Bryan Caplan  

Reflections on Carey at Cato

Further thoughts on Friedman's... Government Innumeracy...

Yesterday's book event at Cato was great fun.  Though I had a chance to respond to Carey in person, here's a more complete version of my reaction to his critique.

1. I'm puzzled by Carey's claim that colleges are exercising some kind of "monopoly."  There's a vast decentralized education system in the U.S.  While people feel a lot of pressure to go to college somewhere, that hardly means that the system is anything other than competitive.  By analogy, does it makes sense to say that "Farming is monopolized" just because everyone needs to eat something?

2. I definitely agree that schools could spend taxpayer dollars far more wisely.  I just think it's highly unlikely.  Due to Social Desirability Bias, schools simply aren't under much pressure to deliver good academic bang for the taxpayer buck.  Challenge for Carey: Name three "no-brainer" educational reforms you favor that haven't happened yet.  Suppose none of them have become popular in ten years.  Would this convince you to say "Cut education spending" rather than "Reform education spending"?  If not, what would it take to convert you to the cause of austerity?

3. Carey objected strongly to my book's assertion that, "There really is no need for K-12 to teach history, social studies, art, music, or foreign languages."  I realize it's a strong statement, but Carey doesn't even seem to see a kernel of truth.  Question: Suppose I narrowed this down to "There really is no need for K-12 to teach foreign languages."  Why would that be absurd, given the microscopic share of Americans who learn to speak a foreign language well in school under the current regime?

4. When Carey says that you have to be broadly educated to be a "fully realized human" or "competent citizen," I'm tempted to agree.  But this dodges the tough questions: What fraction of adults qualify as "fully realized humans" or "competent citizens" now?  And what fraction would qualify if schools focused on literacy and numeracy?  I say we're talking about <5% of the population either way.

5. Carey is right that education potentially serves an exploratory function.  Suppose you study five promising subjects.  This could be a fine approach, even if you eventually specialize in one subject and forget the other four.  But this is a poor defense of actually existing education, where students study a bunch of subjects almost no one uses or remembers.  When I advocate making irrelevant subjects optional, I'm not praising children's wisdom.  But if you're going to make kids learn something for their own good, their guardians first ought to calmly wonder whether it is for the kids' own good.

6. Exercising improves your physique; but if you stop exercising, you soon revert to your normal flabby self.  Is this a "case against exercise"?  Absolutely, if you start out with the false belief that the benefits are durable.  The same goes for education.  The more rapidly you lose what you learn, the weaker the case for learning in the first place.

7. Carey brings up Schultz's work on the alleged effect of education on farmers' productivity.  Frankly, psychologists' work on Transfer of Learning makes it very hard to take Schultz's claims seriously.  At minimum, there's a heavy presumption in favor of a simple ability bias story: well-educated farmers are smarter, harder-working, and richer, and therefore more likely to adopt better farming methods.

8. If Hanushek's "effects of math and science scores" are disguised "effects of IQ", does this mean that all international IQ differences are genetic?  Of course not.  International IQ differences depend on genetics, educational environment, and non-educational environment.  My doubts about the power of educational environment leave both other explanations on the table.  Indeed, you can doubt the power of education but still suspect it makes a slight difference, which is probably the most reasonable view. 

9. General observation: Unlike most education economists, Carey acknowledges glaring deficiencies in actually existing education.  He avoids glib defenses of the status quo like, "If education's so bad, how come it pays so well?"  But he still ultimately trusts the status quo to reform itself even if its funding is secure.  What will it take to shatter Carey's trust?  On purely pragmatic grounds, while not cut education spending first, then offer to restore it after the education system earnestly reforms itself?

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COMMENTS (10 to date)
Adam writes:

One 1, how about thinking about higher ed as a von Thunen-Alonso model of land rents. Burgess developed a similar model for urban human ecology.

Using the Alonso model, the higher ed market would be a series of concentric rings about a central business core or district. Prestige is highest at the center and diminishes at each successive ring about the core.

The core CBD of 'high prestige' schools offer 'degrees'
differentiated by their social prestige and value. Harvard might be thought to be at the exact center, offering the highest prestige and the most 'expensive' degree when measured as the sum of access (e.g., prep school) and matriculation costs.

Colleges offering prestige near that of Harvard have substantial pricing power (e.g., Carey's so-called monopoly power). CBD colleges also gain substantial rents from gov subsidies in loans and scholarships.

Pricing power diminishes as prestige distance from the CBD increases. The outer ring of 2 year community colleges have little pricing power. They enjoy no rents from subsidies, so p = mc = ac.

caryatis writes:

Question I didn't get around to asking last night: in a world with much less education, what would employers use to determine who to hire? I agree that "hire person with most prestigious 4-year degree" is not a great criterion, and no doubt a lot of professions (programming and hairdressing come to mind) could use skills test. But what about jobs (law, business, secretarial) where soft skills like communication and professionalism are highly important?

Matthias Goergens writes:

Caryatis, they can hire on track record, and come up with tests.

Lots of people might want to do a standardised IQ test. They actually work fairly well across jobs, but there are legal hurdles to using them in the US.

Sanghyeon writes:

caryatis: Suppose due to negative externality of coal energy, a book is written that argues we should look for alternative source of energy, and coal subsidy should be eliminated.

Then people ask in a world with much less coal energy, what would we use to produce energy.

In a world without coal subsidy, coal plants unprofitable without subsidy would close. Otherwise we would continue to use coal to produce energy, until alternative energy becomes competitive. Eliminating coal subsidy will be good, not bad, for such development.

ybell writes:

In re $6. You elegantly explain that fitness loss is akin to knowledge loss and that they both militate against the belief that gains are durable.

But the ending sentence is more ambiguous. If the rate of loss is high, it makes investment less attractive on the one hand, but it also makes investment in maintenance more attractive. I think that a lot of people will say and think that loss of shape is a reason to stay in shape, not to not get in shape in the first place.

Cole writes:

@caryatis - I would be interested in seeing a hiring system utilizing a trial period. You can bring in a few candidates, hire each part-time for two weeks to split the given job, and observe them performing their duties. They would obviously be paid during this period, gain experience and make an impression on their manager. The business can choose the best option for the position, while the other candidates return to the job market with some money in their pocket and recommendations if they performed well in their trial but simply weren't the right fit.

Ak Mike writes:

I agree with Prof. Caplan's criticism of Mr. Carey's response to him which did seem rather weak.

On the other hand, it's hard to credit Prof. Caplan's self-image as being cultured on the basis of his love of German opera, given that German opera, which is turgid, pretentious, overblown and humorless, is vastly inferior to the more musical, dramatic, intense and compact Italian opera. After all, even the best opera composed by Germans (Handel and Mozart) is Italian opera.

Joe munson writes:

I remember in high school I was diagnosed with some sort of learning disability meaning the public school system would five me a P for math even if I failed. The P would not nefatively effect gpa nor would it stop me from going to college.

I remember being so worried I wouldnt be able to do all the algebra 2 I was sure to need on a day to day basis. Lol.

Lets just say the algebra required to sell life insurance is minimal.

The knowledge of algebra 2 dequired to pass my college math for liberal arts majors was also minimal

Another Guy named Dan writes:

1. As to colleges being a sort of monopoly, I would argue that in practice they operate as a sort of cartel. They can restrict new entrants to the market via the accreditation process, which I would argue has been largely captured by the incumbent institutions, and government subsidies, including the guaranteed student loan programs, can keep weak players alive when market forces would tend to signal the end of their usefulness.

Keith K. writes:

I think Carey is correct that the current system is intensely monopolistic. Perhaps not at the post k-12 level but the k-12 level is totally monopolistic.

Each family must send their kids to the "district school". Each of these district schools is by law administered by functionaries of the state, who are not accountable to the actual consumers of their product. Moreover, the functionaries are more or less universally required by law to have degrees in Education.

Furthermore there is little one can do to escape this system. Even if one were to go to a private school (with their own money after being forced to pay for the public school), in general those schools are also legally required to be run by functionaries who had to go through the same program of indoctrination (an education degree) than the public school types.

How on earth could such a system be considered competitive? And it is this portion of the system which gets the most subsidization.

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