Here’s Tyler Cowen on American comparative advantage. It’s short, so I’ll quote it in full:
- A sobering thought (Marginal Revolution)
The United States circa 2012 is one of the most productive economies of all time, arguably the most productive if you take into account size and diversification (rules out Norway, etc.). Internationally speaking, in the richest and most productive global economy of all time, which is our most competitive sector?
Hollywood? Maybe, but it could well be higher education. Students from all over the world want to go to U.S. higher education. If we had nicer immigration authorities, this advantage would be all the more pronounced.
In other words, I work in what is perhaps the most competitive and successful sector in the most competitive and successful economy of all time.
And yet what I see around me is a total, total mess. And I believe my school to be considerably above average in terms of how well it is run.
One way to look at this is that one of the most critical sectors in the U.S. economy is built like a house of cards — “a total, total mess” ready to fall apart at the slightest disturbance. Another is to suspect that there’s a lot of low-hanging fruit available in the higher-ed sector, if it can be this successful while being this foxtrot uniform.
In a related note, Arnold Kling points us to a TechCrunch report on the Minerva Institute, an “online Ivy League university” startup that’s getting a bunch of high-profile funding and press. He comments:
The goal seems to be to compete with Harvard in terms of arrogance and exclusivity. Is there really a market for a college that tries to make people feel even more smug than Harvard alumni?
Seems to me that there’s a lot of demand for smug, so, yeah. If Minerva lets people play Ivy League status games without having to fuck around with the INS to get an education visa, then I imagine they’ll reach a lot of people.
I wonder if my mental model of a higher-ed bubble needs refining. Perhaps the bubble is more specific — physical (vs. online) four-year degrees at middle-of-the-road institutions financed by easy federally-backed non-dischargeable debt. Incumbent effects and regulatory capture being what they are, what do you want to bet that when that bubble bursts in a few years, we’ll see a lot of finger-pointing at private and online colleges?