard.edu/continuing-education/environmental-sustainability/facebook.jsp

I guess their reputation doesn’t cover all of their programs =).

Disclaimer: I know, I know, the extension school isn’t the same thing as the law school.

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