Knowledge over State Certification

After outlining the foolishness of submitting to the government and hostile guilds on the question of what to teach your students – because that is what an “accredited education” means — North outlines an alternative manner to provide a superior education.

The only purpose for an accredited degree is employment. That should not be Mises’ goal: their goal is “To publish, promote, explain, and demonstrate the continuing relevance of the economic insights of Ludwig von Mises and Murray Rothbard.”

The church should also be doing the same, but for God and His Law-Word. (And not just economic insights, either!) The modern institutional church is pretty much a joke regarding the mission, so the lay believer will have to do the job instead.

It’s going to take some time to get the leaders, the networks, and the vision we need to do the work. We should be preparing for the call, and looking for ways to prepare the Way of the Lord.

From Gary North, The Mises Institute’s Master’s Degree Program: How to Avoid De-Platforming

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I offer two questions. They were raised by Austrian School economist Peter Klein. He asked them in an article posted on the Mises Institute’s site. “. . . As noted above, most of the arguments I’ve seen simply take it as self-evident that academic research is valuable and that public policy should promote it. But do graduate programs really produce value? How can we tell?” He did not answer these two questions.

Klein was the moderator of a debate between me and Walter Block that was held at the Mises Institute in 2011. The debate question was this: “Is it smart to get a Ph.D. in economics?” I took the negative.

John Maynard Keynes earned a B.S. in mathematics. He never earned a degree in economics. His influence came from his writing.

Ludwig von Mises earned a law degree in 1906. He did not get a professor’s job until 1934. His disciple Wilhelm Roepke got him a job at the Graduate Institute International Studies at the University of Geneva when Mises fled Austria in expectation (correct) that Hitler would one day invade. He left Europe in 1940, literally hours before the Nazis captured all of France. He lived on part-time income in the United States until 1949, when he got a teaching job at the Graduate School of Business at New York University. He got this job only because his salary was paid by donors. The university listed him as a visiting professor from 1949 until his retirement at age 86 in 1967. The other faculty members had no respect for him. They steered students away from his courses. His influence came from his writing.

Murray Rothbard got a Ph.D. from Columbia in 1956. Because he chose to stay in New York City, he could not get a job teaching from 1956 to 1966. Then he got a part-time job at Brooklyn Polytechnic, where he taught engineering students. There was no economics major. He was there for 20 years. Only late in his career did he get a job teaching graduate students at the University of Nevada at Las Vegas. His influence came from his writing.

Henry Hazlitt never went to college. His influence came from his writing.

It is what you know that matters most. But formal education is about certification, not knowledge. Max Weber [Mawx VAYber] was the most influential social thinker in the early 20th century. He died in 1920 at age 56. In his posthumously published book, Economy and Society (1924), he wrote this about academia.

The development of the diploma from universities, and business and engineering colleges, and the universal clamor for the creation of educational certificates in all fields make for the formation of a privileged stratum in bureaus and in offices. Such certificates support their holders’ claims for intermarriages with notable families (in business offices people naturally hope for preferment with regard to the chief’s daughter), claims to be admitted into the circles that adhere to ‘codes of honor,’ claims for a ‘respectable’ remuneration rather than remuneration for work done, claims for assured advancement and old-age insurance, and, above all, claims to monopolize socially and economically advantageous positions. When we hear from all sides the demand for an introduction of regular curricula and special examinations, the reason behind it is, of course, not a suddenly awakened ‘thirst for education’ but the desire for restricting the supply for those positions and their monopolization by the owners of educational certificates. Today, the ‘examination’ is the universal means of this monopolization, and therefore examinations irresistibly advance. (From Max Weber: Essays in Sociology, edited by H. H. Gerth and C. Wright Mills [New York: Oxford University Press, 1946] pp. 241-42.)

In short, getting a degree is all about getting employment. Job offers are based on formal criteria: taking exams. The main barrier to entry is the students’ parents’ ability to pay for programs that administer exams.

Everyone knows this in academia, but the system never changes. It has not changed since about the year 1100.

America’s finest universities over the last decade have put their courses online for anybody to view free of charge or for minimal payments. Online education is a reality. Students from anywhere in the world can get the best lectures from the best professors in the best universities. It does not cost them any money. This is true education. It is mass education. It does not cost the universities anything to post these lectures online. It does not cost the viewers anything to watch them. This is true education.

Online students do not get degrees from these institutions. To earn a degree, you have to spend at least four years on campus, and your parents will have to pay something in the range of $60,000 a year: room, board, tuition, and books. The degree, not the knowledge needed to earn it, is what is valuable in the marketplace.

What if you have the knowledge that you could have received online from one of these universities, but you do not have a degree? Can you market yourself as an expert? Probably not. You will have to do something in addition to walking in the door and asserting the fact that you watched all the videos. You cannot prove this. Even if you could, you cannot prove that you understand them. Even if you can prove that you understand them, the company will pay a wage considerably less than it would pay a graduate from the university.

The question you have to ask yourself is this: “How much less?” Would it pay you to take four years of your life and $240,000 after taxes to earn the degree? You probably would not do this. That is the whole point. That is the barrier to entry.

Can you write your way into success? Here are the people who did: John Maynard Keynes, Ludwig von Mises, and Murray Rothbard.

I have also done pretty well.


The Mises Institute has an excellent reputation among those people who understand the meaning of Austrian economics. The Institute should therefore structure its marketing of this program in terms of its name, not in terms of the government-regulated phrase “degree granted by an institution of higher learning.”

Instead of offering a Master’s degree in Austrian economics, for which there is no known free market demand, it should offer this certificate of performance: Graduate Fellow of the Ludwig von Mises Institute. The word “fellow” is not government regulated.

Through a rigorous program of professor-supervised online education, which the Institute plans to offer, the best and the brightest students from around the world who want to master Austrian School economics will be able to earn such distinction.

To earn it, students must jump through the traditional academic hoops: term papers, computer-graded exams, written exams, and a Master’s thesis. I would add this: mastering digital media. This would include a blog site and a YouTube channel as minimum performance. (The Mises Institute employs Chad Parish, a virtuoso of low-budget video media. He would be an ideal instructor.)

There is no known market value for this certification, but neither is there known market value for a state-authorized degree granted by the Mises Institute.

The degree will derive value from coercive authority of the state. The term “Graduate Fellow of the Ludwig von Mises Institute” will derive value from the reputation of the Mises Institute.

Depending on the quality of the program, and depending on the quality of the published M.A. theses of the fellows, employers will impute value to the certificate.

The Mises Institute should create a program that derives its economic value from the free market. The program should derive its academic value from the quality of the fellows’ publications. The best of them each year will be published by the Mises Institute. These graduates will be designated as Distinguished Graduate Fellows. There should be a special book series published by the Mises Institute: Distinguished Graduate Fellows Series.

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