Seven reasons to hate your parents: Reason #5

The higher "education" scam 

 

by Eugen von Böhm-Bawerk 
In their quest to avoid reality, our parents tried to re-establish the medieval practice of guilds to protect their own interest from our generation

In medieval time’s workers formed associations or guilds to control the practice of their particular craft. A guild was basically a state granted privilege designed to keep potential new comers from entering and hence competing in the particular line of business. Often these guilds emerged around universities with the blessing from the monarch in return for a fee or taxes. The appearance of protective guilds traces as far back as the 13th century.

However, toward the end of the 18th and through the 19th century outspoken intellectuals such as Adam Smith, David Ricardo, John Stuart Mill and Frederic Bastiat managed to rationally argue against guilds and in favour for free trade. Even left-wing thinkers such as Jean Jacques Rousseau and Karl Marx meant the guilds system was degrading to the worker as it locked in social rank and hampered social mobility. It basically was a caste system. By the time scientific thinking and economics in particular, had matured to the extent witnessed by 19th century, no arguments could maintain the continuation of guilds. Thus, we saw guilds being abandoned one by one all over Western Europe. The abolishment of guilds is mostly forgotten when historians today try to explain the “lift-off” and industrial revolution that led to prosperity for the masses!

So why do our parents insist on re-establishing this medieval practice of protection? There can be few other explanations than that they want to keep the goodies for themselves. By making it much harder for us to enter their domain they can reap the benefits while we pay.

The process of creating guilds today takes many forms, but the most prevalent is through the educational system. In order to secure a job at a big corporation the minimum requirement is always a Bachelor`s degree, and very often a Master’s degree. Truth be told, many seek menial corporate jobs with Ph.Ds. We have witnessed all this first hand. A big corporation does not even bother to look at your application unless you hold a Master`s degree from a relatively well renowned University.

Your humble writer has spent five years obtaining a Master degree and can confirm that 90 per cent of the time spent during those five years is a complete waste of time. The diploma derives its entire value solely by functioning as a ticket where the winning price is the opportunity to apply for a job. In the process almost every student has to go deep into debt!

What is even worse is that our parents taught us it didn’t really mean much what you studied, as long as you could prove to have wasted five years of your life. That is all that is needed to secure a ticket. Most of the education today is not investments, but simply kids spending time on their hobbies. Gender studies, fashion design, theatre, history, photography, art etc. may all be interesting, but are strictly speaking only hobbies.

Nonetheless, such is the world today that without an officially recognised degree you are not eligible for any position whatsoever. But this is very close to the guild system. It forces people to take on cost and waste both time and money just to get the entrance ticket for the labour market. A market that seems increasingly designed for the privileged few.

The following charts depict this very well. Most of the so-called education in Europe is strictly speaking not education at all, but debt fuelled consumption.

Source: Eurostat,

Hobby – humanities, social science, service

Real – Science, engineering, agriculture and health care

It should come as no surprise to see delinquencies sky-rocket on the explosive growth in student loans government throw at ill-fated youngsters. Since the “education” most young people get does not prepare them for the real world, their skills are not worth much to the labour market. And if the skills are not worth much, then the yield on their investment is not enough to cover costs. This have become especially true after the bust of 2008, when many students went back to school as there were no jobs to be had and the government threw money after every person willing. Today the results are obvious: increased debt and rising defaults.

Source: Federal Reserve of New York: Report on Household Debt and Credit, own calculations

Today`s young start from the worst possible situation. They have been tricked into getting useless degrees by taking up large piles of debt with very few opportunities to actually get a job paying anything close to a decent return on the “investment” undertaken in education.

There are also other much more explicit guilds under operation today. Taxi drivers need a permit from the government to provide their service. A pharmacist cannot recommend medicines to a patient, that is the job of a doctor. A person cannot give legal advice; that is the job of the barrister and so on.

Guilds were not a good idea in the pre-1900 area, and it is not a good idea in the post-2000 area. Get rid of them!