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Tuesday, December 17, 2013

Tuesday, December 17, 2013

Brad DeLong Repeats the Conventional Wisdom

The Future of Sather Gate?
In a recent post at the Berkeley Blog, economist Brad DeLong offered an unusually succinct example of what has passed for the conventional wisdom amongst the Regents and UC administrators for the past decade.  Perhaps because he seems to think that he is providing bold advice rather than simply conforming to already existing policy, DeLong is more forthright in laying out the implications of the strategy.  Unfortunately,  he doesn't seem to realize that he is offering support for the very positions that have driven UC towards mediocrity and a lack of connection with the state of California.  Given that DeLong is one of the leading figures of the liberal wing of mainstream economics it seems worth it to take the measure of his position.

DeLong starts from the "realist" position that:

The days of Clark Kerr are over. The belief that the taxpayers of California should pay for the young citizens of California to get as much education as they want for free is no longer politically popular. Would that it were still. The old social democratic belief that America should have the best universal free public education system in the world was a principal source of America’s relative prosperity and economic leadership for a century. Now that the political coalition that supported that belief is gone, America will be a much less exceptional place.

But those days are gone. Chancellors can no longer rely on the legislature of California to fund Berkeley at the level needed to keep it an exceptional university. Berkeley needs another and a different strategy.

As DeLong notes, the strategy that Berkeley has adopted under this understanding is to dramatically increase its numbers of international undergraduate students, or as he puts it to develop "the funding stream necessary to maintain a great University by becoming a finishing school for the superrich of Asia."  To be honest, I am not really sure what to make of this characterization of students from Asia.  On the one hand, UCLA has also dramatically increased its students from both Korea and China and I have not had the impression that they are "super-rich."  On the other hand, one of the most striking aspects of the higher education policies of Asian countries has been their commitment--far greater than in the United States these days--to develop real liberal arts institutions for their youth.  But I will leave that question aside.

Now to Delong's credit he admits that this may not be the right strategy.  But he insists that it is the strategy in play, that it is better than no strategy, and that therefore Berkeley needs to follow it ruthlessly.

To do this he thinks that Berkeley's administration needs to direct all money to student life (by which I think he means counseling and mentoring), writing and acting classes, and to certain departments (engineering. pre-med, and interestingly two different types of economics).  DeLong's strategy therefore demands a bifurcated university: certain humanities departments (Theater, English) will provide international students skills in self-presentation and communication while others (economics, life sciences, and economics) will provide them with knowledge.

Apparently, DeLong thinks that Berkeley (and the other UCs for that matter) have not already been spending large amounts of funds in the bio-sciences and engineering or spending lavishly on economics.  But the last time I visited Berkeley I was struck by the dynamic re-construction on the northwest of the campus (where the life sciences are) in comparison to how archaic the buildings on the rest of the campus were (with the exception of the law school).  And last time I checked the pay scales in economics and business are significantly higher than any others outside of the medical centers.  Put another way, there is already heavy investment in the disciplines that DeLong think need money (at least in the knowledge rather than skills disciplines).

What DeLong is proposing is a form of what Andrew McGettigan has described as "internal privatization." (9) It is not something that is entirely under the control of the University--it is a legislative decision to increase private power over public higher education.  What DeLong's suggestion makes clear is how distorting the effects of this strategy is for higher education institutions when driven by the (perceived) desires of students defined as consumers.  This strategy would not preserve the Berkeley he knows:  it would convert Berkeley and the other UCs into a combination Wal-Mart and Tiffany's. We know how well that has worked for the economy as a whole.

Let's step back a minute.  DeLong is advocating this plan not because he thinks that the rest of the University is unimportant or because he thinks that social democracy was a bad thing.  Instead, he is advocating it on two grounds: first that there is something unjust about asking tax-payers to pay for the education of UC undergraduates (he speaks only about Berkeley but it applies throughout the system) and second by mimicking the argument of Margaret Thatcher: There Is No Alternative. 

These two reasons go together.  And both of these reasons depend on an ahistorical sleight-of-hand.

1) Delong implies that higher education is simply a private good. 

DeLong may feel differently in his personal views but in his arguments he reduces higher education to a private good and reduces private goods to the question of income.  Take his discussion of tuition.  Here his treatment is based entirely on the question of graduate's earnings.  The question he poses is: at what point does the loss of income and the cost outweigh the economic benefit of a degree?  To his mind, this question settles into the economist's consideration that for a college education to be a rational expenditure the long-term earning benefit must outweigh the short-term loss of income. 

Since he treats a college degree as a private good relating to income he suggests that since "the average taxpayer of California is considerably poorer than the average Berkeley graduate, that upward transfer to the relatively rich leaves a bad taste in the mouth."  But this position is remarkably over-simplified.  First it ignores that the lack of progessivity in the income tax, or the loopholes in the corporate property tax, or the shifting burden of the tax base from corporations to individuals are results of politics and history not facts of nature.  If these were corrected then we would have a situation where education could serve the entire population and the burdens would fall on those most able to bear them. 

By DeLong's logic there could be no public services except for the very poor--and given the political structure that Delong seems to take as given that would very quickly lead to no public services at all.  Moreover, it ignores all the ways that higher education (like k-12) function as public goods whose costs need to be shared.  I do not make the comparison with K-12 lightly--I know of people who object to paying taxes for public schools because their children aren't in them.  DeLong's argument is the argument of privatizers everywhere.  It fails to see incorporate the civic component of education and also fails to see that the shift from public to private funding increases costs because it forces institutions (and the individuals in them) to waste time, money, space, and labor on seeking out private and limited funding.

2) DeLong "knows" that public support for higher education does not exist anymore and therefore we must try a more privatized strategy: There is No Alternative. 

Now I have a certain sympathy for DeLong on this score:  he is, after all, a member of a discipline that has shown, as both he and Paul Krugman have argued repeatedly, a remarkable inability to recognize how much of economic thinking was rendered obsolete by the crises of the recent past.  So he may simply be thinking that since the economics profession can't change nothing can. 

But the history of economic thinking and policy suggests otherwise (as DeLong himself has pointed out).  Instead that history suggests that what may seem to be an unchallengeable orthodoxy can be changed if people work long and hard at it.   The ideas that now dominate economic thinking and policy (a certain market fundamentalism, a naturalized vision of globalization; a denigration of public institutions) did not drop from the sky.  They were developed in think tanks, spread by politicians and activists, formulated in often originally unpopular arguments, and defended over several decades.  Think back to the 1950s, 60s, or 70s and try to imagine someone seriously arguing that states should be cutting their support to higher education or that government could do nothing to help with recessions.  Our present world did not come about from nature: it resulted from political and intellectual struggles that laid the groundwork for the privatization mania that has created one of the least equal societies with the largest imprisoned population in the world. 

Let's try translating DeLong's diagnosis into somewhat different language.  In effect, he is pointing out that it is impossible to maintain social democracy under the conditions of neo-liberalism.  In this, he is surely right.  But put this way as opposed to the anodyne "the belief that the taxpayers of California should pay for the young citizens of California to get as much education as they want for free is no longer politically popular" reminds us that these are different strategies of politics and governance and not simply a "reality" that needs to be accepted.  Following the path that UC (and Berkeley, Los Angeles, and San Diego in particular) will not preserve quality public education.  It will destroy it.

Instead of simply accepting the doxa of the moment (especially when there is such evidence that it does not work in the interests of the people that Delong appears to want to assist) we should continue to call out the destructiveness of the strategy.  In practice people have begun to do so: passing proposition 30, parents and students sending California kids out of state because public universities are cheaper there, as well as the wide-spread opposition to the growth of non-resident tuition based policies.  DeLong might consider that his proposals will only intensify pressures to further cut state funding to UC not lessen them.  And if anyone really thinks that Berkeley or any other campus could sustain itself without state funding they really need to re-think their positions.  State funding remains absolutely central for the educational core mission of the University.

Advocating that we do a better job of following a poor strategy is not realism.  It is myopia.  


calwatch said...

Professor DeLong has hit on a good point, though... it is obvious that the state is not going to support Berkeley at the levels of the 60's, when the vast majority of the taxpaying families in California will never have a child that will get admitted into the school. Whether it's because their children have interests other than intensive SAT prep and doing activities to fill out the college resume; they want to go to a smaller, more personal liberal arts school; or the parents don't have enough money for tuition and room and board for a school that requires a day's drive from the majority of Californians, Berkeley is becoming more and more elite.

The era of the 60's when Berkeley was admitting anyone that met minimum UC qualifications - and someone of average intelligence could meet UC qualifications with above average diligence and attention to schoolwork - are long since gone. While Cal practices affirmative action on a financial basis, which I as an alumnus am proud of, for someone in the middle class or upper middle class with a child who wants to do something other than study all day and be president of three clubs and play a varsity sport, you can't get in. And quite frankly, a Cal State education may be better for a B average non-honors student. You certainly get more personal attention from professors. DeLong is just pointing out the trends - where Cal currently sets a similar bar for all applicants instead of a high bar for in-state and a higher bar for out-of-state, of high in-state tuition that drives more people closer to home and to Cal States or lesser UCs who offer greater scholarships, and the greater number of better-prepared-on-paper international students who want that prestigious Berkeley degree to get into positions in their home countries - and taking them to their logical conclusion.

Chris Newfield said...

Calwatch: the premise (that "the state" won't "support" high-quality Berkeley) is an assertion rather than a fact, and it is one that has been made repeatedly by UC officials and others--Prof DeLong is at the rear of a long line. It has helped to create the reality of inadequate public support that it laments ("the state" = "the state's political and business elites"--low-tuition public Us still poll very well). The problem with California students is not that that are too average intellectually--Berkeley is famous for rejecting slews of 4.2 or 3.9 GPAs--but that they have grown up in a state that stopped building the high-quality educational capacity to accommodate them. Now Prof DeLong joins the large policy crowd that wants to make that capacity problem worse by leasing out a large part of the most prestigious end of the system to non-residents. (You help out with a 19th century notion of a natural hierarchy of talent to justify it!!) The state still givse Berkeley about $5750 per student (Appendix B at http://senate.universityofcalifornia.edu/Rebenchingreviewpacket.pdf ) Why should it give even that to Prof DeLong's (still-excellent) "finishing school" for non-residents? Why wouldn't it be better to expand on his accurate comments on the "social democratic" university as the foundation of California's post-war success, at the very moment in which Dems have a supermajority and a budget surplus, rather than undermining them with old-school privatization defeatism?

brad said...

Re: "Perhaps because he seems to think that he is providing bold advice rather than simply conforming to already existing policy..."

If U R going to pretend to read my mind, please do it correctly. As it is, U R doing it wrong...

Please try again...

Brad DeLong

Michael Meranze said...

"Perhaps because he seems to think that he is providing bold advice rather than simply conforming to already existing policy"

I would think that the "perhaps" and "seems" might indicate this is not an attempt to read your mind but an interpretation of a text. Given the fact that a large amount of the column is devoted to instructing Dirks on what he must do to make the strategy work I am not sure why you would object to my saying you present this as bold advice?

Would you have preferred the sentence read "Even though he is providing now hackneyed suggestions..."?

By the way, given your, if I may, "bold" statement:

"there is no valid argument for transforming UC Berkeley as it currently exists into Free Berkeley"

You might want to read the numerous political and economic arguments that people have made over several years at this blog for why in fact that would be a better strategy than the current one.

Anonymous said...

$5,749 is per weighted student -- the state still gives UC Berkeley $7,759 per student unweighted -- see line L of the reference you provide above.

Chris Newfield said...

yes - was trying to be generous. It's really too bad that even economists at UCB don't fathom the extent to which that campus is subsidized by the younger members of the UC system.

Gerry Barnett said...

Charles Schwartz, working with published financials, has estimated that undergraduate tuition at Berkeley covers costs that could reasonably be ascribed to instruction. In essence the state pays UC a sum that is remarkably close to UC's actual expenditure on instruction per undergraduate student at Berkeley.

Think about it: the state apparently is paying nearly the cost of the actual expenditures for undergraduate instruction at Berkeley. Tuition then is paying for a second, mostly private operation also calling itself a "university" that is parasitic on instruction but contributes little to instruction, reduced to claiming an important role in keeping Berkeley high up in statistical "rankings" of universities. This somehow translates into higher value for UC diplomas, which somehow translates into higher salaries for UC graduates. UC administrators then use this ranking as a proxy for "excellence" on the premise that the reputation and value of Berkeley instruction needs to be propped up in a major way by things that have nothing much to do with instruction. That in itself is either an insult to Berkeley's instructional staff or a deeply disturbing revelation about an administrative fraud regarding instruction. In administrators' hands, "university" becomes a metaphor for university, and "excellence" becomes a metaphor for excellence. Discussions of the situation then take a fanciful turn, as administrators talk about a bloated fictional world they have created using words that they are pleased to allow to be mistakenly understood to refer to a real world of instruction.

What are the financials of this private operation that eats the financial futures of Berkeley undergraduates while intruding on their academic decisions, hammers faculty instructors with the idea of replacing them with video-taped textbooks wrapped up in half-assed uses of trendy social media, and leaving sufficient gobbets of money around for financial institutions and speculative investors to build industries and careers? What are the actual (not asserted) benefits to the citizens of California of this private operation, and are these benefits actually part of the vision for what public higher education (not the parasitic metaphor but the actual idea of college education) is all about?

UC is pregnant with a private operation that senior UC administrators see as more valuable than instruction. That operation is now nearly as big as UC itself. Is UC birthing a beauty or a monster?

Anonymous said...

If U R going to pretend to respond, please type out "You" and "are"

Chris Newfield said...

Gerry I think you go overboard here. Research, student services and other necessary academic support functions aren't parasitic. We absolutely need a more open discussion about and better accounting of what is and isn't necessary, as you as well as this blog have been calling for over the years. The irony of the Brad De Long position is that in his patronizing way he does favor high-quality instruction, and he says he prefers the social-democratic university (which would include collaborative debates and decision-making about allocations), but then offers only the neoliberal university in which charity has to fill in for inadequate taxation while undermining the public good mission that would justify proper taxation in the first place. Free Berkeley would be broadly popular and financially viable if state and university officials actually proposed it, and it would include research though not many of the privatized auxiliaries you mention.

Gerry Barnett said...

Charles Schwartz's analysis appeared to cover necessary academic support. Written UC policy requires extramural research to cover its direct and indirect costs. If extramural research does not do this, and students are instead made to pay for it, then that's parasitism.

I suggest that the public does not have nearly the commitment to support the extramural research that sponsors, the state, and donors are not willing to fully support. While public instruction carries with it ideals of social opportunity and justice, extramural research does not--the arguments for it are things like making money from licensing patent rights and benefits to the citizens of California--benefits which appear to be primarily focused on helping venture capitalists make money, as the Newco saga at UCLA makes evident.

If the most important part of UC is semi-sponsored research, then the effort to "privatize" is mostly about trying to save this research activity with private money, and the easiest private money is from students' futures in the form of easy credit.

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brad said...

If you have a strategy to make the days of Clark Kerr come again, count me in. If you don't...

Chris Newfield said...

Brad: it's not getting Clark Kerr but rebuilding on the basis of those public values which you obviously share. Step 1 is the kind of thing you did in the first part of your piece, which is tell people the truth about what the current funding model does to their public universities (it makes them good for the affluent and worse for the general public than the old model). Step 2 is laying out why the current model won't actually work financially, which we do a lot of on this blog. Step 3 is getting economists with skills and credentials like yours to help the rest of us figure out a viable funding model that involves internal admin efficiencies etc but also better public funding and an equitable tax base that could be shown --by economists especially--to benefit the state population far more than the minute tax savings (mostly for the wealthy and not them anyway) they get from downgrading the three segments. It would be great to have your help.

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