What’s the “Paper Belt” and Why Set It on Fire?

Tech entrepreneur to talented youth: Skip college.

Sometimes you come across a book with such an intriguing title that you just have to dive into it. That was the case when I saw a reference to Paper Belt on Fire by Michael Gibson. The book’s subtitle sealed the deal: How Renegade Investors Sparked a Revolt Against the University. Too iconoclastic to pass up!

The author, I learned, is a college graduate (New York University) who had embarked on a Ph.D. in philosophy at Oxford when he decided that the academic life wasn’t really what he wanted. Why? Because, he came to understand, it wouldn’t allow him free rein for deep and original thinking.

So he bailed out on the doctorate and, after doing nothing at all for a while, found himself working for Silicon Valley legend Peter Thiel. He was hired as an investment analyst but was soon on the Thiel Fellowship team, evaluating young people for the $100,000 grants that Thiel was making available to innovation-minded Americans who would get the money in lieu of enrolling in college.

College degrees have become a new form of the indulgences the Church used to sell the faithful.That assignment was ideal for Gibson, who had already concluded that college degrees had become a new form of the indulgences the Church used to sell to the faithful who wanted salvation. Just like the Church, today’s universities are flush with money, looking obsessively to amass even more. They sell prestige degrees at a high price, but most of the graduates have forgotten everything they have learned by the time they get into the workforce, usually doing jobs that have nothing to do with what they studied.

It’s a huge waste of time and talent.

As Gibson puts it, “The best universities in the world turned many graduates into krill for too-big-to-fail corporate leviathans.” And that has much to do with a bad trend that he focuses on, namely the loss of momentum for research and innovation, which has “flatlined” since 1971. Too many smart people are spinning their wheels in pursuit of needless paper credentials, and in university departments groupthink is common and outside-the-box analysis discouraged.

College presidents, Gibson observes, are not paid on the basis of student achievement but on whether they manage to increase the supposed prestige of the institution and bolster its endowment. Presidents repeatedly assert that getting degrees from them is terribly valuable, even “transformative,” but they never produce any evidence for those claims.

But the prospect of losing some possible students to Thiel’s fellowship provoked spasms of rage in the higher-education community. For example, Larry Summers, the former president of Harvard, blasted the fellowship idea, calling it “the single most misdirected philanthropy of the decade” and averring that it would be “tragic” for intellectually capable young people to eschew college in favor of Thiel’s backing.

Several Thiel fellows who have done very well are probably glad they didn’t do the usual thing of going to college. Gibson mentions one brilliant student named Ari who had been “paying MIT 50 or 60 grand to take courses covering what he already knew.” Ari decided to leave MIT for a Thiel fellowship. He subsequently devised Workflow, which received an Apple Design Award in 2015 and was purchased by Apple for $20 million in 2017. Ari didn’t need an MIT degree to be a success.

The prospect of losing students to Thiel’s fellowship provoked spasms of rage in the higher-ed community.Another Thiel fellow who has made his mark is Vitalik Buterin, who developed Ethereum, a post-Bitcoin cryptocurrency. He had not gone to college but, at 19, was an expert in mathematics, game theory, and computer programming. Gibson says that he bitterly regrets not buying any Ethereum coins when they first became available. One of his friends did, and his holding was eventually worth over $4 million.

As fascinating and useful as Gibson found the Thiel Fellowships, in 2016 he decided to start his own similar venture. He teamed up with Danielle Strachman, who had been wearing herself to a frazzle running a private school in San Diego called Innovations Academy. Their views about the education establishment meshed perfectly. The two of them formed the 1517 Fund, the name of which comes from the year when Martin Luther nailed his 95 Theses to the door of a church in Wittenberg, attacking the Catholic establishment for its corrupt sale of indulgences.

The concept behind the 1517 Fund was to find sharp and ambitious young people, back them financially, and provide guidance to help them get businesses off the ground. Gibson explains, “Danielle and I had this goal, somewhat vague, but still commanding, to start an alternative educational institution. The heart of our idea was that we would discover the world’s best talent as early as possible. We couldn’t trust the cultivation of extraordinary talent to the traditional institutions of learning any longer.” By supporting people who had either dropped out or never gone to college at all, they would demonstrate that educational credentials are unnecessary and simultaneously give innovation a badly needed boost.

Quoting the Greek philosopher Heraclitus, who said, “Nature loves to hide her secrets,” Gibson replies, “1517’s job is to find them before anyone else.”

The search for talent has taken Gibson and Strachman all over the world. One trip took them to Hong Kong, which became a stupendous success because the city was completely open to ambition and innovation. They then proceeded to Shenzhen in China, a city that grew spectacularly after being declared a special economic zone in 1980, when Deng Xiaoping decided to let some Chinese try freedom. Both places capture “the dynamism of the frontier,” something that Americans once knew but have now mostly forgotten.

Gibson recounts the 1517 Fund’s initial search for venture capital, which was sufficiently successful to begin operations. Once again, the higher-ed establishment denounced the effort of getting innovative kids to bypass college and develop their ideas. That effort entailed startup grants of $250,000 each. Some were highly successful, such as the young man who came up with Opentest, a “Craigslist for chores.” Some of the fund’s investments were so good that other funds poached them away, the dreaded “cram down.” Nevertheless, the 1517 Fund is doing well.

Our educational system “infantilizes teens and assumes they must wait and pay their wasteful dues.”Gibson writes that our educational system “infantilizes teens and assumes that they must wait and pay their wasteful dues. In lieu of any concrete goal, schools encourage vague ambitions like ‘leadership’ and call aimlessness ‘self-exploration.’” His indictment is much like that of Professor Bryan Caplan in his book The Case Against Education, which I reviewed here.

Is there anything that our educational institutions could do to make a positive social contribution?

For one thing, Gibson writes, they ought to work on how to optimize teaching. Our schools are overwhelmingly staffed with teachers who continue to employ antique methods that yield poor results. Our universities shouldn’t be content with that.

For another, they should stop stifling academic freedom so that original thinkers won’t have to worry about offending hypersensitive groups and being penalized for it.

Most importantly, academic departments should identify the five most pressing unsolved problems in their fields, then free faculty members who want to rise to those challenges to attack them.

Getting back to the book’s title, the “Paper Belt” refers to those colleges and universities that purport to educate the country’s future leaders but manage only to waste their time. By introducing competition that will deflate the college credentials balloon, Gibson intends to set that belt on fire. He’s off to a good start.

He won’t succeed alone, but he has caught a wave that is building in power. I suspect that more and more young Americans, ranging from math geniuses to ordinary students who just want to learn useful skills without four or more years of expensive coursework, are going to give college the cold shoulder.

George Leef is director of editorial content at the James G. Martin Center for Academic Renewal.