The Education Industry is a Ponzi Scheme

I am certainly not the first person to state that the education industry is a ponzi scheme, as many have repeatedly said so- especially for ‘higher’ education.

The claim made in this post is somewhat broader.

ALL levels of the education industry are operated as a ponzi scheme.

Note the choice of words- ‘operated as’ instead of ‘are’ suggesting the existence of ways other than those in use.

So what makes even basic levels of education, such as preschool and primary school, into ponzi schemes?

The answer lies, not in their utility but, in their present mode of operation. Apart from the fact that such places are increasingly used to indoctrinate kids rather than educate them, they have one of the most fundamental attributes of a ponzi scheme.

Ponzi schemes are called as such because their returns and projections are based on attracting new suckers. The basic business model or investment opportunity of a ponzi scheme can be very sound, and is often the reason behind their ability to attract more suckers till they run out of bigger fools.

Think of the internet bubble of the late 90s, the ongoing housing bubble or even the ‘china growth is infinite’ bubble. All of them have some pretty reasonable basis in reality, but their growth was largely fueled by belief in infinite expansion at accelerating rates of growth.

The reason why ALL of the education industry is a bubble is this:

We are educating, and employing, an ever-increasing number of people to teach (and administer) fewer and fewer kids.

It certainly does not help that most of these new jobs are related to running the administration of these systems, as opposed to actually teaching students.

Even if we ignore the likely issues of funding such a runaway system with our current tax base and economic paradigms (debt based money), an even bigger problem remains. What is the maximum number of adults we can employ (directly or indirectly) to educate one child? How do we justify such employment?

I have one sarcastic solution:

Why not beat, abuse and cripple each child from birth so that we can employ an army of educators and administrators for the education, and “welfare”, of such kids?

Today only a small percentage of kids require special education, but by converting all of them into abused, crippled and brain-damaged kids we could justify a much larger increase in the number of people employed in that field. While doing something along these lines would only hasten the ultimate collapse of this ponzi scheme, the short-term gains in employment would be incredible.

I do however doubt that many people would prefer this solution. Then again, human greed and stupidity have often triumphed over reason till “too” many people got killed.

Comments?

  1. Gorbachev
    July 21, 2010 at 6:45 pm

    I’m a big fan of charter schools.

    The primary interest for all teachers is themselves. That’s the problem.

    We really need to crush the teachers’ and “educators” unions.
    —-

    They are just symptoms of the underlying problem, an economic model based on the triple fallacy of perpetual accelerating economic growth, jobs as the only source of income and a debt based financial system.

    • Nestorius
      July 22, 2010 at 4:19 am

      Separate posts are worth having about the triple fallacy, especially about jobs as the only source of income.

  2. Slav
    July 22, 2010 at 12:16 am

    You’re wrong on this one. K-12 education is much like a factory, where kids are treated as raw-input and have value-add at each grade level by their teachers.
    —-

    It used to be just a factory, but has become a ponzi scheme over the last 20 years.

    College, however, is a bubble… but I’m not so sure about it being a Ponzi scheme. Where exactly do you see new recruits paying directly for the investment returns of elder members? Maybe in the Liberal Arts, but have English, History, and Social Studies not existed for hundreds of years?

    I am disappointed in the quality of this article, considering how brilliant some of your first ones were.
    —–

    Because you do not want to see how much of K-12 education now looks like a ponzi scheme.

  3. Gorbachev
    July 22, 2010 at 12:36 pm

    All of this doesn’t make education a ponzi scheme.

    More like a protection racket.
    —–

    The two are not mutually exclusive.

  4. P Ray
    February 27, 2016 at 3:15 am

    I have one sarcastic solution:

    Why not beat, abuse and cripple each child from birth so that we can employ an army of educators and administrators for the education, and “welfare”, of such kids?

    Today only a small percentage of kids require special education, but by converting all of them into abused, crippled and brain-damaged kids we could justify a much larger increase in the number of people employed in that field. While doing something along these lines would only hasten the ultimate collapse of this ponzi scheme, the short-term gains in employment would be incredible.

    Zika is going to make that dream world a reality. There is going to be a lot of money to be made selling accessories, creating education certifications and specialised palliative (NOT curative) treatment for those new “kappa-wannabes”, worldwide.

  5. P Ray
    March 12, 2019 at 8:16 pm

    For everyone who has totally believed the dogma of “the rich are better, smarter, taller, more attractive”:
    https://www.dailymail.co.uk/news/article-6802093/Judge-sets-bond-250-000-Felicity-Huffman-college-bribery-scandal.html – Actress Felicity Huffman and husband of fellow star Lori Loughlin make first court appearances after they were among 50 charged over huge US university admissions scandal where parents paid $6M in bribes to get their kids into elite colleges
    Judge sets bond at $250,000 for Felicity Huffman in college bribery scandal
    Huffman (left) and Loughlin (with her daughters bottom right) are among 50 people who are accused of paying bribes to get their children into America’s top colleges. Huffman allegedly paid $15,000 to arrange for someone to secretly change her daughter’s answers during the SAT exam. Loughlin and her husband allegedly agreed to pay bribes of $500,000 in exchange for having their two daughters designated as recruits to USC crew. The two girls did not participate in crew, and Loughlin’s husband Mossimo Giannulli (inset) has also been charged in the scandal and was arrested on Tuesday. Macy (top right with Huffman and thier children)) was in court on Tuesday to support his wife and sat in the front row. Authorities have not disclosed why he was not implicated in the scandal. Huffman has been charged with conspiracy to commit mail fraud. A magistrate judge ordered the actress to restrict her travel to the continental US and she surrendered her passport to the court. Seven FBI agents showed up to Huffman’s home in Hollywood Hills at 6am on Tuesday, drew their weapons, and ordered the actress to come out and surrender.

    Looks like their kids are so stupid, universities had to be bribed to take them. They probably also did either business studies, social science, gender studies or sports as their majors.

    • P Ray
      March 13, 2019 at 12:56 pm

      And on the other side of things,

      [In 2011] “47 percent of America’s kindergarten through 12th-grade teachers come from the bottom one-third of their college classes (as measured by SAT scores).”

      Just lel. A lot of teachers are really quite quite stupid.

      But of course, engineers “can’t communicate” and “only deal with theories that aren’t applicable to the real world”. A lot of being a teacher sounds like a cartel for women-only jobs.

  1. July 24, 2010 at 8:02 pm
  2. July 25, 2010 at 2:49 am
  3. March 5, 2011 at 2:31 pm

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