By Richard Vedder
Gold has long been a favored commodity for defining currencies and the value of money. Everyone understands that gold is valuable, and an ounce of gold in Zimbabwe is worth the same as an ounce of gold in The Netherlands or Japan. It works as a basis for currency because everyone understands its value. In the U.S., we have a monopoly provider of paper currency, the Federal Reserve, because if we had multiple providers we would have costs associated with assessing the relative value of one currency compared with another --a technical difficulty that existed in the U.S. before the Civil War with respect to both paper currency and metallic coins (we used both gold and silver as a basis for defining the dollar). Europe has had a dramatic fall in transactions costs as the Euro has replaced a dozen or so former national currencies. Our forefathers wisely forbade the states from going into the currency business.
That’s enough economics and economic history. All of this, however, came back to me as I read the INSIDE HIGHER ED account of the meeting of the North Central Association, America's largest regional accreditor. Under pressure from the Spellings Commission and Secretary Spellings herself, everyone is talking about "outcomes based assessment", "accountability based accreditation" "value added" and other popular new phrases. In and of itself, that is good. We are rethinking how we evaluate higher education.
But so far there is no move to a common standard numeraire, achieving in education what we achieved in monetary affairs in the U.S. with the Constitution of 1787 and in Europe with the Maastricht Treaty and the establishment of the Euro. If Harvard comes up with one method of measuring "value added", Yale a second way, Slippery Rock State College a third, and the University of Puget Sound a fourth, it is not clear what we have accomplished. We have apples and oranges -- and grapes and bananas.
One of the major functions of assessment is to facilitate knowledge and competition. We need a common assessment method that allows consumers, donors, and policy makers to evaluate the differences between alternative institutions. Suppose students at Harvard on average show a 7 point gain on the ABC Test of Knowledge, Wisdom and Critical Thinking, while students at Slippery Rock gain 4 points on the same test --we are comparing apples to apples.
Just as France was reluctant to abandon the franc, Germany had some sorrow when the mark went bye- bye, and the Brits absolutely refused to abandon the pound, so Harvard wants to do things its way, which is different than the Yale or Slippery Rock way. France finally decided that the economic gains from reduced transactions costs (no need to change currencies every time you cross a border) outweighed the loss of national pride associated with relegating the franc to the dustbin of history. It is time for colleges to make the same calculation, aided by their trade associations.
The colleges need to be pushed into to finding commonality in assessment. A compromise might be to develop two or three assessment approaches and allow colleges to choose amongst them. Colleges sacrifice their autonomy all the time in the name of efficiency --common admissions tests (the SAT and ACT, not to mention the GRE, GMAT, LSAT, etc.) and common application forms are good examples. Moving to a very small number (I prefer one) of assessment approaches would be a major step forward in the reform of American higher education.