Are graduate programs a waste of time and money?

Emory University in Atlanta Georgia has stirred up student and faculty protests with its plan to cut revenue losing academic programs. The plan includes suspending admission to its Graduate Institute of Liberal Arts and to graduate programs in Spanish and economics. Mothballing graduate programs is a magnificent development for a number of reasons and we can only hope that it signals the beginning of a trend among cash-strapped universities.

Graduate programs are enormously costly to maintain because graduate students receive huge subsidies in the form of a tuition waiver plus graduate or teaching assistantships that pay stipends that reportedly can run as high as $30,000 per year. In most cases, the taxpayer is footing a large part of the bill. Not only are most large research universities with graduate programs state-owned institutions, but the Federal government also subsidizes low cost loans to graduate students and bestows huge grants on faculty at research universities that are used to hire graduate assistants. Not surprisingly this massive government subsidy leads to artificially prolonged stays in graduate school, which cause an enormous misallocation of resources and loss of productivity in the economy as many students who will never complete their doctorates delay the start of productive careers for many years. According to a recent study, only 25 percent of Ph.D. students complete their doctorates in 5 years and only 45 percent in 7 years. Completion rates are even lower in the social sciences and the humanities.

The government subsidization of graduate education also explains why many who do complete their doctorates and have aspirations to work in higher education confront markets glutted with job seekers, especially in the humanities and social sciences. If they persist in pursuing an academic career, they then face the prospect of earning a precarious living as an “untenured” adjunct professor, hectically shuttling between teaching assignments at different universities and earning a meager living for their trouble. They, and society at large, would be better off if they had never been lured into enrolling in graduate school and had chosen a different career path, for instance, in the insurance business. 

The main reason for welcoming the demise of graduate education, however, is that most “professional” social scientists, including economists, are apologists for state intervention into society and the economy, and have been since the origin of formal graduate education  in mid-19th century Germany. Economics by its very nature is a vocation and most prominent economists in the 18th and much of the 19th centuries had a “day job” and no doctorate. Not coincidentally, these “vocational” economists generally tended to support laissez-faire policies. The professionalization of economics and other social sciences via graduate programs, which spread from Germany to France, Great Britain and the United States in the late 19th century, was driven by the increasing demands of interventionist and militarist governments for experts and specialists to advise on and plan the expanding programs of the emerging Welfare-Warfare States of the twentieth century. For their part, social scientists, most of whom faced  a precarious existence on the free market, were all too eager to accept the prestige, power and the steady income offered by government positions. Ludwig von Mises eloquentlydepicted the connection between professional economists and government interventionism in 1949:

The early economists devoted themselves to the study of the problems of economics. In lecturing and writing books they were eager to communicate to their fellow citizens the results of their thinking. They tried to influence public opinion in order to make sound policies prevail in the conduct of civic affairs. They never conceived of economics as a profession.

The development of a profession of economists is an offshoot of interventionism. The professional economist is the specialist who is instrumental in designing various measures of government interference with business. He is an expert in the field of economic legislation, which today invariably aims at hindering the operation of the market economy. . . .

[Economists] rival the legal profession in the supreme conduct of political affairs.  The eminent role they play is one of the most characteristic features of our age of interventionism.