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.