THE EDUCATION BUSINESS IN THE USA:Is it Really Educating for the Needs of the Business World?


Dr. V.E.”Bill” Haloulakos is an AIAA National Distinguished Lecturer and a contributor to The Business Thinker



 Rev. Protodeacon George A. Haloulakos, MBA, CFA, is a professor at the University of California at San Diego (and Irvine) Extension programs. He is a Chartered Financial Analyst and is owner/operator of Spartan Research and Consulting.

  • Education has become a big business in the United States
  • The proliferation of the number of departments and major fields of study in both public and private universities is staggering
  • The number of students at undergraduate and graduate levels is phenomenal
  • The amount of money expended is almost beyond measure
  • Yet, many businesses in the US need to hire special help from abroad under the umbrella of the H-1B Visa programs
  • This implies that the education business establishment may not be satisfactorily fulfilling the needs of the Business World
  • The proliferation of for-profit universities and the expansion of special extension courses in many of the large universities strengthen the above conclusion
  • Political correctness has significantly altered the environment whereby open discussion and debate on key issues appears sharply limited or restricted in our schools and universities
  • It was this “new political correctness” environment that caused the President of Harvard University to resign for merely raising the question as to why there is an under representation of women in the fields of science and mathematics and whether they could do something to remedy the situation
  • The deleterious effects of this political correctness is perhaps best illustrated by an article, exposed by Diane Ravitch, in the Wall Street Journal, June 20 2005, titled “ETHNOMATHEMATICS”


Education has been around for the entire history of mankind. It has been something that is always sought in order to elevate and improve a person’s or an entire family’s life. This was by way of acquiring knowledge that enabled one to do things and perform tasks that had market value and as the world of business entered human life the value of education increased substantially. Business required record keeping of the transactions between the trading individuals and groups. In fact it has been suggested that it was this business record keeping that developed the need for written languages.

In the earliest of days “reading-and-writing” was the property or secret of the elites and it was passed from generation to generation via word from mouth to ear and thus, these elite classes exercised a lot of power over the illiterate masses. History is replete with examples of the infamous “scribes” of many early societies, primarily that of Egypt where the whole system of knowledge was the property of the priests and their hieroglyphic writings were uniteligible until the Rosetta Stone was found by Napoleon’s soldiers in Egypt, now on exhibit in the British Museum in London, which eventually deciphered the Egyptian Hieroglyphs.  Even in the, so called advanced and sophisticated days of the Roman Empire the elites had learned the Greek language and communicated among themselves in Greek so as the masses, i.e. “the hoi polloi”, would not understand it. In fact it is this very custom of talking Greek so the masses did not understand it that has resulted in the common phrase of today “It’s Greek to me”.

While there are many early societies that have made numerous contributions to the development and the advancement of education, it is to the Ancient Greeks that most of the credit must go for their contributions are unique, everlasting and widespread. First, they developed the Greek Alphabet and a language that is still used and understood and then they opened education to the masses, which resulted in the plethora of writings, philosophy, history, geometry, and astronomy and on and on… It was Plato who opened his Academy in Athens, the forerunner of today’s university, in the 4th century BC, where one could attend and learn. Inspired by the admonition of his mentor, Socrates, prior to his unjust execution that “the unexamined life is not worth living”, Plato and his student, the political scientist Aristotle, helped lay the foundations of Western philosophy and science. Specifically, geometry and mathematics so were highly valued and thought of that led to Plato’s inscription above the Academy entrance “Let no one enter who does not know geometry”  

Education for many centuries was done by mentors. Galileo became so famous as a thinker, lecturer, scientist, etc. that it resulted in many students from all of Europe moving into his house so they could be mentored. Eventually, however, education became the formal business of organized institutions that we call universities. The first university establishments in the western world are thought to be University of Bologna (founded in 1088) and later Oxford university (founded around 1096). In what is now the United States of America (USA), all of the top private universities were founded by religious orders, quite often as schools on theology. Harvard University, for example, established in 1636, although not officially associated with a church, it primarily trained Congregational and Unitarian clergy. Likewise, 17th century clergymen who sought to establish a college to train clergy as well originally chartered Yale University as the “Collegiate School”. Similar stories can be told about other universities, e.g., the University of Southern California founded in 1880 by the Methodist Church. All these originally religious universities have become and continue to thrive as secular institutions. On top of that there has been a plethora of many other private and public universities that we have rightly call “The American Education Industry”, the main topic of this article.


Today in the United States there are about 4200 degree-awarding institutions [2500 4-year and 1700 2-year universities] with an approximate enrollment of 18 million students. This is indeed a big business! It is a business whose mission is not necessarily to make money, with some exceptions perhaps of some of rather recent “sprouting” of  “for profit schools” to be discussed later in this article, but to help their students improve their life, be productive members of our present society and also equip them with the tools to be creative and influence the future. For sure one critical purpose of a university education is to help individuals become self-sufficient, productive members of society. It can perhaps be observed that schools such as engineering, physical sciences, medical, business and their likes appear to be meeting their goals of their mission but there are other disciplines in the liberal arts such as history, political science, that are may be falling short of this goal and they also happen to put out the largest number of graduates. The exception is either English majors (who possess very strong writing and research skills transferrable to a large number of venues) or those liberal arts graduates who continue their education to acquire a specific skill-set or certification that is either technically or business oriented, and is commercially marketable.

We are not questioning the value of such a liberal arts education but we are simply saying that our economy may not need such an abundance of graduates in fields where there is either limited or no demand for such knowledge. Such individuals may find themselves either unfilled, underemployed or both as their skill set and formal education may not sustain them because they are unable to find gainful employment in that field. Thus, business is often forced to make use of the H-1B Visa plan to bring in international workers while many thousands of our US college graduates remain unemployed.  By any objective measure, this implies that many universities and their current programs are falling short in providing an educated work force with commercially marketable skills.  While institutions strive to educate one for life, it is equally important to remember that education should also, if not hopefully, enable one to make a living as well!

The proliferation of all these “feel good” majors in areas that give the students very limited marketable skills is becoming a national scandal. In an article in the Wall Street Journal issue of February 5, 2013 titled “Higher Learning, Meet Lower Job Requirements” James S. Shaw reports that North Carolina Gov. McCrory suggested in a recent interview with former US Secretary of Education William J. Bennett that “ college degrees should lead to employment”!  Many thousands upon thousands of college graduates today not only remain unemployed but also many of them have acquired huge loans, most of them Government guaranteed, in the process and it has become a national “scandal”. One should then ask, why such a young person spend four to five years studying things that are known not to be easily marketable and also run up such humongous debts in the process? The most likely answer is that perhaps the academic establishment is misadvising them. It is beyond question if these persons would spend those years on even a mediocre job in a four or five-year period they would be further ahead in life and without the burdensome loans.

There are numerous other deleterious effects of this situation. Being in college and pumped up by “marginal” faculty members, students may end up putting their minds to use in less-than productive activities with the worst result being all this political correctness and intellectual intolerance that are so prevalent in today’s university campuses. How can one forget the trials and tribulations of the Harvard University President who not too long ago dared ask, “why are there not more women in the sciences”? HE LOST HIS JOB BECAUSE OF THAT QUESTION! And by the way we still do have not the answer to this question. In fact this prevailing madness in current day academia has made some old jokes, such as putting up the correctness of the Pythagorean theorem to a vote, a reality. This can be seen in June 20, 2005 Wall Street Journal article, by Diane Ravitch, titled “ETHNOMATHEMATICS” where she very eloquently exposes this insane political correctness. She writes:

Those were the days of innocent dumbing-down. Now mathematics is being nudged into a specifically political direction by educators who call themselves “critical theorists.” They advocate using mathematics as a tool to advance social justice. Social justice math relies on political and cultural relevance to guide math instruction. One of its precepts is “ethnomathematics,” that is, the belief that different cultures have evolved different ways of using mathematics, and that students will learn best if taught in the ways that relate to their ancestral culture. From this perspective, traditional mathematics — the mathematics taught in universities around the world — is the property of Western Civilization and is inexorably linked with the values of the oppressors and conquerors. The culturally attuned teacher will learn about the counting system of the ancient Mayans, ancient Africans, Papua New Guineans, and other “non-mainstream” cultures.

Partisans of social justice mathematics advocate an explicitly political agenda in the classroom. A new textbook, “Rethinking Mathematics: Teaching Social Justice by the Numbers,” shows how problem solving, ethnomathematics and political action can be merged. Among its topics are: “Sweatshop Accounting,” with units on poverty, globalization, and the unequal distribution of wealth. Another topic, drawn directly from ethnomathematics, is “Chicanos Have Math in Their Blood.” Others include “The Transnational Capital Auction,” “Multicultural Math,” and “Home Buying While Brown or Black.” Units of study include racial profiling, the war in Iraq, corporate control of the media, and environmental racism. The theory behind the book is that “teaching math in a neutral manner is not possible.” Teachers are supposed to vary the teaching of mathematics in relation to their students’ race, gender, ethnicity, and community”.

This is madness!   As anyone who either has studied or utilizes mathematics in their field knows, the laws of physical science and mathematics are immutable.  To teach otherwise would require one to view the world in the manner described in Lewis Carroll’s classic “Alice In Wonderland Through the Looking Glass.”  No wonder there are so many young people who shy away from the math and science courses and opt for “feel good” subjects (many of which are in the liberal arts venue) instead.  This begs the question: How does one correct this situation?


As it has been the custom in the American Business, it is the private sector that often spearheads changes, innovation and progress. While some may cite World War II or the Space Race of the 1960s as being government-led, such an observation ignores the fact that government largely served to identify goals that were in the national interest of fulfilling on a massive scale.  It was the private sector that made the accomplishment of those goals achievable, feasible and economical.  This is because the price mechanism and the immutable laws of supply-and-demand were allowed to function in a manner that allowed physical, financial and intellectual capital to achieve its highest valued use in the context of the goals (e.g., victory in war, first to the moon) set forth.

In this situation concerning role of higher education, the rise of numerous private and in some cases, “for profit” education institutions, special extension courses and related certification programs is providing the template for maximizing the total return on investment in higher education that is fulfilling in both financial and non-pecuniary terms for the individual while helping to meet the ever evolving needs of the business world.  There are four such examples we can cite that affirm this observation.  Three are direct responses by the private sector, while the fourth example is “private sector” response by a public institution.

Our first example is the aforementioned University of Southern California (established in 1880 by the Methodist Church).  USC is world renowned for its professional schools, including but not limited to business, engineering, dentistry, education law and other such fields of endeavor.  During the post World War II period USC’s emergence as a world-class institution of higher learning began as the university provided “full-time” programs in the aforementioned fields that allowed working adults (many who were returning combat veterans who going to school on the GI Bill) to pursue their studies and earn their degrees in their chosen fields taught by fully-accredited faculty.  When the aerospace industry and other areas of business, along with the education field began to pay their more ambitious employees to acquire marketable and needed technical skills (e.g., science, math, accounting, finance, commerce, educational and business administration) these people were able to accomplish this by matriculating at USC.  They were able to earn undergraduate and graduate degrees (including doctorate and post-graduate level) but did not have to give up their day-jobs.  Thus USC helped its region (Southern California) and later, the rest of the nation and overseas, by making education an option that did not require having to forsake gainful employment and professional advancement because its classes were available both day-and-evening!  USC also pioneered the oft-imitated deployment of “satellite” degree programs in which faculty members teach classes on site for large corporations that allow their employees the benefit of furthering their education but without the time-and-expense of commuting.  For these reasons, USC’s dominance among the aforementioned professions in Southern California owes its legacy to its initiative to anticipate-and-respond to the needs of the business world.  As such, this provided the foundation for the university to achieve national and international eminence that now makes it one of the stellar academic institutions in the 21st century (e.g., named College of the Year by Time magazine and Top 10 and Top 25 rankings in its various professional schools by The Wall Street Journal, Business Week, et al).

A second example of the private sector responding to the needs of a specific end-user market is National University (headquartered in San Diego, CA.)  Founded in the early 1970s, NU is a private, non-profit institution that provides a fully-accredited series of undergraduate and graduate level degree programs that not only meets the needs of working students (on-ground and on-line), but most especially those in active military service whose deployment schedules might otherwise preclude them from acquiring a “traditional” college or graduate level education in a single locale.  The military has become increasingly high-tech, and NU makes it possible for active duty members of the armed forces to acquire much needed technical skills to help them in their day-to-day responsibilities, and also provides a segue into the private sector upon retirement or discharge from their military deployment.

A third example are the for-profit institutions which have come to fruition during the decades of 1990s and 2000s.  These institutions — while coming under heavy scrutiny and criticism by “traditional” universities as well as major print-and-video media publications that appropriately question accreditation and adherence to academic standards — have been able to provide a venue for students who are seeking a particular skill-set to help them in either in their current jobs or launch a new career path.  Such students may lack the background or credentials to earn entry into prestigious or traditional academic institutions. But they are not necessarily seeking an easier way to earn a degree, but rather an opportunity to learn from successful professionals and practitioners as well as expand their own networks.  These students are sometimes described as non-traditional learners, but nevertheless are ambitious to grow and develop into being more self-sufficient and productive members of society.  The group-study and interactive learning modes popularly used by these institutions enable working adults to engage in an environment that is similar to the work world, and thus makes this education more relevant or applicable to their particular circumstances.  In sum, these “for-profit” institutions are a reminder that there is a growing market which looks at higher education from the perspective of finding the school that is best for their needs rather than attending the so-called best school.  This is because the so-called best school in a given field may not be relevant or important IF they are not able to afford it or gain access.

The fourth example, and in response to the increased competition now evident in the realm of higher education, is that well-known universities such as the University of California (the world’s #1 rated public university system) have now developed Extension programs that allow students to receive Certificates of Completion in various fields such as accounting, finance, management, and other areas that are becoming increasing technical and complex in nature.  The Extension format allows students to earn college course credits which can later be applied to a formal degree program if they so desire, Certificates of Completion or both.  These classes are noted for high-level content and rigorous academic standards, but are very narrowly focused and completed in a relatively shorter period of time.  Typically offered both on-ground and on-line, day and evening, the Extension program enables a student to obtain a very high return on his or her investment (especially if from a prestigious public university like the University of California) because the person acquires a specific skill set and Certification that increases versatility, marketability but without the onerous financial burden of lengthy and often expensive graduate level degree programs.  If a student has for example, a bachelor’s degree and is in a solid career track, but wants to augment his or her skill set with specialized knowledge then the Extension program is an ideal way to do so in a fully accredited, academically rigorous but practical venue.  Similarly, this is a very time efficient way to independently acquire knowledge or a recognized academic credential for a change in careers without having to subject oneself to the whims and risks associated with the group study models associated with some, but not all for-profit educational institutions.

These are just a few, but not an all-inclusive list of examples on how the private sector has creatively responded to the ever-changing needs of education.  But since the private sector is based on application of free-market principles, including the price-mechanism, a cautionary note is in order. In his book, titled The Higher Education Bubble, published on June 26, 2012, Beauchamp Brogan Distinguished Professor of Law at the University of Tennessee, Glenn Harlan Reynolds, very eloquently speaks of the problems associated with a speculative bubble in higher education. He writes:

America is facing a higher education bubble. Like the housing bubble, it is the product of cheap credit coupled with popular expectations of ever-increasing returns on investment, and as with housing prices, the cheap credit has caused college tuition to vastly outpace inflation and family incomes. Now this bubble is bursting.

Nationally syndicated radio talk-show host Dennis Prager noted in his February 6, 2013 program that “Glenn Harlan Reynolds explains the causes and effects of this bubble and the steps colleges and universities must take to ensure their survival. Many graduates are unable to secure employment sufficient to pay off their loans, which are usually not dischargeable in bankruptcy. As students become less willing to incur debt for education, colleges and universities will have to adapt to a new world of cost pressures and declining public support.”

The economic principles of supply and demand apply to the entire realm of higher education and thus affects both private and public institutions.  How will the education industry respond?  Only time will tell.  However, in closing, it should be noted that over the course of recorded history, there is a difference between schooling and education.  The two concepts are not one-in-the-same!  One may have a degree or many degrees, or no degree at all. Earning a degree affirm one’s successful completion of a program of study, but that does not mean one is necessarily educated as one may have only learned about published knowledge.  Education requires the blending of wisdom and discernment to accompany the acquisition of knowledge.  As such, it may be possible to be educated without having a degree because one can learn so very much through life and work experience, and through reading on one’s own time!  Samuel Clemens (aka Mark Twain) summed it up when he wrote that “I have never let schooling interfere with my education.”   The world of higher education that provides schooling hopefully will continue to evolve and adapt to the ever present reality of price-and-value relationships, and hopefully this learning that will be accompanied by the wisdom and discernment that will advance our human progress.





The Tyranny of Political Economy


Dr. Dani Rodrik is the Rafiq Hariri Professor of International Political Economy at the John F. Kennedy School of Government, Harvard University. He has published widely in the areas of international economics, economic development, and political economy.

There was a time when we economists steered clear of politics. We viewed our job as describing how market economies work, when they fail, and how well-designed policies can enhance efficiency. We analyzed trade-offs between competing objectives (say, equity versus efficiency), and prescribed policies to meet desired economic outcomes, including redistribution. It was up to politicians to take our advice (or not), and to bureaucrats to implement it

Then some of us became more ambitious. Frustrated by the reality that much of our advice went unheeded (so many free-market solutions still waiting to be taken up!), we turned our analytical toolkit on the behavior of politicians and bureaucrats themselves. ………………………………….

……………………………Politicians became income-maximizing suppliers of policy favors; citizens became rent-seeking lobbies and special interests; and political systems became marketplaces in which votes and political influence are traded for economic benefits.

…………Why are so many industries closed off to real competition? Because politicians are in the pockets of the incumbents who reap the rents. Why do governments erect barriers to international trade? Because the beneficiaries of trade protection are concentrated and politically influential, while consumers are diffuse and disorganized. Why do political elites block reforms that would spur economic growth and development?  Because growth and development would undermine their hold on political power. Why are there financial crises? Because banks capture the policy making process so that they can take excessive risks at the expense of the general public.

……………………. If politicians’ behavior is determined by the vested interests to which they are beholden, economists’ advocacy of policy reforms is bound to fall on deaf ears. The more complete our social science, the more irrelevant our policy analysis………..

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DEMOCRACY IN AMERICA: Does it work? Does it matter?

Garske 3Mr. Joseph P Garske is a retired private investor. He is an invited contributing writer to the
He holds a bachelor degree in history from Harvard.


There is a great deal of discussion today about the condition of American politics. The obvious ineptitude, the low level of debate, the pandering rhetoric, the excessiveness of campaigns–all of these have resulted not only in a paralysis of function, but almost a kind of moral failure as well.

There are, of course, numerous sources of blame for these maladies: A rapacious journalistic media, the influence of special interest groups, a growing sector reliant on handouts, the quality of candidates who seek public office.

However, the purpose here is to address this situation from an obverse point of view. It is not to assert that these problems do not exist, because they do and are obvious for all to see, but rather that in an unfortunate way they may not be important to the extent we imagine.

The basis for such an assertion is a somewhat different perspective on the workings of our national system. Especially, that it is incorrect to equate the two elective branches with the whole of American government. Indeed, the political dimension is an integral part, but it is only a strictly delimited part and in critical ways the least important part, of the national government.

One way to appreciate such a perspective is to review the approach used by the nineteenth century French nobleman, Alexis De Tocqueville. In 1840 he published a classic work entitled “Democracy in America.”  It was a two volume study of American society and government notable for its thoroughness and sophistication.

When reading that work written nearly two hundred years ago the first reaction is to recognize how little American society and its people have changed. But there were very important reasons why a person of such stature and renown would journey to a new and raucous frontier country to study its prisons and its politics.

Governing institutions across Europe were at that time notoriously unstable. They were threatened by a growing public discontent, often with widespread sympathy for radical factions intent on armed revolt. Punitive measures, especially imprisonment, seemed to be the only adequate means to control this rising threat. In fact, within a few years after Tocqueville completed his study the entire continent was swept by the revolutions of 1848. No government in Europe was left unshaken, some were overturned.

What fascinated the Frenchman and other European aristocrats was that in America there was comparatively little radical or revolutionary activity, little need for prisons. The American people for the most part were satisfied to vent their political passions and express their partisan hostilities through an orderly elective process. There was a lesson here for those who governed in Europe.

However, the point was not so much whether the American public actually exerted significant influence over the affairs of their government. Rather, it was the general assumption in the public mind that their participation was a crucial factor in determining those affairs. There was virtually no radical sentiment in the country that sought to overthrow what had been established.

Actually, in Tocqueville’s view the real basis and strength of the federalist structure was the one almost totally removed from popular politics and almost wholly unaccountable to the public. That was what he called the aristocracy of the judicial bench and bar. As long as that strata exerted a guiding influence, the institutions of American life would be secure.

The lesson taken back to Europe was that a public embrace of the political process was critically important. It was important even if the actual basis and stability of the nation was centered elsewhere. The sense of participation was more effective in quelling radical disaffection than any punishment could ever be.

From the perspective of today, however, it is ironic to look back upon the time in which Tocqueville wrote and to realize he made no mention of two profound questions that threatened to tear America apart  at that time. Both matters had a great deal to do with the nature and function of government. One was essentially a domestic issue the other had more to do with foreign relations.

The first question concerned doctrines by which judicial members conduct the business of the courts as well as oversee the realm of public affairs generally. There had developed a contest between two factions, what might be called the followers of Joseph Story as opposed to the followers of William Blackstone. This great sectional division within the fellowship of law was an important contributing factor to the eruption of a tragic Civil War beginning in 1861.

The other question regarded credit and currency relations of the United States with banking institutions across the Atlantic. The issue was whether the existing network of state and local banks might continue to extend credit and issue currency based on their own worthiness, or whether those functions should be centralized into a single federal institution. That question was eventually resolved in the form of the Federal Reserve System in the early twentieth century.

It would be interesting to know how Tocqueville would evaluate American democracy if he toured the country today. Truly, he might despair. But he would still be intrigued by the extent to which the American public remained thoroughly occupied within the arena of politics, with little thought of measures taken outside those limits.

Just as in the nineteenth century, he might also have some reason for confidence. He would perhaps now see a composite aristocracy, or a two part aristocracy of legality and finance as stable arbiters of American life. Both of those operated with great independence and beyond any real accountability to the public. He would find it reassuring that at least these institutions are elevated above the mindless rancor of political disputation.

The real marvel of American democracy for Tocqueville would remain the same. It was not that the vote of the people was the foundation of American government. Instead, it was the way in which a channel was provided through which the broader public could exercise a voting franchise. Focusing public energies within strictly prescribed limits strengthened the foundations of authority that actually rested elsewhere.

In reflecting on these ideas, it is important to remember that the whole idea of democracy as a form of government was unanimously abhorred by the Founding Fathers, and the word does not appear in the Constitution; Tocqueville would have agreed. What he might say today is that America now has the rule of law within its borders just as it has a responsible role in the economy of the world.

As long as the two institutions of court and bank are sound, the adolescent theatrics of its political process could be subsumed beneath them. But he might be perplexed at the crowding of the prison system. With nearly two and a half million of its citizens incarcerated Tocqueville might wonder what American democracy would mean to the European aristocracy this time.