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Their wordsSince signaling, not building human capital, is the main function of education, the main effect of government subsidies is credential inflation.
Their wordsActual war means killing a lot of innocent people - and that cannot be justified unless you have high confidence that the long-run effects are very good.
Their wordsSo a lot of the problem is mere herding: If every other top engineering program is using the GRE, it’s too weird to require a different test even if the alternative test is a far superior selection mechanism.