Coming Soon:

Now Available: Volumes I, II, III, and IV of the Collected Published and Unpublished Papers.

NOW AVAILABLE ON YOUTUBE: LECTURES ON KANT'S CRITIQUE OF PURE REASON. To view the lectures, go to YouTube and search for "Robert Paul Wolff Kant." There they will be.

NOW AVAILABLE ON YOUTUBE: LECTURES ON THE THOUGHT OF KARL MARX. To view the lectures, go to YouTube and search for Robert Paul Wolff Marx."

Total Pageviews

Monday, January 3, 2011


To make this point more clearly [wait for it, Wallyverr, I will get to the point you raised in a moment], imagine that the entire U.S. economy is one enormous corporation, producing all the goods and services aggregated in the Gross Domestic Product, employing all those who earn wages or salaries fulltime or part time, providing all the governmental services, and so forth. if the entire American work force were now to earn higher degrees [quite a boon for young doctoral students hoping to find entry level tenure track teaching positions!], would this vast corporation forthwith transform all the low wage burger-flipping jobs into high wage IT jobs? Would the women who clean my hotel room when I travel and stay overnight in a Courtyard Marriott now be medical technicians in the local hospitals? Who would clean the rooms? Would they continue to clean the rooms but earn medical tech wages? These questions answer themselves, and in each case the answer is no.

Ah, you say [or rather, as Wallyverr says], but with a better educated workforce, companies would be able to switch to different techniques for the producing of goods and services, techniques more capital intensive [if we treat education as human capital] and less labor intensive [where labor here means unskilled or general semi-skilled labor of the sort required for current low wage jobs]. This would fundamentally transform the nature of the economy in such a fashion that the steep pyramid of jobs, determined in the first instance by differential educational attainments, would steadily flatten over time, leading to a less stratified society in which fewer and fewer workers earn low wages and perform low-skill jobs.

There is obviously some truth to this argument. Modern IT hi-tech companies could not exist if there were not plenty of well-educated potential employees around. But for a number of reasons, in my judgment, the argument fails to show what it is intended to show, which is that education is the key to flattening the income pyramid and raising the entire workforce to a better compensated, more satisfying level.

Let me start with facts. Over the past century and more, the American workforce has undergone an astonishing educational upgrade. When my father was a young man, in the very early nineteen twenties, a high school diploma was a rarity, a college degree even rarer. My first father-in-law did not finish high school, and yet ended up the Vice-President of Sears, Roebuck for Public Affairs. Today, almost all workers have high school diplomas, and a quarter of American adults have college degrees. There has, over this period of time, been a steady increase in real GPD per person, with the result that Americans are genuinely better off than they were a century ago. But the shape of the income pyramid has not changed, save to become steeper in the past thirty years, in part as the result of deliberate union busting and anti-labor policies by the Federal Government.

Some modes of production have undergone dramatic transformations, resulting in much greater productivity, but labor intensive services, such as medical services, cleaning services, and so forth have not. What HAS happened, of course, is the globalization of capitalism, one consequence of which is that the lowest levels of the worldwide income pyramid are now occupied by Asians and Latin Americans and Africans rather than by Americans. One of the reasons for our present disastrously high unemployment is that with a world of cheap labor to draw on, capital simply does not need millions of Americans as workers. In good times and bad, they will be consigned to unemployment or underemployment. To be sure, a dramatic educational upgrading of any segment of that world labor pool will advantage that segment, to the consequent disadvantage of the rest, but just as it is impossible for all the workers in our imaginary company to end up as managers in that company, so it is impossible for everyone in the world to have an above average job.

I end these introductory remarks by concluding that education cannot be, for everyone at the same time, a path to the middle class. If we all have jobs that send us on junkets to cities where we stay in hotels, someone in those hotels will make the beds and clean the rooms and serve us in the restaurants. They may not speak English, but they really are people, and they count too.

Which brings me to the question that launched these remarks: Why has higher education become so expensive, and what implications does that fact have for society?

Why higher education has become so expensive is genuinely puzzling. When even medical costs have increased at "only" twice the rate of inflation, why on earth has higher education increased at THREE TIMES the rate of inflation, over the last thirty years?

Let us first observe that although higher education may indeed be the gateway to high wage high tech jobs, it is itself a labor-intensive low tech industry, in which there is virtually no technological innovation. One story may point the moral. In the Spring of 1953, I took C. I. Lewis' legendary course at Harvard, Philosophy 130, on Kant's CRITIQUE OF PURE REASON. Lewis, who retired that semester after a lifetime of teaching at Harvard, used an incredibly rigorous, time-consuming, and life-changing system of written assignments referred to as "Kant Summaries" [I won't bother you with the details.] In the Spring of 1960, as a young Instructor in Philosophy and General Education at Harvard, I actually was given the opportunity to teach Philosophy 130, in the same room, from the same podium on which Lewis had sat. It was, needless to say, the greatest teaching experience of my life, a fact I had the wit to realize at the time. [Small side note; I taught the same course the next Spring, and among my students was a young graduate student, Thomas Nagel. Needless to say, Tom did brilliantly.] I wrote to Lewis, who was living in retirement in Menlo Park, California, to tell him that I was using his system of Kant Summaries. He wrote back a nice note and said that it was not his system. He had learned it from his teacher at Harvard [who must have been Josiah Royce or George Santayana!]. I have taught Kant's FIRST CRITIQUE perhaps seventeen times in my fifty year career, at Harvard, Chicago, Columbia, UMass, and CCNY, and always I have used the system of Kant Summaries, even though it condemns me to grading 20 or more seven page papers each week, every week of the semester. I consider the chore a holy labor.

As must surely be obvious, I am inordinately proud of having kept the system of Kant Summaries alive, and I have not the slightest doubt that those have been the best courses I taught in my entire career. But think for a moment about what I am saying, from an economic perspective. I am saying that the technique of "producing" knowledge of Kant's philosophy has not changed in virtually one hundred years! And I am saying this not apologetically, ruefully, with embarrassment, but proudly, triumphantly. Even the Roman Catholic Church finally got around to revising its technique for producing a High Mass, for heaven's sake!

Higher education has two techniques for delivering its service, neither of which has changed in the slightest in three generations or more: the large lecture, and the small discussion class, both accompanied by written examinations and assigned essays [the Brits have a third technique - the individual tutorial, but it has never caught on in the States.] And that is it. Television has not changed this; the internet has not changed this; IPhones, IPads, laptops, and all the other paraphernalia of the clued in ramped up young person have not altered higher education's technique of production in any significant fashion.

Because higher education has been untouched and unchanged by technological advances, it has not become more efficient and productive. Hence, one would expect the real costs of higher education to track the Consumer Price Index pretty closely. Furthermore, although room and board were not figured into the statistics with which I began this entire discussion, food is food and a bed is a bed, so the cost of providing that to students ought also to keep pace pretty closely with the CPI.

So why in heaven's name has the cost of higher education gone up at THREE TIMES the rate of inflation? That is the puzzle we must try to solve, and I warn you that I do not have any neat, nifty answers. Still and all, I have some ideas, and tomorrow, I shall set them forth, for better or worse.


English Jerk said...

Maybe this is a dumb question, but here goes: Why can't your hotel room be cleaned by robots? A robot couldn't give a course on Kant, but isn't it precisely Wallyver's point that the unrewarding (and poorly remunerated) kinds of labor are the very kinds of labor that potentially there are technological solutions for? And if more education per capita results in more rapid technological advancement along these lines, then maximizing education seems desirable. Of course, at some point you might have to limit population growth, since you just don't need as many technicians to run an automated factory as you need unskilled laborers to stand at a corresponding assembly line. But there are other good reasons to try to limit population growth, so that doesn't seem like a devastating objection. Alternatively, you could solve that problem by just giving people more free time--and with their free time they might well seek more education (since "All humans by nature desire to know"). Surely the ideal scenario is one in which people work fewer hours and continue learning over their whole lives, rather than acquiring (without using) knowledge for 12 or 16 years then working (without thinking) until they're dead.

Of course whether or not capitalism is capable of achieving such ends (either in general or in the particular circumstances in which we find ourselves) is an entirely different question. Chomsky always used to say that anarcho-syndicalism (or council communism) is the best way to run an advanced technological society.

Murfmensch said...

My Kant Summaries are made available to each new Kant class each year at Saint Louis University. I hope no one ever looks at mine.

I blame you, RPW.

I look forward to where this is heading. I have a couple of speculations about cost.

1. Education is, for many, a status good. It cannot confer status if everyone can have it. Price is one way to secure this status. For many people, the price is the point. Expensive brands stick out so others will know they are expensive.

2. Campuses have become city-states that provide everything and not just classrooms. They build and build student centers and sports teams which do drive up costs. Administrators must keep track of these complicated institutions in ways that a German university administrator need never do. (Some of these are good, like health services.)

Both #1 and #2 speak to what many parents and students are after-- the "college experience". Classrooms are a teeny, weeny, component of this. Someone once called it "Beer and Circuses" and that sounds about right.

I want students to party but I don't want any more adjuncts subsidizing the party. That to me is the core problem.

Robert Paul Wolff said...

I am happy to take the blame for Kant Summaries. If anything can get me into the heaven I don't believe in, they are it. As for the costs, I think much of what you say is right. I will try to throw a little light on things in the next post. But, as I say, I do not claim to understand it fully.

john c. halasz said...

It would be interesting to have some international comparative data on education costs here, too. Health care costs were at 10% of GDP in the U.S. before 1980, then, for some reason rose to 12% starting in 1980, and, after flattening out during Bush1 and Clinton1 started rising, especially steeply during Bush2.1, until they are now 16% of GDP. For all other OECD comparables they are at 8-10% of GDP and though they've risen with a low slope over the years as % of GDP, nothing like the U.S. rise has occurred.

john c. halasz said...

The usual econ name for the dynamic adduced in this post is "Baumol's cost disease". A sector that experiences rapid productivity improvement through investment, will experience lowered costs/prices, which, as relative prices, means that other sectors which don't improve in productivity will have de facto higher relative costs/prices, (all of which spill-over into some general measure of the overall price index). The "disease" aspect occurs especially which the productivity-enhanced sector isn't large or expandable enough to capture the gains from investment/increased output, such that the gains accrue to lower relative productivity sectors as what amounts to economic rents. (Incidentally, the same sort of dynamic is often attributed to government expenditures. But since the inventors of N.I.P.A. couldn't figure out how to measure government output and productivity, they simply classed it as consumption expenditure, even though some of it clearly is tantamount to capital investment and other parts of it are necessary to support the productive economy. And, while it's likely that, due to increased legitimation burdens, the politicized nature of appropriations/allocations and various effects of bureaucracy, governments don't implement productivity improvements as readily as "private" enterprises concerned solely with the bottom line, it doesn't actually follow that government output doesn't improve in productivity, nor contribute to productivity improvement in general).

john c. halasz said...

So (off the top of my head) so additional hypotheses:

1) As per the last comment, there has been a decline in public/governmental support for tertiary ed.

2) Demographics: the great expansion of tertiary ed with the post-war boom also involved the baby boom, i.e. an increase in the relative size of the student cohort. With the relative decline in the student cohort, fixed costs needed to be spread over a few number of "units" of output.

3) Quality. Though standard econ attributes competition and its effects to both price and quality, the latter is much harder to measure or account for or explain its transmission. And, whereas some aspects of tertiary ed might have improved in quality, in general, public education seems to have declined in quality. Meaning that tertiary ed institutions now have a much greater burden of remediation to enable students to meet its standards, (which may or may not be qualitatively increasing).

john c. halasz said...

4) As the combination of technical productivity improvement and globalization of production supply has diminished the pool of corporate quasi-rents upon which unionized mass production workers could draw, wages for ordinary workers have stagnated or declined. The only route for protecting against such trends has seemed to be tertiary ed, hence an increasing demand has bid up prices. Equally, growing income equality, together with the need to protect the income/status of higher class students, has resulted in the latter outbidding lower class entrants competitively, increasing the bid qua the amount of relative income "households" are willing to spend to ensure educational advantage.

5) Given 4), to some extent it amounts to bubble behavior. Increasing the supply of degreed workers should also lower the wage differential. Even as costs rise. If not, that could only because of the rent-extracting "power" of degrees is itself increasing, at the expense of the rest of the economy and its workers. (It seems as if, nowadays, with the sharp rise in costs due to budget cutting and the sharp decline in employment opportunities for graduates, this bubble explanation is getting a run for its money).

D Thomy said...

What should be looked is income to schools not only costs to students.

If only half of the students nationally receive a degree (?) and a majority of the students drop out during the first two years what you have is even more of a cost increase for a degree.

The first two years are when the courses are the least expensive to the schools and the “profit” actually subsidizes costs for those who graduate. This assumes other activities of the schools cover their actual costs.

This also is a response to the “rugged individual” who said I paided my way through school with no one else’s help.

No, those who dropped out SUBSIDIZED your education.