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As an economist, I look at it this way: Every profession produces both private returns — the fruits of labor that a person enjoys — and social returns — those that society enjoys. If I set up a shop on Etsy selling photographs, my private returns may be defined as the revenue I generate. The social returns are the pleasure that my photographs provide to my customers.

People in some professions provide a surplus of social returns. Inventors are a good example. Take the modern semiconductor. It made possible countless other inventions — nearly every piece of computing we interact with today.

countries suffer when talented people become what we economists call “rent seekers.” Instead of creating wealth, rent seekers simply transfer it — from others to themselves.

Job titles don’t tell you whether someone is primarily a rent seeker. A lawyer who helps draft precise contracts may actually be helping the wheels of commerce turn, and so creating wealth. But trial lawyers in a country with poorly functioning tort systems may simply be extracting rents: They can make money by pursuing frivolous lawsuits.

In this respect, finance is a vexing industry.

arbitrage is valuable only to a point. It has a gold rush element with prospectors racing to get to the gold first. While finding gold has value, finding gold before someone else does is mainly rent-seeking.

Booth, have shown in a study how extreme this financial gold rush has become in at least one corner of the financial world. From 2005 to 2011, they found that the duration of arbitrage opportunities in the Chicago Mercantile Exchange and the New York Stock Exchange declined from a median of 97 milliseconds to seven milliseconds

correcting mispricing at this speed is unlikely to have any real social benefit: What serious investment is being guided by prices at the millisecond level? Short-term arbitrage, while lucrative, seems to be mainly rent-seeking.

This kind of rent-seeking behavior is widespread in other parts of finance. Banks sometimes make money by using hidden fees rather than adding true value. Debt collection agencies may use unscrupulous practices. Lenders to poor people buying used cars can make profits with business models that encourage high rates of default — making money by taking advantage of people’s overconfidence about what cars they can afford and by repossessing vehicles. These kinds of practices may be both lucrative — and socially pernicious.

The poor face a tremendous problem every day juggling money and expenses. Their pay often fluctuates week by week, yet they must pay rent no matter what they earn. Right now, poor people often use expensive payday loans or must incur expensive late fees.

Surely we could do better. Finding ways to smooth out these shocks is the kind of important, socially valuable problem that finance could solve. Many other crucial social problems have finance at their root, from saving for college to insuring unemployment risk.

Instead of finding clever ways to hide fees, banking innovations could solve these real and important problems.

So how should I feel about my students going into finance? I hope they realize that they have the potential to do great good and not simply make money. It may not be how the industry is structured now, but idealism and inventiveness are two of the best traits of youth, and finance especially could use them.

Economies dominated by hedge financing—that is, those with strong cashflows and low debt levels—are the most stable. When speculative and, especially, Ponzi financing come to the fore, financial systems are more vulnerable. If asset values start to fall, either because of monetary tightening or some external shock, the most overstretched firms will be forced to sell their positions. This further undermines asset values, causing pain for even more firms. They could avoid this trouble by restricting themselves to hedge financing. But over time, particularly when the economy is in fine fettle, the temptation to take on debt is irresistible. When growth looks assured, why not borrow more? Banks add to the dynamic, lowering their credit standards the longer booms last. If defaults are minimal, why not lend more? Minsky’s conclusion was unsettling. Economic stability breeds instability. Periods of prosperity give way to financial fragility.

Minsky’s insight might sound obvious. Of course, debt and finance matter. But for decades the study of economics paid little heed to the former and relegated the latter to a sub-discipline, not an essential element in broader theories.

Minsky was a maverick. He challenged both the Keynesian backbone of macroeconomics and a prevailing belief in efficient markets.

t Messrs Hicks and Hansen largely left the financial sector out of the picture, even though Keynes was keenly aware of the importance of markets. To Minsky, this was an “unfair and naive representation of Keynes’s subtle and sophisticated views”. Minsky’s financial-instability hypothesis helped fill in the holes.

His challenge to the prophets of efficient markets was even more acute. Eugene Fama and Robert Lucas, among others, persuaded most of academia and policymaking circles that markets tended towards equilibrium as people digested all available information. The structure of the financial system was treated as almost irrelevant

In recent years, behavioural economists have attacked one plank of efficient-market theory: people, far from being rational actors who maximise their gains, are often clueless about what they want and make the wrong decisions.

But years earlier Minsky had attacked another: deep-seated forces in financial systems propel them towards trouble, he argued, with stability only ever a fleeting illusion.

Investors were faster than professors to latch onto his views. More than anyone else it was Paul McCulley of PIMCO, a fund-management group, who popularised his ideas. He coined the term “Minsky moment” to describe a situation when debt levels reach breaking-point and asset prices across the board start plunging. Mr McCulley initially used the term in explaining the Russian financial crisis of 1998. Since the global turmoil of 2008, it has become ubiquitous. For investment analysts and fund managers, a “Minsky moment” is now virtually synonymous with a financial crisis.

it would be a stretch to expect the financial-instability hypothesis to become a new foundation for economic theory. Minsky’s legacy has more to do with focusing on the right things than correctly structuring quantifiable models. It is enough to observe that debt and financial instability, his main preoccupations, have become some of the principal topics of inquiry for economists today

As Mr Krugman has quipped: “We are all Minskyites now.”

Financing for the top 35 companies involved in tar sands — one of the most environmentally destructive fossil fuels to extract and process — decreased 27% since 2019, to $16 billion. 

“The policies and commitments that banks have put out so far give us no reason to believe they’re going to make these deep emissions cuts that the science demands,”

This way of doing business rewards huge Internet platforms, since ads that are worth so little can support only companies with hundreds of millions of users.

Ad-based businesses distort our online interactions. People flock to Internet platforms because they help us connect with one another or the world’s bounty of information — a crucial, valuable function. Yet ad-based financing means that the companies have an interest in manipulating our attention on behalf of advertisers, instead of letting us connect as we wish.

Many users think their feed shows everything that their friends post. It doesn’t. Facebook runs its billion-plus users’ newsfeed by a proprietary, ever-changing algorithm that decides what we see. If Facebook didn’t have to control the feed to keep us on the site longer and to inject ads into our stream, it could instead offer us control over this algorithm.

we’re not starting from scratch. Micropayment systems that would allow users to spend a few cents here and there, not be so easily tracked by all the Big Brothers, and even allow personalization were developed in the early days of the Internet. Big banks and large Internet platforms didn’t show much interest in this micropayment path, which would limit their surveillance abilities. We can revive it.

What to do? It’s simple: Internet sites should allow their users to be the customers. I would, as I bet many others would, happily pay more than 20 cents per month for a Facebook or a Google that did not track me, upgraded its encryption and treated me as a customer whose preferences and privacy matter.

Many people say that no significant number of users will ever pay directly for Internet services. But that is because we are misled by the mantra that these services are free. With growing awareness of the privacy cost of ads, this may well change. Millions of people pay for Netflix despite the fact that pirated copies of many movies are available free. We eventually pay for ads, anyway, as that cost is baked into products we purchase

A seamless, secure micropayment system that spreads a few pennies at a time as we browse a social network, up to a preset monthly limit, would alter the whole landscape for the better.

Many nonprofits and civic groups that were initially thrilled about their success in using Facebook to reach people are now despondent as their entries are less and less likely to reach people who “liked” their posts unless they pay Facebook to help boost their updates.

If even a quarter of Facebook’s 1.5 billion users were willing to pay $1 per month in return for not being tracked or targeted based on their data, that would yield more than $4 billion per year — surely a number worth considering.

Mr. Zuckerberg has reportedly spent more than $30 million to buy the homes around his in Palo Alto, Calif., and more than $100 million for a secluded parcel of land in Hawaii. He knows privacy is worth paying for. So he should let us pay a few dollars to protect ours.

“So money equals speech?” I asked. No, he said. “But nobody speaks very effectively without money. If you limit how much you spend on speech, you are also limiting speech.”

Penniman makes a distinction between “ideological givers” — donors like the Koch brothers, motivated by the chance to get like-minded people elected — and “transactional givers,” those who donate because they expect something concrete in return. “These are folks who give just as generously to both sides of the aisle.”

It can be subtle, this influence. “Maybe it’s the amendment that does not get introduced in committee because the congressman knows that it is not in sync with the desires of his money patrons,”

it can be not so subtle, too. “On any given Wednesday night in Washington,” says Nick Penniman, the executive director of Issue One, which is dedicated to reducing the influence of money in politics, “you’ll have a member of, say, the finance committee, standing in the board room of a lobbyist’s office, surrounded by bank lobbyists. At some point, someone will hand a staffer an envelope with the checks in it, and the congressman will have raised $100,000 in 45 minutes. And they know exactly who was responsible for putting it together, and whose phone calls therefore need to be returned.”

Big contributors want something for their money. At its most benign, they want access, the ability to have their side heard whenever there is the possibility that legislation might affect their industry. Far less benignly, they want more — they want to know that their bidding will be done.

“Big money wins regardless of which party wins the election.”

There are two other reasons big money is corrosive to our politics.

One is that the need to raise money has become close to all-consuming.

“It’s a never-ending hustle. You get elected to this august body to fix problems, and for the privilege, you find yourself on the phone in a cubicle, dialing for dollars.”

the constant need to raise money means that “you don’t have the time for the kind of personal relationships that so many of us built up over time.” When people don’t know each other, it is a lot easier to think the worst of them. Polarization is the result.

Finally, there is the effect of big money on the rest of us. The public, Sarbanes believes, knows full well the insidious influence of money in politics. “The rational voter will say to himself, why should I bother voting if the person I’m voting for is a captive of special interests,

how does Ira Glasser react to these tales of corruption? He doesn’t deny them. “Of course there is corruption,” he says. “Of course there is undue influence of money.” But he doesn’t believe that those problems are as great as they are made out to be, or that they trump his First Amendment concerns. “The question is whether the remedy does more harm than good and violates the constitution,”

Quite apart from the “unbalanced power” of the financial sector, and the tendency of a super-sized financial sector to cause increasingly bad global financial crashes, excessive financialization leads to resources being misallocated. “In many of the financial sector’s segments that have grown fastest since deregulation—like investment banks—the transactions are primarily zero-sum.”

However in times of rapid technological transformation like today, the role of the economic priesthood in protecting its own interests can become a massively destabilizing.

Thus we know from the history of the last couple of hundred years that in times of rapid technological transformation, the financial sector tends to become disconnected from the real economy

This has occurred a number of times in the last few hundred years, including the Canal Mania (England—1790s), the Rail Mania (England—1840s), the Gilded Age (US: 1880s—early 1900s) the Roaring Twenties (US—1920s) and the Big Banks of today.

Getting to safety is not made any easier by the fact the modern economic priesthood—the managers of large firms and the banks—has, like their ancient Egyptian forbears, found ways to participate in the casino economy and benefit from “making money out of money”, even as the economy as a whole suffers.  As Upton Sinclair wrote, “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.

Just as the ancient Egyptian economic priesthood clung to power as the economy stagnated, so today the economic priesthood shows no signs of relinquishing their gains or their power. The appetite and expectation of extraordinary returns is still there.

“Corporate chieftains rationally choose financial engineering—debt-financed share buybacks, for example—over capital investment in property, plants and equipment. Financial markets reward shareholder activism. Institutional investors extend their risk parameters to beat their benchmarks… But real economic growth—averaging just a bit above 2 percent for the fifth year in a row—remains sorely lacking.”

As a result, the economy remains in the “Great Stagnation”(Tyler Cowen), also known as “the Secular Stagnation (Larry Summers). It is running on continuing life support from the Federal Reserve. Large enterprises still appear to be profitable. The appearance, though not the reality, of economic well-being has been sufficient to make the stock market soa

Just as no change was possible in ancient Egyptian society so long as the economic priesthood colluded to preserve the status quo, so the excesses and prevarications of the Financial Sector will continue so long as the regulators remain its cheerleaders.

Just listen to the chair of the Securities and Exchange Commission (SEC), Mary Jo White at Stanford University Rock Center for Corporate Governance speaking to directors. In her speech, she makes no secret of her view that the overall corporate arrangements are sound. The job of the SEC, as outlined in the speech, is to find the odd individual who might be doing something wrong. The idea that the large-scale activities of the major banks might be socially corrosive is not even alluded.

Thus in times of transformational technology, there is a huge expansion of investment, driven by the financial sector. Wealthy investors begin to expect outsized returns and so there is over-investment. The resulting bubbles in due course burst

Just as in ancient Egypt, no progress was possible so long as the myths and rituals of the economic priesthood and their offerings to the gods were widely accepted as real indicators of what was going on, so today no progress is possible so long as the myths and rituals of the modern economic priesthood still has a pervasive hold of people’s minds

In the modern economy, the myths and rituals of the economic priesthood are built on the notion that the purpose of a firm is to maximize shareholder value and the notion that if the share price is increasing, things are going well. These ideas are the intellectual underpinnings of the zero-sum activities of the financial sector for “making money out of money”, by whatever means possible

Like the myths and rituals of the priests of ancient Egypt, shareholder value theory is espoused with religious overtones. Shareholder value, which even Jack Welch has called “the dumbest idea in the world,” remains pervasive in business, even though it is responsible for massive offshoring of manufacturing, thereby destroying major segments of the US economy, undermining US capacity to compete in international markets and killing the economic recovery.

If instead society decides that the financial sector should concentrate on its socially important function of financing the real economy and providing financial security for an ever wider circle of citizens and enterprises, we could enjoy an era of growth and lasting prosperity.

Cognitive errors result from incomplete information or the inability to analyze the information that is available. These cognitive errors can be classified as either belief perseverance or processing errors

Processing errors occur when an individual fails to manage and organize information properly, which can be due in part to the mental effort required to compute and analyze data.

Conservatism bias, where people emphasize original, pre-existing information over new data.

Base rate neglect is the opposite effect, whereby people put too little emphasis on the original information. 

Confirmation bias, where people seek information that affirms existing beliefs while discounting or discarding information that might contradict them.

Anchoring and Adjustment happens when somebody fixates on a target number, such as the result of a calculation or valuation.

Hindsight bias occurs when people perceive actual outcomes as reasonable and expected, but only after the fact.

Sample size neglect is an error made when people infer too much from a too-small sample size.

Mental accounting is when people earmark certain funds for certain goals and keep them separate. When this happens, the risk and reward of projects undertaken to achieve these goals are not considered as an overall portfolio and the effect of one on another is ignored.

Availability bias, or recency bias skews perceived future probabilities based on memorable past events

Framing bias is when a person will process the same information differently depending on how it is presented and received.

Cognitive errors in the way people process and analyze information can lead them to make irrational decisions which can negatively impact business or investing decisions

. These information processing errors could have arisen to help primitive humans survive in a time before money or finance came into existence.

Given our decentralized system of government, I could reduce the number of dangerous firearms only by persuading the states to enact uniform laws totally prohibiting the ownership, possession and sale of all automatic and semiautomatic weapons while the national government banned the importation of such weapons.

The fundamental problem was the ready availability of high-powered weapons, which enabled people to convert their murderous impulses into mass killing.

I made clear that my government was willing to hold a nationwide referendum to alter the Australian Constitution and give the federal government constitutional power over guns. Such a referendum would have been expensive and divisive, but it would have passed. And all state governments knew this.

today, there is a wide consensus that our 1996 reforms not only reduced the gun-related homicide rate, but also the suicide rate. The Australian Institute of Criminology found that gun-related murders and suicides fell sharply after 1996. The American Journal of Law and Economics found that our gun buyback scheme cut firearm suicides by 74 percent. In the 18 years before the 1996 reforms, Australia suffered 13 gun massacres — each with more than four victims — causing a total of 102 deaths. There has not been a single massacre in that category since 1996. Few Australians would deny that their country is safer today as a consequence of gun control.

According to the S.E.C.’s complaint, by April 2010 Mr. Davis was in “desperate” financial straits. He owed the I.R.S. $78,000. His brokerage account was heavily margined, and he had run up tens of thousands in credit card debt. He owed $550,000 to one of his investment funds.

The government has shed little light on Mr. Davis’s motive, other than that he needed money. The S.E.C. said he did little to adjust his expensive lifestyle after leaving Credit Suisse in 2001. He experienced a sharp drop in his income, went through an expensive divorce soon after and suffered big investment reversals during the 2008 financial crisis.

Mr. Davis is hardly alone in trying to maintain the illusion of wealth and prosperity even as his personal finances veered out of control.

But after a lifetime of success, Mr. Davis was too proud and too embarrassed to admit any of this and turn to his wealthy friends and fellow golf club members, though many would have been willing to help, according to a person close to him

“Some people would risk anything rather than suffer that kind of personal embarrassment,” Professor Coffee said. “And once you’ve decided you’re willing to risk anything, you can get into deep, deep trouble.”

Scalia declared that “a person who is required to put his name to a document is much less likely to lie than one who can lie anonymously.”Scalia concluded: “I can imagine no reason why an anonymous leaflet is any more honorable, as a general matter, than an anonymous phone call or an anonymous letter. It facilitates wrong by eliminating accountability, which is ordinarily the very purpose of the anonymity.”

With a fortune estimated at $12.5 billion, Dr. Simons now runs a tidy universe of science endeavors, financing not only math teachers but hundreds of the world’s best investigators, even as Washington has reduced its support for scientific research. His favorite topics include gene puzzles, the origins of life, the roots of autism, math and computer frontiers, basic physics and the structure of the early cosmos.

In time, his novel approach helped change how the investment world looks at financial markets. The man who “couldn’t write programs” hired a lot of programmers, as well as physicists, cryptographers, computational linguists, and, oh yes, mathematicians. Wall Street experience was frowned on. A flair for science was prized. The techies gathered financial data and used complex formulas to make predictions and trade in global markets.

Working closely with his wife, Marilyn, the president of the Simons Foundation and an economist credited with philanthropic savvy, Dr. Simons has pumped more than $1 billion into esoteric projects as well as retail offerings like the World Science Festival and a scientific lecture series at his Fifth Avenue building. Characteristically, it is open to the public.

On a wall in Dr. Simons’s office is one of his prides: a framed picture of equations known as Chern-Simons, after a paper he wrote with Shiing-Shen Chern, a prominent geometer. Four decades later, the equations define many esoteric aspects of modern physics, including advanced theories of how invisible fields like those of gravity interact with matter to produce everything from superstrings to black holes.

“He’s an individual of enormous talent and accomplishment, yet he’s completely unpretentious,” said Marc Tessier-Lavigne, a neuroscientist who is the president of Rockefeller University. “He manages to blend all these admirable qualities.”

Forbes magazine ranks him as the world’s 93rd richest person — ahead of Eric Schmidt of Google and Elon Musk of Tesla Motors, among others — and in 2010, he and his wife were among the first billionaires to sign the Giving Pledge, promising to devote “the great majority” of their wealth to philanthropy.

For all his self-deprecations, Dr. Simons does credit himself with a contemplative quality that seems to lie behind many of his accomplishments.“I wasn’t the fastest guy in the world,” Dr. Simons said of his youthful math enthusiasms. “I wouldn’t have done well in an Olympiad or a math contest. But I like to ponder. And pondering things, just sort of thinking about it and thinking about it, turns out to be a pretty good approach.”

In the nations that lead the international rankings — Singapore, Japan, South Korea, Finland, Canada — teachers are drawn from the top third of college graduates, rather than the bottom 60 percent as is the case in the United States. Training in these countries is more rigorous, more tied to classroom practice and more often financed by the government than in America. There are also many fewer teacher-training institutions, with much higher standards.

By these criteria, American education is a failed profession. There is no widely agreed-upon knowledge base, training is brief or nonexistent, the criteria for passing licensing exams are much lower than in other fields, and there is little continuous professional guidance. It is not surprising, then, that researchers find wide variation in teaching skills across classrooms; in the absence of a system devoted to developing consistent expertise, we have teachers essentially winging it as they go along, with predictably uneven results.

Teaching requires a professional model, like we have in medicine, law, engineering, accounting, architecture and many other fields. In these professions, consistency of quality is created less by holding individual practitioners accountable and more by building a body of knowledge, carefully training people in that knowledge, requiring them to show expertise before they become licensed, and then using their professions’ standards to guide their work.

Teachers in leading nations’ schools also teach much less than ours do. High school teachers provide 1,080 hours per year of instruction in America, compared with fewer than 600 in South Korea and Japan, where the balance of teachers’ time is spent collaboratively on developing and refining lesson plans

These countries also have much stronger welfare states; by providing more support for students’ social, psychological and physical needs, they make it easier for teachers to focus on their academic needs.

hese elements create a virtuous cycle: strong academic performance leads to schools with greater autonomy and more public financing, which in turn makes education an attractive profession for talented people.

In America, both major teachers’ unions and the organization representing state education officials have, in the past year, called for raising the bar for entering teachers; one of the unions, the American Federation of Teachers, advocates a “bar exam.”

Ideally the exam should not be a one-time paper-and-pencil test, like legal bar exams, but a phased set of milestones to be attained over the first few years of teaching. Akin to medical boards, they would require prospective teachers to demonstrate subject and pedagogical knowledge — as well as actual teaching skill.

We let doctors operate, pilots fly, and engineers build because their fields have developed effective ways of certifying that they can do these things. Teaching, on the whole, lacks this specialized knowledge base; teachers teach based mostly on what they have picked up from experience and from their colleagues.

other fields spend 5 percent to 15 percent of their budgets on research and development, while in education, it is around 0.25 percent

Education-school researchers publish for fellow academics; teachers develop practical knowledge but do not evaluate or share it; commercial curriculum designers make what districts and states will buy, with little regard for quality.

Early- to mid-career teachers need time to collaborate and explore new directions — having mastered the basics, this is the stage when they can refine their skills. The system should reward master teachers with salaries commensurate with leading professionals in other fields.

research suggests that the labels don’t matter — there are good and bad programs of all types, including university-based ones. The best programs draw people who majored as undergraduates in the subjects they wanted to teach; focus on extensive clinical practice rather than on classroom theory; are selective in choosing their applicants rather than treating students as a revenue stream; and use data about how their students fare as teachers to assess and revise their practice.

Mr. Trachtenberg understood the centrality of the university as a physical place. New structures were a visceral sign of progress. They told visitors, donors and civic leaders that the institution was, like beams and scaffolding rising from the earth, ascending. He added new programs, recruited more students, and followed the dictate of constant expansion.

the American research university had evolved into a complicated and somewhat peculiar organization. It was built to be all things to all people: to teach undergraduates, produce knowledge, socialize young men and women, train workers for jobs, anchor local economies, even put on weekend sports events. And excellence was defined by similarity to old, elite institutions. Universities were judged by the quality of their scholars, the size of their endowments, the beauty of their buildings and the test scores of their incoming students.

John Silber embarked on a huge building campaign while bringing luminaries like Saul Bellow and Elie Wiesel on board to teach and lend their prestige to the B.U. name, creating a bigger, more famous and much more costly institution. He had helped write a game plan for the aspiring college president.

GWU is, for all intents and purposes, a for-profit organization. Best example: study abroad. Their top program, a partnering with Sciences Po, costs each student (30 of them, on a program with 'prestige' status?) a full semester's tuition. It costs GW, according to Sciences Po website, €1000. A neat $20,000 profit per student (who is in digging her/himself deeper and deeper in debt.) Moreover, the school takes a $500 admin fee for the study abroad application! With no guarantee that all credits transfer. Students often lose a partial semester, GW profits again. Nor does GW offer help with an antiquated, one-shot/no transfers, tricky registration process. It's tough luck in gay Paris.Just one of many examples. Dorms with extreme mold, off-campus housing impossible for freshmen and sophomores. Required meal plan: Chick-o-Filet etc. Classes with over 300 students (required).This is not Harvard, but costs same.Emotional problems? Counselors too few. Suicides continue and are not appropriately addressed. Caring environment? Extension so and so, please hold.It's an impressive campus, I'm an alum. If you apply, make sure the DC experience is worth the price: good are internships, a few colleges like Elliot School, post-grad.GWU uses undergrad $$ directly for building projects, like the medical center to which students have NO access. (Student health facility is underfunded, outsourced.)Outstanding professors still make a difference. But is that enough?

Mr. Trachtenberg, however, understood something crucial about the modern university. It had come to inhabit a market for luxury goods. People don’t buy Gucci bags merely for their beauty and functionality. They buy them because other people will know they can afford the price of purchase. The great virtue of a luxury good, from the manufacturer’s standpoint, isn’t just that people will pay extra money for the feeling associated with a name brand. It’s that the high price is, in and of itself, a crucial part of what people are buying.

Mr. Trachtenberg convinced people that George Washington was worth a lot more money by charging a lot more money. Unlike most college presidents, he was surprisingly candid about his strategy. College is like vodka, he liked to explain.

The Absolut Rolex plan worked. The number of applicants surged from some 6,000 to 20,000, the average SAT score of students rose by nearly 200 points, and the endowment jumped from $200 million to almost $1 billion.

The university became a magnet for the children of new money who didn’t quite have the SATs or family connections required for admission to Stanford or Yale. It also aggressively recruited international students, rich families from Asia and the Middle East who believed, as nearly everyone did, that American universities were the best in the world.

U.S. News & World Report now ranks the university at No. 54 nationwide, just outside the “first tier.”

The watch and vodka analogies are correct. Personally, I used car analogies when discussing college choices with my kids. We were in the fortunate position of being able to comfortably send our kids to any college in the country and have them leave debt free. Notwithstanding, I told them that they would be going to a state school unless they were able to get into one of about 40 schools that I felt, in whatever arbitrary manner I decided, that was worth the extra cost. They both ended up going to state schools.College is by and large a commodity and you get out of it what you put into it. Both of my kids worked hard in college and were involved in school life. They both left the schools better people and the schools better schools for them being there. They are both now successful adults.I believe too many people look for the prestige of a named school and that is not what college should be primarily about.

In 2013, only 14 percent of the university’s 10,000 undergraduates received a grant — a figure on a par with elite schools but far below the national average. The average undergraduate borrower leaves with about $30,800 in debt.

When I talk to the best high school students in my state I always stress the benefits of the honors college experience at an affordable public university. For students who won't qualify for a public honors college. the regular pubic university experience is far preferable to the huge debt of places like GW.

Carey would do well to look beyond high ticket private universities (which after all are still private enterprises) and what he describes as the Olympian heights of higher education (which for some reason seems also to embitter him) and look at the system overall . The withdrawal of public support was never a policy choice; it was a political choice, "packaged and branded" as some tax cutting palaver all wrapped up in the argument that a free-market should decide how much college should cost and how many seats we need. In such an environment, trustees at private universities are no more solely responsible for turning their degrees into commodities than the administrations of state universities are for raising the number of out-of-state students in order to offset the loss of support from their legislatures. No doubt, we will hear more about market based solutions and technology from Mr. Carey

I went to GW back in the 60s. It was affordable and it got me away from home in New York. While I was there, Newsweek famously published a article about the DC Universities - GW, Georgetown, American and Catholic - dubbing them the Pony league, the schools for the children of wealthy middle class New Yorkers who couldn't get into the Ivy League. Nobody really complained. But that wasn't me. I went because I wanted to be where the action was in the 60s, and as we used to say - "GW was literally a stone's throw from the White House. And we could prove it." Back then, the two biggest alumni names were Jackie Kennedy, who's taken some classes there, and J. Edgar Hoover. Now, according to the glossy magazine they send me each month, it's the actress Kerry Washington. There's some sort of progress there, but I'm a GW alum and not properly trained to understand it.

This explains a lot of the modern, emerging mentality. It encompasses the culture of enforced grade inflation, cheating and anti-intellectualism in much of higher education. It is consistent with our culture of misleading statistics and information, cronyism and fake quality, the "best and the brightest" being only schemers and glad handers. The wisdom and creativity engendered by an honest, rigorous academic education are replaced by the disingenuous quick fix, the winner-take-all mentality that neglects the common good.

I attended nearby Georgetown University and graduated in 1985. Relative to state schools and elite schools, it was expensive then. I took out loans. I had Pell grants. I had work-study and GSL. I paid my debt of $15,000 off in ten years. Would I have done it differently? Yes: I would have continued on to graduate school and not worried about paying off those big loans right after college. My career work out and I am grateful for the education I received and paid for. But I would not recommend to my nieces and nephews debts north of $100,000 for a BA in liberal arts. Go community. Then go state. Then punch your ticket to Harvard, Yale or Stanford — if you are good enough.

American universities appear to have more and more drifted away from educating individuals and citizens to becoming high priced trade schools and purveyors of occupational licenses. Lost in the process is the concept of expanding a student's ability to appreciate broadly and deeply, as well as the belief that a republican democracy needs an educated citizenry, not a trained citizenry, to function well.Both the Heisman Trophy winner and the producer of a successful tech I.P.O. likely have much in common, a college education whose rewards are limited to the financial. I don't know if I find this more sad on the individual level or more worrisome for the future of America.

This is now a consumer world for everything, including institutions once thought to float above the Shakespearean briars of the work-a-day world such as higher education, law and medicine. Students get this. Parents get this. Everything is negotiable: financial aid, a spot in the nicest dorm, tix to the big game. But through all this, there are faculty - lots of 'em - who work away from the fluff to link the ambitions of the students with the reality and rigor of the 21st century. The job of the student is to get beyond the visible hype of the surroundings and find those faculty members. They will make sure your investment is worth it

My experience in managing or working with GW alumni in their 20's or 30's has not been good. Virtually all have been mentally lazy and/or had a stunning sense of entitlement. Basically they've been all talk and no results. That's been quite a contrast to the graduates from VA/MD state universities.

More and more, I notice what my debt-financed contributions to the revenue streams of my vendors earn them, not me. My banks earned enough to pay ridiculous bonuses to employees for reckless risk-taking. My satellite tv operator earned enough to overpay ESPN for sports programming that I never watch--and that, in turn, overpays these idiotic pro athletes and college sports administrators. My health insurer earned enough to defeat one-payor insurance; to enable the opaque, inefficient billing practices of hospitals and other providers; and to feed the behemoth pharmaceutical industry. My church earned enough to buy the silence of sex abuse victims and oppose progressive political candidates. And my govt earned enough to continue ag subsidies, inefficient defense spending, and obsolete transportation and energy policies.

as the parent of GWU freshman I am grateful for every opportunity afforded her. She has a generous merit scholarship, is in the honors program with some small classes, and has access to internships that can be done while at school. GWU also gave her AP credits to advance her to sophomore status. Had she attended the state flagship school (where she was accepted into that exclusive honors program) she would have a great education but little else. It's not possible to do foreign affairs related internship far from D.C. or Manhattan. She went to a very competitive high school where for the one or two ivy league schools in which she was interested, she didn't have the same level of connections or wealth as many of her peers. Whether because of the Common Application or other factors, getting into a good school with financial help is difficult for a middle class student like my daughter who had a 4.0 GPA and 2300 on the SAT. She also worked after school.The bottom line - GWU offered more money than perceived "higher tier" universities, and brought tuition to almost that of our state school system. And by the way, I think she is also getting a very good education.

This article reinforces something I have learned during my daughter's college application process. Most students choose a school based on emotion (reputation) and not value. This luxury good analogy holds up.

The entire education problem can be solved by MOOCs lots and lots of them plus a few closely monitored tests and personal interviews with people. Of course many many people make MONEY off of our entirely inefficient way of "educating" -- are we even really doing that -- getting a degree does NOT mean one is actually educated

As a first-generation college graduate I entered GW ambitious but left saddled with debt, and crestfallen at the hard-hitting realization that my four undergraduate years were an aberration from what life is actually like post-college: not as simple as getting an [unpaid] internship with a fancy titled institution, as most Colonials do. I knew how to get in to college, but what do you do after the recess of life ends?I learned more about networking, resume plumping (designated responses to constituents...errr....replied to emails), and elevator pitches than actual theory, economic principles, strong writing skills, critical thinking, analysis, and philosophy. While relatively easy to get a job after graduating (for many with a GW degree this is sadly not the case) sustaining one and excelling in it is much harder. It's never enough just to be able to open a new door, you also need to be prepared to navigate your way through that next opportunity.

this is a very telling article. Aimless and directionless high school graduates are matched only by aimless and directionless institutes of higher learning. Each child and each parent should start with a goal - before handing over their hard earned tuition dollars, and/or leaving a trail of broken debt in the aftermath of a substandard, unfocused education.

it is no longer the most expensive university in America. It is the 46th.Others have been implementing the Absolut Rolex Plan. John Sexton turned New York University into a global higher-education player by selling the dream of downtown living to students raised on “Sex and the City.” Northeastern followed Boston University up the ladder. Under Steven B. Sample, the University of Southern California became a U.S. News top-25 university. Washington University in St. Louis did the same.

I currently attend GW, and I have to say, this article completely misrepresents the situation. I have yet to meet a single person who is paying the full $60k tuition - I myself am paying $30k, because the school gave me $30k in grants. As for the quality of education, Foreign Policy rated GW the #8 best school in the world for undergraduate education in international affairs, Princeton Review ranks it as one of the best schools for political science, and U.S. News ranks the law school #20. The author also ignores the role that an expanding research profile plays in growing a university's prestige and educational power.

And in hundreds of regional universities and community colleges, presidents and deans and department chairmen have watched this spectacle of ascension and said to themselves, “That could be me.” Agricultural schools and technical institutes are lobbying state legislatures for tuition increases and Ph.D. programs, fitness centers and arenas for sport. Presidents and boards are drawing up plans to raise tuition, recruit “better” students and add academic programs. They all want to go in one direction — up! — and they are all moving with a single vision of what they want to be.

this is the same playbook used by hospitals the past 30 years or so. It is how Hackensack Hospital became Hackensack Medical Center and McComb Hospital became Southwest Mississippi Regional Medical Center. No wonder the results have been the same in healthcare and higher education; both have priced themselves out of reach for average Americans.

a world where a college is rated not by the quality of its output, but instaed, by the quality of its inputs. A world where there is practically no work to be done by the administration because the college's reputation is made before the first class even begins! This is isanity! But this is the swill that the mammoth college marketing departments nationwide have shoved down America's throat. Colleges are ranked not by the quality of their graduates, but rather, by the test scores of their incoming students!

The Pew Foundation has been doing surveys on what students learn, how much homework they do, how much time they spend with professors etc. All good stuff to know before a student chooses a school. It is called the National Survey of Student Engagement (NSSE - called Nessy). It turns out that the higher ranked schools do NOT allow their information to be released to the public. It is SECRET.Why do you think that is?

The article blames "the standard university organizational model left teaching responsibilities to autonomous academic departments and individual faculty members, each of which taught and tested in its own way." This is the view of someone who has never taught at a university, nor thought much about how education there actually happens. Once undergraduates get beyond the general requirements, their educations _have_ to depend on "autonomous departments" because it's only those departments know what the requirements for given degree can be, and can grant the necessary accreditation of a given student. The idea that some administrator could know what's necessary for degrees in everything from engineering to fiction writing is nonsense, except that's what the people who only know the theory of education (but not its practice) actually seem to think. In the classroom itself, you have tremendously talented people, who nevertheless have their own particular strengths and approaches. Don't you think it's a good idea to let them do what they do best rather than trying to make everyone teach the same way? Don't you think supervision of young teachers by older colleagues, who actually know their field and its pedagogy, rather than some administrator, who knows nothing of the subject, is a good idea?

it makes me very sad to see how expensive some public schools have become. Used to be you could work your way through a public school without loans, but not any more. Like you, I had the advantage of a largely-scholarship paid undergraduate education at a top private college. However, I was also offered a virtually free spot in my state university's (then new) honors college

My daughter attended a good community college for a couple of classes during her senior year of high school and I could immediately see how such places are laboratories for failure. They seem like high schools in atmosphere and appearance. Students rush in by car and rush out again when the class is over.The four year residency college creates a completely different feel. On arrival, you get the sense that you are engaging in something important, something apart and one that will require your full attention. I don't say this is for everyone or that the model is not flawed in some ways (students actually only spend 2 1/2 yrs. on campus to get the four yr. degree). College is supposed to be a 60 hour per week job. Anything less than that and the student is seeking himself or herself

This. Is. STUNNING. I have always wondered, especially as my kids have approached college age, why American colleges have felt justified in raising tuition at a rate that has well exceeded inflation, year after year after year. (Nobody needs a dorm with luxury suites and a lazy river pool at college!) And as it turns out, they did it to become luxury brands. Just that simple. Incredible.I don't even blame this guy at GWU for doing what he did. He wasn't made responsible for all of American higher ed. But I do think we all need to realize what happened, and why. This is front page stuff.

I agree with you, but, unfortunately, given the choice between low tuition, primitive dorms, and no athletic center VS expensive & luxurious, the customers (and their parents) are choosing the latter. As long as this is the case, there is little incentive to provide bare-bones and cheap education.

Wesleyan University in CT is one school that is moving down the rankings. Syracuse University is another. Reed College is a third. Why? Because these schools try hard to stay out of the marketing game. (With its new president, Syracuse has jumped back into the game.) Bryn Mawr College, outside Philadelphia hasn't fared well over the past few decades in the rankings, which is true of practically every women's college. Wellesley is by far the highest ranked women's college, but even there the acceptance rate is significantly higher than one finds at comparable coed liberal arts colleges like Amherst & Williams. University of Chicago is another fascinating case for Mr. Carey to study (I'm sure he does in his forthcoming book, which I look forward to reading). Although it has always enjoyed an illustrious academic reputation, until recently Chicago's undergraduate reputation paled in comparison to peer institutions on the two coasts. A few years ago, Chicago changed its game plan to more closely resemble Harvard and Stanford in undergraduate amenities, and lo and behold, its rankings shot up. It was a very cynical move on the president's part to reassemble the football team, but it was a shrewd move because athletics draw more money than academics ever can (except at engineering schools like Cal Tech & MIT), and more money draws richer students from fancier secondary schools with higher test scores, which lead to higher rankings - and the beat goes on.

College INDUSTRY is out of control. Sorry, NYU, GW, BU are not worth the price. Are state schools any better? We have the University of Michigan, which is really not a state school, but a university that gives a discount to people who live in Michigan. Why? When you have an undergraduate body 40+% out-of-state that pays tuition of over $50K/year, you tell me?Perhaps the solution is two years of community college followed by two at places like U of M or Michigan State - get the same diploma at the end for much less and beat the system.

In one recent yr., the majority of undergrad professors at Harvard, according to Boston.com, where adjuncts. That means low pay, no benefits, no office, temp workers. Harvard.Easily available student loans fueled this arms race of amenities and frills that in which colleges now engage. They moved the cost of education onto the backs of people, kids, who don't understand what they are doing.Students in colleges these days are customers and the customers must be able to get through. If it requires dumbing things down, so be it. On top of tuition, G.W. U. is known by its students as the land of added fees on top of added fees. The joke around campus was that they would soon be installing pay toilets in the student union. No one was laughing.

You could written the same story about my alma mater, American University. The place reeked of ambition and upward mobility decades ago and still does. Whoever's running it now must look at its measly half-billion-dollar endowment and compare it to GWU's $1.5 billion and seethe with envy, while GWU's president sets his sights on an Ivy League-size endowment. And both get back to their real jobs: 24/7 fundraising,Which is what university presidents are all about these days. Money - including million-dollar salaries for themselves (GWU's president made more than Harvard's in 2011) - pride, cachet, power, a mansion, first-class all the way. They should just be honest about it and change their university's motto to Ostende mihi pecuniam! (please excuse my questionable Latin)Whether the students are actually learning anything is up to them, I guess - if they do, it's thanks to the professors, adjuncts and the administrative staff, who do the actual work of educating and keep the school running.

When I was in HS (70s), many of my richer friends went to GW and I was then of the impression that GW was a 'good' school. As I age, I have come to realize that this place is just another façade to the emptiness that has become America. All too often are we faced with a dilemma: damned if we do, damned if we don't. Yep, 'education' has become a trap for all too many of our citizen.

I transferred to GWU from a state school. I am forever grateful that I did. I wanted to get a good rigorous education and go to one of the best International Affairs schools in the world. Even though the state school I went to was dirt-cheap, the education and the faculty was awful. I transferred to GW and was amazed at the professors at that university. An ambassador or a prominent IA scholar taught every class. GW is an expensive school, but that is the free market. If you want a good education you need to be willing to pay for it or join the military. I did the latter and my school was completely free with no debt and I received an amazing education. If young people aren't willing to make some sort of sacrifice to get ahead or just expect everything to be given to then our country is in a sad state.We need to stop blaming universities like GWU that strive to attract better students, better professors, and better infrastructure. They are doing what is expected in America, to better oneself.

"Whether the students are actually learning anything is up to them, I guess." How could it possibly be otherwise??? I am glad that you are willing to give credit to teachers and administrators, but it is not they who "do the actual work of educating." From this fallacy comes its corollary, that we should blame teachers first for "under-performing schools". This long-running show of scapegoating may suit the wallets and vanity of American parents, but it is utterly senseless. When, if ever, American culture stops reeking of arrogance, greed and anti-intellectualism, things may improve, and we may resume the habit of bothering to learn. Until then, nothing doing.

Universities sell knowledge and grade students on how much they have learned. Fundamentally, there is conflict of interest in thsi setup. Moreover, students who are poorly educated, even if they know this, will not criticize their school, because doing so would make it harder for them to have a career. As such, many problems with higher education remain unexposed to the public.

I've lectured and taught in at least five different countries in three continents and the shortest perusal of what goes on abroad would totally undermine most of these speculations. For one thing American universities are unique in their dedication to a broad based liberal arts type education. In France, Italy or Germany, for example, you select a major like mathematics or physics and then in your four years you will not take even one course in another subject. The amount of work that you do that is critically evaluated by an instructor is a tiny fraction of what is done in an American University. While half educated critics based on profoundly incomplete research write criticism like this Universities in Germany Italy, the Netherlands, South Korea and Japan as well as France have appointed committees and made studies to explain why the American system of higher education so drastically outperforms their own system. Elsewhere students do get a rather nice dose of general education but it ends in secondary school and it has the narrowness and formulaic quality that we would just normally associate with that. The character who wrote this article probably never set foot on a "campus" of the University of Paris or Rome

The university is part of a complex economic system and it is responding to the demands of that system. For example, students and parents choose universities that have beautiful campuses and buildings. So universities build beautiful campuses. State support of universities has greatly declined, and this decline in funding is the greatest cause of increased tuition. Therefore universities must compete for dollars and must build to attract students and parents. Also, universities are not ranked based on how they educate students -- that's difficult to measure so it is not measured. Instead universities are ranked on research publications. So while universities certainly put much effort into teaching, research has to have a priority in order for the university to survive. Also universities do not force students and parents to attend high price institutions. Reasonably priced state institutions and community colleges are available to every student. Community colleges have an advantage because they are funded by property taxes. Finally learning requires good teaching, but it also requires students that come to the university funded, prepared, and engaged. This often does not happen. Conclusion- universities have to participate in profile raising actions in order to survive. The day that funding is provided for college, ranking is based on education, and students choose campuses with simple buildings, then things will change at the university.

This is the inevitable result of privatizing higher education. In the not-so-distant past, we paid for great state universities through our taxes, not tuition. Then, the states shifted funding to prisons and the Federal government radically cut research support and the GI bill. Instead, today we expect universities to support themselves through tuition, and to the extent that we offered students support, it is through non-dischargeable loans. To make matters worse, the interest rates on those loans are far above the government's cost of funds -- so in effect the loans are an excise tax on education (most of which is used to support a handful of for-profit institutions that account for the most student defaults). This "consumer sovereignty" privatized model of funding education works no better than privatizing California's electrical system did in the era of Enron, or our privatized funding of medical service, or our increasingly privatized prison system: it drives up costs at the same time that it replace quality with marketing.

There are data in some instances on student learning, but the deeper problem, as I suspect the author already knows, is that there is nothing like a consensus on how to measure that learning, or even on when is the proper end point to emphasize (a lot of what I teach -- I know this from what students have told me -- tends to come into sharp focus years after graduation).

Michael (Baltimore) has hit the nail on the head. Universities are increasingly corporatized institutions in the credentialing business. Knowledge, for those few who care about it (often not those paying for the credentials) is available freely because there's no profit in it. Like many corporate entities, it is increasingly run by increasingly highly paid administrators, not faculty.

GWU has not defined itself in any unique way, it has merely embraced the bland, but very expensive, accoutrements of American private education: luxury dorms, food courts, spa-like gyms, endless extracurricular activities, etc. But the real culprit for this bloat that students have to bear financially is the college ranking system by US News, Princeton Review, etc. An ultimately meaningless exercise in competition that has nevertheless pushed colleges and universities to be more like one another. A sad state of affairs, and an extremely expensive one for students

It is long past time to realize the failure of the Reagonomics-neoliberal private profits over public good program. In education, we need to return to public institutions publicly funded. Just as we need to recognize that Medicare, Social Security, the post office, public utilities, fire departments, interstate highway system, Veterans Administration hospitals and the GI bill are models to be improved and expanded, not destroyed.

George Washington is actually not a Rolex watch, it is a counterfeit Rolex. The real Rolexes of higher education -- places like Hopkins, Georgetown, Duke, the Ivies etc. -- have real endowments and real financial aid. No middle class kid is required to borrow $100,000 to get a degree from those schools, because they offer generous need-based financial aid in the form of grants, not loans. The tuition at the real Rolexes is really a sticker price that only the wealthy pay -- everybody else on a sliding scale. For middle class kids who are fortunate enough to get in, Penn actually ends up costing considerably less than a state university.The fake Rolexes -- BU, NYU, Drexel in Philadelphia -- don't have the sliding scale. They bury middle class students in debt.And really, though it is foolish to borrow $100,000 or $120,000 for an undergraduate degree, I don't find the transaction morally wrong. What is morally wrong is our federal government making that loan non-dischargeable in bankruptcy, so many if these kids will be having their wages garnished for the REST OF THEIR LIVES.There is a very simple solution to this, by the way. Cap the amount of non-dischargeable student loan debt at, say, $50,000

The slant of this article is critical of the growth of research universities. Couldn't disagree more. Modern research universities create are incredibly engines of economic opportunity not only for the students (who pay the bills) but also for the community via the creation of blue and white collar jobs. Large research university employ tens of thousands of locals from custodial and food service workers right up to high level administrators and specialist in finance, computer services, buildings and facilities management, etc. Johns Hopkins University and the University of Maryland system employ more people than any other industry in Maryland -- including the government. Research universities typically have hospitals providing cutting-edge medical care to the community. Local business (from cafes to property rental companies) benefit from a built-in, long-term client base as well as an educated workforce. And of course they are the foundry of new knowledge which is critical for the future growth of our country.Check out the work of famed economist Dr. Julia Lane on modeling the economic value of the research university. In a nutshell, there are few better investments America can make in herself than research universities. We are the envy of the world in that regard -- and with good reason. How many *industries* (let alone jobs) have Stanford University alone catalyzed?

What universities have the monopoly on is the credential. Anyone can learn, from books, from free lectures on the internet, from this newspaper, etc. But only universities can endow you with the cherished degree. For some reason, people are will to pay more for one of these pieces of paper with a certain name on it -- Ivy League, Stanford, even GW -- than another -- Generic State U -- though there is no evidence one is actually worth more in the marketplace of reality than the other. But, by the laws of economics, these places are actually underpriced: after all, something like 20 times more people are trying to buy a Harvard education than are allowed to purchase one. Usually that means you raise your price.

Overalll a good article, except for - "This comes on the heels of Richard Arum and Josipa Roksa’s “Academically Adrift,” a study that found “limited or no learning” among many college students." The measure of learning you report was a general thinking skills exam. That's not a good measure of college gains. Most psychologists and cognitive scientists worth their salt would tell you that improvement in critical thinking skills is going to be limited to specific areas. In other words, learning critical thinking skills in math will make little change in critical thinking about political science or biology. Thus we should not expect huge improvements in general critical thinking skills, but rather improvements in a student's major and other areas of focus, such as a minor. Although who has time for a minor when it is universally acknowledged that the purpose of a university is to please and profit an employer or, if one is lucky, an investor. Finally, improved critical thinking skills are not the end all and be all of a college education even given this profit centered perspective. Learning and mastering the cumulative knowledge of past generations is arguably the most important thing to be gained, and most universities still tend to excel at that even with the increasing mandate to run education like a business and cultivate and cull the college "consumer".

As for community colleges, there was an article in the Times several years ago that said it much better than I could have said it myself: community colleges are places where dreams are put on hold. Without making the full commitment to study, without leaving the home environment, many, if not most, community college students are caught betwixt and between, trying to balance work responsibilities, caring for a young child or baby and attending classes. For males, the classic "end of the road" in community college is to get a car, a job and a girlfriend, one who is not in college, and that is the end of the dream. Some can make it, but most cannot.

as a scientist I disagree with the claim that undergrad tuition subsidizes basic research. Nearly all lab equipment and research personnel (grad students, technicians, anyone with the title "research scientist" or similar) on campus is paid for through federal grants. Professors often spend all their time outside teaching and administration writing grant proposals, as the limited federal grant funds mean ~%85 of proposals must be rejected. What is more, out of each successful grant the university levies a "tax", called "overhead", of 30-40%, nominally to pay for basic operations (utilities, office space, administrators). So in fact one might say research helps fund the university rather than the other way around. Flag

It's certainly overrated as a research and graduate level university. Whether it is good for getting an undergraduate education is unclear, but a big part of the appeal is getting to live in D.C..while attending college instead of living in some small college town in the corn fields.

Many of these journals have names that closely resemble those of established publications, making them easily mistakable. There is the Journal of Economics and Finance, published by Springer, but now also the Journal of Finance and Economics. There is the Journal of Engineering Technology, put out by the American Society for Engineering Education, but now another called the GSTF Journal of Engineering Technology.

Predatory journals have few expenses, since they do not seriously review papers that are submitted and they publish only online. They blast emails to academics, inviting them to publish. And the journals often advertise on their websites that they are indexed by Google Scholar. Often that is correct — but Google Scholar does not vet the journals it indexes.

The number of such journals has exploded to more than 10,000 in recent years, with nearly as many predatory as legitimate ones. “Predatory publishing is becoming an organized industry,” wrote one group of critics in a paper in Nature

Participating in such dubious enterprises carries few risks. Dr. Pyne, who did a study of his colleagues publications, reports that faculty members at his school who got promoted last year had at least four papers in questionable journals. All but one academic in 10 who won a School of Business and Economics award had published papers in these journals. One had 10 such articles.

Academics get rewarded with promotions when they stuff their resumes with articles like these, Dr. Pyne concluded. There are few or no adverse consequences — in fact, the rewards for publishing in predatory journals were greater than for publishing in legitimate ones.

Some say the academic system bears much of the blame for the rise of predatory journals, demanding publications even from teachers at places without real resources for research and where they may have little time apart from teaching.At Queensborough, faculty members typically teach nine courses per year. At four-year colleges, faculty may teach four to six courses a year.

Recently a group of researchers who invented a fake academic: Anna O. Szust. The name in Polish means fraudster. Dr. Szust applied to legitimate and predatory journals asking to be an editor. She supplied a résumé in which her publications and degrees were total fabrications, as were the names of the publishers of the books she said she had contributed to.The legitimate journals rejected her application immediately. But 48 out of 360 questionable journals made her an editor. Four made her editor in chief. One journal sent her an email saying, “It’s our pleasure to add your name as our editor in chief for the journal with no responsibilities.”

When I speak of elite education, I mean prestigious institutions like Harvard or Stanford or Williams as well as the larger universe of second-tier selective schools, but I also mean everything that leads up to and away from them—the private and affluent public high schools; the ever-growing industry of tutors and consultants and test-prep courses; the admissions process itself, squatting like a dragon at the entrance to adulthood; the brand-name graduate schools and employment opportunities that come after the B.A.; and the parents and communities, largely upper-middle class, who push their children into the maw of this machine.

Our system of elite education manufactures young people who are smart and talented and driven, yes, but also anxious, timid, and lost, with little intellectual curiosity and a stunted sense of purpose: trapped in a bubble of privilege, heading meekly in the same direction, great at what they’re doing but with no idea why they’re doing it.

“Super People,” the writer James Atlas has called them—the stereotypical ultra-high-achieving elite college students of today. A double major, a sport, a musical instrument, a couple of foreign languages, service work in distant corners of the globe, a few hobbies thrown in for good measure: They have mastered them all, and with a serene self-assurance

Like so many kids today, I went off to college like a sleepwalker. You chose the most prestigious place that let you in; up ahead were vaguely understood objectives: status, wealth—“success.” What it meant to actually get an education and why you might want one—all this was off the table.

It was only after 24 years in the Ivy League—college and a Ph.D. at Columbia, ten years on the faculty at Yale—that I started to think about what this system does to kids and how they can escape from it, what it does to our society and how we can dismantle it.

I taught many wonderful young people during my years in the Ivy League—bright, thoughtful, creative kids whom it was a pleasure to talk with and learn from. But most of them seemed content to color within the lines that their education had marked out for them. Very few were passionate about ideas. Very few saw college as part of a larger project of intellectual discovery and development. Everyone dressed as if they were ready to be interviewed at a moment’s notice.

Look beneath the façade of seamless well-adjustment, and what you often find are toxic levels of fear, anxiety, and depression, of emptiness and aimlessness and isolation. A large-scale survey of college freshmen recently found that self-reports of emotional well-being have fallen to their lowest level in the study’s 25-year history.

So extreme are the admission standards now that kids who manage to get into elite colleges have, by definition, never experienced anything but success. The prospect of not being successful terrifies them, disorients them. The cost of falling short, even temporarily, becomes not merely practical, but existential. The result is a violent aversion to risk.

There are exceptions, kids who insist, against all odds, on trying to get a real education. But their experience tends to make them feel like freaks. One student told me that a friend of hers had left Yale because she found the school “stifling to the parts of yourself that you’d call a soul.”

What no one seems to ask is what the “return” is supposed to be. Is it just about earning more money? Is the only purpose of an education to enable you to get a job? What, in short, is college for?

The first thing that college is for is to teach you to think.

College is an opportunity to stand outside the world for a few years, between the orthodoxy of your family and the exigencies of career, and contemplate things from a distance.

it is only through the act of establishing communication between the mind and the heart, the mind and experience, that you become an individual, a unique being—a soul. The job of college is to assist you to begin to do that. Books, ideas, works of art and thought, the pressure of the minds around you that are looking for their own answers in their own ways.

College is not the only chance to learn to think, but it is the best. One thing is certain: If you haven’t started by the time you finish your B.A., there’s little likelihood you’ll do it later. That is why an undergraduate experience devoted exclusively to career preparation is four years largely wasted.

Elite schools like to boast that they teach their students how to think, but all they mean is that they train them in the analytic and rhetorical skills that are necessary for success in business and the professions.

Everything is technocratic—the development of expertise—and everything is ultimately justified in technocratic terms.

Religious colleges—even obscure, regional schools that no one has ever heard of on the coasts—often do a much better job in that respect.

At least the classes at elite schools are academically rigorous, demanding on their own terms, no? Not necessarily. In the sciences, usually; in other disciplines, not so much

professors and students have largely entered into what one observer called a “nonaggression pact.”

higher marks for shoddier work.

today’s young people appear to be more socially engaged than kids have been for several decades and that they are more apt to harbor creative or entrepreneurial impulses

they tend to be played out within the same narrow conception of what constitutes a valid life: affluence, credentials, prestige.

Experience itself has been reduced to instrumental function, via the college essay. From learning to commodify your experiences for the application, the next step has been to seek out experiences in order to have them to commodify

there is now a thriving sector devoted to producing essay-ready summers

To be a high-achieving student is to constantly be urged to think of yourself as a future leader of society.

what these institutions mean by leadership is nothing more than getting to the top. Making partner at a major law firm or becoming a chief executive, climbing the greasy pole of whatever hierarchy you decide to attach yourself to. I don’t think it occurs to the people in charge of elite colleges that the concept of leadership ought to have a higher meaning, or, really, any meaning.

The irony is that elite students are told that they can be whatever they want, but most of them end up choosing to be one of a few very similar things

As of 2010, about a third of graduates went into financing or consulting at a number of top schools, including Harvard, Princeton, and Cornell.

Whole fields have disappeared from view: the clergy, the military, electoral politics, even academia itself, for the most part, including basic science

It’s considered glamorous to drop out of a selective college if you want to become the next Mark Zuckerberg, but ludicrous to stay in to become a social worker. “What Wall Street figured out,” as Ezra Klein has put it, “is that colleges are producing a large number of very smart, completely confused graduates. Kids who have ample mental horsepower, an incredible work ethic and no idea what to do next.”

t almost feels ridiculous to have to insist that colleges like Harvard are bastions of privilege, where the rich send their children to learn to walk, talk, and think like the rich. Don’t we already know this? They aren’t called elite colleges for nothing. But apparently we like pretending otherwise. We live in a meritocracy, after all.

Visit any elite campus across our great nation, and you can thrill to the heart-warming spectacle of the children of white businesspeople and professionals studying and playing alongside the children of black, Asian, and Latino businesspeople and professionals

That doesn’t mean there aren’t a few exceptions, but that is all they are. In fact, the group that is most disadvantaged by our current admissions policies are working-class and rural whites, who are hardly present

The college admissions game is not primarily about the lower and middle classes seeking to rise, or even about the upper-middle class attempting to maintain its position. It is about determining the exact hierarchy of status within the upper-middle class itself.

This system is exacerbating inequality, retarding social mobility, perpetuating privilege, and creating an elite that is isolated from the society that it’s supposed to lead. The numbers are undeniable. In 1985, 46 percent of incoming freshmen at the 250 most selective colleges came from the top quarter of the income distribution. By 2000, it was 55 percent

The major reason for the trend is clear. Not increasing tuition, though that is a factor, but the ever-growing cost of manufacturing children who are fit to compete in the college admissions game

Wealthy families start buying their children’s way into elite colleges almost from the moment they are born: music lessons, sports equipment, foreign travel (“enrichment” programs, to use the all-too-perfect term)—most important, of course, private-school tuition or the costs of living in a place with top-tier public schools.

s there anything that I can do, a lot of young people have written to ask me, to avoid becoming an out-of-touch, entitled little shit? I don’t have a satisfying answer, short of telling them to transfer to a public university. You cannot cogitate your way to sympathy with people of different backgrounds, still less to knowledge of them. You need to interact with them directly, and it has to be on an equal footing

Elite private colleges will never allow their students’ economic profile to mirror that of society as a whole. They can’t afford to—they need a critical mass of full payers and they need to tend to their donor base—and it’s not even clear that they’d want to.

Elite colleges are not just powerless to reverse the movement toward a more unequal society; their policies actively promote it.

The SAT is supposed to measure aptitude, but what it actually measures is parental income, which it tracks quite closely

U.S. News and World Report supplies the percentage of freshmen at each college who finished in the highest 10 percent of their high school class. Among the top 20 universities, the number is usually above 90 percent. I’d be wary of attending schools like that. Students determine the level of classroom discussion; they shape your values and expectations, for good and ill. It’s partly because of the students that I’d warn kids away from the Ivies and their ilk. Kids at less prestigious schools are apt to be more interesting, more curious, more open, and far less entitled and competitive.

The best option of all may be the second-tier—not second-rate—colleges, like Reed, Kenyon, Wesleyan, Sewanee, Mount Holyoke, and others. Instead of trying to compete with Harvard and Yale, these schools have retained their allegiance to real educational values.

Not being an entitled little shit is an admirable goal. But in the end, the deeper issue is the situation that makes it so hard to be anything else. The time has come, not simply to reform that system top to bottom, but to plot our exit to another kind of society altogether.

The education system has to act to mitigate the class system, not reproduce it. Affirmative action should be based on class instead of race, a change that many have been advocating for years. Preferences for legacies and athletes ought to be discarded. SAT scores should be weighted to account for socioeconomic factors. Colleges should put an end to résumé-stuffing by imposing a limit on the number of extracurriculars that kids can list on their applications. They ought to place more value on the kind of service jobs that lower-income students often take in high school and that high achievers almost never do. They should refuse to be impressed by any opportunity that was enabled by parental wealth

More broadly, they need to rethink their conception of merit. If schools are going to train a better class of leaders than the ones we have today, they’re going to have to ask themselves what kinds of qualities they need to promote. Selecting students by GPA or the number of extracurriculars more often benefits the faithful drudge than the original mind.

reforming the admissions process. That might address the problem of mediocrity, but it won’t address the greater one of inequality

The problem is the Ivy League itself. We have contracted the training of our leadership class to a set of private institutions. However much they claim to act for the common good, they will always place their interests first.

I’ve come to see that what we really need is to create one where you don’t have to go to the Ivy League, or any private college, to get a first-rate education.

High-quality public education, financed with public money, for the benefit of all

Everybody gets an equal chance to go as far as their hard work and talent will take them—you know, the American dream. Everyone who wants it gets to have the kind of mind-expanding, soul-enriching experience that a liberal arts education provides.

We recognize that free, quality K–12 education is a right of citizenship. We also need to recognize—as we once did and as many countries still do—that the same is true of higher education. We have tried aristocracy. We have tried meritocracy. Now it’s time to try democracy.

Investment is usually the result of forgoing consumption. In a purely agrarian society, early humans had to choose how much grain to eat after the harvest and how much to save for future planting. The latter was investment.

In a more modern society, we allocate our productive capacity to producing pure consumer goods such as hamburgers and hot dogs, and investment goods such as semiconductor foundries. If we create one dollar worth of hamburgers today, then our gross national product is higher by one dollar.

Investment need not always take the form of a privately owned physical product. The most common example of nonphysical investment is investment in human capital.

In an economy that is closed to the outside world, investment can come only from the forgone consumption—the saving—of private individuals, private firms, or government.

In an open economy, however, investment can surge at the same time that a nation’s saving is low because a country can borrow the resources necessary to invest from neighboring countries.

That economists have a fairly strong understanding of firms’ investment behavior makes sense. A firm that maximizes its profits must address investment using the framework discussed in this article.

The theory of investment dates back to the giants of economics. irving fisher, arthur cecil pigou, and alfred marshall all made contributions; as did john maynard keynes, whose Marshallian user cost theory is a central feature in his General Theory.

Investment fluctuates a lot because the fundamentals that drive investment—output prices, interest rates, and taxes—also fluctuate. But economists do not fully understand fluctuations in investment. Indeed, the sharp swings in investment that occur might require an extension to the Jorgenson theory.

In Jorgenson’s user cost model, firms will purchase a machine if the extra revenue the machine generates is a smidgen more than its cost.

The general conclusion is that there is a gain to waiting if there is uncertainty and if the installation of the machine entails sunk costs, that is, costs that cannot be recovered once spent.

Although quantifying this gain exactly is a highly mathematical exercise, the reasoning is straightforward. That would explain why firms typically want to invest only in projects that have a high expected profit.

The fact of irreversibility might explain the large fluctuations in investment that we observe.

This method of financing investment has been very important in the United States. The industrial base of the United States in the nineteenth century—railroads, factories, and so on—was built on foreign finance, especially from Britain. More recently, the United States has repeatedly posted significant investment growth and very low savings.

Consumer behavior is harder to study than firms’ behavior. Market forces that drive irrational people out of the marketplace are much weaker than market forces that drive bad companies from the market.

Because the saving response of consumers must be known if one is to fully understand the impact of any investment policy, and because saving behavior is so poorly understood, much work remains to be done.