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3/7/08
Why "Self-Help" is Relevant to Economics
The self-help genre gets a bad rap. Check here for some thoughts from the author of SHAM: How the Self-Help Movement Made America Helpless, Steve Salerno. Basically, self-help is often criticized as an amalgamation of psychiatric and folk-lore notions that are specifically designed to target vulnerable individuals looking for something to believe in. I'm going to give self-help practitioners the benefit of the doubt though. For the sake of argument, let's assume that so-called "self-help" literature is written by sincere individuals who are simply writing down advice about how to live and how to navigate the complexities of today's world.
Under this assumption, self-help literature or any book or paper giving individuals specific advice, is extremely significant to economics. The economy dictates and is dictated by the sum total of the global infrastructure. Economics is essentially a discipline of observers and theoreticians influencing one another - and helping to map the reality of our economic infrastructure. An economist sees this infrastructure from the top-down, as though he was flying over a corn maze, or huge open air labyrinth.
What if you cannot "afford" a plane ticket? That is, what if you can't be an economist, and understand in great depth the full scope of our economic system?
Let's take the labyrinth analogy and extend it to the common man. Let's say the labyrinth is magical, and moves around dynamically, unpredictably, even while you're attempting to make your way through it. Now let's say you are standing at the entrance to such a labyrinth, wishing for some help on successfully making it through to the other side. What kind of directions would you want? What help would you need? A few people try to help the hapless traveler before he sets out on his journey:
- The economist lands on the ground after flying over the labyrinth in a small plane. He walks over to the traveler with a rough sketch of the entire labyrinth from above. He took a photo as well, but it's blurry, and everyone knows the labyrinth is constantly changing - magically and unpredictably. The economist tells the traveler in exceedingly technical terms how he believes the magic changes are occurring, and why they may occur, and what could cause them to occur at any given time. He then tells him that he has a fairly high level of uncertainty about any particular labyrinthine prediction, but in general, he's right about the labyrinth's behavior.
- The traveler is then approached by another traveler who has already been through the labyrinth, and has also read the stories of the many people who passed through the labyrinth and lived to tell about it. He explains to the would-be traveler that the labyrinth is a dangerous place. He tells him that he'll have to keep his wits about him, and always try to change his situation for his own betterment. He explains how it feels to be alone and scared in the labyrinth, and how to get past those tough times. He explains why it is worth fighting on, and finding a way through to the end.
At its very best, this is how self-help, or religion, or any personal advice plays into the tapestry of economic thinking. We need to be able to find meaning in the economic infrastructure we work and play in. We need to be able to have human compassion for one another as we fight through to the end. The best economist can do both things - explain what the system is all about, and how we can help ourselves to find meaning within it and make a valuable contribution to it. We are all "economic agents" to economists, but we are each very real as well, and we need to be taken seriously as people, talked to as people, and have economic ideas justified in a way that matters to us.
To the extent that self-help authors do this in a way that is not fundamentally deceptive, they deserve the success they've enjoyed.
Under this assumption, self-help literature or any book or paper giving individuals specific advice, is extremely significant to economics. The economy dictates and is dictated by the sum total of the global infrastructure. Economics is essentially a discipline of observers and theoreticians influencing one another - and helping to map the reality of our economic infrastructure. An economist sees this infrastructure from the top-down, as though he was flying over a corn maze, or huge open air labyrinth.
What if you cannot "afford" a plane ticket? That is, what if you can't be an economist, and understand in great depth the full scope of our economic system?
Let's take the labyrinth analogy and extend it to the common man. Let's say the labyrinth is magical, and moves around dynamically, unpredictably, even while you're attempting to make your way through it. Now let's say you are standing at the entrance to such a labyrinth, wishing for some help on successfully making it through to the other side. What kind of directions would you want? What help would you need? A few people try to help the hapless traveler before he sets out on his journey:
- The economist lands on the ground after flying over the labyrinth in a small plane. He walks over to the traveler with a rough sketch of the entire labyrinth from above. He took a photo as well, but it's blurry, and everyone knows the labyrinth is constantly changing - magically and unpredictably. The economist tells the traveler in exceedingly technical terms how he believes the magic changes are occurring, and why they may occur, and what could cause them to occur at any given time. He then tells him that he has a fairly high level of uncertainty about any particular labyrinthine prediction, but in general, he's right about the labyrinth's behavior.
- The traveler is then approached by another traveler who has already been through the labyrinth, and has also read the stories of the many people who passed through the labyrinth and lived to tell about it. He explains to the would-be traveler that the labyrinth is a dangerous place. He tells him that he'll have to keep his wits about him, and always try to change his situation for his own betterment. He explains how it feels to be alone and scared in the labyrinth, and how to get past those tough times. He explains why it is worth fighting on, and finding a way through to the end.
At its very best, this is how self-help, or religion, or any personal advice plays into the tapestry of economic thinking. We need to be able to find meaning in the economic infrastructure we work and play in. We need to be able to have human compassion for one another as we fight through to the end. The best economist can do both things - explain what the system is all about, and how we can help ourselves to find meaning within it and make a valuable contribution to it. We are all "economic agents" to economists, but we are each very real as well, and we need to be taken seriously as people, talked to as people, and have economic ideas justified in a way that matters to us.
To the extent that self-help authors do this in a way that is not fundamentally deceptive, they deserve the success they've enjoyed.
Is it Better to be Well-Liked or to Like Yourself? How the popular “self-help” genre approaches reputation capital
The best way to approach research into popular culture is usually to just turn on the TV – it’s important to tap into media channels that are known to have high viewership. I’ll admit I didn’t do this intentionally either, I was actually watching TV for fun with my girlfriend, and the popular talk show Ellen came on, hosted by Ellen De Generes. After her usually goofy dancing through the audience and light-hearted humor with her initial guests, she brought on Dr. Wayne Dyer. In his most recent book, Dyer’s biographical summary states that he is, “an internationally renowned author and speaker in the field of self-development.” (Back Flap). While Dyer spoke, it became clear that his latest lessons for readers, which he presents in the book Change Your Thoughts – Change Your Life: Living the Wisdom of the Tao , dealt with concerns about one’s reputation and place in the world. He told Ellen that it’s important to be able to detach yourself from your worldly reputation, and find inner peace based in the fact that we’re all spiritual beings having a human experience. Though this statement seems wholly unrelated to the economic issue of educational accreditation, there is certainly a relationship which I’ve suggested in the title above: educational accreditation is a potent form of reputation capital. Dyer’s message is to lower the importance of both material wealth and reputation capital in your life in order to find peace. Later in the paper, we’ll see that a book by Hardball host Chris Matthews shares quite different self-help wisdom on the topic.
Reputation capital is familiar to us in so many ways. We can’t get a low interest home loan without a good credit score, which is said to suggest to lenders our credit worthiness. Many people have no idea that their score is generated by a computational neural network and then reevaluated by 3 monolithic credit bureaus before it’s passed to every financial institution in the nation. Most people do understand that they don’t want it to be too low.
Educational accreditation is at the highest level of reputation capital, because accrediting organizations are the gatekeepers for thousands of universities and institutions of higher education – without the accreditors seal of approval, legitimate degrees cannot be issued to students for use in the larger economy. Institutions seeking accreditation have to care about their own reputation capital, because they want to be able to issue similar reputation-bearing currencies to their members and students. This is a highly organized apparatus for bestowing institutionally-guaranteed reputation capital on an individual, and it’s an extremely powerful system. But is a high level of focus on this system and its rewards good for us as individuals? In the case of Ellen, should she obsess about what the critics say about her show? Dyer says no, emphatically, and I’m inclined to agree at least that overemphasis on reputation could easily become stressful and toxic.
Dyer is questioning the importance of this system and asking us to detach ourselves from it in order to be a bit more in tune with ourselves. Since I did bother to purchase Dyer’s book, let’s take a look at a typical quote from him: “This far-reaching verse of the Tao Te Ching asks you to let go of seeking results in money, accomplishments, acquisitions, fame, and so on. Instead, shift your attention to the energy in the beginning of all things – the elusive and intangible Tao.” (102) This is not particularly useful advice for getting a job or home loan, but it may certainly help some people diminish their obsession with personal accumulation of wealth or fame. From the popularity of Dyer’s books (of which he’s written over 30 in the “self-development” genre), it seems that this sort of advice appeals to a good number of people.
As mentioned earlier, Hardball host Chris Matthews has quite a different take on the importance of reputation. In his latest book, Life’s a Campaign: What Politics has Taught me About Friendship, Rivalry, Reputation, and Success, Chris Matthews introduces concrete tools for marketing yourself, interacting productively with others, and cultivating your reputation. This is essentially a book about finding opportunities for building one’s reputation capital and exploiting them very intentionally. Again, this book was profiled on TV, on Jon Stewart’s popular talk show, and the interview has become popular on YouTube. Take a look: http://www.youtube.com/watch?v=sddRviP8-do
The video shows Chris Matthews being slammed by Jon Stewart for essentially writing a self-help book with no soul. Perhaps the best indication of the book’s life lessons is provided in the front and back flaps:
“The big payoff in Life’s a Campaign is what you’ll learn about human nature:
- People would rather be listened to than listen
- People don’t mind being used; what they mind is being discarded.
- People are more loyal to the people they’ve helped; than the people they’ve helped are loyal to them.
- Not everyone’s going to like you
- No matter what anybody says, nobody wants a level playing field”
As Jon Stewart points out, this looks like a “recipe for sadness”, largely because it seems so cynical. Some of the luminaries reviewing Matthews book on the back cover however, disagree, particular chairman and CEO of General Electric, Jeffrey Immelt: “…People think that leaders ‘tell people what to do.’ More frequently, leadership in business is about selling teams on a vision, and leveraging friendship and trust to get things done. Chris does a great job of bridging his experience in politics with commonsense rules.” (Back Cover)
Immelt may be on to something here – Matthews is simply digging into the mechanisms by which people with significant reputation capital go about using that capital to get things done. When one reaches the stratosphere of political achievement, a lot of the reputation dynamics have to be driven by the players themselves. They are ‘churning’ their reputation capital (i.e. – accumulating it and spending it) at a very high rate. For the average person however, the sort of posturing and strategy Matthews has observed may not be quite so necessary, since in its place, we have many institutions that are ready to grant us credit for our accomplishments and vouch for our ability to perform certain tasks.
The books selected for analysis here were intentionally pulled out of the self-help literature because they present such a profoundly opposing view of how to achieve success – largely because they define success differently. If there are to be criticisms lodged against these two authors, it would be that Dyer is a hypocrite, and Matthews is a cynic. Wayne Dyer does not seem to shy away from tooting his own horn in order to convince us of his credibility – stating that he is a “Dr.” and has written over 30 books. While I don’t question his truthfulness or begrudge him his right to include this information, his book seems to suggest so fervently that reputation is unimportant for well-being that the prominent use of his reputation to market the book does seem like a hypocrisy. Chris Matthews seems to believe that the key to success is in almost fooling others into trust by putting up a façade of likability. The people who I think we generally have the deepest connections with are those who we still like when we see them at their most vulnerable. Deep friendships ought not be based on mutual likability alone, and certainly not on mutual envy of another’s reputation capital stock. This is likely what Jon Stewart was getting at, and he was justified in pointing out Matthews’ cynicism.
In order to bring this issue back to educational accreditation, and the general popular view of accreditation, let’s consider that both these books were popular, and sold well on Amazon. As of March 7, 2008, Chris Matthews’ book ranking on Amazon was #11,251 and Wayne Dyer’s book ranking was #81 – while this may seem like a large difference, Amazon ranks millions of books, so these two are both likely in the top 1% of Amazon sellers. Therefore, people likely have a fairly balanced understanding that outward reputation and inward peace or reflection are both crucial for whole living. Any good educational accreditation program will likely seek to map very carefully onto the natural lives we live – capturing who we are, without interfering with our desire for authenticity.
If you are defined by your diploma, it is fair to say you’d be missing out on life, and may have difficulty discovering what you’re truly passionate about – since the diploma is essentially a contrived label bestowed by others. If you are so self-reflective however, that it serves as a shield or barrier from the interests and concerns of others, then people will simply not know you or trust you to do the work you may be capable of. Somewhere in the middle, popular culture will move to embrace methods of accrediting education and success that aptly recognizes learning and accomplishment, without seeking to exert restrictive influence over its creation.
Works Cited:
Dyer, Wayne. Change Your Thoughts – Change Your Life. Hay House Inc. 2007
Matthews, Chris. Life’s a Campaign. Random House, New York. 2007.
Reputation capital is familiar to us in so many ways. We can’t get a low interest home loan without a good credit score, which is said to suggest to lenders our credit worthiness. Many people have no idea that their score is generated by a computational neural network and then reevaluated by 3 monolithic credit bureaus before it’s passed to every financial institution in the nation. Most people do understand that they don’t want it to be too low.
Educational accreditation is at the highest level of reputation capital, because accrediting organizations are the gatekeepers for thousands of universities and institutions of higher education – without the accreditors seal of approval, legitimate degrees cannot be issued to students for use in the larger economy. Institutions seeking accreditation have to care about their own reputation capital, because they want to be able to issue similar reputation-bearing currencies to their members and students. This is a highly organized apparatus for bestowing institutionally-guaranteed reputation capital on an individual, and it’s an extremely powerful system. But is a high level of focus on this system and its rewards good for us as individuals? In the case of Ellen, should she obsess about what the critics say about her show? Dyer says no, emphatically, and I’m inclined to agree at least that overemphasis on reputation could easily become stressful and toxic.
Dyer is questioning the importance of this system and asking us to detach ourselves from it in order to be a bit more in tune with ourselves. Since I did bother to purchase Dyer’s book, let’s take a look at a typical quote from him: “This far-reaching verse of the Tao Te Ching asks you to let go of seeking results in money, accomplishments, acquisitions, fame, and so on. Instead, shift your attention to the energy in the beginning of all things – the elusive and intangible Tao.” (102) This is not particularly useful advice for getting a job or home loan, but it may certainly help some people diminish their obsession with personal accumulation of wealth or fame. From the popularity of Dyer’s books (of which he’s written over 30 in the “self-development” genre), it seems that this sort of advice appeals to a good number of people.
As mentioned earlier, Hardball host Chris Matthews has quite a different take on the importance of reputation. In his latest book, Life’s a Campaign: What Politics has Taught me About Friendship, Rivalry, Reputation, and Success, Chris Matthews introduces concrete tools for marketing yourself, interacting productively with others, and cultivating your reputation. This is essentially a book about finding opportunities for building one’s reputation capital and exploiting them very intentionally. Again, this book was profiled on TV, on Jon Stewart’s popular talk show, and the interview has become popular on YouTube. Take a look: http://www.youtube.com/watch?v=sddRviP8-do
The video shows Chris Matthews being slammed by Jon Stewart for essentially writing a self-help book with no soul. Perhaps the best indication of the book’s life lessons is provided in the front and back flaps:
“The big payoff in Life’s a Campaign is what you’ll learn about human nature:
- People would rather be listened to than listen
- People don’t mind being used; what they mind is being discarded.
- People are more loyal to the people they’ve helped; than the people they’ve helped are loyal to them.
- Not everyone’s going to like you
- No matter what anybody says, nobody wants a level playing field”
As Jon Stewart points out, this looks like a “recipe for sadness”, largely because it seems so cynical. Some of the luminaries reviewing Matthews book on the back cover however, disagree, particular chairman and CEO of General Electric, Jeffrey Immelt: “…People think that leaders ‘tell people what to do.’ More frequently, leadership in business is about selling teams on a vision, and leveraging friendship and trust to get things done. Chris does a great job of bridging his experience in politics with commonsense rules.” (Back Cover)
Immelt may be on to something here – Matthews is simply digging into the mechanisms by which people with significant reputation capital go about using that capital to get things done. When one reaches the stratosphere of political achievement, a lot of the reputation dynamics have to be driven by the players themselves. They are ‘churning’ their reputation capital (i.e. – accumulating it and spending it) at a very high rate. For the average person however, the sort of posturing and strategy Matthews has observed may not be quite so necessary, since in its place, we have many institutions that are ready to grant us credit for our accomplishments and vouch for our ability to perform certain tasks.
The books selected for analysis here were intentionally pulled out of the self-help literature because they present such a profoundly opposing view of how to achieve success – largely because they define success differently. If there are to be criticisms lodged against these two authors, it would be that Dyer is a hypocrite, and Matthews is a cynic. Wayne Dyer does not seem to shy away from tooting his own horn in order to convince us of his credibility – stating that he is a “Dr.” and has written over 30 books. While I don’t question his truthfulness or begrudge him his right to include this information, his book seems to suggest so fervently that reputation is unimportant for well-being that the prominent use of his reputation to market the book does seem like a hypocrisy. Chris Matthews seems to believe that the key to success is in almost fooling others into trust by putting up a façade of likability. The people who I think we generally have the deepest connections with are those who we still like when we see them at their most vulnerable. Deep friendships ought not be based on mutual likability alone, and certainly not on mutual envy of another’s reputation capital stock. This is likely what Jon Stewart was getting at, and he was justified in pointing out Matthews’ cynicism.
In order to bring this issue back to educational accreditation, and the general popular view of accreditation, let’s consider that both these books were popular, and sold well on Amazon. As of March 7, 2008, Chris Matthews’ book ranking on Amazon was #11,251 and Wayne Dyer’s book ranking was #81 – while this may seem like a large difference, Amazon ranks millions of books, so these two are both likely in the top 1% of Amazon sellers. Therefore, people likely have a fairly balanced understanding that outward reputation and inward peace or reflection are both crucial for whole living. Any good educational accreditation program will likely seek to map very carefully onto the natural lives we live – capturing who we are, without interfering with our desire for authenticity.
If you are defined by your diploma, it is fair to say you’d be missing out on life, and may have difficulty discovering what you’re truly passionate about – since the diploma is essentially a contrived label bestowed by others. If you are so self-reflective however, that it serves as a shield or barrier from the interests and concerns of others, then people will simply not know you or trust you to do the work you may be capable of. Somewhere in the middle, popular culture will move to embrace methods of accrediting education and success that aptly recognizes learning and accomplishment, without seeking to exert restrictive influence over its creation.
Works Cited:
Dyer, Wayne. Change Your Thoughts – Change Your Life. Hay House Inc. 2007
Matthews, Chris. Life’s a Campaign. Random House, New York. 2007.
3/2/08
Government Educational Licensing: Educational Accreditation as an Escalating Institutional Project
Before even considering the government documents that address the topic of educational accreditation, let’s first consider why educational accreditation is an economic behavior that is seen as an appropriate task for governments and non-profit institutions to undertake. Among those with an institutionalist or managerial style of economic thinking in government, this is not a debate, accreditation is absolutely necessary to prevent the fraudulent distribution of worthless degrees by so-called “diploma mills”. While the neoclassical interest in competitive markets has, as we’ll see, its own rare advocates in government, the dominant theme, at least in statements from the government, is that signal educational quality ought to be the job of a institutions. The actual form this institution takes is not monolithic though. A complex array of private institutional accreditors, each recognized by the Council on Higher Education Accreditation (CHEA) and the Department of Education, is allowed to individually grant accredited status to educational institutions either by geographic region or by professional disciplinary area. This system, while decentralized and therefore fairly flexible, presents problems that institutionalists seek to address with greater standardization across the disparate accrediting boards. While this doesn’t necessarily mean consolidation, it has meant cooperation, particularly via the relatively new mechanism of the CHEA, which was only created in 1996 in order to coordinate the operations of the regional accreditors and act as a single national voice for educational quality assurance.
In order to get a robust sense of the conversation that is occurring among government officials with regards to the challenge of educational accreditation, we’ll take a look at three documents: H.R. 773 of the 110th Congress, H.R. 838 of the 108th Congress, and a 2006 Issue Paper from the Secretary of Education’s Commission on the Future of Higher Education entitled, “Assuring Quality in Higher Education”. The first two pieces are contrasting bills presented in the US Congress arguing that very different sorts of action ought to be taken in order to modify the educational accreditation apparatus of the country. The final paper provides a deeper analysis of the issues facing the accreditation process, but frames the entire problem in an institutionalist context, thereby laying out the foundation for an escalating institutional role in accreditation.
H.R. 773 of the 110th Congress is cited as the, “Diploma Integrity Protection Act of 2007” and is of particular interest because it is a very recent piece of legislation that may come in for more public scrutiny as it moves through the House and Senate. The bill was introduced in the House of Representatives in order, “To reduce and prevent the sale of use of fraudulent degrees in order to protect the integrity of valid higher education degrees that are used for Federal purposes.” The bill’s approach to the issue of educational accreditation is institutionalist, stating, for example, that the “preeminence of American universities” is threatened by the trafficking of fraudulent degrees. Its main solution to the problem of the potentially “$500,000,000” industry in diploma fraud is the creation of a temporary governmental “task force” comprised of 19 representatives from across the political and private spectrum. The bill repeatedly highlights the fact that fraudulent diplomas could be used to illegitimately obtain Federal jobs, and notes that one study that discovered numerous working government employees had obtained their post by presenting fake or shoddy credentials during application. Among other things, it’s stated that this practice “imperils the national security of the Unites States.” (5)
The harsh terms presented in this bill to describe the severity of the fraudulent credential problem, and the ways in which it would be swiftly brought under control, also evoked the managerial style of economic thinking. Essentially, the bill is seeking to immediately expand the Federal role in managing/influencing the accrediting apparatus of the country, with the justification that fake credentials can be used to obtain Federal jobs. A neoclassical economist may look at such a bill and ask whether or not this difficulty can be handled at the level of the Federal employees in charge of recruiting and screening applicants, a managerial economist may see this as a problem to be addressed immediately using the machinery of state. On pages 21-22 of the bill, the “Conduct Prohibited” is laid out, and suggested as a modification to FTC rules, and among other things, it specifies that an institution cannot distribute academic degrees without recognition from the Secretary of Education and accreditation by one of the recognized accrediting bodies. This essentially permits the Federal government to shut down almost any for-profit educational establishment that hasn’t met accrediting criteria, raising the activities of the accreditors to an even higher level of importance under the law. Rather than being the gatekeepers for billions of dollars in Federal student loans, this bill, if it became law, would convert accrediting agencies into the first and strongest line of defense against educational “counterfeiting”, however that comes to be defined.
For the record, another potential style that could be attributed to H.R. 773 is the moral/critical style, partially due to the bill’s multiple claims that consumers are often the unwitting victims of “diploma mills”. The assertion that consumers often have a genuine belief that their credentials are going to be valid, and are the unwitting victims of unscrupulous for-profit educators, certainly suggests a moral imperative to protect the public from being morally wronged in this way.
In stark contrast, two members of the 108th congress brought legislation that also addressed the issue of educational accreditation, but with the aim of significantly diminishing its power and influence. In February 2003, congressman Tom Petri brought H.R. 838 in front of the House of Representatives, before it was referred to the Committee on Education and the Workforce, where it eventually died when the 108th congress and the books were cleared. H.R. 838, which was cited as the “Higher Education Accrediting Responsibility Act of 2003”, is the work of neoclassical economic thinkers. Petri, and the bill’s co-sponsor, William Lipinski, seek to, among other things, “…end the virtual monopoly that today’s accrediting agencies enjoy, and require them to operate in a competitive environment like any other industry.” (3) Their primary complaint is the role of accrediting agencies as “gatekeepers” for the Federal student aid program. The fact that an institution’s accreditation determines whether its students will be eligible for Federal student loans makes these agencies power on par with the Department of Education. Another neoclassical theme is the idea that additional bureaucratic costs are passed on to the consumer, which is brought to bear here as well: “The time and effort required of institutions of higher education to comply with the accreditation process imposes costs which must ultimately be borne by students and parents.” (3) While it is not clear how much of a battle was fought over this bill, which effectively would have repealed the accrediting agency’s authority to approve Federal student aid, it is (along with HR 773) certainly evidence that this is recognized as a real issue on Capitol Hill, and the solutions to the problem are not monolithic.
Lastly, a document from within the Department of Education addresses many of the most current issues seen with the present accreditation system. It will be useful to note how these issues are presented though, since it ultimately reflects an interest and preference for institutionalist solutions (which shouldn’t really be surprising, since the Department of Education is an institution). The paper is an “Issue Paper” from the larger project, the Secretary of Education’s Commission on the Future of Higher Education, and is entitled, “Assuring Quality in Higher Education”. The entire first half of the paper describes the present structure of the accreditation, which is interesting background reading, but not as relevant to a discussion of the document’s economic style. The second section of the paper, which frames the “key issues” for discussion, provides much more of an indication regarding the document’s tone. The first such issue, called “Assuring Performance”, contains statements that seem to highlight the role of government in accreditors’ accountability: “States have taken a major leadership role in establishing performance accountability systems to drive improvement in higher education.” (6). The concluding paragraph here notes that the federal government and accreditation organizations have done a lot toward improving the performance-based accountability of the schools and institutions they accredit, but it points out that implementation has been somewhat inconsistent across the accreditation community. This points to an interest in standardization of accountability mechanisms across accrediting organizations and the federal government. If this is the main concern taken from a discussion of accreditation, then it certainly sets out accreditation as a largely institutionalist project that will require enormous effort and focus by the government in order to improve and standardize.
The other two issues presented are, “Open Standards and Processes” and “Consistency and Transparency”. On this issue of open standards, the desire to address new and emerging forms of education and instruction, such as distance-learning and for-profit universities, is discussed. The conclusion drawn however is again institutionalist in nature: “Some accreditation agencies have reviewed leading quality standards…[but] significant concerns still remain as to whether accreditation organizations are going far enough.” (7) And lastly, on the issue of consistency and transparency, it is mentioned that accreditation agencies, under the centralizing influence of the CHEA, have begun developing a single set of guidelines for educational quality. The section also notes the role CHEA has played in promoting credit transfer between institutions that have been accredited by disparate accrediting bodies. (8)
In a sense it is very desirable to have these issues addressed, so the ability for the public to understand accreditation and benefit from its ability to promote credit transfer and equivalence across institutions is ensured. The question here is whether or not the establishment government bureaucracy is self-reflective enough to consider both sides to this issue as the Congress has clearly done. While this is certainly not a raging debate on the Senate floor (let’s hope that have better things to do), it remains an issue: how much government- or institutionally-administered licensing could be taken over by parties in the private sector? Or at the very least, should accrediting agencies led by the CHEA really be the gatekeepers of the Federal student aid program? Despite the legitimacy of these questions and their discussion in Congress, it does not appear to be of interest to the Secretary of Education’s Commission on the Future of Higher Education; not hugely surprising, since they’d be more naturally concerned with how best to do the job themselves, rather than how others could do it better.
In order to get a robust sense of the conversation that is occurring among government officials with regards to the challenge of educational accreditation, we’ll take a look at three documents: H.R. 773 of the 110th Congress, H.R. 838 of the 108th Congress, and a 2006 Issue Paper from the Secretary of Education’s Commission on the Future of Higher Education entitled, “Assuring Quality in Higher Education”. The first two pieces are contrasting bills presented in the US Congress arguing that very different sorts of action ought to be taken in order to modify the educational accreditation apparatus of the country. The final paper provides a deeper analysis of the issues facing the accreditation process, but frames the entire problem in an institutionalist context, thereby laying out the foundation for an escalating institutional role in accreditation.
H.R. 773 of the 110th Congress is cited as the, “Diploma Integrity Protection Act of 2007” and is of particular interest because it is a very recent piece of legislation that may come in for more public scrutiny as it moves through the House and Senate. The bill was introduced in the House of Representatives in order, “To reduce and prevent the sale of use of fraudulent degrees in order to protect the integrity of valid higher education degrees that are used for Federal purposes.” The bill’s approach to the issue of educational accreditation is institutionalist, stating, for example, that the “preeminence of American universities” is threatened by the trafficking of fraudulent degrees. Its main solution to the problem of the potentially “$500,000,000” industry in diploma fraud is the creation of a temporary governmental “task force” comprised of 19 representatives from across the political and private spectrum. The bill repeatedly highlights the fact that fraudulent diplomas could be used to illegitimately obtain Federal jobs, and notes that one study that discovered numerous working government employees had obtained their post by presenting fake or shoddy credentials during application. Among other things, it’s stated that this practice “imperils the national security of the Unites States.” (5)
The harsh terms presented in this bill to describe the severity of the fraudulent credential problem, and the ways in which it would be swiftly brought under control, also evoked the managerial style of economic thinking. Essentially, the bill is seeking to immediately expand the Federal role in managing/influencing the accrediting apparatus of the country, with the justification that fake credentials can be used to obtain Federal jobs. A neoclassical economist may look at such a bill and ask whether or not this difficulty can be handled at the level of the Federal employees in charge of recruiting and screening applicants, a managerial economist may see this as a problem to be addressed immediately using the machinery of state. On pages 21-22 of the bill, the “Conduct Prohibited” is laid out, and suggested as a modification to FTC rules, and among other things, it specifies that an institution cannot distribute academic degrees without recognition from the Secretary of Education and accreditation by one of the recognized accrediting bodies. This essentially permits the Federal government to shut down almost any for-profit educational establishment that hasn’t met accrediting criteria, raising the activities of the accreditors to an even higher level of importance under the law. Rather than being the gatekeepers for billions of dollars in Federal student loans, this bill, if it became law, would convert accrediting agencies into the first and strongest line of defense against educational “counterfeiting”, however that comes to be defined.
For the record, another potential style that could be attributed to H.R. 773 is the moral/critical style, partially due to the bill’s multiple claims that consumers are often the unwitting victims of “diploma mills”. The assertion that consumers often have a genuine belief that their credentials are going to be valid, and are the unwitting victims of unscrupulous for-profit educators, certainly suggests a moral imperative to protect the public from being morally wronged in this way.
In stark contrast, two members of the 108th congress brought legislation that also addressed the issue of educational accreditation, but with the aim of significantly diminishing its power and influence. In February 2003, congressman Tom Petri brought H.R. 838 in front of the House of Representatives, before it was referred to the Committee on Education and the Workforce, where it eventually died when the 108th congress and the books were cleared. H.R. 838, which was cited as the “Higher Education Accrediting Responsibility Act of 2003”, is the work of neoclassical economic thinkers. Petri, and the bill’s co-sponsor, William Lipinski, seek to, among other things, “…end the virtual monopoly that today’s accrediting agencies enjoy, and require them to operate in a competitive environment like any other industry.” (3) Their primary complaint is the role of accrediting agencies as “gatekeepers” for the Federal student aid program. The fact that an institution’s accreditation determines whether its students will be eligible for Federal student loans makes these agencies power on par with the Department of Education. Another neoclassical theme is the idea that additional bureaucratic costs are passed on to the consumer, which is brought to bear here as well: “The time and effort required of institutions of higher education to comply with the accreditation process imposes costs which must ultimately be borne by students and parents.” (3) While it is not clear how much of a battle was fought over this bill, which effectively would have repealed the accrediting agency’s authority to approve Federal student aid, it is (along with HR 773) certainly evidence that this is recognized as a real issue on Capitol Hill, and the solutions to the problem are not monolithic.
Lastly, a document from within the Department of Education addresses many of the most current issues seen with the present accreditation system. It will be useful to note how these issues are presented though, since it ultimately reflects an interest and preference for institutionalist solutions (which shouldn’t really be surprising, since the Department of Education is an institution). The paper is an “Issue Paper” from the larger project, the Secretary of Education’s Commission on the Future of Higher Education, and is entitled, “Assuring Quality in Higher Education”. The entire first half of the paper describes the present structure of the accreditation, which is interesting background reading, but not as relevant to a discussion of the document’s economic style. The second section of the paper, which frames the “key issues” for discussion, provides much more of an indication regarding the document’s tone. The first such issue, called “Assuring Performance”, contains statements that seem to highlight the role of government in accreditors’ accountability: “States have taken a major leadership role in establishing performance accountability systems to drive improvement in higher education.” (6). The concluding paragraph here notes that the federal government and accreditation organizations have done a lot toward improving the performance-based accountability of the schools and institutions they accredit, but it points out that implementation has been somewhat inconsistent across the accreditation community. This points to an interest in standardization of accountability mechanisms across accrediting organizations and the federal government. If this is the main concern taken from a discussion of accreditation, then it certainly sets out accreditation as a largely institutionalist project that will require enormous effort and focus by the government in order to improve and standardize.
The other two issues presented are, “Open Standards and Processes” and “Consistency and Transparency”. On this issue of open standards, the desire to address new and emerging forms of education and instruction, such as distance-learning and for-profit universities, is discussed. The conclusion drawn however is again institutionalist in nature: “Some accreditation agencies have reviewed leading quality standards…[but] significant concerns still remain as to whether accreditation organizations are going far enough.” (7) And lastly, on the issue of consistency and transparency, it is mentioned that accreditation agencies, under the centralizing influence of the CHEA, have begun developing a single set of guidelines for educational quality. The section also notes the role CHEA has played in promoting credit transfer between institutions that have been accredited by disparate accrediting bodies. (8)
In a sense it is very desirable to have these issues addressed, so the ability for the public to understand accreditation and benefit from its ability to promote credit transfer and equivalence across institutions is ensured. The question here is whether or not the establishment government bureaucracy is self-reflective enough to consider both sides to this issue as the Congress has clearly done. While this is certainly not a raging debate on the Senate floor (let’s hope that have better things to do), it remains an issue: how much government- or institutionally-administered licensing could be taken over by parties in the private sector? Or at the very least, should accrediting agencies led by the CHEA really be the gatekeepers of the Federal student aid program? Despite the legitimacy of these questions and their discussion in Congress, it does not appear to be of interest to the Secretary of Education’s Commission on the Future of Higher Education; not hugely surprising, since they’d be more naturally concerned with how best to do the job themselves, rather than how others could do it better.
Works Cited:
HR 773. “To reduce and prevent the sale and use of fraudulent degrees in order to protect the integrity of valid higher education degrees that are used for Federal purposes.” 110th US Congress. January 31, 2007.
HR 838. “To amend the Higher Education Act of 1965 to provide greater academic freedom for institutions of higher education, and for other purposes.” 108th US Congress. February 13, 2003.
Schray, Vickie. “ISSUE PAPER: Assuring Quality in Higher Education: Key Issues and Questions for Changing Accreditation in the United States.” A NATIONAL DIALOGUE: The Secretary of Education’s Commission on the Future of Higher Education. 2006.
2/1/08
Krugman's Cause and My Reflections
The four readings that we did in this section by Paul Krugman were Op-Ed pieces from the New York Times dealing with market failures and corruption, following revelations that Enron was cooking the books. These discussions are supposed to represent the institutionalist style of economic thought, and it is a style that stands out in American life today as we try to decide who our next leader ought to be. Many of the candidates also point out glaring market failures, and like Krugman, do not believe that government programs are inherently wrongheaded.
In order to talk about Krugman's point of view within a context, let's consider some of the ways the other styles would respond to his criticisms. Krugman is of course an established economist, trained in neoclassical doctrine, but (as was discussed in class) as a journalist or commentator in the media, has often tended to be a critic of ubiquitous free markets and a proponent of tighter or clearer regulation. In his New York Times piece on Conrad Black, he also excoriates the close association of market interests with government interests, and highlights conflicts of interest in journalism as well.
While the Moral/Critical style, Social/Democratic style, and even Marxist style would seem to encourage this sort of perspective, their response would likely range from disappointment to disinterest. Under the Moral/Critical style, the inhumanity of corporate interests like Enron would essentially be a foregone conclusion. The question for the novelist or artist would be how to best bring this criticism to the common man, allowing them to reflect on their world constructively. They would likely feel that Krugman, as an economist, was simply trying to speak the concerns of the people in a language that even the economic priesthood could comprehend.
In It Takes a Village Clinton's ideal seems to be a world in which individuals making responsible decisions hold larger interests accountable. Krugman's assumptions are actually a bit less empowering, since they seem to say that there are and always will be extremely powerful and unscrupulous profiteers who we need to regulate. Clinton is at least placing some of the emphasis on citizens, who represent the consumer base and therefore can collectively demand "good" things, like that cigarette advertising ought not be aimed at young children. Perhaps Hillary would have been disappointed with Krugman's pieces in that they assume that relatively few players are controlling the economy - Hillary's preference seems to be to focus on what people choose to demand from their companies and their governments. Krugman's preference seems to be to focus on the bad eggs that somehow prove that the whole lot is rotten and needs to be carefully controlled.
Marxist doctrine, which is essentially based upon an all-encompassing prediction that we're moving toward some "sublime" state of global collectivism, would likely view Krugman's work on Enron as foolish. To a Marxist, allowing free markets to self-destruct is a perfectly legitimate way to speed us toward collectivism - so taking an interest somehow fixing the markets from the top-down would be seen as an unnecessary delay of the inevitable.
Now this discussion was particularly interesting to me because I find almost all of it disturbing. I'll break the rules of the reader response essays and include a bit of my own perspective on this whole discussion now that I've done the necessary diagramming of it. There are very slim elements in each of these styles that I do like. From Krugman I appreciate that he is concerned with the elements in our society who benefit from our trust and then violate flagrantly. These are the people who lie and cover up. It is hard to do anything to these people after the fact though, it is merely preferable that we have a reliable way to keep them from gaining our collective trust to begin with. Traditionally, this is what professional accreditation or educational accreditation has been useful for - establishing flows of "trust capital" from one trustworthy entity to newly emerging ones who need to be vetted and approved in similar fashion. Large institutional solutions do fail, and for precisely the same reason, because they're comprised of people who we have to put our faith in. We need a better way for identifying the best, most responsible, and honorable people, not a solution that looks good on paper but may do more harm than good. Krugman may have needed to retake the part of economics that discusses unintended consequences.
I find myself agreeing with Hillary Clinton only in that I think citizens should feel empowered, either as individuals or as groups, whichever is most advantageous - and it is never just one or the other, though Hillary would likely favor groups. Economic demand, as a concept, might as well be extended to societal demand more generally. If the citizens want clean energy, and if they think it's important, then they vote with their dollars, using the Internet to funnel their consumptive power toward vendors that represent their values. This is again an issue of truthfulness - if we have producers willing to be honest to themselves, and with us, about what they believe, then there will be far less disillusionment in the economy.
Finally, the Marxists are just a funny contradiction. They have been so concerned with the manner in which economic history will unfold (deterministically, I presume) that they don't even seem to acknowledge their own impact on that history. There's no better proof that you can't make predictions about human history in a social vacuum - largely because you have to be human to make them. The only thing I find appealing about Marxism is that it does predict a bright future. I think an economics that values what people value will be bright, even if not communist. I think the hybridization of non-profit and for-profit entrepreneurship is going to make the decentralization of social works possible, and put more educational, social, and financial opportunities in the hands of individuals. This is perhaps a prediction of both extreme libertarianism and communism at the same time. Collectively, all the unique individuals will be pretty happy with what they're able to provide to one another and learn from each other. Wrap your head around that one, Marxists.
In order to talk about Krugman's point of view within a context, let's consider some of the ways the other styles would respond to his criticisms. Krugman is of course an established economist, trained in neoclassical doctrine, but (as was discussed in class) as a journalist or commentator in the media, has often tended to be a critic of ubiquitous free markets and a proponent of tighter or clearer regulation. In his New York Times piece on Conrad Black, he also excoriates the close association of market interests with government interests, and highlights conflicts of interest in journalism as well.
While the Moral/Critical style, Social/Democratic style, and even Marxist style would seem to encourage this sort of perspective, their response would likely range from disappointment to disinterest. Under the Moral/Critical style, the inhumanity of corporate interests like Enron would essentially be a foregone conclusion. The question for the novelist or artist would be how to best bring this criticism to the common man, allowing them to reflect on their world constructively. They would likely feel that Krugman, as an economist, was simply trying to speak the concerns of the people in a language that even the economic priesthood could comprehend.
In It Takes a Village Clinton's ideal seems to be a world in which individuals making responsible decisions hold larger interests accountable. Krugman's assumptions are actually a bit less empowering, since they seem to say that there are and always will be extremely powerful and unscrupulous profiteers who we need to regulate. Clinton is at least placing some of the emphasis on citizens, who represent the consumer base and therefore can collectively demand "good" things, like that cigarette advertising ought not be aimed at young children. Perhaps Hillary would have been disappointed with Krugman's pieces in that they assume that relatively few players are controlling the economy - Hillary's preference seems to be to focus on what people choose to demand from their companies and their governments. Krugman's preference seems to be to focus on the bad eggs that somehow prove that the whole lot is rotten and needs to be carefully controlled.
Marxist doctrine, which is essentially based upon an all-encompassing prediction that we're moving toward some "sublime" state of global collectivism, would likely view Krugman's work on Enron as foolish. To a Marxist, allowing free markets to self-destruct is a perfectly legitimate way to speed us toward collectivism - so taking an interest somehow fixing the markets from the top-down would be seen as an unnecessary delay of the inevitable.
Now this discussion was particularly interesting to me because I find almost all of it disturbing. I'll break the rules of the reader response essays and include a bit of my own perspective on this whole discussion now that I've done the necessary diagramming of it. There are very slim elements in each of these styles that I do like. From Krugman I appreciate that he is concerned with the elements in our society who benefit from our trust and then violate flagrantly. These are the people who lie and cover up. It is hard to do anything to these people after the fact though, it is merely preferable that we have a reliable way to keep them from gaining our collective trust to begin with. Traditionally, this is what professional accreditation or educational accreditation has been useful for - establishing flows of "trust capital" from one trustworthy entity to newly emerging ones who need to be vetted and approved in similar fashion. Large institutional solutions do fail, and for precisely the same reason, because they're comprised of people who we have to put our faith in. We need a better way for identifying the best, most responsible, and honorable people, not a solution that looks good on paper but may do more harm than good. Krugman may have needed to retake the part of economics that discusses unintended consequences.
I find myself agreeing with Hillary Clinton only in that I think citizens should feel empowered, either as individuals or as groups, whichever is most advantageous - and it is never just one or the other, though Hillary would likely favor groups. Economic demand, as a concept, might as well be extended to societal demand more generally. If the citizens want clean energy, and if they think it's important, then they vote with their dollars, using the Internet to funnel their consumptive power toward vendors that represent their values. This is again an issue of truthfulness - if we have producers willing to be honest to themselves, and with us, about what they believe, then there will be far less disillusionment in the economy.
Finally, the Marxists are just a funny contradiction. They have been so concerned with the manner in which economic history will unfold (deterministically, I presume) that they don't even seem to acknowledge their own impact on that history. There's no better proof that you can't make predictions about human history in a social vacuum - largely because you have to be human to make them. The only thing I find appealing about Marxism is that it does predict a bright future. I think an economics that values what people value will be bright, even if not communist. I think the hybridization of non-profit and for-profit entrepreneurship is going to make the decentralization of social works possible, and put more educational, social, and financial opportunities in the hands of individuals. This is perhaps a prediction of both extreme libertarianism and communism at the same time. Collectively, all the unique individuals will be pretty happy with what they're able to provide to one another and learn from each other. Wrap your head around that one, Marxists.
1/26/08
Third Person and First Person Economics
The particular reading that was most interesting to me from this set was Neuromancer by William Gibson. Neuromancer is a futuristic dystopia, a work of fiction, and while certainly thought-provoking, it is interesting to answer the question as to why it is economics. This question, when addressed in view of the Marxian readings, can be rephrased: Why all the confusion about what economic ideas really are?
The dichotomy at work in economics is highly reflective of a conflict every human being faces: when to think vs. when to act. Thinking about a problem inevitably removes you from it to some degree or another, but the results can be very positive if some deeper insight is revealed by the period of reflection. Acting on a problem places you in the middle of the problem, risking that your actions may only exacerbate it, but also giving your solution a chance to actually bring about a positive change. How do we balance these forces in our own lives? Quite often we pick an area of "expertise" in which we believe we can passively absorb a sufficient amount of information to justify our stepping into the fray ourselves. The more thoughtful approach is to tightly connect reflection and action in our daily lives. After all, reflection is an action too with some cost of time attached, and the best ideas are those born of the greatest real-world feedback. Speeding the two-way feedback cycle between one's thoughts and one's actions is really a noble ideal to pursue when it's practical to do so. In extreme cases of course, one cannot stop to reflect with every step - one just has to trust their instincts and take the action that seems the most accurate at the time. With this caveat in mind, it becomes clear why ethical and social thought is so multi-dimensional, even fractal, because many self-similar feedback loops are operating in our lives simultaneously. At the highest level of ethical abstraction, we may be in the middle of questioning our religious faith, or we may be rock solid in our belief system. This on and off pattern of thinking and action trickles down to the very simplest action - typing on a keyboard - an action for which I don't have any regret at the moment, but perhaps if I get hungry or my fingers sore I'll quickly reconsider. I could question everything all at once, but that would be almost immediately depressing - uncertainty isn't fun, but neither is absolute certainty - so I tie many of my questions to the feedback I receive from my actions, and ultimately a rather "modular" equilibrium of thought tends to keep me satisfied.
This is an important idea to swallow to understand how I see economic thought. Economics is a manner of thinking that is immediately descriptive and influential. At least something that I do today I'll do (perhaps indirectly) because I believe that free markets are generally an enlightened tool for letting people self-organize, optimize, and generally be pretty happy. If I didn't believe that at all, then I'd no doubt be rather disenchanted with almost everything going on around me. This was of course the way Marx viewed the world he inhabited. Since he had prophesied that free markets would essentially exhaust themselves into communism, he found no enjoyment out of the prospect of newly discovered resources in Australia. He would no doubt be annoyed that capitalists are launching into space (e.g. - Virgin Galactic, Ansari X prize, etc...) and have designs on the abundant mining resources of the moon and Mars. Once Marx's model of the economy was fixed in his mind, he supported the forces that fit into the model and was disturbed by anything that seemed to contradict it.
This is third-person economics, and anyone making models of behavior, or making forecasts with the hope of being correct is engaging in it. It is essentially an attempt to make a contribution to the 'big picture' of economics - to the all-encompassing belief systems that can dictate subsidiary beliefs. Left unquestioned for too long, these belief systems will not flexibly adapt to reality and can suddenly face wholesale decline. These top-down views of the world succeed in proportion to their willingness to adapt. With Catholicism we had Vatican II, and with mathematical economics we have the seemingly endless flexibility of adding new variables into our models. It's nearly a matter of energy conservation though, that we have these third-person beliefs. Claiming that it's "simply the way the world works" is often a handy way to get around the accusation that you're doing nothing to change it. If every individual wanted to change the world at the same time, there would certainly be some unnecessary conflict, so in the long run it really does make good sense for us all to select a handful of 'big picture' vantage points - even if they are only approximations.
William Gibson on the other hand, who was also clearly disturbed by some of the economic and technological trends he was observing in the 80s, decided to think about it in an entirely different way. The argument that Neuromancer is economic almost inevitably includes the observation that its thematic elements and dystopian foreshadowing influences the economic agents who read it. The book is built around the idea that the economy of the 80s could shape a world of tomorrow that nobody would want to live in. This is not a model. Nothing about Neuromancer suggests an effort to model anything. Gibson was holding up a mirror; structuring his book to cleverly convey a warning about what we're doing to ourselves out of faith in our economic belief system. Perhaps mathematical economists would hesitate to call Neuromancer "economics" because they could explain away Gibson's paranoia and its corresponding niche market of readers with some sort of variable. Maybe the success of Gibson's book simply meant that the Pna factor was increasing slightly, and econometricians would rush to say that this new factor is correlated with changes in the technology level A. Treating Gibson's work as something that can be quantified and predicted by a larger and more comprehensive framework is fundamentally unfair, because, as the title of this blog suggests, these same econometricians would have to somehow deal with the impact of their own ideas on the economy. One quickly imagines a mathematical economist trapped into an endless loop of modeling the reasons for his own occupation, and after soon realizing that his conclusions had helped influence a new economic reality, set about on a further iteration of self-examination (ad nauseum, to be sure).
So let's imagine for a moment that Gibson had been a die-hard third-person economist, making elaborate models, and arriving at predictions about where economic forces were conspiring to take us. Useful work insofar as it leads this hypothetical Gibson to a conclusion that he has very high statistical confidence in: the world will almost certainly evolve into the world described in Neuromancer. Now, the economist Gibson does something very strange indeed. Unlike other economists, who might go testify in front of Congress, or publish papers in scholarly journals, Gibson devises a method for influencing the future economy: write a science fiction novel and publish it for all to read. Bring the warning to the people who most need to hear it.
This is of course not who William Gibson was or what he did - he was a science fiction novelist from the start and not a classically trained economist. But the point remains that even if he had been a classically trained economist it could been an entirely rational decision for him to eschew traditional avenues of economic influence and go straight to the people and urge them to reconsider the path his economic models seem to indicate they've set out upon. If you want economic thought to really matter, you have to come up with economic thoughts that have the power to change minds and influence those who comprise the economic system you observe. In Hard Times Charles Dickens cleverly pulls the reader into a world dominated by stringent "Fact" and the coldest definition of rationality. Neuromancer reads like a comic book or action movie.
This is first-person economics. This is the economics of influence, where ideas are essentially measured by their practical appeal to a large audience. The novelist Ayn Rand, whose libertarian ideal was the centerpiece of her fiction novel Atlas Shrugged, explained in The New Intellectual that, "In a certain sense, every novelist is a philosopher, because one cannot present a picture of human existence without a philosophical framework; the novelist’s only choice is whether that framework is present in his story explicitly or implicitly, whether he is aware of it or not, whether he holds his philosophical convictions consciously or subconsciously." No matter what you may think of Rand's beliefs, this point is very sensible. It is a good justification for including novels about economic trends or issues in the catalogue of economic thinking, because all schools of economic thought "present a picture of human existence."
Lastly, this ties back in with my "modular" equilibrium discussion above by considering what happens when one reads a novel. By empathizing with the characters represented one is always considering what they might do in a similar position. Connecting your daily feedback process with a fictional character's is far more likely to convince someone to actually change specific behaviors. Large third-person economic models can have an enormous impact, as Marx and the neoclassical economists have clearly shown, but the nature of the impact is top down. One can subscribe to third-person economics and feel reassured that private property is a good or bad idea, but one must more deeply contemplate first-person economics and consider what it means for daily lifestyle choices.
The dichotomy at work in economics is highly reflective of a conflict every human being faces: when to think vs. when to act. Thinking about a problem inevitably removes you from it to some degree or another, but the results can be very positive if some deeper insight is revealed by the period of reflection. Acting on a problem places you in the middle of the problem, risking that your actions may only exacerbate it, but also giving your solution a chance to actually bring about a positive change. How do we balance these forces in our own lives? Quite often we pick an area of "expertise" in which we believe we can passively absorb a sufficient amount of information to justify our stepping into the fray ourselves. The more thoughtful approach is to tightly connect reflection and action in our daily lives. After all, reflection is an action too with some cost of time attached, and the best ideas are those born of the greatest real-world feedback. Speeding the two-way feedback cycle between one's thoughts and one's actions is really a noble ideal to pursue when it's practical to do so. In extreme cases of course, one cannot stop to reflect with every step - one just has to trust their instincts and take the action that seems the most accurate at the time. With this caveat in mind, it becomes clear why ethical and social thought is so multi-dimensional, even fractal, because many self-similar feedback loops are operating in our lives simultaneously. At the highest level of ethical abstraction, we may be in the middle of questioning our religious faith, or we may be rock solid in our belief system. This on and off pattern of thinking and action trickles down to the very simplest action - typing on a keyboard - an action for which I don't have any regret at the moment, but perhaps if I get hungry or my fingers sore I'll quickly reconsider. I could question everything all at once, but that would be almost immediately depressing - uncertainty isn't fun, but neither is absolute certainty - so I tie many of my questions to the feedback I receive from my actions, and ultimately a rather "modular" equilibrium of thought tends to keep me satisfied.
This is an important idea to swallow to understand how I see economic thought. Economics is a manner of thinking that is immediately descriptive and influential. At least something that I do today I'll do (perhaps indirectly) because I believe that free markets are generally an enlightened tool for letting people self-organize, optimize, and generally be pretty happy. If I didn't believe that at all, then I'd no doubt be rather disenchanted with almost everything going on around me. This was of course the way Marx viewed the world he inhabited. Since he had prophesied that free markets would essentially exhaust themselves into communism, he found no enjoyment out of the prospect of newly discovered resources in Australia. He would no doubt be annoyed that capitalists are launching into space (e.g. - Virgin Galactic, Ansari X prize, etc...) and have designs on the abundant mining resources of the moon and Mars. Once Marx's model of the economy was fixed in his mind, he supported the forces that fit into the model and was disturbed by anything that seemed to contradict it.
This is third-person economics, and anyone making models of behavior, or making forecasts with the hope of being correct is engaging in it. It is essentially an attempt to make a contribution to the 'big picture' of economics - to the all-encompassing belief systems that can dictate subsidiary beliefs. Left unquestioned for too long, these belief systems will not flexibly adapt to reality and can suddenly face wholesale decline. These top-down views of the world succeed in proportion to their willingness to adapt. With Catholicism we had Vatican II, and with mathematical economics we have the seemingly endless flexibility of adding new variables into our models. It's nearly a matter of energy conservation though, that we have these third-person beliefs. Claiming that it's "simply the way the world works" is often a handy way to get around the accusation that you're doing nothing to change it. If every individual wanted to change the world at the same time, there would certainly be some unnecessary conflict, so in the long run it really does make good sense for us all to select a handful of 'big picture' vantage points - even if they are only approximations.
William Gibson on the other hand, who was also clearly disturbed by some of the economic and technological trends he was observing in the 80s, decided to think about it in an entirely different way. The argument that Neuromancer is economic almost inevitably includes the observation that its thematic elements and dystopian foreshadowing influences the economic agents who read it. The book is built around the idea that the economy of the 80s could shape a world of tomorrow that nobody would want to live in. This is not a model. Nothing about Neuromancer suggests an effort to model anything. Gibson was holding up a mirror; structuring his book to cleverly convey a warning about what we're doing to ourselves out of faith in our economic belief system. Perhaps mathematical economists would hesitate to call Neuromancer "economics" because they could explain away Gibson's paranoia and its corresponding niche market of readers with some sort of variable. Maybe the success of Gibson's book simply meant that the Pna factor was increasing slightly, and econometricians would rush to say that this new factor is correlated with changes in the technology level A. Treating Gibson's work as something that can be quantified and predicted by a larger and more comprehensive framework is fundamentally unfair, because, as the title of this blog suggests, these same econometricians would have to somehow deal with the impact of their own ideas on the economy. One quickly imagines a mathematical economist trapped into an endless loop of modeling the reasons for his own occupation, and after soon realizing that his conclusions had helped influence a new economic reality, set about on a further iteration of self-examination (ad nauseum, to be sure).
So let's imagine for a moment that Gibson had been a die-hard third-person economist, making elaborate models, and arriving at predictions about where economic forces were conspiring to take us. Useful work insofar as it leads this hypothetical Gibson to a conclusion that he has very high statistical confidence in: the world will almost certainly evolve into the world described in Neuromancer. Now, the economist Gibson does something very strange indeed. Unlike other economists, who might go testify in front of Congress, or publish papers in scholarly journals, Gibson devises a method for influencing the future economy: write a science fiction novel and publish it for all to read. Bring the warning to the people who most need to hear it.
This is of course not who William Gibson was or what he did - he was a science fiction novelist from the start and not a classically trained economist. But the point remains that even if he had been a classically trained economist it could been an entirely rational decision for him to eschew traditional avenues of economic influence and go straight to the people and urge them to reconsider the path his economic models seem to indicate they've set out upon. If you want economic thought to really matter, you have to come up with economic thoughts that have the power to change minds and influence those who comprise the economic system you observe. In Hard Times Charles Dickens cleverly pulls the reader into a world dominated by stringent "Fact" and the coldest definition of rationality. Neuromancer reads like a comic book or action movie.
This is first-person economics. This is the economics of influence, where ideas are essentially measured by their practical appeal to a large audience. The novelist Ayn Rand, whose libertarian ideal was the centerpiece of her fiction novel Atlas Shrugged, explained in The New Intellectual that, "In a certain sense, every novelist is a philosopher, because one cannot present a picture of human existence without a philosophical framework; the novelist’s only choice is whether that framework is present in his story explicitly or implicitly, whether he is aware of it or not, whether he holds his philosophical convictions consciously or subconsciously." No matter what you may think of Rand's beliefs, this point is very sensible. It is a good justification for including novels about economic trends or issues in the catalogue of economic thinking, because all schools of economic thought "present a picture of human existence."
Lastly, this ties back in with my "modular" equilibrium discussion above by considering what happens when one reads a novel. By empathizing with the characters represented one is always considering what they might do in a similar position. Connecting your daily feedback process with a fictional character's is far more likely to convince someone to actually change specific behaviors. Large third-person economic models can have an enormous impact, as Marx and the neoclassical economists have clearly shown, but the nature of the impact is top down. One can subscribe to third-person economics and feel reassured that private property is a good or bad idea, but one must more deeply contemplate first-person economics and consider what it means for daily lifestyle choices.
1/24/08
Theme for the Semester: Economic Perspectives on Educational Accreditation
There is a fundamental economic dynamic to educational administration. Students are often artificially placed in situations to compete for the "scarce resources" of teacher approval: grades, PhDs, points, diplomas, and every other manner of educational credit or record comprise what I like to call "educational currency". This notion is also familiar to members of my generation who grew up playing video games - it was only by the score, or the accumulation of experience points, that one knew how they stacked up against other players. But where does the fundamental value of a currency come from? Currencies used to be backed by metals. If you could give someone a hunk of gold for their currency they were willing to hold it and use it - kind of silly. Now currency is essentially backed by the trust we place in good monetary policy. As long as government agencies are responsive to the needs of the economy both at home and abroad, we feel secure in holding our dollars (a presumption that today looks a bit shaky, due to the dollar's decline against the euro).
Educational currency works in a way similar to these fiat currencies we're already familiar with. The extent to which having a particular chunk of educational currency is considered valuable largely based on institutional trust. Duke is "known" to be a good school, so a Duke diploma is thought to be worth the extra "investment" (by a fair number of parents at least). But what if Duke has an off year? Or what if Duke's faculty is infiltrated by fraudsters who hand out A's to even the most anti-intellectual students? How is an employer going to know a diploma from Duke, or any other school, actually means? In other words, if Duke checks and improves upon students, who is checking and improving upon Duke? The answer of course is that accrediting organizations do - independent third parties who have the authority to renew Duke's accreditation, and all the other schools. Without accreditation, a school might as well close its doors, because its credits will not transfer, and its graduates efforts will be questioned or rejected by potential employers. This is a very real concern today, as for-profit universities have recently attempted to open up this debate in Congress, calling for credit transferability to be ensured between their programs and non-profit or state institutions. It is the accreditors that provide a standard by which we've traditionally put our faith in the educational credits handed out by universities and community colleges, and that standard is really what needs to be brought to bear on the problem of educational credit transferability and reliability - somehow, but the debate rages on.
So how are people approaching this problem? And is economics important to all these questions?
The multiple economic perspectives on this issue are going to fascinating to explore. Educational credit is seen as many different things by educators, some viewing it as a necessary evil (small liberal arts colleges), and others embracing the rigid standards necessary for measuring a professional skill (training schools). If we do live in a knowledge economy, then the role of educational currency, from an neoclassical economist's perspective, would clearly be its power to get the holder a new job quickly and easily, easing transitions in the labor market. But the moral/philosophical view is going to certainly take issue with a life's intellectual achievement being reduced to pieces of paper. It may be a contentious discussion indeed...
The following preliminary bibliography contains articles written about education from both a policy perspective and an economic perspective.
Preliminary Bibliography:
Mause, Karsten. "Rethinking government licensing of higher education institutions." European Journal of Law and Economics (2008) 25: 57-78
Lien, Donald. "International accreditation and brain drain: A simple model." Economics of Education Review. 25 (2006) 335-340.
Blumenthal, Robert A. "What does accreditation really mean?" The John William Pope Center for Higher Education Policy. November 21, 2007. Accessed online: <http://www.popecenter.org/issues/article.html?id=1928>
Leef, George. "Accreditation has no clothes." The John William Pope Center for Higher Education Policy. January 15, 2001. Accessed online: <http://www.popecenter.org/news/article.html?id=1487>
Siskos, Yannis. et al. "A multicriteria accreditation system for information technology skills and qualifications." European Journal of Operational Research. 182 (2007) 867-885.
Educational currency works in a way similar to these fiat currencies we're already familiar with. The extent to which having a particular chunk of educational currency is considered valuable largely based on institutional trust. Duke is "known" to be a good school, so a Duke diploma is thought to be worth the extra "investment" (by a fair number of parents at least). But what if Duke has an off year? Or what if Duke's faculty is infiltrated by fraudsters who hand out A's to even the most anti-intellectual students? How is an employer going to know a diploma from Duke, or any other school, actually means? In other words, if Duke checks and improves upon students, who is checking and improving upon Duke? The answer of course is that accrediting organizations do - independent third parties who have the authority to renew Duke's accreditation, and all the other schools. Without accreditation, a school might as well close its doors, because its credits will not transfer, and its graduates efforts will be questioned or rejected by potential employers. This is a very real concern today, as for-profit universities have recently attempted to open up this debate in Congress, calling for credit transferability to be ensured between their programs and non-profit or state institutions. It is the accreditors that provide a standard by which we've traditionally put our faith in the educational credits handed out by universities and community colleges, and that standard is really what needs to be brought to bear on the problem of educational credit transferability and reliability - somehow, but the debate rages on.
So how are people approaching this problem? And is economics important to all these questions?
The multiple economic perspectives on this issue are going to fascinating to explore. Educational credit is seen as many different things by educators, some viewing it as a necessary evil (small liberal arts colleges), and others embracing the rigid standards necessary for measuring a professional skill (training schools). If we do live in a knowledge economy, then the role of educational currency, from an neoclassical economist's perspective, would clearly be its power to get the holder a new job quickly and easily, easing transitions in the labor market. But the moral/philosophical view is going to certainly take issue with a life's intellectual achievement being reduced to pieces of paper. It may be a contentious discussion indeed...
The following preliminary bibliography contains articles written about education from both a policy perspective and an economic perspective.
Preliminary Bibliography:
Mause, Karsten. "Rethinking government licensing of higher education institutions." European Journal of Law and Economics (2008) 25: 57-78
Lien, Donald. "International accreditation and brain drain: A simple model." Economics of Education Review. 25 (2006) 335-340.
Blumenthal, Robert A. "What does accreditation really mean?" The John William Pope Center for Higher Education Policy. November 21, 2007. Accessed online: <http://www.popecenter.org/issues/article.html?id=1928>
Leef, George. "Accreditation has no clothes." The John William Pope Center for Higher Education Policy. January 15, 2001. Accessed online: <http://www.popecenter.org/news/article.html?id=1487>
Siskos, Yannis. et al. "A multicriteria accreditation system for information technology skills and qualifications." European Journal of Operational Research. 182 (2007) 867-885.
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