Egypt’s Revolution and Higher Education

One thing few people have noticed about the revolutions sweeping the Middle East and North Africa right now is that they are led mostly by unemployed and underemployed college graduates. Consider the following facts:

In Egypt, the median age is 24. At present more than 25 percent of the population is attending or has attended university, with about a 50 percent dropout rate. University education in Egypt is free. The unemployment rate in Egypt is comparable to that in the United States: 9.4 percent. Yet, 87.2 percent of the unemployed are between the ages of 15 and 29, and Marcus Noland, deputy director and senior fellow at the Peterson Institute for International Economics in Washington, points out that unemployment among Egyptian college graduates is ten times higher than for those who did not go to college (all this is from a Feb. 1, 2011, Marketplace feature on PBS television).

Is it a coincidence that, as Noland also observes, most of Egypt’s anti-government protesters are precisely this demographic? I think not. Among the things an education will do for you is create an expectation that you will get a better job, make a better living, have a better life than if you did not have a college degree. And what if that does not pan out? What if, upon graduation, you find that you cannot get a job in your field, or in anything that requires an education—or that you cannot get a job at all?

The natural reaction is to find someone to blame. Who to blame? How about the people who sold you a rotten bill of goods? In the case of Egypt, that would be the government who, in quite literally giving a college education away, was signaling that a college degree was so valuable to society that it was willing to remove every barrier to entry. Why would the Egyptian government do this? Perhaps because it has been sold on the argument that prosperity comes from an educated populace. This is indeed the current theory popular among those trying to “help” developing countries. If only we can educate the populace, then the economies will grow. But this gets things completely backwards.

Many look at the wealthiest countries and ask what it is that these countries have that others do not. Since all too often “free markets” and “property rights” are not even remotely considered, one is left with the fact that such countries have a highly educated populace. However, that’s not where the wealthy countries began. Does education result in strong economic growth? History demonstrates that it is strong economic growth that results in more education. In all underdeveloped countries, including the United States two centuries ago, uneducated farmers’ wealth is turned into primary education and job training for their children, which results in entrepreneurs and factory workers, whose wealth is turned into college degrees for their children, which results in doctors, lawyers, and MBAs, whose wealth is turned into college degrees for their children, which results in scientists, artists, and scholars. These latter are luxuries one gets only from sufficient wealth having been built up.

With education subsidies, however, these steps are often skipped. My brother and I went from a father who is a coal miner to artist and poet/playwright/humanities scholar—clearly skipping a step or two. The result is underemployment and misallocation of skills for both of us. Many in Egypt went right from uneducated farmer to various college degrees. The wealth was not there to support those endeavors.

The result is unemployment. The result is revolution.

This is not to underplay the Egyptian people’s just grievances. Quite the contrary. There are plenty of reasons to want to overthrow the sitting Egyptian government. But the irony is that the government’s largesse is part of the problem. The government provided free educations for its people, even though there was not a sufficiently complex economic system in place to create jobs for all of those people. In 2001, Alison Wolf argued in Does Education Matter? that “Egypt is a country whose government made a commitment to give (university) graduates first call on jobs in the public sector. It very quickly found itself with a vast and underemployed army of civil servants, and a huge queue of students aiming at comparable sinecures for themselves” (p.40).

There can only be so many government jobs. What happens when government can no longer absorb the excess college graduates? In the end, the Egyptian government created the current situation by creating a population too educated for its economic system.

Critics will immediately accuse me of arguing that we ought to keep the masses poor and uneducated, to ensure they don’t rise up. What I am in fact arguing is that we cannot create wealth by skipping steps, by leaping a country into a population whose education does not match its economic realities.

One of the side effects of an overly-educated population (overly-educated meaning there are more people with educations than jobs for them at that level of education) is that one has a population composed of people who are both dissatisfied with their lot in life and who know exactly what is causing their dissatisfaction. Their world is bigger, and the limits of their situation cannot contain them. It eventually spills into the streets.

The situation in the United States is not quite so dire. At least, not yet. We have a very complex economy with a large number of jobs that require a considerable amount of education. Yet, we are starting to see some changes. Unemployment for college graduates in the United States is lower than that of the general population. Yet in the past few years recent college graduates have had a hard time finding jobs. Between their moving back in with parents or borrowing yet more money to keep going to school, most of the relevant numbers are not apparent. Yet their borrowing is contributing to the education bubble in the U.S. And more than that, most recent college graduates are not getting jobs that even require college degrees, and likely won’t for many years. When they do, they won’t get jobs even remotely related to their degrees.

The result of all of this is going to be increasing dissatisfaction. In the U.S., college graduates are taught that the problems of the world rest on the shoulders of capitalism and capitalists. So when our college graduates rise up, what will they demand? More freedom? Or less?

The world is in a financial crisis. The Federal Reserve, in combination with various government policies, helps hold interest rates down to artificially low levels, making money cheap, encouraging people to make risky investments. Government housing policy directed most of the malinvestments into housing. The result was the housing bubble which, when it burst, resulted in widespread financial instability and a jump in unemployment focused on manufacturing.

But the world is also facing an education crisis. In the U.S., the federal government has made getting a college degree cheaper through various grants and subsidized student loans (which only delay the payments, swamping people in overwhelming debt for years). Thus, more and more people have gone to college, without understanding what jobs are available—sometimes without understanding that their degrees won’t get them any kind of job outside of academia. What will be the result when this bubble finally bursts, as it clearly has in Egypt?

An economic bubble like the one we just had in housing merely causes a recession or a depression, with an increase in unemployment. An education bubble, however, can lead to a revolution.