A book that pays high returns for decades with endless insights is Joseph Schumpeter's Capitalism, Socialism and Democracy (1942).
It's not a systematic treatise. It's more of a series of observations about huge problems that vexed those times and ours. Many are informed by economics. Some by history. Some by sociology and culture.
Schumpeter was a partisan of the old-school bourgeois order educated in turn-of-the-20th-century Vienna but darkly convinced by midcentury that civilization was doomed to be replaced by some amalgam of socialism/fascism.
This was for an interesting reason: not because capitalism itself fails but rather because it breeds the seeds of its own destruction. It makes so much wealth that it's too easy to dispense with the institutional/cultural foundation that makes it all possible.
Here let's focus on one fascinating insight concerning higher education, just a small piece of the whole.
He correctly saw that the West was headed toward bringing ever more people into the academic fold with classes and degrees, away from manual labor and raw skill and toward intellectual pursuits.
By that he doesn't just mean becoming academics but people working from and with an apparatus of ideology and philosophy a class of information workers that's ever more distant from actual productivity.
He is, in other words, speaking of the rise of the credentialed managerial class that would populate every field, among which were journalism and media where workers are detached from the real-world consequences of the ideas they push.
They would come to form a class of their own with unique cultural power and a united interest in constructing social and political systems that benefit themselves at others' expense.
Let's see what he has to say. And keep in mind this is 1942:
One of the most important features of the later stages of capitalist civilization is the vigorous expansion of the educational apparatus and particularly of the facilities for higher education. This development was and is no less inevitable than the development of the largest-scale industrial unit, but, unlike the latter, it has been and is being fostered by public opinion and public authority so as to go much further than it would have done under its own steam.
Whatever we may think of this from other standpoints and whatever the precise causation, there are several consequences that bear upon the size and attitude of the intellectual group.
First, inasmuch as higher education thus increases the supply of services in professional, quasi-professional and in the end all "white collar" lines beyond the point determined by cost-return considerations, it may create a particularly important case of sectional unemployment.
In other words, he is suggesting that the subsidization of higher education itself would end up creating far more in the way of credentialed intellectuals than society actually needs or the market demands. So these people will always face a kind of job insecurity, or at least believe they do because their abilities have a limited market.
Schumpeter continues:
Second, along with or in place of such unemployment, it creates unsatisfactory conditions of employment employment in substandard work or at wages below those of the better-paid manual workers.
That's an interesting observation and it remains true today. A truck driver makes far more than a starting professor and journalist at a newspaper. An electrician or engineer is paid more than any graduate in humanities.
Even top writers and media influencers command lower salaries than financial analysts and accountants, fields where training and credentialing take place outside of the academy.
And that breeds resentment among the credentialed intellectuals.
In 1943, only about 15% of the U.S. population was enrolled in college. Today about 66% of people graduating from high school enroll in college. That's a rather gigantic change from then to now.
So whatever problems Schumpeter observed about college graduates the lack of real skills, the job insecurity, the resentment against genuine productivity, the urge to muck around with the public mind without consequence are vastly worse today.
The last several years have seen the formation of the absolute hegemony of a ruling class that has zero experience in any real-world commercial activity at all.
Waving their diplomas and CVs, they feel themselves entitled to dictate to everyone else and endlessly pound the system of free commercial activity to conform with their own imaginings of social and cultural priorities, regardless of what either people or economic reality demands.
The move toward every manner of "Great Reset" priorities is an excellent example. DEI on campus, ESG in the corporate world, HR in all management of everything, EVs in transportation, Impossible Burgers as meat, wind and solar as energy sources and you name it: All are products of exactly the forces Schumpeter describes.
They are by, for and of the intellectuals born of university environments, implemented and enforced by people with a limited market for their knowledge set and so attempt to rearrange the world to better secure their place within it.
This is the expert class that Schumpeter predicted would dismantle freedom as we know it.
Sure enough, the people who ruled the day during the catastrophic COVID lockdowns were not the practitioners much less the workers who delivered the food or the small-business owners or even the hands-on epidemiologists.
No, they were the theorists and the bureaucrats who faced zero consequence for being wrong and are still in hiding today or simply blaming someone else in the bureaucracy. Their plans for now are to keep their heads down and hope that everyone forgets until they can reemerge to manage the next crisis.
In this way, we see that Schumpeter was completely correct. The rise of mass higher education did not breed a sector of society that's wiser and more responsible but just the opposite. He already saw this developing 80 years ago. It took time, but it would be justified to call him a prophet.
And where are we today? An entire generation is rethinking the model.
Is it really advantageous to shell out six figures, forgo four years of real job experience, become saddled with 20-plus years of debt, all to end up in a vast bureaucracy of miserable souls who do nothing but plot the demise of freedom and the good life for everyone else? Maybe there's another way.
And just what are people really gaining from the choice of college, much less graduate school?
Each professional field has a credential. Each credential has an exam. Each exam has a book. And each book has extensive methods of learning the material to enable students to learn and pass. And these systems are not about ideology and socialization. They're about real skills that you need in a genuine marketplace.
In other words, the market itself is making college obsolete.
The push to force everyone into higher education has proven to be a massive diversion of financial and human energy, and, just like Schumpeter predicted, it did the cause of freedom no favors.
It's only ended up breeding debt, resentment and an imbalance of human resources such that the people with real power are the same people least likely to possess the necessary skills to make life better. Indeed they are making it worse.
Schumpeter's prescient warning was right on target. And that's a tragedy.
The Daily Reckoning