Monday, January 25, 2021

Software Eats The World!

Michael Roberts, in a wonderful article republished in Left Voice, describes the current economy as clearly and as accurately as anybody. There is almost nothing he says that I disagree with. It's what he doesn't say that raises issues.

Weirdly, I'm actually more pessimistic about the economy than he is. Usually it's Marxists who predict capitalism's imminent demise--but now I'm in the strange position of seeing more problems than he.

His description of the current economy is spot-on. I'll condense Mr. Roberts' argument to bullet points.

  • "US economic activity is still some 20-25% below where it was this time last year."
  • "Overall, the US economy has shrunk by about 4-5% in 2020.  That is the largest contraction since the early 1930s – or 90 years ago!"
  • "All the evidence suggests that there has been permanent ‘scarring’ to the economy in employment, investment and incomes."
  • "Instead, there is what I have called a ‘reverse square root’ recovery where output falls but then does not recover to the same trajectory of economic growth that was there before. That output is lost forever, as the forecast for the US from Oxford Economics below shows."
(Source)

Mr. Roberts then describes the government response to this situation. I don't disagree with him, but I'd like to put it in a different context.

There are two components to the so-called "stimulus," which for shorthand I'll refer to (imprecisely) as fiscal stimulus and monetary stimulus.  Fiscal stimulus refers to payments made by the government directly to households and businesses. The money comes from government borrowing. That would include the CARES package, the $1200 checks we all got a few months ago, and the $600 checks we got a couple weeks ago. This is actual money put into the real economy, and should by all rights be inflationary.

Monetary stimulus, meanwhile, are actions taken by the Fed, most notably quantitative easing (QE), also misleadingly known as "printing money."

Jeffrey Snider (paywalled) describes the Fed as operating a warehouse, and as long as money stays within the warehouse, there is little effect on the real economy outside. The Fed prints money inside the warehouse, but unless the cash escapes into the wider economy, it doesn't really do anything. QE means the Fed is buying T-bills (and other assets) from banks (and now corporations). These assets are considered cash equivalents, i.e., nearly as good as money, and they are removed from the economy and sucked into the Fed's vaults inside the warehouse. Meanwhile, freshly-printed money is simply moved from one side of the warehouse to the other side--it never leaves!

The result--since cash equivalent assets are sucked into the warehouse and no cash is let out--is QE is disinflationary! Indeed, in the long history of quantitative easing, no inflation has ever ensued.

Essentially, in terms of inflation, QE undoes what the fiscal stimulus is supposed to accomplish--namely to create inflation. While QE removes assets, fiscal stimulus injects cash--and there is no net inflation. But there is now more cash and there isn't very much to buy with it (restaurants aren't open; planes aren't flying), so it goes back into assets. Mr. Roberts describes it this way.
Indeed, what has happened to all these credit injections is that they have been used by banks and big businesses to speculate in the stock and bond markets rather than to pay wages, preserve jobs or raise investment.  After the initial panic of the pandemic in March, the US stock market has gone on an unparalleled binge.

It is now at all-time highs and, relative to earnings and productive assets, is at extreme levels.  Yet with more Fed support to come, financial markets may well go rolling on up for a while longer.  So all monetary policy has done is to keep businesses on life support, while boosting the wealth of the very rich.

I'd take slight issue with the last phrase. It's not just the "very rich" who have benefited (though they certainly have), but it's anybody able to invest in assets. That includes the upper middle class--perhaps the top 10-15% of the population. People with 401Ks, owners of real estate, buyers of fancy collectables, and even bitcoin hoarders have benefited. Investable assets have all gone up.

It's a gigantic merry-go-round, spinning faster and faster, that nobody wants to be riding. If the Fed stops QE we'll end up with hyperinflation, which would be much worse than the problems we've got. And if they stop fiscal stimulus, the result will be bottomless deflation which, given the huge global debt overhang would rapidly lead to the biggest credit crunch the world has ever seen. So we're stuck.

Put aside the merry-go-round--which is just forestalling disaster. What really is the big problem that starts the merry-go-round spinning to begin with?

The big problem is deflation--the secular cost of everything is going down. The world is getting cheaper. That sounds wonderful--life on $2/day is sweet. But there are winners and losers in a deflationary world. The big losers are people in debt, since deflation causes real interest rates to go up. That's why we need all the fiscal stimulus--to make sure people can make their mortgage payments. It's hard to live on $2/day when the rent is $1500/month.

(Above I suggested a future problem might be hyperinflation. How can hyperinflation and deflation coexist at the same time? Hyperinflation is a problem with the dollar--too many of them chasing too few goods. The deflation I'm talking about is a much deeper problem, and it is that the costs of goods and services are decreasing in real terms, i.e., independent of whatever unreliable currency unit you choose to measure them with.)

The causes of deflation are much discussed. A big reason is demographics--global population growth is slowing, and in many big economies it is now shrinking. Because baby boomers are aging into retirement, the labor force is shrinking even faster than the population. The result is less demand for everything--food, oil, copper, etc., and accordingly, lower prices.

A second reason is automation--the examples are legion and are now part of everyday life. Just one to illustrate: in the old days a human cashier would ring up your groceries, and then make change for a $20 bill. Today I use the self-checkout (beep, beep, beep) and pay with a debit card (no change required). They still do have a few cashiers at Walmart for old folks who haven't caught on yet.

But we ain't seen nothing yet! Because now we're embarking on the second half of the chessboard. I first encountered that analogy in a book entitled The Second Machine Age (my review here). The analogy refers to the ancient king, proposing as a settlement for some debt, suggesting that his rival put a grain of wheat on a chessboard square. And a month later two grains of wheat on the second square, and then four on the third square, and then, on subsequent squares, 8, 16, 32, 64... By the time you get to the 32nd square, the king is due 4,294,967,296 grains of wheat--still maybe doable. But when you go beyond that, to the 33rd square and more, pretty soon his rival will owe more grains of wheat than there are stars in the universe!

Moore's Law is like that--computer power doubles roughly every 18 months. (While Moore's Law in the narrow sense seems to have reached its physical limits, progress in software and bandwidth continues the effect.) For example: college professors smugly note that Zoom meetings are no competition for the live classroom--and true enough. But 18 months from now, Zoom (or whatever replaces it) will be twice as good. And in 36 months it will be four times as good--so good, in fact, that nobody will ever want to sit in a classroom again (at least not for getting an education).

Community colleges and grad schools are already headed for extinction, replaced by Zoom and YouTube. Four-year colleges are not far behind--the notion that one has to sit in a classroom to get educated is doomed. And with that realization, everything else about colleges collapses: degree programs disintegrate, tuition plunges, campuses sit empty. Everything gets sucked up into the ether.

The ultimate software is artificial intelligence, which is advancing very rapidly. Consider another example: drug discovery. Today, a clinical trial consists of a single drug tested against a single disease. That's all the human brain can process at one time. But given enough data, AI can measure a single drug against all diseases, or for that matter all drugs and nutrients against all diseases, all overlayed on variations in the human genome. In other words, drug discovery becomes vastly more efficient--think about all the scientists who are about to get unemployed.

So here's the rub--where deflation is biting most hard. The real wages of the bottom half of our society are going down (h/t Jeff Booth--paywalled). They're competing against software, and in the end software is vastly cheaper. Software will win--it's eating the world. This is a disaster--society can't survive when half the population--professors, retail clerks, insurance agents, factory workers--are being reduced to poverty. The merry-go-round exists to forestall this cataclysmic event. 

The Fed--which is neither evil nor stupid--is working all out to prevent disaster. But it's got the wrong toolbox--using tools that were invented before software was ever a thing. All it can do is spin the merry-go-round ever faster until the whole thing falls apart.

It's not the fault of the bourgeoisie--who will also eventually lose out to software. Their current increase in wealth comes from the Fed whose merry-go-round pumps money into assets. But when the spinning stops the markets will crash, and only owners of software assets (e.g., bitcoin) will come out on top.

It's not the fault of the Democrats--who are working hard to completely miss the boat, arguing about who is more woke and who deserves promotion in the English department.

It's not the fault of the Republicans--who think if we just cut the budget all our problems will be solved. Nope.

Our Marxist friends have no solution. The proletariat can't stop the march of software anymore than the bourgeoisie. Fretting over the precise nature of the "vanguard party" is a spectacular waste of time.

The only winners will (eventually) be consumers, which ultimately is all of us. We'll all be able to live comfortably on $2 per day.

Further Reading:

Thursday, January 14, 2021

Louis Proyect and "Degrowth"

I have often accused Louis Proyect of being pro-poverty (e.g., here, here, and here).

I did expect pushback at some point--how can a Marxist be in favor of poverty? Surely, I thought, Mr. Proyect would deny my charge and argue that he was indeed for human well-being.

What I didn't expect was a confession--Mr. Proyect explicitly admits to being pro-poverty! He concedes as much in an article entitled A reply to John Molyneux and Michael Lowy on degrowth. (Molyneux's paper is here; Lowy's can be found here.) "Degrowth" is a synonym for "we all need to take a big cut in our standard of living." He offers a succinct definition here:

Degrowth is completely focused on the question of how humanity can not only survive into the 22nd century but how can civilization continue until the planet dies due to astrophysical realities. It poses solutions based on the needs of a modest life-style that while giving up on SUV’s and all the other crap can allow the full development of the human being, who might have to work 10 hours a week while painting landscapes or growing orchids the rest of the time. That means addressing the population question that people like Molyneux recoils from.

The argument is that Joe, by not driving an SUV today, will measurably enhance the well-being of whatever civilization exists a billion years from now. This is ridiculous on its face!

At bottom, Mr. Proyect's philosophy is a death cult.

He makes two assumptions: first, he fails to discount the future--i.e., the comforts of his great-great-great grandchildren two hundred years from now are as, or even more important than our comforts today. This is ironic because I don't believe that Mr. Proyect even has any grandchildren, which renders the whole issue hypothetical. Since part of the proposed solution is reducing the birth rate, putative future generations won't exist at all. How's that for a wonderful life?

Second, he supposes he can predict the future. He knows with unseemly confidence that Joe's SUV is gonna ruin the climate--not just now, but literally for all time! I think he's almost certainly (99.999%) wrong about climate change--whatever that is, it isn't an existential threat, and future generations (much less distant civilizations) will not remember us for our carbon profligacy.

I can't possibly go through all the bullshit in his correspondents' two papers. Lowy's piece is so far detached from reality that it establishes him firmly among the 99% of academics that give the remaining 1% a bad name.

Our authors completely ignore capitalism's benefit to consumers. Capitalism produces the goods and services that we want to buy and which greatly prolong and enhance our lives. Claiming that capitalism's sole benefit is profit for the capitalist is simply not true.

They all maintain that democratic decision making will make for a better environment, arguing that somehow the majority will elevate the interests of future civilizations billions of years from now over those of their own children (or themselves) today. There is no evidence for that. Joe with his SUV gets to vote just as much as Mr. Proyect.

Their claim that capitalism wastes resources is not true. A capitalist wants to cut costs, which means using as few resources as possible. Now there are issues that arise from "the tragedy of the commons," i.e., people passing environmental costs on to their neighbors. This is where government has to step in and why we need an EPA (the purpose of which is not to preserve the environment for the next billion years). But for the most part, capitalism wastes as little as possible, and is therefore much cleaner than rival societies, such as socialist ones.

Most regrettably, our friends want to limit people to working 10 hours per week--they can spend the rest of their time "painting landscapes or growing orchids." But they're not allowed to earn any extra money! They can't start a business--not even a lemonade stand--because somebody a billion years from now might object.

Trading goods and services is a uniquely human trait--no other animal does that. Mr. Proyect calls it "working," and we're now supposed to be forbidden from doing it. This is like being in prison--where they sit around all day painting landscapes.

Somehow Mr. Proyect concocts a wood shortage--mysteriously there is now a dearth of trees. Capitalism is "[s]o efficient at reducing forests to toothpicks." He writes,

Molyneux proceeds to define some of the norms we can expect under world ecosocialism. This one stuck out for me: “The extensive retrofitting of homes”. I am not sure what this means exactly but it would point to the banning of any house or apartment over 3,000 square feet for a family of four. I’m definitely for that but within such an advanced new way of sheltering, how do we create the furniture that people need for a modicum of comfort? We certainly need chairs, tables, beds, desks, and bookshelves, don’t we? Can we have a socialist Ikea that supplies such basics?

In this new ecosocialist utopia, some bureaucrat is gonna tell you "you can't have that end table. We need to save the wood for the folks living a billion years from now."

Some people would prefer to have fine furniture to painting landscapes. Who are these ecosocialist creeps to tell them they can't do that?

One thing I really don't understand about ecosocialists is their fixation on "mass transit." Somehow they imagine that a technology from the early 1900s is the ultimate solution to problems faced by civilizations a billion years from now. I don't get it.

So how do people get to work? In 2019 (before the pandemic), 1.4% of American commuters took mass transit, while 5.3% worked from home. (These are median numbers from a list of 110 US metropolitan areas.) Since then transit's share has collapsed. Ridership in the New York metro is down as much as 90%, while the work from home share has skyrocketed. As of September, 2020, 33% of all employees worked exclusively from home, while another 25% worked from home for part of the week. Only 42% of American workers still go to the office or factory every day.

This trend may partially reverse post-pandemic, but it will never go back to where it was. The number of people working in Lower Manhattan or Chicago's Loop is now permanently reduced.

Please, Mr. Proyect--tell us why you think we need more buses and subways? (And let's forget about streetcars, which average speed is only 19 mph!)

The whole mass transit thing is an anachronism. And the whole ecosocialism thing is a vile religious movement that is very bad for children and other living men and women.

Further Reading:



Tuesday, January 5, 2021

Book Review: The Future of Higher Education

Because the topic is so close to my heart, this post is very long.

The book, Sustainable, Resilient, Free: The Future of Higher Education,  by John Warner, is a joy to read. Mr. Warner, an untenured affiliate professor of English at the College of Charleston, can definitely practice what he teaches--he knows how to write. Whatever else you think about this book, you won't be bored.

I thank Mr. Warner for agreeing to send me a review copy. His generosity is not the important part, but rather the attitude his gift implies. For he knows that I will be critical of his thesis (as indeed I am), yet still thought I should read it. I call this charity in the sense that Abraham Lincoln meant it: with malice toward none, with charity for all. 

That is, I doubt Mr. Warner expects me to agree with him, but perhaps he does hope that I will understand him. It's not that we should bury our differences in some kumbaya moment--our disagreements are too profound for that. It's likely there will never be a meeting of the minds. But if we can understand each other, give credit to each other for acting in good faith, and engage in civil discourse--then surely the world is a better place and our democracy that much stronger. (This blog is founded on the principle of civil discourse.)

Right-wing though I may be, I can't stand Sean Hannity and Laura Ingraham--or Rachel Maddow and much of the PBS News Hour. Those are all propaganda shows, and I have no use for propaganda.

Mr. Warner's book is not propaganda, but he does fall down a bit in the charity department. In the first chapter he calls Republicans "evil", and accuses us of "sabotage." Mocking Betsy DeVos is given as an example of how "someone has benefited from their college education." This is not charitable language, and fortunately it's not typical of the book as a whole.

The major thesis of the book is that nearly all public higher education expenses should be borne by the federal government, and no tuition should be paid by students. There are at least two problems with this:

  1. The federal government is (by definition) a political animal, and with every change in administration the goals set for higher ed will change. Remember that Republicans will be in power approximately half the time--for every Arne Duncan there will follow a Betsy DeVos. Is putting all your eggs in that one basket really a sustainable way to run higher ed? Probably not.
  2. As Mr. Warner repeatedly points out, students need to be in charge of their own education. That means at very least they must have a right to exit--that is, when they leave they can take their money with them. If they put no money on the table, they ultimately lose any authority to change anything. They will always be at the mercy of Betsy and Arne in the Education Department.
Case in point: the feds already allocate substantial funds to higher ed (both public and private) and use the accruing authority to regulate students' romantic relationships down to the most intimate details. There is a case for colleges acting in loco parentis, but to defer this responsibility to Betsy and Arne strikes me as a path toward totalitarianism. The solution is to reduce federal investment in higher ed, and thereby minimize their power.

Germany is a cautionary tale. German universities are tuition-free (and prior to 2014 they charged only nominal tuition)--and they're terrible. It takes the typical student nearly a decade to complete their education, the classrooms are massively overcrowded, grades are assigned exclusively by final exams, and the faculty are completely unaccountable to anybody (they can't even be fired for financial exigency). Entrance criteria rely overwhelmingly on a nationwide test, and admitted students are assigned by the government to any university in the country. Is this the model Mr. Warner wishes to emulate?

Another wonderful example of "free education" is K-12 in this country, where, apart from a few charter schools, students have lost the right to exit. It's a complete disaster. Indeed, the more money spent per student, the worse it gets. Why does Mr. Warner think federalizing higher ed will somehow have a different outcome?

According to Statista, in 2017 the US spent 2.6% of GDP on higher education, second on a list of 42 countries (including, I believe, all OECD countries) behind only Chile (2.7%). (The complete list is behind a registration wall.) Of that fraction, 1.7% of GDP was spent at private institutions (I suspect largely on their research mission), while 0.9% was spent at public institutions. By comparison, Germany spent a mere 0.2% on private schools, but 1% on public schools.

Perhaps Mr. Warner can tell us: What fraction of GDP is optimally spent on higher education? Who should make that decision? And who is going to be accountable for the results? His book doesn't say. I think students should have a significant voice in these decisions, and that means they have to put money on the table and be able to vote with their feet.

Mr. Warner's major complaint about the current system is it forces colleges to compete against each other. In his opinion this is bad--and he does have a point. On first pass, competition reduces to simple-minded comparisons, such as the execrable US News and World Report rankings--that are apropos nothing in particular. But that's only on first pass--anybody who's serious about going to college will be looking under the hood. Think about the campus tours, the open houses, the relentless efforts of admissions offices to generate people to fill the seats. None of that would happen if students weren't concerned about more than magazine ratings.

Here's some news for you, Mr. Warner: prospective students know more about your college than either Mr. Duncan or Ms. DeVos. Please let students decide where to spend their money and time--not some corruptocrat up in Washington. It's the job of your institution--from the admissions office on down--to provide them with as much information as possible. And precisely because they are paying you, it is also your responsibility to live up to whatever promises you make to them. Your advertising can't be bullshit.

Which means Mr. Warner presents a false dichotomy. He quotes Carol Christ, chancellor at UC Berkeley: 
Colleges and universities are fundamentally in the business of enrolling students for tuition dollars.
And of course that's true, but it's only half the truth. For in order to enroll students, the institution must deliver a good product--otherwise no students will enroll. Without money one can't provide a good education, and without providing a good education, one can't possibly earn the money. Does Mr. Warner work for his paycheck? Or does the paycheck enable him to do his work? The answer is both--so when he claims that competition detracts from the goal of a good education, he's just plain wrong. It's possible--indeed, essential--to do good teaching and earn tuition dollars at the same time.

Mr. Warner's plan will require only a minor modification to Ms. Christ's statement:
Colleges and universities are fundamentally in the business of enrolling students for tax dollars.

In other words, students will lose their vote. 

Mr. Warner rightly notes that the magazine rankings are a zero-sum game--for every college that moves up a notch, another must move down. It is then ironic that he champions social mobility as a goal for higher education. He writes
Data compiled by Harvard economist Raj Chetty shows that colleges are largely stratified by socioeconomic class in terms of students they admit. Only a few institutions in the country achieve a high "mobility rate," moving students from the bottom 40 percent of income to the top 40 percent.

And perhaps it's good--to move students into the top 40%. But of course it is mathematically impossible to move 80% of students into the top 40%--by definition only 40% of students can be in the top 40%. That means that for every student that moves up, another must move down. So just like the magazine rankings, social mobility is a zero-sum game. It is ironic that Mr. Warner is imposing on students precisely the zero-sum game from which he wants to hold colleges exempt.

Who are these downwardly mobile? Consider the seven rich kids--white, college graduates, well-travelled, progeny of upper-middle-class parents, ranging in age from 20 to 30--who are members of the New Afrikan Black Panther Party [transgressive "k" in original] and got themselves arrested for rioting and smashing store windows during the recent "George Floyd" protests.

Why did they do that? I don't know, but here's an educated guess: elite educations and wealthy parents notwithstanding, these folks have only menial and/or low wage jobs to look forward to. Their futures look bleak, an upper-middle-class lifestyle is increasingly out of reach. In other words, college didn't prepare them for anything--they're on the downhill slide, and they know it. Of course they're pissed.

Social mobility is great for the folks moving up, and traumatic for those on the other side. There is no net benefit to society as a whole. Increasing social mobility should not be a goal for either the government or the university, and it is no reason to federalize higher education.

Unlike social status, wealth is not a zero-sum game. A rising economic tide lifts all boats--rich and poor alike. The goal is to lift the boat, not merely to rearrange the deck chairs. Taking money from the rich and giving to the poor works only if it also grows the size of the pie. In most real cases, however, it actually shrinks the pie and on average makes everybody poorer. For example, forgiving student loans will have precisely that effect: it is a benefit to rich people attending medical school, paid for mostly by people who never went to college. The primary beneficiaries will be unproductive rent collectors, namely the med school cartel.

Speaking of rent collecting, tenure is a lifelong pass to collect rents paid for by 19 year-olds. By "rent," I mean an income stream that depends only on a person's position or status, and not on their labor or ability. (Rent in the real estate sense doesn't mean the same thing.) A bribe paid to a bureaucrat is a form of rent. Licensing enables rent collection--people with licenses can charge extra for their services despite not doing any more work than people without licenses. (Milton Friedman argued convincingly that all occupational licenses should be abolished except for nurses.)

Rents are a dead-weight loss to the economy--and certainly that's true for tenured professors. "I just got tenure" is a synonym for "screw students."

Contingent faculty receive no rents, and therefore are likely paid at the market rate. Mr. Warner has a long chapter explaining how he wants to lower salaries for tenured faculty (i.e., deprive them of their rent), and raise the salaries of adjuncts. The former is not likely (no way are the tenured gonna give up their rents), and the latter is not desirable. What Mr. Warner is really suggesting is that adjuncts should also be entitled to rents.

Suppose adjuncts are paid at the market rate. Then the reason salaries are so low for contingent English faculty is because of competition from the gazillion English PhDs out there looking for any kind of professional employment. The benefit to students is maximized when as many of them are hired as possible--and the market rate does that. Paying below market will cause fewer adjuncts to seek positions, harming students. Paying above market will, because of financial constraints, reduce the number of adjuncts that colleges can afford. So the market rate maximizes the number of adjuncts--which is certainly good for students, and probably on net best for adjuncts as well. Mr. Warner's rent collection scheme means there will be more unemployed English PhDs--imagine the misery of those folks as they glide down the status escalator.

What is the purpose of going to college? According to Mr. Warner, it is most importantly a certain je ne sais quoi--an ill-defined, vaguely religious mission of self-discovery and enlightenment, the value of which will only become apparent years after completion. This, along with "critical thinking skills" (whatever those are--don't get me started) is what justifies taxpayer support for higher education.

I think if you ask students why they go to college, you'll likely get some list like this: career preparation, finding a spouse, partying, making life-long friends, having sex, discovering new things, getting drunk, playing sports, joining a fraternity/sorority, smoking weed...  Those are mostly good reasons, though few of them have much to do with academics. I don't know what on that list maps onto Mr. Warner's je ne sais quoi, nor do I see anything that justifies a huge government subsidy--except maybe it gets the kids off the street for a few years.

For adults returning to school, the list shrinks almost exclusively to career preparation.

Mr. Warner makes two implicit assumptions that I think are incorrect. First, he seems to believe that there is a shortage of educational opportunity in this country. I strongly disagree. In my view we are already hugely over-invested in higher ed, much of what we spend on it is wasted, and the economy will do better if we redirect resources elsewhere. The last thing this country needs is more seat-time in college classrooms.

We're really scraping the bottom of the barrel. Mr. Warner writes about a survey conducted during the pandemic disruption, which found that
44 percent of two-year college students and 38 percent of four-year college students experienced food insecurity. Eleven percent of two-year students and 15 percent of four-year students lacked a stable place to live.

Admittedly, the pandemic is an extraordinary time which has greatly exacerbated these statistics--and perhaps some short term response is in order. But even before the pandemic, SUNY campuses (my employer before I retired) had made food pantries and housing solutions a priority.

I'm not against feeding the hungry or housing the homeless, but this is NOT a responsibility for higher ed. Our job is to educate all qualified students--qualified being a term Mr. Warner uses. Somebody whose life is in such disarray as to be homeless and/or hungry has urgent problems that preclude them from being qualified. By enrolling them, colleges are artificially inflating their enrollments and therefore receiving more subsidies--it's a grossly unethical tax-grab.

Mr. Warner writes that 

Another reason why elite private institutions are irrelevant in terms of reshaping the higher education ecosystem as an engine for broad-based prosperity is that these schools overwhelmingly serve students who are already prosperous. The Raj Chetty data on economic mobility reveals that the median annual family income for students at Ivy League institutions is between $150,000 and $200,000. Two thirds of their students come from the top 20 percent in terms of income. While graduates of Ivy League colleges who started in the bottom 20 percent income bracket have a better than even chance of moving up to the top 20 percent bracket, fewer than 4  percent of Ivy League students come from the bottom 20 percent to begin with.

This means that fewer than 900 individuals per year are put on track to move from the bottom to the top of the income ladder by graduating from an Ivy League institution. 

Elite colleges (including the Ivy League) may not be leaders in social mobility, but they definitely excel in overall wealth creation. Bill Gates, Mark Zuckerberg, the Google Guys, and many more attended elite schools. Eight of the nine sitting supreme court justices attended law school at either Harvard or Yale--Amy Coney Barrett (Notre Dame) being the lone outlier. Bill Clinton got his law degree from Yale, Barack Obama is J.D., Harvard. Donald Trump graduated from Penn. George Bush must've read a book or two while studying at Yale, and eventually completing an MBA from Harvard Business School. Odds are that the corruptocrat who works for Betsy and Arne is an Ivy Leaguer.

For better or worse, these people are key for "broad-based prosperity." People in the top few percent of  the IQ distribution, regardless of where they went to college, are responsible for the overwhelming majority of new science, technology, and social/political movements. Without them we'd all be as poor as church mice. 

Apples usually don't fall far from the tree. Children born into the top quintile are more likely to be: smart, healthy, beautiful, do well in school, come from intact families, excel at standardized exams, attend church, compete in science fair projects, and marry other people from the top quintile.

Children born into the bottom quintile are more likely to: fail in school, be unhealthy and perhaps obese, have substance abuse issues, come from single parent households, suffer from homelessness and hunger, get involved in crime, watch too much TV, and never get married. None of these problems will be fixed by going to college.

Seen this way, it is quite astonishing that Ivy League institutions can find 900 qualified students per year from the bottom 20%. They must work really hard at this--and even though I'm not necessarily a fan of social mobility, the fact that so many kids can be pulled out of poverty into the elite is inspiring. We should celebrate this, not deride it as a lack of educational opportunity. It is precisely not that.

Mr. Warner's second implicit assumption is that the interests of faculty and students largely coincide--that faculty invariably have students' welfare at heart. I don't blame him for thinking that way, for until I entered the administration I would've agreed with him.

I call it the lowest common denominator effect.

I used to teach general chemistry, a task I shared with three or four other people in my department. We agonized over textbooks, teaching methods, exams, etc. We worked hard to do right by our students, and I can say without hesitation that everybody on that team cared deeply for our pupils. Likewise, Mr. Warner and his colleagues are similarly passionate about English composition--and I'm sure they work just as hard.

But were Mr. Warner to ask me what textbook he should use, I'd have no clue. Similarly, I don't even really know what their pedagogical objective is: is it how to follow the MLA style manual? Or how to write a coherent paragraph? Or how to construct a grammatically correct sentence? Or merely an opportunity to get students to express ideas on paper, regardless of skillset? Even given the objective, I'd have no idea how to execute it in practice. Meanwhile, Mr. Warner is expert on all those issues--even though he probably couldn't do a simple titration if I put the equipment in front of him.

As a former dean of science & engineering, I was shocked to learn how differently the math department thought about instruction than did the chemistry faculty. Meanwhile, the geologists are fixated on problems posed by long camping trips, e.g., to the Grand Canyon, that our English colleagues might think of as junkets. I had some interaction with the fine arts faculty, and honestly, they live on a completely different planet.

Each of those faculties care deeply about what they do and work very hard at it. On that level, student interest and faculty interest largely correspond (though even there not completely). But when the professors get together--say at a general faculty meeting or as part of a union--what do they talk about?

How are we all gonna keep our jobs? Are we really gonna get the promised 2% raise this year? What constitutes a full time teaching load? Why do I have to work so hard? This is the lowest common denominator--it's the only stuff we're all concerned about.

It has nothing to do with students or teaching. The more faculty there are in a room, the less important the topics of discussion become. It justifies the old saw: nothing is less important than the agenda of a general faculty meeting.

Let me cite one especially egregious example. The college's general education (GE) requirements are subject to review and revision every ten years or so, and this is the responsibility of the faculty as a whole. The whole thing is a travesty, because the GE program is designed specifically to satisfy the lowest common denominator demands of the faculty. While lots of suggestions come forth that might actually benefit students, what comes out at the end is a turd.

Many years ago the college instituted a foreign language requirement--students were all obligated to take two years (four semesters) of foreign language instruction. Perhaps that made sense thirty years ago, but it's crazy today. Now we have cheap software (e.g., Rosetta Stone), cheap airfares (less than the cost of tuition), and Google Translate (for the incorrigibles who refuse to learn a language). Plus English is far and away the world's second language--it is surely the international language of tourism.

So while I think foreign languages are important, college classroom instruction in a language is no longer very useful--especially since students are rarely fluent even after four semesters (my impression is that many can't speak it at all). So the requirement really should be abolished!

I was not alone in my opinion, but doing that required laying off the folks who teach the classes, and this the lowest common denominator faculty refused to do. Admittedly, the language teachers would have had a very hard time finding another job (which says something about the importance of said instruction), and the proper solution is hard-hearted. So the language requirement persists to this very day--students' best interest be damned. They're still forced to waste their tuition money, and worse, their time. (My motto as dean became Never waste a student's time.)

As individuals, faculty are generous, idealistic, hardworking people. Collectively they're a bunch of selfish jerks. I learned that as dean, and my goal in that job was to push back against lowest common denominator policies. Needless to say, I wasn't very successful.

I could go on about Mr. Warner's book, but I won't. Let me close on a happier note.

For as much as I disagree with his book, I deeply admire him as a person. First, unlike us tenured sorts, he's earned an honest living, surviving only because he's very good at his job.

Second, his dedication is amazing. He could surely have chosen a higher-paying career, and yet he loves to teach. The world needs more people like that. If I were dean, I'd hire him in a heartbeat!

Finally, he really is a good writer. For as much as I wanted to throw my shoe through the TV set, I happily kept reading his book. It's very clear, passionate, occasionally funny, brutally honest--and completely wrong.

But read it anyway. It's worth your time. I went with the Kindle edition, which worked fine. As you'd expect from Mr. Warner, I didn't find a single typo.


Further Reading: