Education: One of the Business Diseases of the Industrial Age

Before the education system, us uneducated folk were doing just fine. In the early 1800s Noah Webster (spelling book), Walter Scott (novels) and James Fenimore Cooper (novels) sold five million or more copies each to a population of only 20 million, a staggering 80 million books each in today’s numbers. Even though their prose was complex and highly allusive, this makes them the three best selling authors in history by far.

In 1840, before compulsory education, 90% of northerners and 81% of free southerners were literate. By 1850, it was closer to 97%. In 1852, Massachusetts passed the first compulsory education act, requiring everyone to attend public schools. Nearly 80% resisted. The Barnstable parents were over run by militia who marched the children off to school under guard. The education elite justified it by saying, ” In too many instances the parents are unfit guardians of their own children. The children must be gathered up and forced into school”. Industrialists always believe people are stupid and lazy.

At the time, literacy in Massachusetts was 98%. Today national literacy fluctuates between 60% to generously 80%, depending on whose statistics you follow.

Get a High School Degree – Become a Fortune 500 CEO
A recent survey said “the school of hard knocks”, featuring CEOs who dropped out or never even attended college, was the number one source of CEOs of S&P 500 companies; not Harvard.

Drop Out of High School Or College – Get Rich
Forrester says a stunning one out of five of America’s millionaires never attended college at all, and a much higher percentage never finished. 63 of the top 400 richest Americans never finished college and half of those never bothered to start. With Bill Gates out of the equation, billionaires with only a high school diploma are worth an average $5.3 billion, while billionaires with a PHD are worth $3.2 billion, and those with a bachelor’s, $2.9 billion. Dropouts and non-attenders do the best by far, even without Bill Gates.

Beware – Finishing College Will Make You Miserable
If you measure success by personal well-being or happiness instead of money, a study has found that completing a university degree leads to lower levels of happiness for 23 to 25 year olds, compared to those 23 to 25 year olds who instead got an apprenticeship or vocational training.

Good Luck Learning Something In College
If you measure success by sheer learning, a third of college graduates gain no measurable skills during their four years in college.

High Schoolers Work The Hardest
If you measure success by productivity, only 59% of high school graduates waste time at work, compared to 66% of those with a bachelors, 65% with a masters, and taking the top spot, PHDs at 67%.

But College Grads Make a Million More…
And finally, if you measure it by salaries, high schoolers win there, too. “College graduates make a million dollars more in their lifetime than non-college graduates.” It’s an urban myth perpetuated by education junkies and an education system that needs your money to keep it afloat.

In a classic “fox watching the hen house” study, Georgetown University released a study in 2011 that the media intelligentsia loved. But the college junkies didn’t bother to look closely at the facts and how Georgetown avoided them.

Let’s Leave Out The First Seven Years
The report didn’t measure any earnings before 25 years old, lopping off seven years of earnings for high schoolers while their college counterparts are going backwards into debt. Let’s not start the clock at the beginning of the race; we won’t look as good; a ridiculous omission that invalidates the results right out of the gate.

Let’s Use Bad Math
The study also just piled up this year’s earnings 40 years in a row on top of each other, which skews the numbers in the favor of what they are selling. But after lying about the $1million number, in small print at the end, they tell you if you use the actual accumulated net worth number that any bank or financial planner uses, the lifetime gap between a college grad and a high school grad isn’t a million, it’s $593,000. Add back in the seven unreported years of income at, say, $45,000, and the gap shrinks to $224,000 in raw numbers.

Let’s Not Mention That College Costs Money
Georgetown also didn’t bother to include the cost of the education itself or the living expenses while there, or the $24,000 in average debt students are stuck with after it’s all over. Include all these and the high schoolers now make more. But we’re not done.

Let’s Assume No High Schooler Saves
The study also doesn’t bother to compute in the money saved by those not attending college. If the high schooler or their parents put even half of it in the bank instead of spending it on college, 40 years later it puts the high schooler way ahead, by hundreds of thousands.

Let’s Ignore That The Product Is Not Delivered 33% Of The Time
And then there is the rest of the untold cost story. The Georgetown study doesn’t address the inconvenient fact that 30 percent of college students who get loans drop out, with only the debt and no degree. At for-profit universities, it’s a staggering 50 percent. Any other product would be under federal investigation for non-delivery at these rates.

College is a cost in search of a benefit.

Let’s Ignore That The Highest Growth Jobs Don’t Require a Degree
And finally, Georgetown conveniently left this out – you don’t need a degree to get hired. 18 of the top 24 occupations with the largest expected job growth through 2018 will require no four-year college degree, including the top seven occupations on the list. This doesn’t even include the idea of starting your own company or working for yourself – that’s #21. Most of the remaining six highest-growth occupations, which are at the bottom of the list, will still accept people without degrees who have learned the necessary skills in other ways.

Industrialists Run The Schools
Industrialists run our school systems. Just like Wall Street titans, these are people who want to dominate and be the only players in town. They want to keep a closed market, they resist change and progress, and they see innovators as a “competition” and a threat. Educators fulfill at least four of the six attributes of an Industrialist, and you only need to fulfill one of them to wear the label “Industrialist”.

Fortunately Their Time is Very Limited
I predict the university system and the compulsory education system, as we know them today, will largely be dismantled in the next five decades, and replaced with “education technology”, locally, in the homes, and online. It could even happen well inside 15 years. It’s already well on its way.

The Industrial Age is receding behind us like water receding behind a broken dam. And as it does, the legacy school systems that were developed specifically to feed the Factory System are being exposed below the water line. They are rusty and full of holes, and in most cases simply resting on the bottom, unable to move.

The compulsory education system and most of the universities were boats built for another time, and the farther we get from the Industrial Age, the more obvious it becomes. As it does, the pressure on one of the last giant monopolies of the Industrial Age will grow, until once again the small and local learners take over and rebuild the great learning opportunities that have alluded us ever since we made education mandatory.

This is a summary of a chapter from Chuck’s new book, “Why Employees Are ALWAYS a Bad Idea (And Other Business Diseases of the Industrial Age)”. Click here to pre-order this new ground breaking book at a discount on IndieGoGo.com until July 28.