Mike Judge's Idiocracy and American Progress

A student in one of my classes commented recently on Mike Judge's Idiocracy. The student wrote:

If you recall in Idiocracy, there's no great resurgence of intellectual enlightenment at the end... only the exponential success of the few educated time-travelers over the rest of the happily stupid. This success doesn't come from educating people or instigating growth but from keeping to themselves and turning their (historical) knowledge into power. So, is that what we're in for? People that bother to read an uncensored history book or a hard-science technical manual when curious about an idea are becoming more and more rare, and their existence is being actively stigmatized. Is the reality to shut up and keep knowledge to oneself and get rich from it? The bulk of society are getting their degrees and entering the workforce having never had to fix a crisis in their lives, neurologically underdeveloped, missing critical-thinking skills that were absolutely normal even just 10 years ago. This is our workforce of tomorrow?

How do you work in this environment? It's like going to work in construction and finding out that the Dept of Labor suddenly designated that shadow-acting construction work should be treated as equivalent payable labor as actual labor. Now all the construction workers are 100 lbs and don't know how to use their tools, pantomiming construction behaviors and getting full pay for it. If you ask one of them to spot you when lifting something heavy, you're on your own. That's how I've felt at most of my jobs for almost five years now. 

My student indeed.  A century ago Ludwig von Mises wrote about how depressed interest rates stimulate malinvestment.  Malinvestment occurs when projects that are not feasible at market interest rates are funded at below-market rates. The rates will generally have been depressed by stimulative Fed policies.

The Fed has pursued stimulative policies for many decades.  At present, for instance, student-loan debt is about $1.5 trillion. The same period has seen the politicization of higher education. In today's universities, ideology and advocacy in the guise of social justice education substitute for learning about culture and science.  Much of this dumbed-down advocacy lacks any legitimate educational content.  It is funded by paper money, artificially created by the Federal Reserve Bank.  Much of the paper money loans will never be repaid because the dumbed-down social activists will not find jobs, and the unpaid loans will be a deadweight loss to society.  

Students educated in the politicized soft social sciences, the humanities, and the studies fields will not produce value beyond the value that high school graduates are capable of producing. They are not literate or numerate; they lack understanding of basic American institutions; their training teaches them to exclaim their oppressed status, making them difficult to employ in all but menial jobs.  A few months ago Ben Shapiro  noticed, with respect to research that I did earlier this year, that the extent of politicization of academic disciplines is inversely related to the earnings of the graduates. Effete graduates of the studies fields and left-ideological fields like sociology do dismally in the job market. 

There is no doubt of the importance of scientific and mathematical education. When the humanities involved education about the basis for American history and culture, it too was important.  The hard social sciences may at times help business decision making, but it is unclear whether the soft social sciences in their current state contribute to the social good.  However, most college students funded by the paper-money-based education bubble do not take science, math, languages, or the hard social sciences. Dumbed-down studies like gender studies are increasingly influential in fields like history.

Hence, as the number of college students has expanded and as the sciences have been downplayed in favor of politicized fields like gender studies, the value contributed by American universities has declined.  It may now be in negative territory: The net costs of higher education may exceed its social benefits.  

The malinvestment in education is linked to the flexible paper money system.   Inefficiencies are hidden by an artificially depressed cost of capital.  American corporations were already inefficient by the 1970s: Books like Patrick J. Wright's On a Clear Day You Can See General Motors

depict an already-inefficient industrial system.  Major firms like GM and GE have been on monetary life support for years.  In turn, the paper-money bubble receives global life support  because the dollar is the international reserve currency.  That double-subsidization of inefficiency  has continued since the end of World War II.

One outcome has been plant relocation to Mexico and China.  With near-zero capital costs, relocation costs were eliminated, and the cost efficiency of relocation to low-wage countries was increased.  Waste is in thousands of fields, including the military,  health care, and finance.  When the waste, especially with respect to federal government debt,  becomes so extreme that inflation is the only way out, the dollar's reserve currency status will end.  There may be a switch to an international basket of currencies such as the IMF's special drawing rights. This may be accompanied by sharp reductions in government spending, public pensions, welfare, and subsidized health care, much as occurred in Greece.  

One of the effects of malinvestment is a workforce increasingly effete and obsessed with supposed injustices.  Such shadow workers, as my student calls them, will be ill equipped to handle an economic depression.  Of course, it is always possible that technology will evolve that will solve these problems, but even during periods of much more rapid technological advance than today's, such as during the laissez-faire period of the late nineteenth century, depressions and wars that posed greater challenges than the recent generations of Americans have experienced required better problem solvers than the current American system of higher education is producing.