Jeremy takes issue with my rant.

http://michaelperelman.wordpress.com/2009/12/05/therapeutic-rant-of-the-day-the-ayatollahs-of-academic-privatization/#comments

Actually, I take his contribution as confirmation of what I wrote. Jeremy is an economics student at California State University, Chico. Unfortunately, I have never had the opportunity to have him in the classroom, although I recently had a very good discussion with him.

I mentioned in my rant about the shenanigans of the University of California system, because the lack of transparency in the state college system makes an exposé, such as Meister’s, virtually impossible.

Jeremy suggests that most of the money is being used to create classrooms, but here in Chico, I cannot see much expansion of classrooms. I agree that building more classroom space for students is important. In fact, one of the greatest legacies of the G.I. Bill after World War II was to flood the university system with students, creating an urgent need for expansion. This new capacity, once built, made facilities available for generations of students. This expansion was a major factor in creating the golden age of higher education, which is coming to an inglorious end.

Jeremy suggests that students who really want an education can find a way. Since I began teaching in 1971, the greatest change has been the number of hours that students work in order to pay for their education. This pressure drags down education because so many students cannot put in the necessary study time. It also creates stress levels that interfere with education. Grade inflation is a partial response to this situation.

In addition, the financialization of higher education, together with budgetary stringency, forces programs to compete for students to sustain their funding. For example, prerequisites in economics discourage students who may choose majors that seem easier. Economics departments have to lower the barrier to entry in order to compete. Other departments will respond by making their programs easier.

Jeremy correctly describes one aspect of higher education; namely, that the college has become extended day care for many. He is both right and wrong. I become critical of my day care students until I remember that I was a day care student when I first came to University of Michigan. Over time, I became hooked.

In conclusion, Jeremy’s message is that we are still able to do something right in order to get an intelligent response, such as his.

Like anyone concerned about higher education, I am disgusted by the disappearance of public support for universities, as well as by the wretched performance of their CEOs, who have the responsibility of looking out for the welfare of their institutions.

The latest wrinkle concerns the CEOs’ soundings about the potential for privatization. The idea would be that the state would be relieved of certain degree of responsibility for funding, while the executives would be free to secure other sources of money without any public oversight. Of course, oversight today is minimal.

This move by the higher executives echoes, in part, the disastrous fate of the Soviet Union. One of the major forces behind the breakup of the Communist Party was the apparatchiks’ hope that they could claim great chunks of the public property for their own. They were correct, although some of the robber barons were not close to the center of power. The result was a horrendous economic collapse, from which the country only recently recovered largely because of an oil boom, which has since languished.

Perhaps, a better analogy comes from Iran. My knowledge of the country is sketchy at best, but here is my understanding. Large parts of the economy are under the control of various ayatollahs’ “charitable organizations.” Again, freed from oversight, one might not be surprised to learn that some of these religious “leaders” have done quite well for themselves, while the economy suffered.

Robert Meister of the University of California, Santa Cruz has done remarkable work explaining the intricacies of the financing of the University of California. His well-circulated “They Pledged Your Tuition (An Open Letter to UC Students)” shows how tuition pays for building projects as well as education. The university system has also engaged in a half billion dollar deal with BP, as well as an earlier deal with Novartis (now Syngenta), which gave corporate interests us significant influence over what should be academic matters.

A report by the state auditor described performance of an employee of my own university system was earning more than $200,000 year. He built the university for expensive hotel stays, world travel, meals that cost nearly $167 a head, as well as $43,000 for commuting between his home in northern California and the Chancellor’s office in Long Beach. His “punishment” was to transfer to the University of California where he earns $230,000 a year as chief information officer. Both university systems have lobbied hard to prevent transparency from interfering with the ayatollahs’ questionable moves.

Just as the ayatollahs are intolerant of the slightest hint of dissent, so too will the CEOs of the privatized universities, which already have a spotty record of toleration.

If the corporate CEOs had a clue about the way economy works, about how the states’ excellent educational system attracted talented people from around the world who then contributed to the state’s economy, they would move quickly to protect what is left of the fast disintegrating system of higher education.

Brad took a 3 hour drive to give a talk in Chico.  The lecture was both informative and entertaining.  He spoke for 1 1/2 hours & took questions for another 30 minutes — until we had to surrender the hall.  Then he joined a reception, which was a continuation of the question and answer session, without showing much fatigue.

Brad refused to take any money for his time or expenses.  Very unusual behavior for an economist.

Thank you & sleep well.

Adam Smith is a brilliant writer, who began as a professor of rhetoric.  The first part of his book is an exercise in ideological purity. In the later parts, he contradicts much of this extreme ideology.

In the Invisible Handcuffs, I show how Smith’s famous pin factory story was a mix of plagiarism and deception.

In contrast to his Theory Of Moral Sentiments, the Wealth Of Nations was not particularly popular until the French Revolution, when the defenders of the status quo recognized the ideological value of the work, or presumably assuming that no one would read much past the first few chapters.

After the Revolutions of 1848, the age of Classical Political Economy ended. Economists became much more careful in allowing realism to seep into their works. Consequently, their work became far more sterile.

Today’s Sacramento Bee has a story about an opponent of same-sex marriage bans taking family values to a new level. He has started an initiative to ban divorces, purportedly in the name of family values.

I appreciate the humor, but in light of the current extent of political craziness, it could pass.

“To restrain private people, it may be said, from receiving in payment the promissory notes of a banker for any sum, whether great or small, when they themselves are willing to receive them; or, to restrain a banker from issuing such notes, when all his neighbours are willing to accept of them, is a manifest violation of that natural liberty, which it is the proper business of law not to infringe, but to support. Such regulations may, no doubt, be considered as in some respects a violation of natural liberty. But those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments; of the most free, as well as of the most despotical. The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty, exactly of the same kind with the regulations of the banking trade which are here proposed.”

Available at midnight tonight, from the same source as her popular, The Story of Stuff.  Enjoy.

http://storyofstuff.com/capandtrade

I have completed the last part of my lecture and have edited it. I still hope to incorporate data on the defunding of higher education.

An Idiosyncratic Perspective on the Economy and Economics

One of the problems is that science has become politicized. Industries hire hacks (including scientists) to attack any science that does not meet their needs. Think of the Chamber of Commerce’s recent call for economists to write a paper that will attack health care.

Under constant attack, scientists may feel the need to “play defense.” Just like a football team that keeps its practices secret to prevent opponents from learning their plans, scientists may well become insular.

In this way, industry destroys good science, which should depend on sharing of information.

Jonathan Gruber is a health economist from MIT — an expert, no doubt.  David Leonhardt quotes his favorable comment on the Senate health care bill: “I can’t think of a thing to try that they didn’t try.”

Leonhardt, apparently, never bothered to ask him about single payer.