(Interviewed by Louis James, Editor, International Speculator)

This interview was first published on October 21, 2009

Editor’s Note: In yesterday’s Weekend Edition, Casey Research founder Doug Casey debunked the popular belief that you must go to school in order to have an education.

Today, Doug explains why the whole U.S. educational system needs to be dismantled…

Louis James: I've long thought similarly about what we call a “liberal arts education” today. Paying lots of money to read literature with friends seems patently silly, and to have someone tell you what some long-dead artist really meant seems arrogant to boot.

But there are also things like physics, chemistry, and medicine. When I was a physics major at RPI, I was glad to have all sorts of laboratories and machine shops at my disposal: stuff I could never have built in my backyard…

Doug: I totally agree with you on that. Aside from the patina and connections I've been talking about, there are two valid reasons for going to a university. One is to study a hard science. You can still learn these on your own, but you're right; it helps a lot to have the labs and so forth. That's worth paying for.

The second reason is if you need a piece of paper that shows you've jumped through hoops other people recognize. In other words, if you're going into a trade, like doctoring, lawyering, or engineering, for which you need a certificate in order to be able to hang a shingle without getting arrested, that's okay because it's necessary.

Well, maybe not for lawyering. We have entirely too many lawyers in the world today. They've turned from expert helpers to parasites at considerable risk of overwhelming the host body.

Another degree I would strongly advise anyone against getting is an MBA, which has, regrettably, become a very fashionable degree. In our shop, if anyone applies for a job, an MBA is an active strike against them. They'd have to come up with a really good explanation for why they spent all that money and two years of extra time to get something that serves no useful purpose.

It's amazing, when you stop and think about it. The professors who teach MBA courses are not successful business people out making millions in the economy: they're academics! Successful business people with proven track records wouldn't work for their wages. These academics have no hands-on experience and are teaching theories, most of which are based on completely phony and fallacious economics.

Don't get conned into this gross misallocation of time and money. An MBA is worse than useless. Only a fool would rather have one than the $100,000, the lost income, and the two years of lost time and experience it costs.

L: I guess that explains how I got this job, with no relevant papers.

Doug: Of course…you're not a dog or a horse, for cryin' out loud. We don't need pedigree papers to identify talent we can see.

L: Another example in which training is desirable, and not a corruption of education, would be the military schools. Generals like rote, conditioned behaviors.

Doug: They do indeed. And soldiers need to learn practical skills, deeply ingrained, that can keep them alive under very difficult circumstances. Military academies are like advanced trade schools.

I very nearly went to West Point. The only reason I didn't is because I went to a four-year military boarding high school. In those days, military boarding schools were rather gruesome. I decided that I'd had quite enough of shining shoes, marching in squares, and saying “Yes, Sir!” to people I had no respect for.

L: Is that why you're an anarchist, Doug? Was your response to that training to go as far in the opposite direction as you could go?

Doug: Well, let's not say that I have a problem with authority. I just have a problem with people telling me what to do.

L: Okay, well, I get the criticism of higher education, and I see the broad strokes of your proposed alternative educational strategy, but what about younger children? You seem to be saying that the very idea of the classroom is a bad one, public or private.

Doug: As a matter of fact, when I got out of college in 1968, I needed a job and I got one: teaching sixth grade in Hobart, Indiana, the heart of Blues Brothers country. I only did it for one semester, but one thing really impressed me deeply: most of my co-workers were complete morons. They were people Jay Leno would feature on his Jay Walking videos if he'd ever met them. They had so little knowledge of the world and anything that matters, I was embarrassed to be called a teacher.

There are exceptional teachers, of course, but by and large, they are not the best and the brightest, they're losers. I wouldn't want to expose my progeny, if I had any, to a random collection of people who want to be government employees imprisoning kids for six hours a day.

L: Does that apply to private schools as well?

Doug: As I said, I went to a private military high school. Were my teachers any better than others? I suspect they were…but can't prove it. I'm sure there are some places, like Exeter Academy in New Hampshire, that pay more and probably attract a better grade of teacher. But if anything is worth doing, it's worth doing well, and in education, that means doing it yourself. Which means read, read, read.

L: So, your general view is that homeschooling is the way to go for younger children?

Doug: Exactly. Though I'm sure you'll sympathize with me when I say that I think toddlers ought to grow up for a couple years with wolves, so they can toughen up a bit and learn some survival skills. Kids are way overprotected these days. They are so isolated and insulated from reality, it's totally counterproductive. Sadly, it's hard to find a good wolf today.

So it's homeschool, then college only for technical trades and for the largely cosmetic advantages of an Ivy League pedigree. For most people, just reading books and then going out into the real world and doing stuff is way smarter, cheaper, and more productive. The difference between a properly educated kid and one subjected to conventional training is the difference between the Arnold Schwarzenegger character and the Danny DeVito character in the movie Twins.

And for God's sake, don't send your kids to business school. Better they should try some real businesses instead. Whether they succeed or fail, they'll learn much more.

L: That would put hundreds of thousands of people in the education business out of work. According to you, they are ill-equipped for productive work…doesn't sound like a politically viable reform plan, Doug.

Doug: The ones who are any good would rise to the occasion and do something better with their time. And those who are not…well, we need people to clean toilets and sweep streets. At least they'd be away from our kids.

And all this dead weight is expensive. I understand that the per-pupil cost of public schooling in the U.S. is running $10,000 to $12,000 per year. And college is $40,000 to $50,000 per year. There's no reason, no excuse, for it to cost so much.

Teachers who are any good could do as they did in ancient Greece and Rome, and solicit students. They could teach in their houses or in rented facilities, and compete with each other. They'd have every incentive to strive for the lowest cost and highest-quality service and they'd make more money, because most of the money spent on so-called education these days goes to administration and overhead. Not towards getting superstar teachers.

L: I can imagine a future in which the best teachers are celebrities, rich superstars. People would compete for spots in their classes. What would someone with a real passion for astrophysics pay to be able to study with Stephen Hawking?

Doug: That's exactly what I mean. And instead of having reason to conform as teachers do now, being members of unions, they'd have reason to excel. Unions have a well-established interest in making sure no one stands above the average, so they foment a culture that guarantees mediocrity. The whole educational system in the U.S. needs to be flushed.

Unfortunately, just the opposite is happening. The Obama people want to give everyone a college education, probably including really useful mandatory courses in Gender Studies, Global Warming, and Marxist Economic Theory. Why stop there? Everyone ought to have a post-grad education as well.

L: Like Luna, in Woody Allen's Sleeper, who has a Ph.D. in oral sex?

Doug: Yes. It's insane. It's another sign that the whole system in the U.S., not just education, is upside down and overdue for collapse.

L: There's no reforming such an entrenched system, supported by such powerful unions and a population that believes it can and should be fixed. On the other hand, the education system in the U.S. is such a dismal failure, people are opting out their kids in droves. So, with reality-reality vs. political reality, it could actually collapse. Maybe there is hope for a future in which there's real education, simply because the old system implodes and disappears.

Doug: It could happen. The U.S. Department of Education should be abolished. The National Education Association building in Washington DC should be boarded up or dynamited. No, better yet, cleaned out and sold on the market, so some entrepreneur can put it to some useful business purpose.

L: It could be turned into a brothel. It would be more honest.

Doug: It would. You'd actually get value for your money.

L: Investment implications?

Doug: I expect I'll expand on this theme with an examination of publicly-traded online universities. They represent an interesting trend.

L: Okay, well, thanks for another interesting talk.

Doug: My pleasure.

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.