Bryan Caplan's Blog, page 71

I Win My Recession Bet, by Bryan Caplan

Two years ago, I made the following bet with a brave young economic pessimist, Jackson Taylor:

$200 on whether or not America will have
a recession, defined as two consecutive quarters of negative real GDP
growth, in the next two years. Q4 of 2017 being the end of the period.
But if that quarter happens to be negative, then we can look to the next
one to see if we were or were not in the middle of a recession.

Fourth quarter U.S. GDP numbers are now in, showing +2.6% annualized GDP growth.  Since growth was positive in every preceding quarter since the bet, I have clearly won.  The commendable Jackson prepaid, so we are all settled up.

Why did I make this bet?  As I explained at the time:

Base rates.  U.S. quarterly GDP growth is about 3%, and there's a high
short-run positive correlation for quarterly growth.  So we're extremely
unlikely to have negative GDP growth for the next two or three
quarters.  The chance we actually get two consecutive quarters of
negative growth before the clock runs out therefore seems well below 50%
to me, making this a good bet.

By my count, this leaves me at 16 wins, 0 losses for my public bets.

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Reflections on Carey at Cato, by Bryan Caplan

Yesterday's book event at Cato was great fun.  Though I had a chance to respond to Carey in person, here's a more complete version of my reaction to his critique.

1. I'm puzzled by Carey's claim that colleges are exercising some kind of "monopoly."  There's a vast decentralized education system in the U.S.  While people feel a lot of pressure to go to college somewhere, that hardly means that the system is anything other than competitive.  By analogy, does it makes sense to say that "Farming is monopolized" just because everyone needs to eat something?

2. I definitely agree that schools could spend taxpayer dollars far more wisely.  I just think it's highly unlikely.  Due to Social Desirability Bias, schools simply aren't under much pressure to deliver good academic bang for the taxpayer buck.  Challenge for Carey: Name three "no-brainer" educational reforms you favor that haven't happened yet.  Suppose none of them have become popular in ten years.  Would this convince you to say "Cut education spending" rather than "Reform education spending"?  If not, what would it take to convert you to the cause of austerity?

3. Carey objected strongly to my book's assertion that, "There really is no need for K-12 to teach history, social studies, art, music, or foreign languages."  I realize it's a strong statement, but Carey doesn't even seem to see a kernel of truth.  Question: Suppose I narrowed this down to "There really is no need for K-12 to teach foreign languages."  Why would that be absurd, given the microscopic share of Americans who learn to speak a foreign language well in school under the current regime?

4. When Carey says that you have to be broadly educated to be a "fully realized human" or "competent citizen," I'm tempted to agree.  But this dodges the tough questions: What fraction of adults qualify as "fully realized humans" or "competent citizens" now?  And what fraction would qualify if schools focused on literacy and numeracy?  I say we're talking about

5. Carey is right that education potentially serves an exploratory function.  Suppose you study five promising subjects.  This could be a fine approach, even if you eventually specialize in one subject and forget the other four.  But this is a poor defense of actually existing education, where students study a bunch of subjects almost no one uses or remembers.  When I advocate making irrelevant subjects optional, I'm not praising children's wisdom.  But if you're going to make kids learn something for their own good, their guardians first ought to calmly wonder whether it is for the kids' own good.

6. Exercising improves your physique; but if you stop exercising, you soon revert to your normal flabby self.  Is this a "case against exercise"?  Absolutely, if you start out with the false belief that the benefits are durable.  The same goes for education.  The more rapidly you lose what you learn, the weaker the case for learning in the first place.

7. Carey brings up Schultz's work on the alleged effect of education on farmers' productivity.  Frankly, psychologists' work on Transfer of Learning makes it very hard to take Schultz's claims seriously.  At minimum, there's a heavy presumption in favor of a simple ability bias story: well-educated farmers are smarter, harder-working, and richer, and therefore more likely to adopt better farming methods.

8. If Hanushek's "effects of math and science scores" are disguised "effects of IQ", does this mean that all international IQ differences are genetic?  Of course not.  International IQ differences depend on genetics, educational environment, and non-educational environment.  My doubts about the power of educational environment leave both other explanations on the table.  Indeed, you can doubt the power of education but still suspect it makes a slight difference, which is probably the most reasonable view. 

9. General observation: Unlike most education economists, Carey acknowledges glaring deficiencies in actually existing education.  He avoids glib defenses of the status quo like, "If education's so bad, how come it pays so well?"  But he still ultimately trusts the status quo to reform itself even if its funding is secure.  What will it take to shatter Carey's trust?  On purely pragmatic grounds, while not cut education spending first, then offer to restore it after the education system earnestly reforms itself?



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What My University President Says, by Bryan Caplan

I'm fortunate to be at a school where the university president puts scholarship over politics.

As far as critiques of our education system go, my colleague @bryan_caplan's is pretty good (even if still fundamentally flawed) https://t.co/gP26zjpJ9x

-- ��ngel Cabrera (@CabreraAngel) January 30, 2018

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My Interview with The Chronicle of Higher Education, by Bryan Caplan

When the typical professor deals with the media, he has a litany of complaints.  "They're not accurate!"  "They're not fair!"  "They made me look stupid!"  My experience is precisely the opposite.  Virtually everyone in the media treats me well.  Case in point: my new interview with The Chronicle of Higher Education.  You might think The Chronicle of Higher Education would skewer the author of The Case Against Education .  But Scott Carlson was, as expected, a gentleman and a scholar.  Highlights from our conversation:

You write: "As far as I can tell, the only marketable skill I
teach is 'how to be an economics professor.'���" But isn't that a failure
of your imagination to make your subject relevant, not a failure of
education itself?

In order to make my subject relevant, I
would actually have to learn a lot about the occupations the students
are doing and just teach, really, a completely different subject.
Economics is not designed to be occupational training for bankers or
salesmen. In terms of raising the job performance, I can't honestly say
that I'm raising the job performance of students who are doing a bunch
of jobs that are really quite unfamiliar to me.

Some of the most
useful skills that I do try to give to students are, for example, "walk
out of movies if you're not enjoying yourselves." That's what economics
tells us to do. But even there, I'm not optimistic that students
actually change their lives based on what they're taught. Most people
think of education as writing some answers on a test, then getting on
with your life and going back to what you were doing before.

[...]

Isn't there value in forcing people to march through topics
they might not be interested in? They might discover some interest in
it.

Once in a very long time, it happens. But there's a
greater number of students who suffer through it and don't get any value
from it. People who don't like school rarely write essays about how
terrible it was. Instead they just suffer in silence or complain to
their friends, and then they go and get a practical job and we never
hear their voices again. The whole conversation about education is
really driven by people who did enjoy school and who work with students.
Part of what I wanted to do is give a voice to the voiceless and say,
"They may not talk about it, but they are suffering." It's not a real
mystery if you actually go to a classroom and look at the faces.
Students are generally not happy. They're bored.

But if you talk with employers today, many laud the liberal arts and say they want well-rounded, broadly thinking people.

In
this book I talk a lot about social-desirability bias. People say
things, and often believe things, that sound good, but if you look
closely at their behavior, you'll see that either they are being
dishonest or they don't believe it all the way down. When employers say
they want people who are well-rounded, you can see who they actually
reward when they hire. I don't see any signs of rewarding the
well-rounded people. They're rewarding people who do the job well and
make the employers money. Employers want to sound like nice, open-minded
people. They don't want to say, "I don't care if you're a troglodyte as
long as you bring in money."

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My Cato Talk, by Bryan Caplan

Tomorrow I'm speaking at the Cato Institute on my new book.  Kevin Carey, author of The End of College, comments.  You can live stream it, but I hope to see you there!

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Confessions of a Voc-Tech Teacher, by Bryan Caplan

Email from a reader, who asked to remain anonymous...

My name is [redacted] and I'm in my 3rd decade
of teaching vocational education or Career Technical Education (CTE) in [redacted] CA.  

I was very pleased to hear about your position
about our educational system on the Fox Business Channel this am. I wanted to
bring to your attention that there is no functional pipeline for attracting
vocational education teachers into public education. When shop instructors
retire or transfer as I've done more often than not the that shop
class will be closed. This is due in part to the state of California
making the requirements too difficult to attract industry professionals into
education and also the decline of CTE teacher training programs at the
universities.  Furthermore, professionals who do enter education from
industry as I did quickly discover that they are not supported as much as
their academic colleagues which mainly support the college track. As a
result, trade schools have been started that charge students lofty tuition to
be trained in plumbing, mechanics, electrical, and so on to fill the need
for vocational education. 

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Two Comments on Coy, by Bryan Caplan

Check out Bloomberg's Peter Coy's fair and fun review of The Case Against Education . Two reactions:

1. Narrow point.  Coy writes:

Notice that this signal has nothing to do with what he or she may have
learned. The signal to employers--of diligence, persistence, and
conformity--is just as strong whether the applicant studies Sanskrit or
cement mixing.

Yes, you can signal diligence and persistence by studying anything.  But you can't signal conformity by signaling anything!  To signal conformity, you have to study what's expected and valued in your culture - or sub-culture.  That's why students still can't safely substitute a computer language for Spanish, French, or Latin (!).

2. Broad point.  Coy again:

Caplan's solution--slashing public support for public education--is what's
problematic. He argues that if subsidies were taken away, poor youths
who couldn't afford college would be unharmed, because employers would
begin to view a diploma as a signal of family money, not brains. Maybe.
But those strivers would also be deprived of the human capital that
college builds--which even Caplan estimates at a fifth of the value of a
degree and some other economists say is substantially higher. In a 2015
column for the Hechinger Report, an education website, Andre Perry, a
fellow at the Brookings Institution, writes that the clich�� "college
isn't for everyone" is code for "those people aren't smart enough for
college."

In my book, I blame ubiquitous global support for education on Social Desirability Bias.  Human beings like saying - and believing - whatever sounds good, even if what sounds good makes little sense.  My question for Coy: If deleting 80% of the perceived social rewards of education makes you no more willing to cut public support for public education, what would?  What if we deleted 90% of education's perceived social rewards?  95%  99%?  I know it sounds nice to say, "If it helps one person, it's worth it," but that's crazy.  No one spends their own money so casually - nor should they.  Furthermore, you can easily use some of the budgetary savings to help "strivers" in more cost-effective ways.  So why not?

The Andre Perry line is likewise steeped in Social Desirability Bias.  If I wanted to join the NBA, an honest assessment would be, "You lack the necessary height, endurance, dexterity, background, and drive."  So what's so awful about saying that some people aren't smart enough for college?  Sure, if you want to seem nice, you'll tell everyone they can do anything they set their minds to.  But if you want to actually be nice, you'll tactfully try to match people's goals with their aptitudes.

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My Interview with Princeton University Press, by Bryan Caplan

Highlights:

The "signaling model of education" is the foundation of your argument. What is this model?

The standard view of education, often called the "human capital
model," says that education raises income by training students for their
future jobs. The signaling model, in contrast, says that education
raises income by certifying students for their future jobs.
Doing well in school is a great way to convince employers that you're
smart, hard-working, and conformist. Once they're convinced, career
rewards naturally follow.

Could you give an analogy?

Sure. There are two ways to raise the value of a diamond. One is to
hand it to an expert gem smith so he can beautifully cut the stone. The
other is to hand it to a reputable appraiser with a high-powered
eyepiece so he can certify the pre-existing excellence of the stone. The first story is like human capital; the second story is like signaling.

Is it really either/or?

Of course not. The human capital and signaling models both explain
part of education's career benefits. But I say signaling is at least
half the story--and probably more.

[...]

In 2001, Michael Spence won a Nobel Prize for his work on
educational signaling. Can the idea really be so neglected?  What is
your value-added here?

Signaling enjoys high status in pure economic theory. But most
empirical labor and education economists are dismissive. Either they
ignore signaling, cursorily acknowledge it in a throw-away footnote, or
hastily conclude it's quantitatively trivial. My book argues that
there's overwhelming evidence that signaling is a mighty force in the
real world. There's strong evidence inside of economics--and even
stronger evidence in educational psychology, sociology of education, and
education research. And finally, signaling has abundant support from
common sense.

[...]

Given today's political climate, who do you think will be most receptive to your message?  The most hostile?

Support for education is bipartisan. Most people, regardless of
party, favor more and better education. It's no accident that both
Bushes wanted to be known as "education presidents." That said, I think
my biggest supporters will be pragmatists and fiscal hawks. And my
biggest opponents will be ideological fans of education and fiscal
doves. Most progressives will probably dislike my book, but they really
shouldn't. If you care about social justice, you should be looking for
reforms that help people get good jobs without fancy degrees.

You're a full professor at George Mason and a Princeton Ph.D.
How can you of all people possibly challenge the social value of
education?

I see myself as a whistleblower. Personally, I've got nothing to
complain about; the education system has given me a dream job for life.
However, when I look around, I see a huge waste of students' time and
taxpayers' money. If I don't let them know their time and money's being
misspent, who will? And if I wasn't a professor, who would take me
seriously?

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Huemer on Ultra-Ineffective Altruism, by Bryan Caplan

Mike Huemer, my favorite philosopher, has two great pieces on a recent $75M donation to the Johns Hopkins Philosophy Department.  They deserve a wider audience, so I'm posting them here with his permission.
Post #1: The Stimulus

I see that Bill Miller has given $75 million to the Philosophy Department at Johns Hopkins.
Background: Miller is a brilliant investment manager who, it turns out,
once studied philosophy at Hopkins and believes that his philosophy
training helped him to think clearly and cogently.

I hate* to
rain on anyone's parade, but this is among the most wasteful charitable
donations I've ever heard of (apart from gifts to even richer
universities, like Harvard). Let's review (a) what this money will
accomplish, and (b) what else could have been accomplished with a $75
million charitable donation.

[*Note: Here, by "hate" I mean "very much enjoy".]

(a)

Hopkins will use the money to hire 9 more philosophers, and provide
more funding for graduate students. This does not mean that 9 new
brilliant philosophers will be created. Rather, it will most likely
simply move 9 already-successful (and already well-paid) philosophers
from other schools to Hopkins. These philosophers will do pretty much
the same stuff they were already doing, but with more money.

Of
course, the schools they leave will then try to hire replacements; on
net, there will be room for 9 more people in the profession of
philosophy. This means, roughly, that an expected 9 marginal
philosophers will stay in the profession who otherwise would have left -
that is, 9 people who would have just barely failed to make it in
philosophy will instead just barely make it. Of course, there is a lot
of unpredictability, but something like that is the *expected* impact of
a change of this sort. Note: "marginal" is here used in the economic
sense.

In addition, some graduate students will have better
accommodations, or less financial strain during graduate school. Perhaps
this will occasionally make the difference to whether they stay in
philosophy or leave. If so, this might be a benefit to the ones who stay
. . . or it might very well be a cost, since philosophy is not that
great of a career for most people (again, esp. the 'marginal' people).

Also, society can look forward to a slightly increased production of
'philosophy', that is, more articles and/or books in philosophy - added
to the *tens of thousands* of such articles that are already being
produced every year, and already going almost completely unnoticed
because we have thousands of times more of them than any human being
could read.

Note again, the expected net effect is to increase
production by the *marginal* philosophers, not the top philosophers -
i.e., some people who would have just barely failed to get a research
job will now just barely get one. The *top* researchers would have
continued doing research either way; now they'll just have a little more
money.

Is this marginal increase in the quantity of philosophy a social benefit? No, it isn't. It obviously isn't, for two reasons:

(i) We already have way more philosophy than we know what to do with;
if anyone pays attention to these additional marginal philosophy
articles, that attention will come at the expense of *other* philosophy
articles.
(ii) Most philosophy that people write is false. We know
that because published philosophy papers on the same question usually
contradict each other. We should expect the added, marginal philosophy
articles to be even more likely to be false, and less likely to be
interesting, than the average existing philosophy article. So probably,
the main effect of these added articles will be to take attention away
from better articles. That is actually a social harm.

(b)

What else could have been done with $75 million? According to rough
estimates from GiveWell, the most effective charities save lives at a
cost of around $3000 per life. This means that, instead of the above
effects, Bill Miller could have taken that same money and saved ~25,000
people's lives.

Now, I'm no utilitarian. I'm not just complaining
that Miller failed to maximize utility. It can be rational to fail to
maximize utility. But when you are specifically *giving to charity*, I
tend to assume that the purpose is to do good for others. If so, it's
just irrational to give to a philosophy department.

You might
say: maybe his purpose wasn't to do good. Maybe he just had positive
feelings toward the philosophy department where he had studied, and he
was partial to those people. But then what he should have done is given
money to those individuals - e.g., his favorite professors. Now his gift
is going to go to *other* professors who are presently at other
schools, to make them move to Hopkins. Also, some money will go to
future graduate students whom Bill Miller doesn't know. So this form of
partiality makes no sense to me.

If you're trying to do good for
the world, give to GiveWell, the Humane League, or something like that.
If you're trying to help people that you personally like or have a
special relationship with, then give to those individuals. In neither
case should you give to a university.

Post #2: The Response
 

Some philosophers are unhappy about my claim that giving $75 million to a philosophy department is a giant waste of money. In truth, I kind of knew this would happen.

My own fb friends were fairly calm about it. Not so for philosophers
elsewhere on fb where the post was shared. Here are some of the comments
made by the lovers of wisdom (names omitted to protect the guilty)*:

(*Note: All spelling and other errors in quotations are in the original. Material in square brackets added by me.)

Part I: Anger & Insults

1. "What's intriguing about [Huemer's post]? 'Blablabla, I'm not a utilitarian, but...'" [That was the complete comment.]

2. "I'm not impressed at all. [...] WTF is on with this 'top
philosophers'/'marginal philosophers' elitism (like seriously? no
philosopher that found it hard to get a job ever end up making amazing
contribution to the field?)."

3. "Ugh. I am not amused by this."

4. "This whole condescending effective altruism stuff is classic 'keys under the street light' stuff."

5. "the argument that most published philosophy is false, is a *terrible* argument."

6. "[Teaching seems to be entirely discounted.] Quite. Particularly stupid of an omission [...]"

7. "Lost me at 'we already have way more philosophy than we know what
to do with.' Take away this sooper-deep insight into the value of
scholarship and all you have left is the usual 'effective altruism'
twaddle".

* * *

Part II: Inarticulate rejections

1.
"But his response is that the new people hired would be riffraff from
the "almost didn't make it in philosophy" pile, so not much added value
to the field (WTF?)"

2. "Well, thats a claim."

* * *

Part III: Ideology

1. "Unlike Huemer, I don't think that anybody should be allowed to be
rich enough to do this anyway: simply expropriating Miller's money and
redistributing it to better causes would be the way to go."

2. "I
see your points, Mike, and basically agree. [...] Johns Hopkins, being
the kind of institution it is, will in all likelihood not seek out
young, radical, feminist or so called 'radical' or 'transgressive'
thinkers. They will, I think we can be pretty sure of of that, hire a
bunch of (probably older, white, established and already highly paid
men) who have already been validated/rewarded for their contributions to
a field which, let's be honest here, is fairly conservative (at least
in the US) and dominated by middle aged and older white men. [...]

"Also, I just don't find Johns Hopkins to be at the cutting edge when
it comes to literary theory, continental philosophy, film and media
studies, work by women/feminists, creative writers, people of color."

3. "The discussion should not be on maximizing utility when spending
billions, but on the conditions that allow this to happen at all.
(Higher) Education should be a public service and a public good, not a
money game."

* * *

Part IV: Objections

1. In response to the point that the gift will add 9 marginal philosophers to the profession:

"Look, I think I have been a fairly successful philosopher. I am
inclined to say as successful as Huemer, but let's just go with 'better
than worthless'. I almost didnt make it. My first time on the market I
got one offer that I might well have turned down, and got saved with a
postdoc because [famous philosopher] knew me and went to bat personally.
So I was pretty close to the bottom of that pile."

2. A reductio:

"I'm curious - do you think universities in general should be shut
down? Because those are the kind of sums that universities in general
receive in donations in order to survive"

3. Another reductio:

"It is hard to see how this doesn't generalise. [...] it's hard to see
what would justify anyone spending money on philosophy (or any other
humanity discipline) except as a private consumer good."

4. "Lots
of US universities are privately funded through donations. This is one
major donation that is targeted at a particular department. So? This
happens every day (look at all the named departments and chairs), why
should this one be called out?"

5. To the point that the donation will just move 9 established philosophers to JHU, to keep doing what they're already doing:

"this is totally wrong [...] Why think these people will do exactly
what they would anyhow do? [The donation] allows one to plan hires
systematically, and build up a new community of people who might
interact with each other in interesting ways. I get *a lot* out of
talking to my colleagues, and I certainly would not have done exactly
the same work if I was elsewhere."

6. "What if having more
philosophy courses and more respect for the field makes it a bit less
likely that a Trump will be elected?"

7. "I cover effective
altruism in my Intro to Ethics class [...] I find it fascinating that
they can just see, pre-theoratically, that just because it is easier to
calculate the lives saved if one gives to the Against Malaria foundation
than the good done if one donates to a sexual violence services center
or a philosophy department [...], that doesn't prove that it is better
to do the first."

8. To the point that most philosophy papers must be wrong, since they regularly contradict each other:

"If you assume that you can equate a philosophy paper with the
conjunction of the claims in it, then the fact that two papers
contradict each other entails that at least one of them is false. [...]
But this is compatible with there being lots of true claims in each of
the papers."

9. "the whole argument seems to assume that the
value added by philosophy professors is in their publications. Teaching
seems to be entirely discounted."

10. "Further [...] it obviously
wont just move people. The people moving will be replaced. There will
be more total employed philosophers."

11. "For a start, no one was given a sum of 75mil to just play around with"

* * *

Exercise for the reader: match each of the above arguments to one or more of the following argumentative problems:

a. Argumentum ad ignorantiam
b. Speculation
c. Anecdotal argument
d. Personal bias
e. Non sequitur
f. Missing the point
g. Failure to distinguish total utility from marginal utility
h. Straw man

* * *

Survey question: Does the above increase or decrease your confidence in the value of Miller's donation?

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Tomorrow's Events, by Bryan Caplan

Two big Case Against Education events tomorrow:

1. I'm doing a full-hour interview with Glenn Beck.  Please tune in!  (Listen live here).

2. I'm speaking at the Free Library of Philadelphia.  Hope to see you there!

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