People who drive heavier cars are more likely to survive accidents.  Since life is the most valuable commodity of
all, shouldn’t governments give out grants or loans to help the poor buy bigger cars? 

Even leaving the issue of pollution aside, the typical wonk knows why a big-car subsidy is questionable policy: Part of the reason big cars are safer is
because they’re bigger than the average
.  You’d be fueling an arms race,
where the soccer mom in the heaviest SUV wins. 

According to the signaling
theory of education
, this is what we’re doing with college education: We
know that kids with above-average education earn more, so we’re trying to make
sure that more kids are above average.  Lake
as our national education policy. 

According to the purest version of signaling theory, college is “smart for
one, dumb for all.” Every college degree pollutes the value of every other
college degree.

Signaling isn’t an all-or-nothing proposition, of course: College might be part
signaling, part skill acquisition.  But
if even 10 or 20 percent of the value of college comes from signaling, the argument
for government subsidies weakens dramatically (one relevant citation; see
the conclusion).  Why fuel an arms race?

Every good policy analyst knows what to do with polluting industries…and the
answer isn’t “subsidize it.” But for some reason, analysts rarely apply that
lesson to education. 

The latest entry: Felix
Salmon’s critique
of Megan McArdle’s Newsweek
(where Bryan is
).  Salmon correctly notes that
college helps particular people earn more; but since heavier cars help particular people
stay safe, that doesn’t give us a sound argument for college

He then makes this more interesting claim:

[W]e’re part of a global economy, where many employers will hire only
college grads — and if they can’t find those college grads in the US, they’ll
find them in Ireland or Israel or India instead.

So even if the U.S. cut back subsidies for degree pollution, other
countries might keep up the loans and grants and free educations, making our
workers look worse by comparison.  But we
know the solution to polluting industries that can slide across national
borders, at least in principle: A multilateral agreement.

So perhaps governments in the rich countries should think about negotiating
an education arms control treaty: And then perhaps someday, the bachelor’s will
be the new master’s.