(Interviewed by Louis James, Editor, International Speculator)

This interview was first published on October 21, 2009

Editor’s Note: The typical American thinks going to school is the best way to achieve success. As President Obama said in a 2012 presidential address, “If we want America to lead in the 21st century, nothing is more important than giving everyone the best education possible – from the day they start preschool to the day they start their career.”

Casey Research founder Doug Casey has a very different take…

Louis James: Doug, in our recent conversation on global warming, you made some critical remarks about modern education. I know that wasn't mere drive-by disparagement…can you tell us why you're so hard on teachers today?

Doug: Sure. Since the school season started recently, it's probably a good time to talk about schools and education.

L: School season? Is there a bag limit on how many schools you can take down?

Doug: Well, I think that most of the money that's spent on so-called education is, if not wasted, definitely misallocated.

There was a book written a few years ago called something like All I Really Need to Know I Learned in Kindergarten. I have to admit I never read the book, but the title resonated with me. I think there's a lot of truth behind the notion. To me, it implies that a person should have absorbed basic ethical values and an understanding how to relate to other people, animals, and objects by the time he's six years old. Those are the most important things anyone can learn and should be the first things one learns. But it doesn't seem any institution, and fairly few parents, think to teach them.

But the first thing to do is to ask: What is education?

L: Okay, I'll bite. What is it?

Doug: Education is the process of learning how to perceive and analyze reality correctly. That would include subjects like ethics, science, history, and important literature.

L: What about logic? You'd have to include logic.

Doug: Yes, definitely. All things of that nature. The ancients developed the idea of liberal arts, which had a different meaning to them than our current usage. The root of “liberal” is “liber,” meaning free. So the liberal arts were subjects that a free man (as opposed to a slave or a menial) was assumed to be acquainted with. They were divided into the arts and the sciences. The idea was, these things gave you the tools of thought and the building blocks of culture. They were distinct from the mechanical arts, which were means of earning a living. You'd learn the mechanical arts as an apprentice.

Put it this way. The quality of a person can be determined by how he relates to three critical verbs: Be, Do, and Have. The classical liberal arts show you how to “be”; they help form your essence, your character, your will. The mechanical arts show you how to “do”; they are impor­tant, but really are just acquired skills. As a consequence of what you are and what you can do, you “have”; acquire goods and money and reputa­tion.

But it seems pretty clear that most people have the sequence totally backward. They want the “have” part, the material goods, but they don't understand it flows as a consequence of being something and having the ability to do something. Having things is trivial. It's why trailer-park trash will win a million-dollar lottery and wind up back on the dole a year later.

I fear that most of what kids get today, whether in grade school, high school, college, or post-grad, is not education. It’s training.

Entirely apart from that, it seems to me that most institutions degrade as time passes. They naturally and inevitably become constipated, concrete-bound, and corrupt. That certainly appears to have happened to education in the U.S., and probably most other countries.

I'm sure you've seen that eighth-grade test from 1895 that's been floating around the Internet for some years. Snopes.com had a go at debunking it, but they didn't claim the test isn't real, and it does cover a lot of basic stuff few people today know anything about. What every educated person should know may change from age to age, but the basics of thinking and its application to language, science, etc. are enduring. And there are certain minimums of knowledge, tools for living, that everyone should have. The U.S. education system is not delivering these basics.

Training is different. Training is rote learning with a view towards productive behavior in the future. It's what you'd learn on the job, as an apprentice laborer. This would cover most high school and college courses, which are not designed to produce educated young people but useful em­ployees, ready to enter the labor force. But they don't even do that well.

I'll go further. Most schools today are state schools or, if they are not state schools, they teach state-approved curricula. There's an implicit orientation to train the kids to be good little cogs in the wheel, as in obedient subjects, and as opposed to independent thinkers and citizens. That's probably the most important reason not to send your kids to a state school.

Homeschooling is a great alternative, though so many homeschoolers are religious fanatics, they've given the whole idea an unfortunate and undeserved aura of nuttiness. And in my view, filling your kids' heads with all sorts of religious superstition is no better than filling their heads with statist superstition. What they need is a classical education in the liberal arts starting in grade school.

L: Do you really think homeschooling has such a bad reputation? Aren't homeschooled kids burning up the track at the spelling bees, geography bees, etc.?

Doug: Perhaps it depends on which circles you travel in. You homeschool, and you're not religious, so maybe you see things differently. But my sense is that media portrayal tends to emphasize the religious homeschoolers, and perhaps rightly so, since they constitute (I believe) the majority of homeschoolers.

But I'll give you a good reason to favor homeschooling, regardless of who most homeschoolers are. I had a good enough time in school, and I generally enjoyed the social interaction with the other kids. But it was a misallocation of my time; there's little of value you can learn from other kids. It's simply a bad idea to put your kids in an environment where they spend most of the day associating with young yahoos, many or most of whom have a lot of bad habits. The average school is full of unrefined young chimpanzees. Sure, kids need to learn how to work together and socialize, but school is not the only, and certainly not the best, place to do that.

Another reason is that every class, like a group traveling together, tends to move at the pace of the slowest kids in the group. An environment tailored for the lowest common denominator bores the smart kids to tears…or trouble. I was perpetually bored and distracted by the “one size fits all” program of my schools.

It's the same in college, which was an even more serious misallocation of four years of my time and a bunch of my parents' money. And it's much worse today, in either current or constant dollars.

Like most of my friends, I'd end up cutting a lot of classes, because I'd stayed up too late the night before. When I did go to class, I'd fall asleep half the time. And even fully awake, my mind would wander and I wouldn't take good notes, so then I wouldn't bother reading the notes. Of course you learn stuff, but I think it's mostly through osmosis. Entirely apart from the fact that the professors varied greatly in quality.

Most people go to college today because they actually think someone is going to give them an education, when in fact, an education is something you have to give yourself.

You absolutely do not need a college to do that. The old saw about “Those who can, do, and those who can't, teach” is all too true. Professors can't educate anyone, though a few of the good ones can help motivated students educate themselves. But the college business is now structured like a manufacturing business; Aristotle and Seneca wouldn't know what to make of it.

L: My Webster's dictionary says the word educate has two roots: e-, “out,” and ducere, “lead, draw, or bring.” In other words, to draw out, or bring out what's in the student's ability to grasp and remember…not to cram whatever the teacher thinks is important into the student's head.

Doug: That's what “education” today fails to do and why it's such a waste of money. There is no point at all in going to a college today, unless you're looking to learn a trade. Or, perhaps, because the people you meet in college might be of some future benefit to you. In other words, it's pointless unless it's Harvard, Princeton, Yale, or the like. Because of the classes? No. It's because the kids that go to such schools are the most intelligent and ambitious “up and comers,” so the connections you make and the patina you get at these places can open a lot of doors.

But if you look closely, the very best and brightest, people like Bill Gates or Steve Jobs, drop out or don't even go.

I would suggest that a parent thinking of allocating $40,000 to $50,000 per year for four years of college education instead grubstake their kid with that same money. You could even make it a fraction of that, to be put into actually doing something like starting a business or trying out different investment strategies, and get a lot more experience and knowl­edge for your kid as a result.

You certainly don't need a college to gain knowledge. For example, there's an outfit called The Teaching Company that hires the very best professors in the world in all sorts of subjects to deliver superb audio courses. I listen to these things all the time in the car. I watch the ones that have important visual components on my computer, and I can go back and repeat anything I don't understand clearly when my mind is receptive to it. It's much more effective than going to college would be, and it's vastly cheaper. Superior in every possible respect.

Another thing I'd do if I had a college-age kid is plan out a travel schedule. He'd have to spend at least a month in a dozen countries and report on what he does there. Travel may be the single best type of education, at least if done with a method and an objective.

There are many ways to get an education besides going to college…and going to a second-rate, third-rate, or community college is a complete waste of time and money. It serves no useful purpose whatsoever.

Doug Casey is a multimillionaire speculator and the founder of Casey Research. He literally wrote the book on profiting during economic turmoil. Doug’s book, Crisis Investing, spent multiple weeks as number one on the New York Times bestsellers list and was the best-selling financial book of 1980. Doug has been a regular guest on national television, including spots on CNN, Merv Griffin, Charlie Rose, Regis Philbin, Phil Donahue, and NBC News.

Doug and his team of analysts write The Casey Report, one of the world’s most respected investment advisories. Each month, The Casey Report provides specific, actionable ideas to help subscribers make money in stocks, bonds, currencies, real estate, and commodities. You can try out The Casey Report risk-free by clicking here.