Good Advice Depends On Circumstances

John Taylor has a fun column about opportunity cost, curriculum, and Tiger Woods.  As it happens Tiger was one of John’s students during freshman year at Stanford.  John says about Tiger:

With Tiger Woods just winning the Tour Championship, I have a wonderful example today of opportunity costs. Tiger took my course in 1996. He was the best economics student: As I have often said, he learned opportunity costs so well that he left Stanford and joined the pro tour.

As John says, it is about the choices people make when faced with scarcity.  The stock answer to, “I am a good student.  Should I stay in school or follow my dream?” is stay in school.  But the back story matters.  If you have the proven skills of Tiger Woods

In 1995, he successfully defended his U.S. Amateur title at the Newport Country Club in Rhode Island[46] and was voted Pac-10 Player of the Year, NCAA First Team All-American, and Stanford’s Male Freshman of the Year (an award that encompasses all sports)

Then leaving school in 1996 looks to be the right choice before the fact and obvious after the fact.  Here are two of our experiences about advice and opportunity cost.  A student comes to our office and says she has a local offer that she likes because it requires less hours but she wants as much money as her classmates that will be working in bigger cities and working more hours.  Our answer is that that is the trade-off she wants.  She should jump at it.

Another student comes to our office and asks for a couple of days off.  We ask why.  Our expectations were a wedding or a senior vacation.  Instead we hear that he has been invited to the NFL combine.  We said yes and he went to the Combine and played in the NFL for several years.

Trade-offs matter.  Tiger and the other folks are in the best position to make their own decisions.  Those of us that give advice for a living should always recognize that the stock answer isn’t always the best.  We need to find out about the individual when giving advice.  Exceptional golfing skills, a need to stay local, or ability to make the NFL all change the typical answer.  Then, sometimes, we wander beyond the economics to all that other stuff.



Research Basics

After we commented on Cass Sunstein’s article about The Problem Of All Those Liberal Professors we recognized that we failed one of the standards of archival research.  You should aways check the original document(s).  The original document that Cass referred to is: Homogenous: The Political Affiliation of Elite Liberal Arts College Faculty by Mitchell Langbert.  It was posted on the National Association of Scholars (NAS) website.  NAS is:

[A] network of scholars and citizens united by our commitment to academic freedom, disinterested scholarship, and excellence in American higher education. Membership in NAS is open to all who share our commitment to these broad principles. We publish a journal and have state and regional affiliates.

Yup, that basically makes them conservatives. It is not a surprise that Mitchell’s article showed up at NAS.  Other outlets might not be interested.

We were concerned that Cass understated the impact of the lack of conservatives on faculty because the faculty run the place.  They set the curriculum and the related courses.  They determine the research standards.  They hire (sometimes with a little help) administrators.  Most administrators were former faculty.  These administrators set accreditation standards.  In short, faculty run the place although not all faculty are equally involved in such activities.

So let’s see what Mitchell said about the impact of the lack of ideological balance in colleges and universities:

So pervasive is the lack of balance in academia that more than 1,000 professors and graduate students have started Heterodox Academy, an organization committed to increasing “viewpoint diversity” in higher education.4The end result is that objective science becomes problematic, and where research is problematic, teaching is more so. [Site added]

To an academic it is reasonable to include curriculum development in teaching but we don’t think that the general public does.  We think it is important to understand that faculty have somewhere between an extensive to exclusive say about what classes are taught and how, what research is acceptable, what outside speakers come to campus, and almost everything else that happens on campus.

Mitchell notes that West Point and Annapolis are two outliers in that they are more balanced that almost all the other schools.  We took a look at the history curriculum for Annapolis (US Naval Academy) and a local school that we have access to.  It should give you a feel for the differences between a school with balance (Annapolis) and one without balance.

Examples of history themes from the US Naval Academy:

Examples of topics include piracy, the development of national identities and the growth of capitalism.

Sidebar: We really, really want to take the course on the history of pirates.  Especially on International Talk Like a Pirate Day.  End Sidebar

Here are some selected history course titles from a regional state school (yes we are aware that Mitchell was surveying Liberal Arts schools):

Women in the Modern United States: 1890-Present

History of Motherhood in the United States

U.S. Reform Movements

You can check the sites and see if you agree with us that the curriculums are very different.  Even when the titles are similar, Peace and War versus History of The Technology of Peace And War, we are willing to wager that the courses are very different.  Mitchell recognizes the connection of balance to research.  Without approved research a faculty member is highly unlikely to earn tenure.  If Military History is not part of the curriculum then military historians need not apply.  Too bad Victor Davis Hanson.  But the impact of the lack of balance is even more.  It is what happens in the classroom.  But it is also the classes that get taught, the speakers that come to campus, and the other services offered by the university.

Cass and Mitchell are right to identify the problem.  It is just bigger than they think.  It has an impact on every student in every major in every way.



Academia And Politics

We know that the the vast majority of college professors are on the left.  Cass R. Sunstein, who at various times in his career has been a professor, is discussing a recent survey of faculty:

A few months ago, Mitchell Langbert, an associate professor of business at Brooklyn College, published a study of the political affiliations of faculty members at 51 of the 66 liberal-arts colleges ranked highest by U.S. News in 2017.

Of course, it comes up with the expected results that almost everyone, everywhere is a Democrat.  Cass says they don’t really mean it:

Such discrimination might take the form of unconscious devaluation of people whose views do not fit with the dominant perspective. For example, young historians who cast Franklin Roosevelt’s New Deal in a terrible light might not get a lot of job offers.

And says it only matters sometimes:

It is true that in some fields, political affiliations do not matter. In chemistry, math, physics and engineering, students should not care about the party affiliations of their professors. Sure, it’s conceivable that Democratic chemistry professors want to hire fellow Democrats. But that would be surprising. In all likelihood, they are looking for good chemistry professors.

He is wrong on both counts.  What is disappointing is that he has been in academia but did not seem to pay attention to the influence of faculty.

They, the folks on the left, mean it.  They set up curriculum, e.g., Woman’s Studies, and courses, e.g., Women and The US Economy, to attract fellow travelers.  Research works the same way as they create outlets for these areas.  Accreditation and hiring senior administrators happens in a similar manner.

Political affiliation matters in every field for at least three reasons.  First, folks on the left need the support of all faculty to create a leftist environment.  All faculty are involved in running the university.  Curriculum, courses, outside speakers, and senior administrators are largely to entirely selected by faculty.  Second, a big part of picking faculty is collegiality.  Of the folks that can do the job who do you want to spend the next twenty years with?  This is another way they do it on purpose.  Third, the scientists don’t just talk about science in classes.  Students should, as Cass says, be exposed to the joys of markets as well as market failure.  We commonly heard about the latter when scientists made research proposals at the university level.  We are certain that those comments made it to the classroom too.

We are glad that Cass recognizes that the political tilt of academia is a problem.  We wish he realized how serious it really is.





College Cartel Tofu Edition

Frederick M. Hess and Grant Addison are at NRO discussing some trends in employment.  They start out with:

Earlier this month, the job-search site Glassdoor compiled a list of 15 major companies that no longer require applicants for certain posts to have a college degree. The list included an array of entry- and mid-level jobs —everything from barista to “Apple Genius” to “senior manager of finance”

It is worth reading the whole thing.  We are generally in agreement with Fred and Grant but we find that they go a bit overboard with the red meat.  That’s why we call this tofu edition.

Fred and Grant point out an important reason why lots of employers require a college degree when there isn’t a compelling reason to do so.  They have a useful term for it, degree inflation:

There are multiple factors to blame for degree inflation, but a big one is the unintended consequences of federal anti-discrimination law. Title VII of the Civil Rights Act of 1964 prohibited employers from discriminating against workers or job applicants on the basis of race, color, religion, sex, or national origin. It did, however, allow the use of “professionally developed” ability or employment tests, insofar as they were not “designed, intended or used” to discriminate.

Trying develop an entry level test independently  has been a magnet for lawsuits.  Requiring a degree has not although Fred and Grant don’t see why.  It is OK to disagree with the courts but there is no reason to expect they will suddenly change their minds and agree with us or Fred and Grant.  Here is where some of the red meat comes:

And colleges, of course, reap the outsize benefits of acting as the gatekeepers to employment. It’s an arrangement which allows campus bureaucrats to pull in six-figure salaries while tuition costs soar ever-higher and schools feast on billions in federal student loans and other taxpayer funds.

The actions by the employers in the first paragraph will have precious little impact on highly competitive colleges.  We are not going to name names on who is worried about those employer changes  but we are sure the Ivy League and the Big Ten are not.  Fred and Grant recommend:

While there are policy changes that could help, businesses have a chance to do well by doing good. They can take the initiative to cultivate new partnerships, expand apprenticeships, charge HR departments with reexamining outdated assumptions, and find ways to move beyond routines that close the door to qualified workers who lack the right piece of paper.

We are with Fred and Grant that it is not a policy problem.  We are with them that employers should cultivate and expand partnerships.  Paid apprenticeships, internships, other on-the-job training should be expanded.  The partnerships might be with colleges, high schools,  vocational schools, or on their own.  These programs at the various schools and businesses might be run by highly paid folks.  They might be bureaucrats.  Let the markets sort out the prices.

The Purpose Of Public Subsidies

The NRO article by Frederick M. Hess and Cody Christensen on college dropouts and what can be done is worth reading in its entirety but here we want to look at one sentence to discuss the nature of public subsidies.  The sentence comes early:

As 2 million students drop out of college each year, the costs should give everyone pause — including a half-trillion dollars in unpaid student debt and public subsidies wasted on college-goers who never graduate. [Emphasis added]

The unpaid student debt is an interesting issue but we will focus on the part in bold.  Are public subsidies wasted on college-goers who never graduate?  We think no for two reasons.  First, students can get something out of college without getting a degree. Sometimes they learn something in college while other times they learn something about themselves.  There is, or at the very least, can be, a significant value to college without graduating.

Second, and more important, it is reasonable for the government (local, state, and federal) to take reasonable risks with tax receipts.  Two examples are basic research, mostly at the federal level, and college students, mostly at the state level.  There doesn’t appear to be an effective market mechanism for subsidizing college students.

Sidebar One: Students often change their major in US colleges.  This is one of the reason it was hard to get hiring organizations like accounting firms to support freshman scholarships.  They wanted their scholarships to go to students that had made substantial progress towards a degree.  The state and some other foundations were willing to take such a risk.  End Sidebar One.

Instead, the state subsidizes a wide variety of students and a substantial number fail.  It would be easy to reduce failures by increasing entry standards but that would reduce successes too.  Fred and Cody’s article is well done but they are wrong about subsidy waste.

Sidebar Two: The subsidy loss might be compared to bad debts.  In a for profit organization we try find the level of bad debts that maximizes profits.  For the state the computation of subsidy losses versus graduates is hard to conceptualize never mind trying to compute it.  End Sidebar Two.

It is not a waste to subsidize students that don’t graduate and we don’t want to entirely eliminate students not graduating.  It is, properly, a political decision.  What are the risks necessary to provide the labor force needed?

Evaluating Colleges

Yesterday we wrote about the joys of capitalism.  Today we try to address the challenges of evaluating colleges. It is absolutely true individuals in the corporate world and the college world behave inconsistently with the goals of their organization. The advantage of capitalism is that the need to show a profit reduces such behavior.

David Leonhardt at the NYT has declared there is a new dropout crisis.  The old dropout crisis was in high school and the new dropout crisis is in college:

It’s a good news/bad news story. About a decade ago, the number of college dropouts exceeded the number of K-12 dropouts, and the two have continued to move in opposite directions since then. And if you focus only on high-school dropouts — excluding people, many of whom are immigrants, who dropped out earlier and never reached high school — there are now about twice as many college dropouts as high-school dropouts.

We are not sure that it is bad news but it is news.  There are at least two reasons not to worry about it.  First, it might suggest rational behavior from one or both of the parties involved.  Second, there is the measurement and incentive problem.

Let’s start with rational behavior.  Students could be leaving college because of the bad behavior of colleges.  For example, progressive ascendancy in many classrooms and essentially all dorms might be driving students away.  It could come from good behavior on the part of colleges by enforcing standards.  We doubt David thinks that college is infinitely scalable but this quote suggests it:

The worst part of the college-dropout problem is the cost to students. The returns on a college degree are very large, in terms of money, health and happiness. And a growing share of college dropouts come from low- and middle-income families, which means that colleges’ low graduation rates are stifling upward mobility.

We are a big fan of college but it is not for everyone and especially at 18 years old.  Our first faculty position was at an open-enrollment school.  The faculty believed that open-enrollment means open exits too.  Some folks are ready later like the student that failed or dropped our introductory accounting course seven [that is not a typo] times before passing it and graduating as an accounting major.  We know there are all kinds of interesting stories but we think the most likely explanation for increased dropout rates is rational behavior.

Frederick M. Hess and Cody Christiensen at NRO are all over the incentive problem.  We would say the problem is that colleges are trying to serve multiple masters and so the incentives are hard to follow.  Fred and Cody start with the facts:

Policymakers have sought to answer the challenge [public subsidies wasted on college-goers who never graduate], with most states adopting performance-based funding policies. Currently, 32 states allocate a portion of their higher-education funding based on educational outcomes. Ohio, for instance, allocates more than half of its funding to colleges based on how many students earn degrees. Other common metrics including retention and job-placement rates.

The University of Wisconsin System has an accountability dashboard that reports a wide variety of data including retention and graduation rates by campus.  What UW schools have the highest retention and graduation rates?  Those with the highest admission standards.  We are not surprised when Fred and Cody report that:

Last month, a new meta-analysis conducted by scholars at the University of Oklahoma and the University of Wisconsin found that performance-based funding has not actually yielded gains in graduation rates or other metrics. The authors observe that researchers have not had success linking “performance-based funding policies to increased college completion rates,” note that analyses “consistently show primarily null findings,” and conclude that “performance-based funding has no effect on completion, on average.”

Fred and Cody go on to discuss the need to overhaul reporting systems.  That is exactly the problem.  Reporting systems at the university system level almost never change.  Creating performance based funding was the work of at least a decade.  Try to refine it regularly is an extraordinary challenge.  University systems in the USA are the envy of the world.  We think it is because of student choice but even we are not certain.  We know capitalism works because of consumer choice.  We are not confident that a top down solution is going to help public colleges.



An Odd Kind Of Socialism

[Our first try did not post correctly]

This is our second but hopefully not our last comment on Kevin Williamson epic article at NRO: “Socialist” Is The New “Libertarian”.  Today we want to discuss Kevin’s comments on university education.  He is taking Michael Tomasky, editor of Democracy, to task for some ill-judged comments about capitalism when he says:

[Michael] isn’t making quite the point he thinks he is: Those nifty smartphones are the product of the part of 21st-century human endeavor characterized by free enterprise, free markets, private investment, etc., that we call capitalism. Education, for the most part, isn’t. In the United States, the state university system is a social enterprise, one generally based on state ownership of economic assets such as land or, in the case of my alma mater down in Austin, mineral rights. It’s as close to a socialist program as we have, and all the would-be socialists are complaining about it.

Kevin is right three times: Those that decry socialism often don’t understand it.  Those that advocate socialism often don’t understand it.  And the state university systems are socialist enterprises.  Let’s check the dictionary to define socialism:

{A]ny of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.

Yup, in state university systems the government owns the land, buildings, and equipment.  All the employees, including the administrators, are government employees.  It sounds like a textbook example of socialism.  What is odd about it?  The answer is consumer choice.  Socialists think that choices are wasteful.  College students move to college so they are less geographically restricted than in K-12.  Once in college American students can and do change majors.  Often.  .  American students can and do transfer to other schools.  These behaviors might not be unique to America but in the few countries that we have experience with, it is much harder to change majors or schools.  Funding, generally and sometimes slowly, follows the students.  High demand programs can have higher tuition or barriers to entry.  And, of course, there is competition from private schools.

Our experience is that departments and colleges within a university are highly competitive about students and resources.  Once, when we were chair of the university budget committee, a dean recommended that we should wear a bullet-proof vest if we entered his building.  Among universities within the system we were intensely interested in what was happening with things like changes in curriculum and faculty recruiting at other schools in the system.

State university systems are organized in a socialistic manner but with the very odd addition of consumer choice.

Sidebar: Some would argue that the consumers are the folks who hire our graduates rather than our students.  In either case there is consumer choice.  End Sidebar.

State university systems are very odd.  Perhaps that is why they are a rare example of successful, and very unusual, socialism.