What kind of good is Higher Education? By Peter Thiel

Transscript: What kind of a good is education? Is it an investment? So you’re going to college as an investment into a future, or is it a consumption good where it’s like a four year party? And so these are, these are two very different kinds of things. And often when I started my critique of colleges, I thought it was sort of a weird superposition of an investment good and a consumption good, which is why people were confused. So they thought they were investing, but they’re really consuming. But I’ve now come to think that it’s actually a combination of two things that are much crazier than those two even. It’s on the one hand, it’s the main reason people go to college is actually as an insurance product, where people go to college because they’re scared of falling through the very big cracks in our society. And so even if even if it’s not a great investment, it’s still important to buy insurance. That’s what parents save up so much money to send their their kids to the to college and then why the kids take out so much in in in in student debt and and so I think we should and when whenever people are spending this much on insurance, I think we should be asking the underlying question why have the cracks in our society gotten so big that people are spending more and more on insurance. And that would be a good question for us to ask. And then some ways it gets obscured by the education. So on the one hand it’s an insurance product, but then on the other hand it’s it’s on some level it’s a it’s a tournament where which is, which is the exact opposite of an insurance where especially the sort of elite universities are driven by exclusion. And and the sort of the thought experiment I give is if you were the president of Harvard or Stanford or any of these places, if you wanted to get lynched by a mob of students, faculty and alumni, what you should do is you should give a speech saying that because you’re such a great college and you’re educating people so well, you’re going to triple enrollment. And it’s because the value of the elite universities comes from excluding people. And what they really are is like it’s like a Studio 54 nightclub where you want there to be an enormous line of people outside and don’t want to let anybody in. And and and that’s that’s that’s what a tournament looks like. And that’s very different from an insurance policy. And it’s when you conflate a tournament with an insurance policy superpose those two I I think you end up with some some really wacky decisions.