The economist as scapegoat

Russ Roberts defends Milton Friedman (and many others, implicitly), excerpt:

What about spending for public schools? Has that been reduced in this allegedly draconian neoliberal era?

In 1960, per pupil expenditure for elementary and high school students was just under $4000. In 1980, when the neoliberal ideology allegedly began its ascendance, it was a little less than $8000. The latest numbers from 2015–2016 are just under $15,000. All numbers are corrected for inflation (in 2017–2018 dollars). So under this time of alleged cutbacks and resource starvation, per pupil expenditures rose dramatically.

What about transportation infrastructure? Total spending is up in real terms. What about as a percentage of GDP? There has been a decline since 1962 as a percentage of GDP but the numbers are basically flat since 1980…

What about investment in non-defense research and development, and health? Up dramatically since 1980 in real terms.

There is much more at the link, including excellent visuals.

Comments

Pretending Baumol doesn't exist is the new pretending inflation doesn't exist.

+1. Paying more for the same or worse doesn't count as a win for neoliberals or anybody for that matter.

Starte Capacity?

Respond

Add Comment

Respond

Add Comment

What would be the strongest example of Baumol in an industry not subsidized/run by government?

Movies/tvshows

Have these become expensive? We used to have three broadcast TV networks. Now, we have hundreds of cable channels plus nearly unlimited streaming. What would that have cost a consumer in the past? The same show/movie now reaches a much broader audience in both time and space so, even if cost per movie has gone up, cost per viewer might not have. (Contrast that with education, where a single teacher does not educate more students than in the past.) One could counter that those are productivity gains from innovation and, thus, don't contradict Baumol. But, that's the point --- the private sector allows innovation that grows viewers per actor in a way that government education does not grow students per teacher.

TV shows have just gotten really slow. But don't worry, it's not that they are being cheap, that just the Prestige Television aesthetic.

Respond

Add Comment

Respond

Add Comment

I'm in an industry which faces the Baumol effect. Productivity comes from competence, anything that can be automated or labor costs limited ends up being done elsewhere.

What ends up happening is simply that work doesn't get done because it is too expensive. Or the customers find different ways that cost less money to do what they need to do.

Education and health care with substantial government subsidies keep increasing in price. If the subsidies weren't there, less of it would be done to match the available resources.

Respond

Add Comment

Respond

Add Comment

U.S. healthcare.

😒"...in an industry not subsidized/run by government"

Though I always am confused if Neoliberals are pro Military Industrial Complex?

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

How much have classroom sizes in public schools changed since 1960? My guess is that the 1960s were the peak for students per teacher due to the baby boom, but that classroom sizes haven't got dramatically smaller, with much of the incremental spending going into staffers, especially Special Ed spending.

. One magnetic response imaged a plate pictured across the color spectrum, instead of seeing where the blood flowed, they measured serotonin (rose) and dopamine (panic fell) with an ink injected in a vein—the yellow and black as if a mix of a dream and TV being tuned.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Russ is pretty much right here and it's something I noticed in college when the more liberal minded professors and students complained about the perverse influence of Friedman and the neoliberals on society. This was especially apparent in a class where we watched "The Shock Doctrine". At the time I was fairly liberal myself, but I could see just how unfair the documentary and professor were. I knew that so much of what was being presented was flat out wrong. Friedman was apparently one of the great villains of the 20th century, who had masterminded our complete ruin.

Friedman basically got nothing he wanted. School vouchers? No. Negative income tax? No. Government spending as a share of national income falling to 10 or 20%? No. Massive deregulation? No? Actual monetarism? No. His only real victorious I could think of were what Russ did. Eliminating the draft(only partially done, we still have selective service) and floating exchange rates. I might give half credit to promoting freer trade. But Trump's tariffs and a number of quotas that existed in Friedman's time that are still here mean on net we are probably about the same.

If there is any nuance to this it's that government may have stagnated in some areas in the last 20-40 years. For example, the total Federal workforce hasn't really grown that much. https://blogs.wsj.com/economics/2014/11/07/the-federal-government-now-employs-the-fewest-people-since-1966/
But yeah, in most places government has gotten bigger or stayed the same since 1980. Maybe Milton Friedman's influence was to prevent government from getting even bigger than it otherwise might have been?

"Massive deregulation? No?" Not sure what counts as "massive", but airlines and telecom were deregulated and usually counted by neoliberals as successes.

"Actual monetarism?" In terms of targeting money supply growth, no. However, it is conventional wisdom now that the Fed caused both the Great Depression and Great Inflation --- Bernanke's "apology" to Friedman and Schwartz: "You're right, we did it. We're very sorry. But thanks to you, we won't do it again." That the Fed targets inflation is and implicit admission that "Inflation is always and everywhere a monetary phenomenon." How else could monetary policy be expected to achieve an inflation target?

Banks were deregulated in the 1980s and 2000s and those were counted as disasters even by neoliberals. AT&T, America's top telecom monopoly at the time, being broken up by the government doesn't count as regulation?

Please list specific, abolished bank regulations and expound on 'zackly how each abandonment contributed to the listed disasters.

This book goes into great detail. Lots of regulations were modified that dealt with repo loans and other high leverage Instruments https://marginalrevolution.com/marginalrevolution/2018/04/crashed-decade-financial-crises-changed-world.html

DRTL

Do you know what is a repo loan? The real world knows them to be repurchase or resale (borrow/lend) agreements wherein banks pledge UST or investment quality securities as security for loans for liquidity/reserves requirements. I don't think a repo loan has a high-leverage feature.

So, enlighten me. Name three deregulated regulations that were erased pre-crisis and reinstituted post-crisis.

Respond

Add Comment

Respond

Add Comment

Money funds are like FDIC savings accounts but without the FDIC related bank regulations to prevent insurance claims against FDIC caused by bad bank loans.

Milton Friedman said money funds like Primary Reserve Fund would never fail from making bad loans with savers deposits.

Then rumors about Primary Reserve triggered a bank run than forced Primary Reserve to declare a bank holiday, which triggered runs on hundreds of other money funds, but not yet a panic, but, the Bush Fed and bank regulators panicked and within hours, the money funds were covered as if they were regulated FDIC bank deposit accounts.

https://money.cnn.com/2008/09/29/news/economy/money_market/ reports the end of the crisis that Friedman claimed would never happen because uninsured unregulated banks would never make bad loans with savers money.

I followed the debate in the early 70s because I had read "A monetary history" friedman/Schwartz, plus his Newsweek column, and watched Wall$reet Week with Louis Rukeyser so I did not believe money funds treated as substitutes for FDIC accounts could be safer. It was just a matter of time until they suffered the fate of bank accounts before 1935 on a regular basic.

Before circa 1970, it's unlikely you could have any money in a retail money mutual fund, because you would need a licensed broker certify you could lose some or all the money deposited. By 1975, almost anyone could open an account by phone and sign the papers sent and return them with a check. If you used a local broker, he'd probably charge $75 or so.

Five years later, billions were drained from banks and S&Ls into these money funds. This was called "disintermediation". It totally whacked the stats for M1, M2, M3, etc. In the mid to late 80s, Volcker presented a paper about how the Fed was flying blind from 1978-1985 because they had no idea what the real money supply was doing.

The same was true to a degree from 2008-201x. This time money was draining from money mutual funds into FDIC accounts held by banks that no longer made many loans because so much savings had moved out of banks to money funds.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

But then Bernanke turned around and did it again! The price level is still not were it would have been if the Fed had been targeting average inflation as the "prices" side of its dual mandate not to mention the slow recovery of employment.

OTOH, we do have a modest EITC/Child tax credit.

How does the Fed inject money into the shadow banking system? Make deposits into Primary Reserve Fund to increase overnight lending to Lehman to fund more cash out refis via mortgage origination boiler room getting packaged into tranches of risk on bundles of 10,000 mortgages?

FED member banks had way too much money, no lending operations to lend it because unregulated mortgage originators had taken 90% of the business, plus all mortgages looked way too risky given real estate prices were plunging.

Do you mean you do not believe the Fed could not have done more? QE could have started in September, not January; no IOR, No announcement of time and amount limits on QE, rather average inflation, employment limit.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

As Russ pointed out, the Federal register is more bloated than ever. It basically does not go down, despite some industries seeing regulations cut. Worth noting, this is only at the Federal level, it doesn't include state regulations. In the 70s about 10% of all professions were licensed, by the 2000s it was more like 30%, that is basically all at the state level. We are simply a more bureaucratized nation.

Respond

Add Comment

I've taken some time to think over your comment on monetarism after work. I think you'r mostly right, central banks are implicitly monetarist. The fact that they don't(more like can't) target growth in monetary aggregates isn't that big of a deal. Friedman was basically right about monetary policy and without admitting it most central banks admitted it. They target inflation and pay close attention to the money supply, not just short term interest rates. QE was basically an idea Friedman had, so is paying interest on excess reserves, and so were most of things the Fed did to deal with the Great Recession. Friedman gets a 3rd point.

Respond

Add Comment

Respond

Add Comment

Your last example, the federal government, actually shows the opposite of what you think. It's a great example of the problems people are talking about when they complain about "neoliberalism." It used to be the case that the federal government used almost entirely direct employees, who had good benefits and job security.

As the article notes, government contractors are not counted as federal employees. If you live in the DC area, it seems like everyone you run into is a government contractor. The way this generally works is you are an employee of a staffing firm like Booze Allen Hamilton or Deloitte that bids on government contracts. The government generally pays the contracting firm about half of what the contracting firm pays their employees. So now the government is spending a lot of money for the privilege of not offering the people working for it good benefits or job security, and these middlemen firms get rich.

Respond

Add Comment

Respond

Add Comment

Real neoliberalism has never been tried!

Maybe real neoliberalism only exists in the academia echo chamber . . .

Respond

Add Comment

Respond

Add Comment

No one measures what didn't happen and for political fashion economists don't undertake measurement of what didn't but could have happened. Hence everyone gets to be right and avoid embarrassing conversion about past choices.

Respond

Add Comment

Pretty insightful overall but neoliberalism can’t both take credit for the great enrichment of the past while bemoaning that it’s policies have not been enacted. If neoliberalism has never been tried, then what is responsible for our prosperity?

I don't think neoliberals have ever tried to take credit for the (non-existent) vast improvement in K-12 education from 1960 to present. So, airlines and long-distance phone have been deregulated and costs have come way down. K-12 has not been (neo)-liberalized, and costs continue to climb. There's no contradiction here.

+1

Respond

Add Comment

Respond

Add Comment

There was certainly non-negligible deregulation, which I think was beneficial and they should take some credit for, but with respect to government spending, there’s been little changed, and the focus of anti-neoliberalism is usually that they’ve starved the provision of public services.

Respond

Add Comment

Respond

Add Comment

Trump and his trade representatives complain that China has an unfair advantage because China's government is so small. Got your attention? They complain that China has an unfair advantage because China's government is so large, investing massive sums in infrastructure (high speed rail to nowhere), a robust industrial policy (the leader in 5G technology), and government funded research and development (out front in the development of AI). Trump's answer to this advantage? Demand a veto power over China's fiscal policy. That's the large and small of it.

Meanwhile, America's billionaires lament the decline in the price of vintage cars (and complain about the size of America's government). https://www.nytimes.com/2020/01/30/business/arizona-car-auctions-2020.html

That’s a bit of a simply cheap shot. I think principled of all stripes can look at govt and say either “I wish it worked better” or “I wish it were smaller and less intrusive “ or both.

And you are principled right counsellor?

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Someone should write a book on all the things that have been called "Neoliberlaism." I thought it was reforming regulation along cost-benefit grounds and substituting transparent tax and subsidize for regulation in order to achieve distribution goals. In other words, there's never been very much of it since airline deregulation. Rejigging taxes to transfer more income to high income people is not "neoliberalism" in my book; that's "neo-feudalism."

Phil Magness has written extensively about this. Take a look at his work.

Could be a good candidate for the author.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

So, let's define terms first:

"Neoliberalism" is contemporarily used to refer to market-oriented reform policies such as "eliminating price controls, deregulating capital markets, lowering trade barriers" and reducing state influence in the economy, especially through privatization and austerity."

Then, let's ask some questions:

1. As for education, was English as a second language a feature of 1960's grade school education?

2. How how were children with disabilities treated in the educational system in the 1960's?

3. How widespread was bus transportation used to transport kids in the 1960's?

4. Did you notice that the educational expenditures numbers that are being bantered about include those components. Did they point out that the two components are instructional costs and SUPPORT services per student? Did they tell you this and did they report on the change in instructional services and the change in support services over time?

2. As for austerity, what is this year's budget deficit and how much of it was accounted by the tax cut?

3. As for deregulation, did you know that there was bipartisan support for deregulation of air and surface transport during the 70's, that Ribicoff's committee led the way, and that Jimmy Carter signed the airline deregulation act in 1978, and that Carter signed the trucking deregulation act in 1980?

All this and more. Schools today are constantly under threats of lawsuit from parents. Schools today cannot use corporal punishment.

Respond

Add Comment

Respond

Add Comment

Not a big fan of "total" education numbers. Transportation costs vary. Construction costs vary. Heating and air conditioning costs vary. Sports program costs vary. Not to mention band or cheer competitions.

If we are concerned about education, we need some kind of normalized cost of instruction.

And in getting that, we might discover that "amenities" haven't just invaded higher education.

Here is a page that tries to break down school costs in the states.

It's varied enough to make a national headline number pretty useless.

That's my reaction to a lot of the stats in Roberts' piece. They are used to build momentum for his argument, but each one is not so simple.

If the argument is just "hey look, we haven't slashed everything," that's fine.

But that is not an argument that any particular sector or project is right-sized for a nation of our wealth.

You jumped off the rails again.

The whole point of that number is that instead of spending per pupil declining it has increased by close to 400%, adjusted for inflation.

You took this number and then went on a rant about cheerleading competitions and heating costs? You either have a tremendous problem with reading comprehension or simply jump straight to mood affiliation.

Back at you, crazy person.

Respond

Add Comment

Motivated reasoning + Dunning Krueger Effect = anon the junior financial analyst explaining how there's no comparison of education spending between New York and Iowa because marching band uniform markups vary by region.

Back at you too.

Maybe you could do a comparison of "marching band uniform markups vary by region" or something even better, like a huge correlation of cost centers and student test results.

But is it really smarter to say that you don't want to know?

In a country where some state's in classroom funding is more than *double* that of others, you don't want to know how it works?

Such studies have already been done. It isn't my job to educate you on what they say, but I assure you that extracurricular activities aren't a big driver of the differences in spending nor in student achievement.

Appeal to missing data noted.

Is there a fee for using google where you live?

I have linked to data supporting my conversation. Above and below.

Respond

Add Comment

Does money matter? Yes.

In the U.S., many states have undergone reforms in how they finance education. Historically, most primary and secondary education was financed by local property taxes, so richer areas had better funded schools. But between 1971 and 2010, more than two dozen states had to reduce inequality in spending due to judicial decisions. This led to changes in school spending that were not related to other variables – like local commitment to education – that normally make it hard to parse out the link between financing and education. Using the variation in spending coming from the first wave of reforms, “a 10% increase in per pupil spending each year for all 12 years of public school leads to 0.31 more completed years of education, about 7% higher wages, and a 3.2 percentage-point reduction in the annual incidence of adult poverty. They also find that the effects are more pronounced for children from low-income families.”

Especially note these words:

"This led to changes in school spending that were not related to other variables – like local commitment to education – that normally make it hard to parse out the link between financing and education."

That's why I ask for "some kind of normalized cost of instruction" which you deride as "band uniforms."

+1 Thanks for the link World Bank analysis and fact based information.

Respond

Add Comment

-1, that's a strawman position. No one has said there's not a variance in school spending. The argument is that it hasn't gone down.

Respond

Add Comment

I see, so you're willing to accept those aggregate statistics, but not others. Could it be because they conform to your priors?

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Given that the US spends more per student than almost every other developed country, including your supposed European role models, it’s hard to argue we’re spending less than the right amount, or else no one is.

This is another good reason to be suspicious of Americans who want to make education (or healthcare) more ‘socialized.’ The best argument for it is that it’d allow the state to ration everything and force costs down. But most people who want it actually think of it as a means to increase spending on these things despite unfavorably comparing us with countries that already spend far less.

I think we should be equally suspicious of anyone who looks at the national numbers and says "more" or "less." That's lazy at best.

.. a growing number of researchers are pushing back against what they see as a simplistic, reductionist view of the role that spending plays in school quality and student performance.

Not surprisingly, spending sometimes improves outcomes.

Respond

Add Comment

Respond

Add Comment

"The best argument for it is that it’d allow the state to ration everything and force costs down. "

Indeed, it sometimes works that way, probably when the "good" in question is largely in demand as an expensive signal. If no one is allowed to wear a fancier suit than the king, then there can be no endless spiral of ever fancier suit-wearing.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

In today’s episode of Adventures with Anonymous, he realizes aggregate measures don’t account for subtle differences in circumstances. Later today, he will forget this and advocate for a one-size-fits-all, top down solution to some random problem.

Warren 2020!!!

I'm actually the guy who has linked to fine grain maps a dozen times on all sorts of issues.

So I don't even know what you are on about.

Unless, I don't know, this is some rando argument that we shouldn't have Social Security because "everybody is different?"

Respond

Add Comment

Slappy, Please contribute to the contribution with facts.

anonymous has, but you haven't.

Aren't you ashamed of yourself?

So education spending per pupil has not grown over 400% adjusted for inflation? That was the actual fact at issue

Or perhaps the null hypothesis in education has been overturned? Please, if what you say is true we have utopia on the horizon!! Link the paper overturning the null hypothesis please, I cannot wait to read it. We’ll be a nation of Einsteins in 15 years!

What relevant facts have been cited, apart from “richest school district in SoCal spends 20% more per pupil as a result of property taxes than one of the poorest districts in SoCal.”

Yeah. Bullshit.

Here’s a Haiku:

Bill Link The JSTOR
That says null hypothesis
Has been overturned

Respond

Add Comment

Respond

Add Comment

So, when you say "not so simple," you mean: "Actually, in contrast to Russ Roberts, I think we should blame Milton Friedman and neoliberalism for 'economic inequality, wage stagnation, economic dislocation due to globalization, and loss of jobs and economic security due to technology and automation; and the reason I think so is because although aggregate numbers completely validate Roberts' point, I have poked around and found isolated instances in which some funding increases could improve outcomes at the margin!"

Do I have that right?

Because, if not, you're not addressing Russ Roberts' essay at all. You're obfuscating the issue with a wild red herring.

I was primarily offering an aside, which apparently was found "dangerous." That is, it didn't offer a neat solution that "more funding is bad."

I actually have a moderate and pragmatic position, and if you read carefully, you'll see it. Sure, sometimes more spending can be bad or wasteful, but not always, and probably not in the poorest districts.

Now, how does that relate to Roberts' collections of graphs? Well, do any of them speak as I say to "right-sizing?" Is it particularly bad, for instance, that the size of the Code of Federal Regulations rises, with technology, over time? Before there were airplanes, there were no airplane regulations. Yay?

So again, I have a moderate and pragmatic position. There might be "excess" in these graphs, but you don't demonstrate it my merely showing growth.

So you are changing the subject. Russ Roberts wrote something about Milton Friedman, free market economists, and the so-called rise of "neoliberalism." You changed the subject and now want to present your own person opinion (yet again) as the iconic version of "moderation" by attempting to make anyone who stays on topic seem quixotic and crazy.

It's a cheap trick, and you should stop it. Nobody likes a cheap trickster, least of all me. Stay on topic. Say something about neoliberalism and economics. If you have something "moderate" to say about that, then go ahead and say something moderate about it.

But this dirty, cheap trick where you change the subject to your own personal policy agenda and then try to paint any and all objections as "objections to moderation" is dirty and cheap, in addition to being not very intelligent, and certainly not a good contribution to the actual topic of the discussion.

So, do you have anything on-topic to say here, or just more dirty, cheap tricks?

I'm decoding what I see as the inner logic of those charts, the ones that Tyler sees as central to the argument. "Excellent visuals."

If you don't like that, you can keep walking.

"I'm decoding what I see as the inner logic of those charts,..."

You seem to do a lot of decoding of things no one else can see.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

1. Russ says the narrative is wrong, gives examples including education spending rising > 400%

2. You comment about cheerleading competitions and spending varying by district. Which is completely irrelevant to the post

3. ...profit ?

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Hmm... In 1960 real US per capita GDP was one quarter what it is today. So yeah, the figures for per student seem right.

I like this criticism. Why use GDP for transportation spending, but not education? Lies, d@mn lies, and statistics.

Just putting a number to Baumol's cost disease and pointing out the increase in spending per pupil is exactly what would be expected for a field without productivity gains. Meanwhile, an inflation adjusted dollar will buy me around 5 times as much clothing today as it did in 1960.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

They lionized big business, defending the concentration of corporate power,

Big business has its negativities but it's a necessity. There are no "Mom and Pop" manufacturers of commercial passenger jets. Production and distribution of electrical power probably wouldn't be practical for a sole proprietorship.

Respond

Add Comment

School spending and the effect of school spending are the most overlooked (and probably deliberately obscured) political / social issues.

1. Most people have been told that public schools are constantly cutting budgets, which is just not true.

2. Most people have been told that urban schools receive low funding compared to suburban schools, which is just not true.

3. Most people assume that increasing school funding will increase outcomes, which doesn't seem to be the case. Spending per pupil has tripled since 1960 and doubled since 1990, which approximately no change to test scores. New Jersey provided a huge increase of funding to Newark, Camden, etc. with the Abbot law, and those are among the best-funded school districts in the country, and it had no effect on achievement.

You can find a whole social science literature about the positive effects of funding on student achievement in a particular area indicating promising national policy prescriptions, but, ... wait, what? It defies the notion of a statistical sample. Why do you need to estimate the population (US schools) with a sample (one district's schools) when we already have measurements of the population?

Filed under "well, duh". School spending isn't about educational outcomes; it's about signaling that you care.

But only for your local school. Screw the next town over.

Which again is why national figures should be considered useless, averaging Beverly Hills and Compton, rather than examining them.

"Highlights

- Beverly Hills spends 55.2% more per student than Compton.

- The Student Teacher Ratio is 25.2% lower in Beverly Hills than in Compton. (lower means fewer students in each classroom).

- Beverly Hills had 56.9% more residents who had graduated High School compared to Compton"

https://www.bestplaces.net/compare-cities/compton_ca/beverly_hills_ca/education

"Beverly Hills had 56.9% more residents who had graduated High School compared to Compton"

Gee, I wonder why.

Beverly Hills: 78.6% White; 8.9% Asian; 3.8% Hispanic; 2.2% African- American; 0.1% Native American. Median income: $103K

Compton: 65% Hispanic; 32.9% African-American; 0.8% White; 0.7% Native American; 0.3% Asian. Median income: $43K

More spending is as much as an effect as it is a cause of graduation rates.

From Massachusetts data http://profiles.doe.mass.edu
per pupil cost 10th Gr. MCAS % white/Asian
FY2018 2019
engl. math
Cambridge $27,597.30 506.7 507.4 53.8

Boston $22,748.42 496.5 498.5 23.9

Georgetown $13,764.43 518.1 517.7 95.1

suggesting that spending has a minimal relationship to results. Comparing spending nationwide seems pointless; the cost of living in Manhattan or San Francisco makes it impossible to hire teachers (or other school employees) there for what you could pay teachers in Montana or Mississippi.

Respond

Add Comment

Respond

Add Comment

"But only for your local school. Screw the next town over."

Fine open up charter schools with open enrollment.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Misunderstandings. Clayton Christensen died recently. He wrote the seminal book on disruptive innovation, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (1997). He was misunderstood: he didn't praise disruption, as is often assumed, his was a warning. "Disruption" is a Silicon Valley buzz-word, which is a shame, because folks in tech use the term not in the way Christensen intended. I mention this here because economists are often misunderstood. Christensen had an undergraduate degree in economics from BYU (he was a Mormon), a graduate degree in applied econometrics from Oxford, and an MBA from Harvard, where he taught in the business school after a successful career in business. Here is his NYT obituary: https://www.nytimes.com/2020/01/25/business/clayton-christensen-dead.html

I read Christensen back in the day, and have seen people right and left misunderstand him for screwy ideological reasons. But his type of disruption is definitely a thing. It's kind of interesting how, after The Innovatior's Dilemma is largely forgotten, it plays so big in the Tesla story. Did everyone see that GM is going to bring out a Hummer branded electric super truck? It's a direct response to Tesla's Cybertruck, and the Christiansen style recognition that Tesla stole a march on innovation.

They were able to steal that march because the major manufacturers were so deep in a liquid fuel "value network."

@rayward, here is used to indicate place not time.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

The excerpt seems to reflect the common flaw in reasoning that just an increase in $ means much -- how the $ were spent as well as the underlying changes in costs may have impacted the level of funding needed seem critical here.

The proffered excerpt is thus representative of Cognitive Elitist thought: greater funding for public education from 1960 to 2016 perhaps only means that more money is today being spent to achieve far more defective outcomes and far less substantive outcomes.

Id est: the excerpt that Tyler has displayed fails to note that roughly 20% of American adults today cannot claim literacy in English.

Another one in five American adults (also likely "beneficiaries" of public education) are SUB-literate when it comes to texts in English.

Because Cognitive Elites commonly demonstrate next to no concern with American adult literacy rates, we have little data concerning the quality of American adult literacy among the 40% of American adults said to be "functionally literate": and with the figures already cited, we may legitimately suppose "functional literacy" in 21st Century America to be something less than might otherwise be advertised.

(Barely one in three American adults can be safely thought to be "fully literate", able to digest at least somewhat written matter appearing across numerous intellectual and cognitive domains.)

Our Cognitive Elites, therefore, have been pleased for almost sixty years to preside over the stultification of Americans (courtesy of poor public schooling and media entertainment distractions galore) who have neither the networking connections nor the sterling credentials that residency (for some small few) in the DC-to-Boston Corridor permits.

Respond

Add Comment

Respond

Add Comment

I mean, there is a very abstract question on the table. That is "how fast should funding grow?" Do we decide based on performance, ROI, or what?

To me the personality issues, is Milton Freedman good or evil, are irrational, and not something I'm interested in following. That's why I structured my argument in a more pragmatic way.

I'm not trying to frame *you* as evil to get out of that discussion.

No, that’s not the point at all.

There’s a narrative in which neoliberals led by Milton Friedman demolished public education, slashed public R&D, and gutted infrastructure.

Prof Roberts is showing that this narrative is demonstrably false, empirically, using a very conservative estimate via inflation adjustment. That narrative is false, it’s a lie, it’s factually untrue.

Whether spending should be 1000% higher instead of “only” 400% is a completely different question altogether.

Here's a serious answer. The unavailable data on all those charts is the dotted line called "ideal." Every bit of spending or regulation is high or low relative to that missing data series.

The sad thing is, because the ideal is not available, the liberals, and neoliberals, and socialists, and libertarians, will make an implicit estimate. They often do this without showing their math, but even if they did, we could see how some people would "feed in" higher goals for growth, some for greater equality, etc.

This in turn leads to arguments that "the other side is winning!" because actual spending or regulation level is far from (your personal) ideal.

My prescription is to forget all that. The more general your claim is that "spending is too high/low" the less grounded it is.

Ground yourself in the specific, the goals, and ROI you seek in each particular.

So we can agree on the facts, per pupil spending has gone up by over 400%, adjusted for inflation?

So then we can agree that Friedman et al were completely ineffective in lowering per pupil spending (among the rest of the examples)?

Because that’s the entire point of the post. Not whether Compton Unified spends 20% less per pupil than a tiny rich school district of 4000 total kids K-12.

It has no bearing on the post at all.

We should all know Wagner's Law as a background. If we define neoliberal success as stopping that in it's tracks, it didn't happen.

But it's a very neoliberal idea to think that it should have happened. No computers in schools? No robotics class?

And again, I do see those attacks on Friedman and neoliberalism. They are not saying there was no growth either. They are saying neoliberalism stopped them from having their version of "nice things."

To which the conservatives respond, "funding went up, what more do you want."

Respond

Add Comment

And sometimes of course they are talking about actual and specific cuts:

http://www.wisconsinbudgetproject.org/years-after-historic-cuts-wisconsin-still-hasnt-fully-restored-state-aid-for-public-schools

Respond

Add Comment

Respond

Add Comment

You mean... you'd rather people just put their normative commitments on the table...?

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Improperly adjusted for inflation, mind you, because they stupidly chose to use CPI as their price index even though every Econ 1B student is taught that CPI overstates inflation and therefore over-deflates, the error compounding over time. Meaning per pupil expenditures rose even more dramatically than this poorly-constructed data suggests.

Respond

Add Comment

Progressive government: the more you have, the more you need.

Respond

Add Comment

oh this is just silly, schools provide a range of specialty services and individualized administration and planning that simply didnt exist sixty years ago.

you can argue that those services are unnecessary or whatever, but it is patently dishonest to pretend a ford pinto and a tesla are apples and apples

"it is patently dishonest to pretend a ford pinto and a tesla are apples and apples"

?? How long would it take to drive a Tesla from Fairbanks to Calgary in January? Snort. Holy shit, man. Electric cars still suck.

An 88" HD TV is different than a 12" B&W but it's still a TV, nothing more nothing less. A half-hour show is still a half-hour show.

I suspect you are deliberately missing the point

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment