Author Archives: Arnold Kling

Aid to higher education

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Ryan Craig advocates,

  • Requiring colleges and universities to restructure degree programs to ensure students achieve industry-recognized (stackable) credentials.
  • Mandating colleges and universities to provide experiential learning (work experience) as part of degree programs.
  • Limiting short-term Pell funding to programs offered in conjunction with a qualified employer or industry group, to make sure that beneficiaries acquire the skills that lead to good, middle income jobs.
  • Providing a new basis for government aid to education: not for delivering educational programs, but for achieving graduate placement into a “good job.”

I think that the very top tier of schools would and should resist this, but they should not be getting aid in any case.

My cynical view is that you cannot structure aid to higher education in such a way that the schools won’t just use it to continue to operate as they do currently.

Libertarians, the trolley problem, and listening to others

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Raymond McCrea Jones writes,

Graham explains that the libertarian cognitive style is cerebral rather than emotional. “Libertarians are far and away the most likely to say, ‘Yeah, push the guy off.’ They just see it as a math problem,” he tells me. “They have no squeamishness about having to kill the person.” It’s coldly calculating, but also, arguably, rigorously ethical. As Graham tells me this, I can’t help but think that efforts to unpack what separates red states from blue states haven’t been careful to differentiate between conservatives and libertarians. Venn diagrams of voters generally categorize voters as Republicans and Democrats or liberals and conservatives. But as is becoming increasingly apparent, the cool-headed libertarian in my classroom who’s willing to sacrifice his mother for the greater good doesn’t fit neatly into any of these circles.

But the point of the article is better represented by this:

NYU psychologist Carol Gilligan, who began the Radical Listening Project in 2017, says the essential step is “replacing judgment with curiosity,” or, as put by my student Gaby Romero, who has been trained in the diplomat Hal Saunders’ Sustained Dialogue protocol, “to acknowledge that everyone is there out of a genuine desire to learn and understand.” University of Michigan professor Donna Kaplowitz, who practices an approach known as Intergroup Dialogue, simply calls it “generous listening.”

He concludes,

Imagine if, instead of requiring a swim test for college students or gym for middle-schoolers, we required students to sit in a room with a diverse group of people and listen to the stories of their life. “If I wanted to prepare children to live as citizens in a democratic society,” Gilligan says, “nothing would be more valuable than to teach them to listen.”

Aggregate economic data

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For the essay I am writing on Edward Leamer, I have been re-reading Macroeconomic Patterns and Stories. He is really good at diving into data. Most academic macroeconomists think that actually studying the way that statistics are collected and looking for patterns would be beneath them.

For example, Leamer found the pattern of momentum in payroll employment growth. From that standpoint, the period from October 2011 through the September 2019 has been really uninteresting. There have been no sequences of three months of employment gains that were either well above or well below average. My rule of thumb is that less than 50,000 net jobs is a low-growth month and more than 350,000 is a high-growth month. Over the past eight years or so we have had only 3 low-growth months and one high-growth month (which barely made the cut at 355,000). So no real chance to test the momentum pattern, although I suppose that you count the persistence of middling numbers as “momentum.’

Anyway, I have the following thoughts, not all of which comes from Leamer.

1. The short-term fluctuations in GDP and net employment changes that we call recessions, even deep ones, are really small relative to: long-term growth; seasonal fluctuations (Leamer points out that real GDP on average drops at a 20 percent annual rate in the first quarter of the year, before the Commerce Department does its “seasonal adjustment” of the data. That is more than twice as much as the rate at which (seasonally-adjusted) real GDP falls during a bad recession.); secular shifts between sectors, e.g. employment rising in health care and education but declining in manufacturing; gross job flows, with 4 million workers leaving jobs and 4 million workers starting new jobs every month.

2. Can we say that the process for calculating real GDP in 2019 resembles the process in 2009? In 1999? In 1979? In 1959? In 1929? It would be an interesting exercise to go back to the raw data collected by the Commerce Department (or by Simon Kuznets prior to that) to estimate GDP. Fifty years ago, the government statisticians were calling manufacturing firms and getting counts of steel production or automobile assemblies or what have you. Now those figures are a much smaller fraction of GDP. How are the statisticians calculating the output of hospitals, of non-profit organizations, etc.? Academic economists don’t want to know how the statistical sausage gets made, but that seems to me to be a serious oversight.

3. Overall, I recommend being very wary of macroeconomic analysis that purports to give trends in productivity or to compare real income today with real income in past decades. The range of different answer that you can get using reasonable alternative methods for constructing the data far exceeds the variation in the phenomena that you are trying to assess.

Graduate school in economics

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Tyler Cowen writes,

Andy Abel wrote a problem with dynamic programming, which was Andy’s main research area at the time. Abhijit showed that the supposed correct answer was in fact wrong, that the equilibrium upon testing was degenerate, and he re-solved the problem correctly, finding some multiple equilibria if I recall correctly, all more than what Abel had seen and Abel wrote the problem. Abhijit got an A+ (Abel, to his credit, was not shy about reporting this).

I am older than Tyler, and I went to MIT rather than Harvard, but this anecdote perfectly captures the atmosphere in grad school as I remember it. Heavy math, mathematical ability the primary source of respect. It was a system designed to produce idiot savants. A few students from that period, including Banerjee, managed to do useful work in spite of their training, but I still seethe about many of my courses, which were nothing other than a form of fraternity hazing using math exercises.

More with Less

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Andrew McAfee writes,

Our wants and desires keep growing, evidently without end, and therefore so do our economies. But our use of the earth’s resources does not. With the help of innovation and new technologies, economic growth in America and other rich countries — growth in all of the wants and needs that we spend money on — has become decoupled from resource consumption. This is a recent development and a profound one.

I have not yet read the book from which this essay is excerpted. Of course, those of you who have read Specialization and Trade already are clued in. Both McAfee and I were influenced by Jesse Ausubel.

By the way, could this decoupling be responsible for low interest rates? Think of a Hotelling model of resource storage but with the interest rate as endogenous and the path of resource prices exogenous. As long as economic growth required more use of resources, you expect a positive return from storing resources. You get a positive interest rate out of that. But when growth is decoupled, you do not expect a positive return from storing resources. If you want to create a store of value with a positive rate of return, you need to find some productive investment.

For more on McAfee and his latest book, see Alex Tabarrok on McAfee’s long-term bets.

On college administrators and schools of education

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Musa al-Gharbi argues that the progressive left has successfully conquered university administration and schools of education.

As Sam Abrams’ research has shown, college administrators hail predominantly from the arts, humanities and social sciences. Graduates of these fields often have a distressingly limited understanding of how, concretely, many social institutions operate – and how, specifically, these institutions might be leveraged to achieve particular ends. However, those who gravitate towards administration often do understand, or come to understand, how to ‘work the (higher ed) system.’ And one of the key things they have done with this institutional knowledge is expand the size and influence of the administrative class itself.

…Perhaps the most genius aspect this approach (targeting ed schools) is the indirectness. This strategy was implemented in a very deliberate, systematic, forward-thinking way by a constellation of activists, scholars and practitioners (who were very explicit about the political goals of their pedagogical approach!). Nonetheless, when their efforts began to come to fruition, it appeared as though it was a spontaneous, organic, student-driven movement. Young people reached (elite) universities, and increasingly the workplace (in particular industries), attempting to mold these institutions in accordance with the logics that have been inculcated into them since primary school — by teachers executing the curricula designed by these activists, practitioners and scholars. Yet rather than taking up their disagreement with the people who had designed said curricula, who had laid out these modes of thought and engagement, critics were instead forced to contend with the students themselves — by then, true believers. The optics of this were not great (for the critics, that is, who came off as reactionary, out of touch, overly-judgmental, etc. for their apparent denigration of the students and their views).

Some random notes of my own.

1. I suspect that a lot of the growth in college administration serves to provide an employment safety-valve for people earning degrees, especially Ph.D’s, that are not very marketable.

2. My high school experience definitely preceded the leftist take-over of schools of education. My freshman year, the principal brought in Up With People to perform for us. They struck me as an attempt to promote social conformity, so that we wouldn’t become hippies or Vietnam War resisters. I told those around me that this was a right-wing propaganda exercise. The experience stuck with me, primarily because when I voiced my suspicions a very attractive classmate sneered at me, “Arnold, you have no soul.”

3. I don’t think that those of us on the right should try to make an issue of the political orientation of college administrators or at schools of education. Instead, I think that we should push for intellectual rigor in college courses and in education research and policy. I would rather make my stand on the cause of intellectual rigor than on the cause of political balance.

4. My father was a college administrator in the 1970s, as Dean of Arts and Sciences and later Provost at Washington University. The environment was different in those days. Continue reading →

A new revolution in food production?

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Peter Diamandis writes,

Today’s breakthroughs will soon allow our planet to boost its food production by nearly 70 percent, using a fraction of the real estate and resources, to feed 9 billion by mid-century.

It seems that these are his predictions for 2030. He cites vertical farming, 3D printing of food, and other technological advances.

Capitalism = market-tested innovation (McCloskey) = more with less (McAfee).

Experience with MMT

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Sebastian Edwards writes,

It turns out that MMT — or some version of it — has been tried in a number of emerging countries. Although most cases have taken place in Latin America, there have also been episodes in other parts of the world, including in Turkey and Israel. MMT-type policies were also attempted in France during the Mitterrand presidency. Almost every one of the Latin American experiments with major central bank–financed fiscal expansions took place under populist regimes, and all of them ended up badly, with runaway inflation, huge currency devaluations, and precipitous real wage declines. In most of these episodes — Argentina, Bolivia, Brazil, Chile, Ecuador, Nicaragua, Peru, and Venezuela — policymakers used arguments similar to those made by MMTers to justify extensive use of money creation to finance very large increases in public expenditures.

Did you two visit the same research?

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These two books, both from Princeton University Press, struck me as taking very different views about the prospects for policy interventions to affect cognitive ability.

1. Jonathan Rothwell, an economist, wrote Republic of Equals. p. 291:

As I’ve argued, there is no logical or scientific basis for hereditarianism. The best available genetic research shows that the heritability of IQ has been greatly exaggerated, even within the same age group and by greater amounts across generations or societies at different levels of economic development. The environmental origins of the massive two-standard-deviation increase in cognitive ability over the past 100 years are themselves powerful evidence that genes cannot account for more than a modest share of variation across individuals.

p. 285:

At the heart of this book is the claim that equal access to education would have profoundly pro-egalitarian effects on the distribution of IQ, income, and wealth, among other good things.

2. Kevin Mitchell, a neuropsychologist, wrote Innate. He emphasizes that variation in brain structure occurs during gestation, meaning between conception and birth. p. 9:

In sum, the way our individual brains get wired depends not just on our genetic makeup, but also on how the program of development happens to play out. This is a key point. It means that even if the variation in many of our traits is only partly genetic, this does not necessarily imply that the rest of the variation is environmental in origin or attributable to nurture—much of it may be developmental. Variation in our individual behavioral tendencies and capacities may be even more innate than genetic effects alone would suggest.

and p. 53:

Many studies have looked for systematic associations between specific environmental factors or experiences that differ between siblings and specific behavioral outcomes. These typically fall under a number of categories including differential parenting, peer relationships, sibling interaction, teacher relationships, and what is known as “family constellation” (birth order, age difference between siblings, whether or not they are the same gender, etc.). The results from these studies are very clear. They have failed to identify any robust, consistent, or substantial effects on any of a variety of outcomes including adjustment, personality measures, or cognitive ability.

This struck me as a generalized form ot the Null Hypothesis.

Twitter matters

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Nicholas Grossman argues that political Twitter matters a lot.

There’s always been a national conversation, just as influential people will always spend a significant amount of time participating in and absorbing it. But thanks to Twitter, it’s faster, more interactive, more present. It’s easier to put down a newspaper, walk away from the television, or put off in-person conversations than it is to fully disconnect from your smartphone. Traditional information gatekeepers used to have much more control; now, access to information has been democratized.

But these are bugs, not features. “Faster, more interactive, more present” means that people react with emotion, not reason. People behave better when they do disconnect. And the democratized access is mostly to slurs and distortions.

Twitter excites its users. But if you step back and watch, it enfeebles them. I generally find about 20 percent of the links on Tyler Cowen’s blog to be interesting. But that percentage drops to near zero when the link goes to a Twitter thread. I think he (and everyone else) would benefit from quitting Twitter.