Wednesday, December 4, 2013

Is college a scam?

I live in a town with two small, but highly-regarded liberal arts colleges.  They are both beloved and have intensely loyal alumni.  They both give this little town a degree of elegance, sophistication, and grace that would be sorely lacking without their presence.  And yet there are moments when I come to think of them as elaborate hoaxes whose main function these days is to sell a bunch of great kids into debt peonage.  This outcome is virtually assured for the simple reason that both cost around $50,000 / year.

Now admittedly, this is a mostly a problem caused by 40 years of middle-class income stagnation where the gap between college costs and the ability to pay is made up with paper hawked by loan sharks pushing debt that cannot be discharged.  Yes, the schools are complicit in all of this.  Many of those rising costs are for expensive buildings and winter-break biology classes held on a beach in Belize.  These are NICE places to go to college.  Well, enjoy yourselves, kids—there is a pretty good chance your life will never again be so stimulating and pampered.

At some point, the question must be asked—is there really anything you can teach a 19-year-old, no matter how bright, that is worth $50,000 per year.  I have more than my share of really smart friends and while I am probably out of line to speak for them, I am pretty sure their answer is NO. I know mine is.

What makes this all the more interesting is that this absurd inflation in educational costs is happening when you can now access the sum total of all human knowledge on your smartphones for $50 a month.

My proposed solution to the problem of crazy education costs is to set up a standards system that is rigorous enough to be considered a legitimate measure of one's educational attainment.  It would be like the bar exam except for everything.  The tests would cost a minimal fee—like $100—and could be taken whenever the student felt ready.  Here's the big selling point!  The state or whomever the society wants to entrust with this certification process, would pointedly not care how someone came to know what they do, only that they could prove they learned something somewhere.  So if someone wants to learn in pretty little liberal arts schools in small-town USA and can afford $50,000 a year—fine.  And if someone would rather do in-depth research on the Internet for $50 a month, that's fine too.

When it came to taking the official certification test, everyone would be equal.  But would the $50,000 / year education yield better results than folks, on their own hook, digging up important knowledge on the internet?  I seriously doubt it.

Millennials, rise up! College is a scam — you have nothing to lose but student debt

Students chase degree after degree, adding crushing debt, as jobs vanish. It is time to radically rethink college

Excerpted from "Does Capitalism Have a Future?"

Credential inflation is the rise in educational requirements for jobs as a rising proportion of the population attains more advanced degrees. The value of a given educational certificate or diploma declines as more people have one, thereby motivating them to stay in school longer. In the United States, high-school (i.e., twelve-year secondary school) diplomas were comparatively rare before World War II; now high-school degrees are so commonplace that their job value is worthless. University attendance is now over 60% of the youth cohort, and is on the way to the same fate as the high-school degree. It is a worldwide trend; in South Korea, 80% of high-school graduates now go on to higher education. The main thing that inflated degrees are worth is to plough them back into the educational market, seeking still higher degrees. This in principle is an endless process; it could very well reach the situation of the Chinese mandarin class during the later dynasties, when students continued sitting for exams into their thirties and forties— only now this would affect the vast majority of the population instead of a small elite. Different countries have gone through educational inflation at different rates, but from the second half of the 20th century onward, all of them have followed this path.

Educational degrees are a currency of social respectability, traded for access to jobs; like any currency, it inflates prices (or reduces purchasing power) when autonomously driven increases in monetary supply chase a limited stock of goods, in this case chasing an ever more contested pool of upper-middle-class jobs. Educational inflation builds on itself; from the point of view of the individual degree-seeker, the best response to its declining value is to get even more education. The more persons who hold advanced degrees, the more competition among them for jobs, and the higher the educational requirements that can be demanded by employers. This leads to renewed seeking of more education, more competition, and more credential inflation.

Within this overall inflationary process, the most highly educated segment of the population has received an increasingly greater proportion of the income; at least this has been so in the United States since the 1980s. One should be wary about extrapolating this particular historical period into an eternal pattern for all times and places. Those at the top of the inflationary competition for credentials have benefited from several processes: [a] they were in the relatively safe havens when technological displacement was hitting, initially, the last of the decently paid manual labor force, and then low-paid clerical work. [b] The quality of work performance between different levels of the educational hierarchy has apparently widened.

What has been insufficiently recognized is that the inflationary spiral in schooling has brought increasing alienation and perfunctory performance among students who are not at the top of the competition, those who are forced to stay in school more years but get no closer to elite jobs. Grade inflation and low standards of promotion are symptoms of this process. There is considerable evidence, from ethnographies of teenagers, of youth culture, and especially youth gangs, that the expansion of schooling has brought increasing alienation from official adult standards. The first youth gangs appeared in the early 1950s when working-class youth were first being pressured into staying in school instead of going into the labor force; and their ideology was explicitly anti-school.

This is the source of the oppositional youth culture that has grown so widely, both among the minority who belong to gangs and the majority who share their antinomian stance. Employers today complain that jobs in the lower half of the service sector are hard to fill with reliable, conscientious employees. But this is not so much a failure of mass secondary education to provide good technical skills (one hardly needs high-school math and science to greet customers politely or ship packages to the right address) as a pervasive alienation from doing menial work. The mass inflationary school system tells its students that it is providing a pathway to elite jobs, but spills most of them into an economy where menial work is all that is available unless one has outcompeted 80% of one’s school peers. No wonder they are alienated.

Although credential inflation is the primary mechanism of educational expansion, overt recognition of this process has been repressed from consciousness, in virtually a Freudian manner. In this case, the idealizing and repressing agent, the Superego of the educational world, is the prevailing technocratic ideology. Rising technical requirements of jobs drive out unskilled labor, the argument goes, and today’s high-skilled jobs demand steadily increasing levels of education. Thirty years ago, in The Credential Society, I assembled evidence to show that technological change is not the driving force in rising credential requirements. The content of education is not predominantly set by technological demand; most technological skills—including the most advanced ones—are learned on the job or through informal networks, and the bureaucratic organization of education at best tries to standardize skills innovated elsewhere. In updated research on credential inflation vis-à-vis technological change, I have seen nothing that overturns my conclusions published in 1979. It is true that a small proportion of jobs benefit from scientific and technical education, but that is not what is driving the massive expansion of education. It is implausible that in the future most persons will be scientists or skilled technicians. Indeed, the biggest area of job growth in rich countries has been low-skilled service jobs, where it is cheaper to hire human labor than to automate. In the current US economy, one of the biggest growth sectors is tattoo parlors: a non-credentialed occupation, small-scale business, low-paying and thus far immune from corporate control—and selling emblems of alienation from mainstream culture.

Although educational credential inflation expands on false premises— the ideology that more education will produce more equality of opportunity, more high-tech economic performance, and more good jobs—it does provide some degree of solution to technological displacement of the middle class. Educational credential inflation helps absorb surplus labor by keeping more people out of the labor force; and if students receive a financial subsidy, either directly or in the form of low-cost (and ultimately unrepaid) loans, it acts as hidden transfer payments. In places where the welfare state is ideologically unpopular, the mythology of education supports a hidden welfare state. Add the millions of teachers in elementary, secondary, and higher education, and their administrative staffs, and the hidden Keynesianism of educational inflation may be said to virtually keep the capitalist economy afloat.

As long as the educational system can be somehow financed, it operates as hidden Keynesianism: a hidden form of transfer payments and pump-priming, the equivalent of New Deal make-work setting the unemployed to painting murals in post offices or planting trees in conservation camps. Educational expansion is virtually the only legitimately accepted form of Keynesian economic policy, because it is not overtly recognized as such. It expands under the banner of high technology and meritocracy—it is the technology that requires a more educated labor force. In a roundabout sense this is true: it is the technological displacement of labor that makes school a place of refuge from the shrinking job pool, although no one wants to recognize the fact. No matter—as long as the number of those displaced is shunted into an equal number of those expanding the population of students, the system will survive.

The rub is on the expense side. The two main ways to pay for schooling (at all levels: elementary, secondary, tertiary, and whatever further levels become added on) are either by government provision or by private purchase. Both of these come under pressure in times of economic downturn and squeezed government revenue. In the years around 2010, both in the United States and many other countries, the costs of public education became such a substantial proportion of government budgets (especially at the local level) that they gave rise to movements to cut educational spending. In Chile, for instance, where 50% of the youth cohort now attends university, there is a struggle between the organized students demanding free university education for all and administrators and tax conservatives who push an increasing proportion of higher education into the private marketplace. Similar issues have roiled the student population in France and elsewhere. In the United States, where higher education is funded largely (and increasingly) by the students themselves and their families, there has been much concern over the amount of debt in the form of student loans—now (as of 2011) approaching 10% of GDP. If one extrapolates both the numbers of students extending their stay in schools in response to technological displacement, and the proportion of the economy made up by student debt, one can see that another twenty years or so of technological displacement and credential inflation will become enormously expensive to the system as a whole. What would happen if student debt rose to 50% of GDP, or 100%?

Education is a major cost of government, and this tends to limit future expansion. With higher costs, there are pressures to privatize, shifting the burden of funding to students or parents; but this too faces a limit as the middle class is economically squeezed. By 2012, there was a wave of publicity in the United States about what kinds of degrees are not worth the cost of acquiring them, in terms of the jobs one can get or one fails to get. Although one individual solution would simply be to drop out of the educational competition, the more popular choice among youth has been to seek specific vocational education, and there has been an upsurge of schools in areas like apparel design, computer programming, business, etc. But the shift to vocational education does not evade the dynamic of credential inflation, and we can predict increasing competition inside those vocational sectors, and rising inflation of vocational degrees. One indicator has been controversy, both in the political sphere and in accrediting and regulatory agencies, critiquing the low rate of job success for such vocational students, and denying them access to government loans. That is to say, the inflated value of educational degrees has become an explicit problem.

Information Technology is again being invoked as a solution. There is a rush toward university courses online, thereby achieving great economies of scale. Some of these are for sale, albeit at rates far lower than the cost of actual tuition at a bricks-and-mortar institution. Others are offered altruistically for free. Neither method will hinder credential inflation; indeed, both add to it, by putting still more educated persons on the market. As of now, the new kinds of credentials are being labeled as distinct from university degrees, and in that sense not directly competing with them. This remains to be seen; in effect a new form of cheap educational currency is being created, alongside a more traditional and expensive educational currency. If educational currencies are strictly like money, Gresham’s law would apply, and the cheap currency would drive out the expensive one. On the other hand, in economic sociology, as we know from Viviana Zelizer (1994) and Harrison White (2002), high-quality economic objects can exist in separate circuits alongside cheap ones, and that may well continue to be the case in the production of educational credentials.

The dilemma is this: efforts to make education cheaper have the effect of reducing employment in the educational sector itself; if a few famous universities monopolize teaching through online courses, and a few professors can do the vast amount of the teaching with electronic assistance, one more sector of employment becomes technologically displaced. The result is the same through the pathway of old-fashioned tax revolts; a short-term reduction in the population’s tax burden has the roundabout effect of reducing jobs available for that same population.

Of the five escape routes from capitalist crisis, continued educational inflation seems to me the most plausible. An expanding educational system driven by credential inflation reaches a potential crisis point within the educational system itself. This is not necessarily final. One can envision a series of such plateaus, stopping and restarting as our secular faith in salvation through education goes through disillusionment and revival. But if this becomes increasingly government sustained, it amounts to socialism in the guise of education. It is conceivable that liberal governments might find their way to keep expanding educational systems, using them as a Keynesian safety valve, and a form of transfer payments from the capitalists and the diminishing sector of the employed, to sustain the otherwise unemployed. But to get such a government might well take a near-revolutionary disillusionment with capitalism.

When Will Full-Blown Crisis Happen?

Computerization of middle-class labor (since the last decade of the 20th century) is proceeding at a much faster pace than the mechanization of the manual labor force (which took approximately the entire 19th century and three-quarters of the 20th). Technological displacement of middle-class labor is not much more than twenty years old; whereas it took almost 200 years to destroy the working-class labor force.

Another estimate of the timing of future capitalist crisis is provided by world-system (W-S) theory. In earlier writing on the capitalist world-system, Wallerstein and colleagues presented a theoretical model of systemic long cycles. The core regions of the W-S in their expansive phase generate their advantage by resources extracted under favorable conditions from the periphery. Hegemony is periodically threatened by conflicts within the core, and especially by semiperipheral zones rising to threaten the hegemon. Eventually the core gets caught up with, just as increasing competition in a new area of entrepreneurial profit brings down the profits once gained by the early innovator; in this respect, the W-S operates like Schumpeter’s cycle of entrepreneurship, but on a global scale. With each new cycle, new opportunities for expansion and profit arise, under the leadership of a new hegemon. The crucial condition in the background, however, is that there must be an external area, outside the W-S, which can be incorporated and turned into the periphery of the system. Thus there is a final ending point to the W-S: when all the external areas have been penetrated. At this point the struggle for profit in the core and semiperiphery cannot be resolved by finding new economic regions to conquer. The W-S undergoes not just cyclical crisis but terminal transformation.

On the basis of past cycles, Wallerstein (also Arrighi, 1994) project the crisis of the W-S at approximately 2030–2045. My own estimate of the crisis point generated by the mechanism of technological displacement of the middle class depends on the rate at which structural unemployment grows. (This must be measured not merely in convenient technical terms such as, in the United States, the number of applications for unemployment compensation, but by our best measure of the proportion of the adult population unable to find work and driven out of the employment sector entirely.) An unemployment rate of 10% is painful, by American standards; 25% (found in crisis economies) is big trouble, but it has been sustained in the past. But when unemployment reaches 50% of the work-capable population, or 70%, the capitalist system must come under such pressure—both from under-consumption and political agitation—that it cannot survive. If we think such unemployment rates are unimaginable, let us imagine again, through the lens of technological displacement of all categories of work by electronic machinery. It is clear that the rate of technological displacement has accelerated in the last fifteen years. We could well reach 50% structural unemployment by the year 2040, and 70% not long after that. In gross terms, this agrees with the W-S projection of a terminal crisis of capitalism around the middle of the 21st century.

Anti-capitalist Revolution: Peaceful or Violent?

If the crisis of technology displacement becomes severe enough—a highly automated, computerized world in which very few people work, and most of the population is unemployed or competing for menial low-paid service jobs—would there be a revolution?

Here we must leave economic crisis theory and examine theory of revolution. Since the 1970s, the theory of revolution has been revolutionized. Skocpol [1979], Goldstone [1991], Tilly [1995], and others, by their comparative researches on the rise and fall of state regimes, have established what can be called the state breakdown theory of revolution. Successful revolution depends on what happens at the top, not on disaffected and impoverished masses from below. The chief ingredients are: first, a fiscal crisis of the state; the state becomes unable to pay its bills, and above all to pay its security forces, its military and police. State fiscal crisis becomes lethal when it is joined by the second ingredient, a split among elites over how to deal with it. We could add secondary factors, back in the chain of antecedents, typically although not always including military causes; a state fiscal crisis often comes from accumulated military expenses, and elite deadlock is especially exacerbated by military defeat, which delegitimates government and provokes calls for drastic reform. Splits among elites paralyze the state and open the way to a new coalition with radical aims. It is in this power vacuum—what social movement theorists now call the political opportunity structure—that social movements are successfully mobilized. Often they do so in the name of grievances from the bottom, but typically such radical movements are led by upper-middle-class fractions with the best networks and organizing resources. As de Tocqueville recognized long ago, the radicalism of a movement is not correlated with the degree of immiseration; exactly what does determine the degree of radicalism is more in the realm of the ideological and emotional dynamics of exploding conflict, although just how to theorize this remains unfinished.

Virtually all revolutions, up to this point in history, have come not from economic crisis of capitalist markets, but from government breakdown. The key component is fiscal crisis in the government budget itself, but this is usually independent of major crisis in the larger economy. This means revolutions can continue to happen in the future, through the narrower mechanism of state breakdown, the state-centered fiscal crisis, elite deadlock, and ensuing paralysis of state enforcement apparatus. State crises are more frequent than full-scale economic crises. What happens when we put this in the context of the long-term trend to technological displacement of the labor force? Several things are possible: revolutions can happen in particular states, not necessarily those with the greatest amount of technological displacement. Or, revolutions can happen that do not act on a policy of solving technological displacement. But also, revolutions can happen which do take an explicitly anticapitalist turn.

Since history is driven by multiple causes, the future is like rolling multiple dice, as in the Chinese game Yahtzee—waiting for sixes to come up on all five dice simultaneously. Thus we could have the general anticapitalist revolution sometime in the future, through the right combination of state breakdown, perhaps plus war defeat, plus the omnipresent technological displacement.

The crisis of capitalism sets the agenda. At some point the politically mobilized populace will have to deal with it. This could happen by the classic route of state breakdown: the legitimacy of the state is called into question; the state itself stops functioning (paralyzed by fiscal crisis and/or political splits within its own ranks, mirroring political polarization outside); the monopoly over organized violence breaks apart, as police and the military lose organizational coherence and factionalize. This may or may not produce extensive violence, whether in riots and crowd suppression, or in civil war. In some moments of revolution (for instance the French Revolution of February 1848) the period of tense crisis was resolved with relatively little violence, as the existing regime lost organizational coherence, no one wanted to take charge of continuing the existing regime, and a new parliamentary power was quickly constituted. Similarly in Russia in February 1917, after several days of sporadic violence and wavering between crowds and soldiers, the Czarist regime ended in a flurry of abdications and refusals to pick up the reins. These cases also show that in ensuing months and years the new revolutionary regime may have trouble consolidating power, especially when restorationist movements mobilize against it, and later violence is often more severe than the initial revolutionary transition. Separating the revolutionary moment from its aftermath, the process of revolutionary state breakdown need not be very violent. Political sociology has not yet taken up the issue of under what conditions postrevolutionary consolidation of government is peaceful or violent. All we can say is that the range of violence seen in historical revolutions and their consolidation would also be possible in the terminal crisis of capitalism. The most dangerous possibility is that the prospect of anticapitalist revolution, seen by its enemies as the threat of violent change, would give rise to a neofascist solution: an authoritarian regime supported by popular movements nostalgic to save capitalism, which would carry out enough redistribution so that the massively unemployed population would be kept alive, but under a police state constantly on the alert for subversion. We do not know how to estimate the chances of an attempted fascist solution, compared to a democratic postcapitalism. Wallerstein has conjectured that it may be 50–50.

But a favorable alternative may be quite likely: the institutional transformation from capitalism to a noncapitalist system of political economy—an institutional revolution—could come about through peaceful political process. If the crisis of capitalism is severe enough—a majority of the population structurally unemployed, robots and computers doing almost all the income-generating work but owned by a small number of wealthy capitalists, the economy in deep depression—at some point a political party could win electoral power on an anticapitalist program. Some governing party or coalition would have to replace capitalist production, distribution, and finances with a system that redistributes wealth outside the system of labor market and profit-taking.

This kind of electoral politics might seem far-fetched in the political atmosphere on the present—just twenty years after the fall of the Soviet bloc, coinciding with an enormous market expansion in nominally communist China and with the triumph of market ideologies everywhere. But political moods are prone to wide swings every twenty or thirty years: think back through each twenty-year segment of the 20th century. If the structural trend to technological displacement continues to deepen, a vast reversal of opinion another twenty years into the future is not at all unlikely.

A peaceful institutional revolution is possible. The deeper the structural crisis of the middle class, the more mobilization for electoral politics is facilitated. Along that route lies the prospect for a relatively nonviolent transition. more

1 comment: