The GI Bill turns 60 this year. The legislation, guaranteeing that returning soldiers could attend college at the expense of the federal government (to be more accurate — the expense of federal taxpayers), was the first of Washington’s many interventions into higher education. Before the bill, federal politicians paid no attention to colleges and universities. After it, they have passed laws and regulations covering higher education at an accelerating pace.
To almost everyone in the education establishment, it is a given that the bill and its subsequent extensions were a good thing. Without the massive assistance that the federal government has given students so they could afford a college education, no doubt America would be lagging far behind other industrialized nations and could not have achieved the rate of economic growth that we have experienced since the end of World War II.
In a recent article in The Chronicle of Higher Education, former Illinois Sen. Paul Simon displays the “sacred cow” view of the legislation, writing, “The GI Bill’s education benefits made a huge difference in the lives of millions of veterans who otherwise would not have gone to college — and it enriched the nation immeasurably. We would not have our high standard of living in the United States if the GI Bill had not been enacted.”
Simon listed the benefits of the bill: “It produced 450,000 engineers, 240,000 accountants, 238,000 teachers, 91,000 scientists, 60,000 physicians, 17,000 journalists, and untold numbers of dentists and members of the clergy.” Impressive. Who could possibly doubt that it was a good investment?
I do. When politicians point to favored programs and say, “Look at its wonderful results,” they are playing an intellectual trick on you. The trick, which they may not realize is one, lies in the hidden assumption that in the absence of the program, people would have done nothing on their own. Consider all those engineers, accountants, teachers, and so on. Simon would have us believe that if it hadn’t been for the free college training under the bill, the nation would have had 450,000 fewer engineers, 240,000 fewer accountants, and 238,000 fewer teachers. Naturally, the country would have suffered under those shortages.
Here’s the right question: Before the federal government started subsidizing college attendance, did the United States have a shortage of engineers, accountants, etc.? Did lots of engineering work go undone and books go unbalanced because we didn’t have enough of those professionals? No. You will look in vain for evidence that the labor market was failing to provide enough qualified people to perform those or any other tasks.
Through the operation of the free market, the United States had always been able to fulfill its manpower needs. The only difference that the GI Bill made was to shift away from direct training programs — apprenticeships, for example — and toward training provided in college classrooms. If the bill hadn’t been passed, the United States would still have had enough engineers, accountants, teachers and so on, but many would have learned their trade without spending four years in college, learning many other things (some valuable, some not) in the process.
Rather than a tremendous boon to the nation, I agree with economics professor Thomas DiLorenzo, who calls the GI Bill, “a budget-busting middle-class entitlement scheme that had destructive effects on higher education, and set the stage for virtually all our current educational problems.” It was the camel’s nose under the education tent.
We would have had just as many engineers, accountants, etc. with or without the bill, but with it, taxpayers had to cover the cost of four-year college degrees where previously individuals or employers would have borne the cost for the necessary training. With this subsidy program, we both shifted and enormously increased the costs of occupational preparation, and at the same time created a new source of funds for colleges and universities — the federal government. In the decades to follow, they would constantly lobby for more.
Don’t get me wrong. I’m certainly not against higher education. I just don’t think that it is the only or necessarily the best way for people to acquire the skills they need to succeed in life. By subsidizing it heavily for the last 60 years, the federal government has turned the college degree from a mark of important personal accomplishment into just a credential that signifies nothing.
A tenet of economics is that when you subsidize something, the result is overproduction. That’s just as true for college degrees as any other product.