QUARTER MILLION

Just wanted to take note of the fact that this blog has passed the quarter million visits milestone. Of course, if you deduct my visits, it probably drops to thirty-seven, but, hey, who's counting?

CHEAP SHOTS AND LOW POSTS

I am aware that in the circle of readers who have done me the honor of visiting this blog regularly, there are at least some who live outside the United States. Unless I am mistaken, these number residents of Scotland, England, Israel, Canada, and Finland, and also perhaps South Africa. I quite well understand that my obsession with the minutiae of the American public world may seem inappropriately parochial in one committed to viewing Being sub specie aeternitatis. Nevertheless, since, in the immortal words of Tip O'Neill, all politics are local, I consider my periodic snarking at the right wing of the American political spectrum no more than an evidence of my humanity. So, here I go again.

The action in recent days has, of course, been on the floor of the House of Representatives. With a show of fundamentalist piety that would have made a televangalist proud, the House Republicans began their newly acquired rulership of the House by organizing a reading, verbatim, of the United States Constitution. The point of this exercise was to ensure that henceforward, everything done in the People's House would conform to, be derived from, and not go even a half-step beyond what is contained in our nation's founding document. Except that the Republicans, despite their attentiveness to Original Intention, chose not to read that embarrassing bit about counting slaves as three-fifths human. It remained for Glen Beck to explain [as part of his newly created one-man university] that this compromise was actually intended to undermine the endurance of slavery. What! you say? Never mind.

Like all Fundamentalist Inerrantists, the new Tea Party inspired Republicans only remember the bits of the Scripture that say what they want the Scriptures to say. Thus, for example, these Constitutional Fundamentalists cannot often enough quote the Tenth Amendment, which states that "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people," which they read as severely restricting what Congress can pass in the way of laws [read Obamacare]. Except that they forget the last clause of Section 8 of Article I, which gives to Congress the power "to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof." Anyone who has ever tried to get a biblical fundamentalist to explain Genesis Chapter 4, verses 17 and 18, will be familiar with this sort of selective ignorance. [That's the part where the Bible says that Cain went and dwelt in the land of Nod, on the east of Eden, and there knew his wife -- who would have had to be his sister, if everyone in the world is really descended from Adam and Eve.]

The next thing the Republicans did is violate the Constitution. It seems two Republican Representatives decided to attend a little celebration on Congressional property while the swearing-in was taking place on the floor of the House. These two bozos actually raised their hands while watching the event on television [this is really a trifle hard to believe], and were so convinced that by this charade they had indeed become Representatives that one of them trundled off and voted in a committee meeting. The rumbling sound then heard in the Rotunda was Thomas Jefferson turning over in his grave [in Monticello, of course]. Somewhat chagrined, the Republicans organized a hasty vote of correction and absolution, which they actually had the gall to ask the Democrats to support as an act of "collegiality."

The net effect of all this was to make the Republicans look like fools, rather than like serious reformers out to rectify the terrible policy errors inflicted on America by the Democrats. All they did, of course, was to make life easy for the writers of the Rachel Maddow show.

But the most fascinating new turn of events concerns the hot button issue of health care reform. The Democrats and Obama managed to carry a flawed and much amended omnibus bill across the finish line. limping and groaning every step of the way. It was health care, more than any other single issue, that created the Tea Party protest and gave the Republicans their smashing November victory. Until now, Democrats have been running away from the issue, managing by their behavior to communicate that they think it is an albatross around their necks, not a victory garland of laurel. But the election is over, a number of major elements of the new bill are going into effect, and the Democrats now have discovered that they would be delighted to debate with the Republicans whether insurance companies should regain their right to ban those with pre-existing conditions, or to cancel the policies of insured folks who are so imprudent as actually to get sick. The Republicans rammed through a preliminary vote setting up the vote to repeal Obamacare, and as Rachel Maddow noted on her show last night, only four Democrats voted with them. All those other Democrats who voted against the original bill want nothing to do with repealing it.

Taking all in all, the opening days of the 112th Congress have revealed the Republicans for the ideologically rigid, clueless frauds we always knew they were. The coming months may not be quite as bad as we feared.

SOME COMMENTS ON THE COMMENTS

My three part post on the soaring cost of higher education, launched in response to an emailed question, sparked a rather lively exchange of comments. Before moving on, as it seems one always does in a blog, I thought I would respond a bit to some of the comments, beyond what I have already said.

I have always been a raconteur, a teller of stories. Sometimes my stories are about my encounters with famous people -- Bertrand Russell, Henry Kissinger. Sometimes they are about people equally interesting, but less well-known -- former students, colleagues, members of my family. And sometimes I tell stories of a rather different nature, stories about ideas. I am not really a scholar, as I have several times observed on this blog, although I have published books and essays that look like scholarship. Nor am I an ideologue, even though some of what I have written has earned me that epithet. Rather, I conceive my philosophical writing as the telling of the story of an idea. This is what I did in my first book, KANT'S THEORY OF MENTAL ACTIVITY, in which I told the story of the central idea of the Transcendental Analytic. It is, as well, what I did in UNDERSTANDING MARX, unraveling the story of Marx's critique of classical political economy so that it became a clear, simple story with a beginning, a middle, and an end. In UNDERSTANDING RAWLS I told the story of Rawls' idea, exhibiting the final, bloated version of A THEORY OF JUSTICE as his series of revisions to the simple story of a "Justice as Fairness." Because I see myself as a story teller, rather than as a scholar or an ideologue, I do not very much care what critics say about my stories once I have told them. So it is that I have not read most of the reviews of my books. If the circle of people to whom I tell my stories like them, find them interesting, perhaps even learn something from them about life, about themselves, about me, or about a philosophical work, I am content.

All of this is by way of explaining why the comment that touched me and pleased me the most was Angus' brief remark. Thank you, Angus. I was indeed there, and am happy if my stories can give others some sense of having been there too.

I have already commented on John C. Halasz's long and very valuable observations, and also on the firestorm provoked by my inaccurate explanation of the Fallacy of Composition, so I shan't revisit those topics. WallyVerr's remarks about "human capital" and the Chicago School are right on the mark, and have implications beyond those he mentioned [a fact of which I suspect he is well aware.] I think, though I am not sure, that the economist who introduced the term "human capital" was Gary Becker. The notion itself is important, and deeply ironic [as I explained in MONEYBAGS MUST BE SO LUCKY], although I seriously doubt that Becker and his followers understood the irony. It is worth taking a moment to explain this.

According to the neo-classical theory of a capitalist economy, entrepreneurs, producers of commodities, encounter one another in a free, open market and make uncoerced bilateral exchanges out of mutual self-interest. Wheat growers invest their capital in land, tractors, seed and fertilizer. Cloth manufacturers invest their capital in wool, power looms, and coal to drive the looms. And workers, whose product is their labor, invest in the food, clothing, and shelter they need to enable them to sustain their capacity for labor -- what Marx, famously, labeled their labor power. [Never mind that they ought therefore to be able to deduct the cost of these capital outlays from their gross income before paying income taxes. That battle has been litigated and lost.] Viewed in this light, the costs incurred by future workers for their education count as investments in capital, the payoff for which will eventually be their ability to command a higher price for their labor in the market.

I speak of this view as containing an irony for the following reason. [I have written briefly about this in MONEYBAGS, and worked out the mathematics of it in an essay, "A Critique and Reinterpretation of Marx's Labor Theory of Value," that is apparently available on line. If you can handle some not too difficult linear algebra, I recommend it.] According to standard economic theory, an economy-wide rate of return on invested capital, or profit rate, emerges from the constant search by capitalists for the highest rate of return on their capital. If computers are paying 10% a year on investments, and buggy whips are paying 3%, over time the capitalists making buggy whips will pull their capital out of that line of manufacture and go into computers. This, in turn, will increase the supply of computers in the market, bringing the price down and lowering the profit rate a bit. A sort of rolling equilibrium will equilibrate the profit rate across all sectors. And so forth.

But [this is the bitter irony], alone among all of the entrepreneurs, the workers are unable to switch their capital from labor producing into a more profitable line, because their capital is their bodies, and the only way they can cash in their capital is -- by cashing it in, which is to say, dying. Were it not for the metaphysical accident that the body is inseparable, in this life, from the soul, an accident for which capitalism of course is not to be held responsible, the workers could earn the same rate of return on their capital as all other entrepreneurs.

The concept of education as human capital has another very interesting implication, which we can see once we free ourselves from the mystifications and delusions of standard economic theory. In a modern capitalist economy, with its seemingly permanent class distinctions between unskilled, semi-skilled, and highly skilled labor [marked, of course, by years of formal educational credentials], it is possible to see that in addition to the exploitation by which capital extracts profits from its labor inputs, there is also a structure of relative exploitation, whereby as capital exploits labor, more highly skilled labor exploits less highly skilled labor. The first formal analysis of this, to my knowledge, was a very interesting article by my old UMass colleagues Sam Bowles and Herb Gintis, published many years ago.

And finally, an acknowledgement of the truth of Charles Pigden's observation about the somewhat insular nature of American commentators [myself included]. I have long been aware that it is necessary to place America's educational institutions in an international context. Through my friendships with senior academics in Africa and Europe, I have been made aware that many phenomena, such as the increasing corporatization of higher education, which I am accustomed to talk of as American problems, are in fact worldwide tendencies. For that reason, as I cast about for something to do with myself now that I am retired, I have more and more thought that it would be exciting, if it could be managed, to start a center or institute devoted to the study of, and advocacy for, the liberal arts in modern higher education worldwide. The problem, of course, is money, but I have been thinking about this for a year or more now, and perhaps I can find time in the coming semester to take some first steps, even though I will be teaching both at Duke and at UNC Chapel Hill.

Well, that is enough for now. Perhaps tomorrow I shall hit upon something else to blog about. Thank you all for the intelligence of your comments. You make this a pretty classy site.

THE SOARING COST OF TERTIARY EDUCATION LAST POST

Whew. Who would have thought that a casual reference to the fallacy of composition would have elicited such a storm of comments? In the future, I better be careful what I refer to! But all of that is, as they say, water under the bridge. Today, I want to address directly the question originally posed to me, which was why tertiary education costs have soared and what effect that has had on the society.

Let me begin by saying that I was really taken by one part of the complex and many-sided series of comments that John C. Halasz posted. [And how nice to have someone actually put his or her name to comments. I like that.] I am going to restate in my own words the point he made that struck me so powerfully. John, if I get it wrong, please correct me.

Briefly, as I understand it, the point is this: What we refer to as prices are actually exchange ratios -- that is, they are the ratios in which goods and services exchange with one another in the market. Originally, economies used what is called commodity money. A unit of one of the many goods in the market [a cow, an ounce of gold, a pound of silver, a cowrie shell] was taken as "numeraire," or unit of money, and everything else was expressed as equivalent in value to so and so many units of that money-commodity [so many pounds sterling, as the British used to say.] If, over a long period of time, technological advances make many commodities less costly to produce [fewer man-hours, less material, etc], while one significant commodity or service does not experience a like improvement in production, the price of the unimproved commodity will rise relative to all the others. Even though nothing has altered in the way it is produced [as I noted for tertiary education], its exchange value vis-a-vis everything else will decline. It will, in short, rise in price. Think fine hand-crafted furniture [not antiques -- that is something else entirely]. Now, when this happens, consumers may respond by substituting another product that serves more or less the same purpose -- mass produced furniture for hand-crafted furniture, for example. Or, they may simply stop buying that good altogether [not the same thing as substitution.]

But suppose the good or service in question is indispensible. Then consumers may just pony up the money and pay the much increased price. Tertiary education, in and of itself, has many substitutes [reading books on your own, organizing community discussion groups, and so forth.] But in our society, the degree [not the education -- that is another thing entirely] is the admission ticket to the world of scarce and well-compensated jobs. Hence there is a continuing demand, at ever increasing relative prices.

Do I have that right, John? Obviously, one would have to crunch a lot of numbers to estimate what portion of the relative increase in the price of higher education is attributable to this cause, but I have to say that intuitively, it strikes me as really plausible. And, just to set the record straight, it had not occurred to me at all until I read John's comment.

One can use the same language and mode of analysis to explain something a good deal less mysterious -- namely, the explosion of lower cost public higher education. This is complicated, because part of the lower cost is a consequence of state and federal subsidization. But clearly, many, many students are opting for a degree from the state university, even though its value as a good job getter is inferior to that of a degree from a name private institution.

There is another factor at play, in my judgment, one to which murfmensch alluded in a comment. This is one I had planned to talk about, and I can begin, as is my wont, with a story. Each year, Harvard puts out a red-covered book listing all the people at Harvard who are classified as "Officers of Instruction." When I was a student, in the early fifties, this was a relatively slender book that listed faculty members throughout the university, with their offices and phone numbers. Many years later, on one of my very infrequent trips back to Harvard Square, I chanced upon a recent copy of the book, and was astonished to find that it had ballooned into a huge, fat volume many times the size of the original. I was surprised because I knew that Harvard had not expanded its student body significantly in the interim [save for the absorption of Radcliffe, but since Radcliffe had virtually no faculty of its own, that did not change things much.] Curious, I paged through the book, and discovered that people actually teaching students were a very small fraction now of all the folks listed. There were, it seemed, a simply endless number of Centers, Institutes, Research teams, deans, sub-deans, associate deans, assistant deans, and who knows what else. None of these people, so far as I could tell, had much of anything to do with the education of undergraduates, and precious little to do with the education of graduate students.

At my own institution, the University of Massachusetts, where a college degree is of course only a fraction of the cost of a Harvard degree, it is nevertheless also the case that administrative ranks have mushroomed in the time I have been there. I can testify from personal experience that the quality and even the quantity of administrative performance has not increased at all over that time period. I am dead certain that this expansion of non-pedagogical activities and personnel at America's colleges and universities has contributed at least some portion of the soaring relative price of a college degree.

Finally, we get to the question originally posed in the email that got all of this started: What is the effect of this increased cost of higher education on society? [And, though my correspondent did not put it in these terms, is the effect a good thing or a bad thing?]

This is a very large question, an adequate answer to which would require a book. But I would like to focus on just one small aspect of the issue, which may not have received as much attention as I think it deserves. As all of you are aware, over the last generation and more, it has become commonplace in America for college [and graduate] students to take on very large debts in order to pay for their tertiary education. "Financial aid" has come, more and more, to mean loans, not grants or scholarships. It is quite common for seniors to graduate with loan burdens of twenty, thirty, or forty thousand dollars, with even higher amounts weighing down graduates of pricey private colleges. Law students, medical students, and MBA students take on the sort of debt that someone launching a middle-sized business might assume.

Which, of course, is just the point. Even now, when the payoff is diminishing, the average increased lifetime earnings stream associated with the acquisition of a higher degree makes the taking on of the loans a rational economic decision. Once again, if we take seriously the notion that education produces a form of capital -- human capital -- then paying up front for a higher degree makes as much sense as laying out a bundle for a new piece of machinery that is going to increase the productivity and hence the profitability of a business enterprise. Now, of course, just as some businesses fail, leaving their proprietors with unpayable debts, so some degrees don't result in an earnings stream sufficient to justify their cost. But that is just the way of the market in a capitalist economy. No one would suggest that businesses should not invest in new equipment, or in research and development, simply because some such investments fail to pay off.

But there are hidden consequences to this financialization of human capital investments, consequences with profound ideological implications that it is in the interest of economists and others to keep hidden from general view. To put the point simply, students who takes out loans to finance their higher education are compelled by the debt to which they are shackled to move as quickly as they can into the labor market and become docile, obedient, interest-paying, risk-averse fodder for the great capitalist machine. No wanderjahren for them; no labor organizing, no protest movements, nothing that might interfere with their ability to amortize the human capital in which they have invested. There is no need for society to harangue them with sermons about the virtues of thrift. The monthly loan repayment bill will teach that lesson quite nicely.

To be sure, the very richest schools, which flatter themselves that they are above such mundane considerations, make arrangements to allow their graduates to do good works,. Yale Law School, whose graduates exit from the ivied halls loaded with debt, actually are offered a certain amount of loan forgiveness if they shun the high paid Wall Street law firm associateships and instead go to work for non-profits. A nice touch of noblesse oblige. But the graduates of UMass, I can assure you, are offered no such soft landing. And the rightwing think tanks offer tasty internships to the worst and the brightest at salaries that allow the budding nutjobs to pay their loans while working for the cause -- a conservative version of Tom Lehrer's "old dope peddler," who was, in the words of his song, "doing well while doing good."

We have talked on a this blog on a number of occasions about what might be done to kick start some real progressive, even, revolutionary action in America. One answer, simple but totally unrealizable, is: get rid of the loan burden with which so many young people embark upon adult life.

Well, this has gone on a good deal longer than I expected. I welcome your comments [and let us not have a fight among the economists akin to what broke out in the philosopher's corner of the readership of this blog! With the Republicans taking over the House tomorrow, we will all have plenty of enemies on whom to vent out anger.]

THE SOARING COST OF HIGHER EDUCATION PART TWO

To make this point more clearly [wait for it, Wallyverr, I will get to the point you raised in a moment], imagine that the entire U.S. economy is one enormous corporation, producing all the goods and services aggregated in the Gross Domestic Product, employing all those who earn wages or salaries fulltime or part time, providing all the governmental services, and so forth. if the entire American work force were now to earn higher degrees [quite a boon for young doctoral students hoping to find entry level tenure track teaching positions!], would this vast corporation forthwith transform all the low wage burger-flipping jobs into high wage IT jobs? Would the women who clean my hotel room when I travel and stay overnight in a Courtyard Marriott now be medical technicians in the local hospitals? Who would clean the rooms? Would they continue to clean the rooms but earn medical tech wages? These questions answer themselves, and in each case the answer is no.

Ah, you say [or rather, as Wallyverr says], but with a better educated workforce, companies would be able to switch to different techniques for the producing of goods and services, techniques more capital intensive [if we treat education as human capital] and less labor intensive [where labor here means unskilled or general semi-skilled labor of the sort required for current low wage jobs]. This would fundamentally transform the nature of the economy in such a fashion that the steep pyramid of jobs, determined in the first instance by differential educational attainments, would steadily flatten over time, leading to a less stratified society in which fewer and fewer workers earn low wages and perform low-skill jobs.

There is obviously some truth to this argument. Modern IT hi-tech companies could not exist if there were not plenty of well-educated potential employees around. But for a number of reasons, in my judgment, the argument fails to show what it is intended to show, which is that education is the key to flattening the income pyramid and raising the entire workforce to a better compensated, more satisfying level.

Let me start with facts. Over the past century and more, the American workforce has undergone an astonishing educational upgrade. When my father was a young man, in the very early nineteen twenties, a high school diploma was a rarity, a college degree even rarer. My first father-in-law did not finish high school, and yet ended up the Vice-President of Sears, Roebuck for Public Affairs. Today, almost all workers have high school diplomas, and a quarter of American adults have college degrees. There has, over this period of time, been a steady increase in real GPD per person, with the result that Americans are genuinely better off than they were a century ago. But the shape of the income pyramid has not changed, save to become steeper in the past thirty years, in part as the result of deliberate union busting and anti-labor policies by the Federal Government.

Some modes of production have undergone dramatic transformations, resulting in much greater productivity, but labor intensive services, such as medical services, cleaning services, and so forth have not. What HAS happened, of course, is the globalization of capitalism, one consequence of which is that the lowest levels of the worldwide income pyramid are now occupied by Asians and Latin Americans and Africans rather than by Americans. One of the reasons for our present disastrously high unemployment is that with a world of cheap labor to draw on, capital simply does not need millions of Americans as workers. In good times and bad, they will be consigned to unemployment or underemployment. To be sure, a dramatic educational upgrading of any segment of that world labor pool will advantage that segment, to the consequent disadvantage of the rest, but just as it is impossible for all the workers in our imaginary company to end up as managers in that company, so it is impossible for everyone in the world to have an above average job.

I end these introductory remarks by concluding that education cannot be, for everyone at the same time, a path to the middle class. If we all have jobs that send us on junkets to cities where we stay in hotels, someone in those hotels will make the beds and clean the rooms and serve us in the restaurants. They may not speak English, but they really are people, and they count too.

Which brings me to the question that launched these remarks: Why has higher education become so expensive, and what implications does that fact have for society?

Why higher education has become so expensive is genuinely puzzling. When even medical costs have increased at "only" twice the rate of inflation, why on earth has higher education increased at THREE TIMES the rate of inflation, over the last thirty years?

Let us first observe that although higher education may indeed be the gateway to high wage high tech jobs, it is itself a labor-intensive low tech industry, in which there is virtually no technological innovation. One story may point the moral. In the Spring of 1953, I took C. I. Lewis' legendary course at Harvard, Philosophy 130, on Kant's CRITIQUE OF PURE REASON. Lewis, who retired that semester after a lifetime of teaching at Harvard, used an incredibly rigorous, time-consuming, and life-changing system of written assignments referred to as "Kant Summaries" [I won't bother you with the details.] In the Spring of 1960, as a young Instructor in Philosophy and General Education at Harvard, I actually was given the opportunity to teach Philosophy 130, in the same room, from the same podium on which Lewis had sat. It was, needless to say, the greatest teaching experience of my life, a fact I had the wit to realize at the time. [Small side note; I taught the same course the next Spring, and among my students was a young graduate student, Thomas Nagel. Needless to say, Tom did brilliantly.] I wrote to Lewis, who was living in retirement in Menlo Park, California, to tell him that I was using his system of Kant Summaries. He wrote back a nice note and said that it was not his system. He had learned it from his teacher at Harvard [who must have been Josiah Royce or George Santayana!]. I have taught Kant's FIRST CRITIQUE perhaps seventeen times in my fifty year career, at Harvard, Chicago, Columbia, UMass, and CCNY, and always I have used the system of Kant Summaries, even though it condemns me to grading 20 or more seven page papers each week, every week of the semester. I consider the chore a holy labor.

As must surely be obvious, I am inordinately proud of having kept the system of Kant Summaries alive, and I have not the slightest doubt that those have been the best courses I taught in my entire career. But think for a moment about what I am saying, from an economic perspective. I am saying that the technique of "producing" knowledge of Kant's philosophy has not changed in virtually one hundred years! And I am saying this not apologetically, ruefully, with embarrassment, but proudly, triumphantly. Even the Roman Catholic Church finally got around to revising its technique for producing a High Mass, for heaven's sake!

Higher education has two techniques for delivering its service, neither of which has changed in the slightest in three generations or more: the large lecture, and the small discussion class, both accompanied by written examinations and assigned essays [the Brits have a third technique - the individual tutorial, but it has never caught on in the States.] And that is it. Television has not changed this; the internet has not changed this; IPhones, IPads, laptops, and all the other paraphernalia of the clued in ramped up young person have not altered higher education's technique of production in any significant fashion.

Because higher education has been untouched and unchanged by technological advances, it has not become more efficient and productive. Hence, one would expect the real costs of higher education to track the Consumer Price Index pretty closely. Furthermore, although room and board were not figured into the statistics with which I began this entire discussion, food is food and a bed is a bed, so the cost of providing that to students ought also to keep pace pretty closely with the CPI.

So why in heaven's name has the cost of higher education gone up at THREE TIMES the rate of inflation? That is the puzzle we must try to solve, and I warn you that I do not have any neat, nifty answers. Still and all, I have some ideas, and tomorrow, I shall set them forth, for better or worse.

THE SOARING COST OF HIGHER EDUCATION

Readers of this blog will have noticed that it takes almost nothing at all to get me started writing. Back in early October, "Luke's Mother" asked briefly how one ought to study society, and that idle question provoked a twelve-part answer from me that might easily have become a monograph. Now, a reader newly come to this blog has sent me an email wondering whether I might say something "on the subject of the ever increasing cost of education past high school and how it impacts the various levels of American society." Since this is another subject to which I have given a good deal of thought over the past half century, I will be happy to oblige. This will not run on to many segments, I shouldn't think, but it may require more than a single blog post.

I need to talk about some other matters before addressing this question directly, but it might be useful to put down just a few facts at the outset, to create a context for what follows. I spent some time this morning surfing the web with the aid of Google, and I was not able to come up with what I really wanted, which was a table showing year by year increases over the past half century, in nominal dollars and in dollars adjusted for inflation, for both public and private tertiary institutions I am sure such tables exist, and if anyone reading this can point me to one, I would be most grateful.

I did, however, come up with the following information, which can serve as a substitute for a fuller and more detailed data set. Between 1978 and 2008, the cost of living rose roughly 330% [including some hairy years in the late 70's and early 80's when annual inflation was running near or above ten percent]. Over the same thirty years, tuition and fees at four year colleges rose about 980%. By way of comparison, during that three decades long stretch, medical costs, which of course have been soaring, rose a bit less than 600%. Thus, although medical costs rose somewhat less than twice as fast as inflation, tuition and fees at four year colleges actually rose three times as fast as inflation. Clearly, there is something here that needs explaining, even before we come to talk about the impact of this rapid rise on students, families, and the society as a whole.

But first, let me talk about the widely held belief that higher education for all is the key to moderating the increasingly severe income inequality that shames and blights American society. Everyone seems to have embraced this notion, from politicians, newspaper columnists, and bloggers to Nobel laureate economists. And it yet it is rather obviously false. What is going on here is a pandemic commission of what we in Philosophy call "the fallacy of composition." The Fallacy of Composition is the mistake of going from the premise that something is true of each of the members of a group to the conclusion that it is true of all the members of the group. A simple example should make this all clear. When an audience leaves a concert hall at the end of the performance, it is true of each person in the audience that he or she can be the first person to leave the hall. But assuming that the exit is a normal doorway, it is not therefore true that all of the members of the audience can be the first person to leave the hall, not even if we allow for ties. Indeed, if the entire audience tries to be first through the door [which happens, typically, only after someone has yelled "fire"], the likely result is that there will be a jam at the door and no one will leave at all.

Familiar statistics, many times repeated, show that individuals with tertiary degrees are less likely to be unemployed and also enjoy, over their working lives, markedly higher incomes. From these facts, everyone draws the conclusion that if we can only dramatically increase the average number of years of education successfully completed in the workforce as a whole, unemployment will drop and average lifetime earnings will increase. This, as I say, is an example of the Fallacy of Composition.

To see why the conclusion does not follow from the premise, we need simply imagine a company that has, let us suppose, one thousand employees. Assume that ten of these are senior management, fifty are middle management, eight hundred are production or service workers who actually make the product or provide the service that the company sells, and the remaining one hundred forty have low end jobs as cleaners, janitors, loading dock workers and such. Let us also make three further assumptions that correspond pretty closely, I would think, to reality:

First, we will assume that wages, salaries, benefits, and fringe perks improve as we move up the ladder from the one hundred forty low end workers, through the eight hundred production or service workers, into middle management and then to upper management. We need not put numbers to these levels of employment, but I am going to suppose that the differences between those at the top and those in the middle are dramatic -- sufficient to support totally different lifestyles -- while the differences between the middle group and those at the bottom are certainly not trivial.

Second, we will assume that level of educational attainment correlates pretty closely with level of employment, at least in this sense: All of the top and middle managers have college degrees, and at least some of the top managers have MBAs. Keeping in mind that only 25% of adult Americans have college degrees, we will also assume that having or not having a college degree correlates in some measure with where in that great middle group of eight hundred one sits, although length of employment may also be an important factor here as well.

Finally -- and this is in fact the most important and often overlooked element of the entire situation -- I am going to assume that the wages, salaries, fringe benefits, and perks attach to the jobs, not to the people. What I mean is this. The company has a fixed number of jobs of various sorts that it must fill to carry out its business plan. When a top manager retires or leaves, the company either promotes someone into that job or recruits someone for it from the outside. The job carries a salary and associated benefits, which are offered to whomever they select to fill the job. If a middle manager is promoted, she gets a raise, and perhaps an office of her own. Should the company be restructured, so that a top manager is demoted to middle management level, he does not carry his top management salary with him. That went with the job, and he must accept a lower salary and fewer perks if he wants to stay at the company.

Now, let us suppose that a bright young woman in one of the service departments reads a Paul Krugman column about the importance of educational attainments, and by sint of great effort manages to earn a college degree. Will she improve her chances of promotion? You bet. If her company does not have any slots open higher up on the food chain, she will start reading the Help Wanted pages of the local newspaper and, with her diploma in hand, will stand a better chance of snagging a job that is a step up.

So, what happens if EVERYONE in the company reads the same column and goes to night school, earning college degrees. Does the company respond to this extraordinary upgrading of the educational credentials of its employees by totally eliminating the lowest level jobs and reclassifying all one thousand as managers, with appropriate salary raises and perks? Alas, no. Who will actually make the products or deliver the services if every employee in the company is a manager? And who will clean the offices of the newly promoted managers and haul away the trash they generate in those new offices? Indeed, where are they going to find the space for so many managerial offices?

We all know what actually happens. It has been happening in America for more than a century. The boss redefines the criteria for the various levels of employment. It now takes a Ph. D. as well as an MBA to be a senior manager. MBAs bag middle management jobs. Graduates of good private colleges get production or service jobs, and holders of diplomas from state colleges get to work on the loading dock. High school graduates need not apply.

But, you say, surely these thousand college graduates will fan out across America and find better jobs somewhere? True, true. Unless, heaven forbid, everybody in America takes to reading Paul Krugman, and they all earn college degrees. Then, the Fallacy of Composition kicks in with a vengeance. Only in Lake Wobegon are all the children above average.

Well, this is enough to get us started. I shall continue tomorrow or the next day.

JANUARY 1, 2011 7:36 A.M.

On this first morning of 2011, let me send New Year's greetings to the many folks who visit this site, and most particularly to those who have taken the time to post comments. The year just ended was an extraordinary experience for me, what with writing and posting an eight hundred page Memoir, a tutorial on formal methods in political philosophy, and countless other, shorter comments on the passing scene and meditations on larger questions. I am very grateful to all of you who have been generous enough to read what I have written, to comment on it, and even, or so it seems, to recommend this site to others. I am myself a compulsive web surfer, and it strikes me that the intellectual quality of the comments posted here is many orders of magnitude more elevated than the usual snarking comments posted on the more popular sites.

On a lighter note, here, reproduced verbatim, is an email I received this morning:

"Just a quick note to wish you a Happy New Year from us at Knesek Guns; We appreciate your continued support which has made 2010 one of our strongest years to date, and we're looking forward to a great 2011. If you haven't had a chance yet - make sure to pick up a copy of Jan 2011 Tactical Weapons for Military and Police - Check out this exerpt article on the XM408 weapon system: http://www.knesekguns.com/thor.pdf - this system is capable of long range shooting beyond 2,000m - one of the most impressive systems we currently offer

Visit our website when you have a free moment to check out some of the great new products we'll be offering for the coming year.

Thanks again, and take care!

Kendall Newton

DIRECTOR OF SALES

www.knesekguns.com"

Nowe, I ask you. What mailing list have I gotten myself onto that brings me messages like this?

Here is the reply I sent:

"Hi, many thanks for writing to me. Since I am totally committed to banning all such weapons systems from sale anywhere in the world, I think it is very big minded of you to write to me.

Have a happy new year."

I can snark with the best of them.