THE "SOCIAL" EFFICIENCY OF EDUCATION by James M. Buchanan My assignment for these meetings is a paper on the "Students' Image of the Enterpreneur." I approach this by looking at the effects of modern education on the socio-political-economic philosophy of university and post-university students in the United States and the impact of this philosophy on social policy. I shall examine the following propositions: (1) For the first time, "education" is now effective. Students are acting out the ideas that they have absorbed in their academic experience. (2) This effectiveness has only recently emerged because of a. the transformation of traditional conservative institutions-notably the family, the church, and the law. b. economic affluence that has produced the relatively new "parasitic option" out of the more general "samaritan's dilemma," I should emphasize that these are propositions to be examined and discussed. They provide one possible interpretation of what we see around us in American higher education in 1970. Alternative interpretations are possible, and these lead to quite different implications. By discussing the propositions here, I argue only that they seem sufficiently plausible to warrant my concentration in this paper, nothing more. Education is Effective My central hypothesis is that students in American colleges and universities are demonstrating that they have indeed paid some attention to what their instructors have been saying to them. They are acting out, in word and deed what they have been taught in classrooms from elementary schools through the university postgraduate schools, what they have seen on their television screens, what they have read in their newspapers, from the underground rags through the New York Times. This effectiveness of education is new to our time. But I do not suggest that it results from any sudden or dramatic change in educational inputs. My subsidiary hypothesis explaining the change is quite different. The educational inputs have, of course, changed, but the changes have surely been gradual over the last forty years. The observed output has been rather suddenly transformed because only in the 1960's did the inputs come to have much influence on outputs. The production function shifted. In the 1960's, and for the first time, the socio-political inputs into the educational process began to be "efficient." Until this decade, the effects were relatively unobservable. What we are now getting by contrast is a highly visible output that seems directly to be related to inputs. The reason for this change lies in the transformation of countervailing influences. An implication of my central hypothesis is that the educational prosess has never provided an effective means through which the traditional socio-political values of American (read Western) 1