Education: The End

Nathan Allen
6 min readSep 23, 2021

Political genius lies in extracting success even from the people’s ruin. — Aleksandr Solzhenitsyn

It’s axiomatic that ponzi and multi-level marketing schemes continually require new money, and usually this new money comes from new investors/consumers. The lever such schemes pull is information asymmetry. Those on the inside have information that ‘new money’ doesn’t have. This information asymmetry makes the swindle possible.

You can never be an experienced consumer with this much innovation…move the goalposts to “invisible stains” and you can never tell if it works. (Source.)

A significant part of consumerism similarly relies on information asymmetry, which is why products desperately push ‘the new.’ These new features — a flavor of chips or function of an iPhone — drive users to the experience. Occasionally there’s actual innovation but much of the sales process relies on information asymmetry that’s no different from multi-level marketing schemes. Much (probably most) consumer businesses profit on information symmetry. (Undeniably, some small component of consumer businesses profit off of pure need.)

It’s incredible that we still see “new” laundry detergents and razors and soaps. The overt argument is that such products are better; the functional argument is that you have no idea — at least until you buy it. And then the gamble is that you’ll be lazy and keep buying it (brand familiarity or loyalty). Tide has a new “hygienic” line of laundry detergent, which seems to suggest that other laundry detergents are unhygienic. Of course, the argument gains traction because, in any substantive, informed way and despite the corporate narrative framing (“innovative liquid detergent technology”), you really have no idea if this product is superior to anything else until you try it. And by the time you realize that it’s the same as everything else, Tide will have a new detergent, with new claims. It’s a ponzi scheme of promises.

Once a majority of the population had college degrees and thus were experienced higher-ed consumers, they curiously turned against higher ed. (Source.)

Generally, higher education behaves the same way as any other consumer product, though the information asymmetry tilts the argument toward ponzi scheme (due to the non-tangible consumer information, the vague, disparate results, the inability to normalize expected outcomes to assess whether any given student got what they paid for, etc.).

The increasing dissatisfaction with higher education is, in part, a result of the fact that a majority of current higher education consumers — the parents, not the students — are experienced consumers of higher education. In the 1950s and 1960s, a majority of college consumers (and their parents) had never purchased higher education products. Of course, they didn’t know what to expect. Without experience to rely on, their experience was heavily informed by the marketing of such colleges. They were promised X, so they largely interpreted their experienced in terms of X. If X is vague enough, the marketing can be transformed into the experience by some mystical process called “education.”

The enemy of the over-hyped, over-priced, poor product is an experienced consumer. (Source.)

This trend began changing in the 1970s, and, by the 1990s, a vast majority of students who attended college also had parents who attended college. This inevitably shifts consumer expectations (as it would with any product). Experienced consumers are far more confident in their critique of a product and typically hold the product not to a higher standard but to the standard set by the product’s marketing. If a detergent claims to miraculously remove stains, you give the marketing the benefit of the doubt. If, at first, the detergent fails to remove the stain, you perhaps blame yourself. You re-read the instructions and perhaps ask others about their experiences. After trying the detergent a few more times, repeated failure shifts your expectations and, eventually, your opinion of the product. The enemy of the over-hyped, over-priced, poor product is an experienced consumer.

The hype.

By the 1990s, in order to maintain ‘the new’ (“innovative liquid detergent technology”), colleges began to engage in “innovation” — buying students laptops, installing lazy rivers, creating an endless supply of low-effort “studies” majors. These ever-increasing bouts of desperation together with their co-conspiratorial propaganda (like the old one about college students making much more than those with only high school diplomas) were accompanied by ever-increasing prices. The sizzle may sell the steak to novice consumers, but experienced consumers have purchased this before.

The reality. (And no, it’s a celebration of consumerism, which is uncorrelated to capitalism. But just wait until the NYT discovers that this analysis applies to education, except education has never delivered the iPhone 1.) (Source.)

Ruthless incrementalism — trivial improvements hyped as major innovation — is the best possible outcome. But this only works with fundamentally good products. If you’re selling a bad product or are operating something akin to a multi-level marketing scam, ruthless incrementalism is not an option. If your growth and your pricing leverage depends on novice consumers, ruthless incrementalism does nothing to solve the problem of experienced consumers. If your ruthless incrementalism more applied to your pricing than your products, then those experienced consumers may actually revolt. Many consumer products must rely on novice consumers.

Of course, this happened in K12 too, but the dynamics were different. The first generation for whom a K12 education was normed started school after WW2. By the 1970s, their children were in K12. And the general panic over the poor quality of K12 started in … the 1970s (a panic that lasted to the early 2000s). The nation was littered with reform movements of every conceivable kind. Once those failed, the predictable response of the experienced consumer was to reject the product and seek new products. And so, weary from reform promises and cognizant of the dissonance between product and promise, K12 education consumers began to search for new products. Thus, the wave of homeschooling, charter schools, Classical Christian schools, and everything else. That revolt is a predictable response of experienced consumers aware of the unfulfilled promises of a product.

Ignoring the politics, a majority of everyone believes that higher ed is going in the wrong direction.

None of this is political. It’s simply the well-trod path of consumer cycles. Some businesses rely on novice consumers (new money) for their very existence; others rely on novice consumers for revenue growth. The first kind of business is usually a scam; the second kind is everyone else (every major industry requires revenue growth).

That’s quite some revenue growth. Gonna take a lot of hype to maintain it. (Total cost = cost of K12 education of a student. Sources, NAEP Long Term Trends, Digest of Ed Stats 2011 Table 191; US DOE; CPI adjusted to constant 2012. And the Digest.)

And the industry that requires the greatest revenue growth? Well, healthcare. But education is second. Education policy is presently about minimizing the effects of experienced consumers while maintaining avaricious revenue growth. The injection of politics into this is largely an effort to toxify and neutralize the experienced consumer.

As colleges start to suffer the throes of death, they shouldn’t examine how they’re engaging their students; rather, they should first reflect on what they did to their parents. And their parents will tell you that the stain is still there.