My piece in the National Interest is now up under the exciting headline China’s imminent collapse. That’s great for reader interest – the piece has only been up a few hours and is already #1 on the Most Popular list, but I fear readers will perceive a bit of bait and switch when they reach the conclusion
Given the opacity of the system, there is no way of telling how and when a breakdown might occur except to observe that is likely to be precipitated by an economic crisis of some kind. Moreover, there is no way to tell whether a crisis would produce a relatively smooth transition towards democracy or something more chaotic and perhaps bloody.
Paul Krugman tells me he gets to choose his own headlines, a rare privilege in the world of newspapers and magazines. I asked my Australian Fin Review editors about this and they have said I can suggest them if I want to, though the tradition there runs more to cute subeditorial puns that I can’t really replicate.
Meanwhile apologies to readers for not providing accessible links to the papers I mentioned in my previous post. Through a mental process I won’t try to explain, I’d convinced myself that simply uploading the papers to CT would result in the imminent collapse of our hosting facility. Looking at the filesize that’s silly. So here are near-final drafts of:
The Politics and Society piece on financial markets
The Chronicle of Higher Education piece on inequality and the admissions race
{ 26 comments }
Barry 09.13.11 at 6:41 pm
Thanks!
Watson Ladd 09.13.11 at 7:01 pm
This seems to be ignoring the role of financial aid. Some elite schools have need blind admissions and very generous financial aid policies. Others don’t. So what I would claim is that income inequality in access to higher education reflects inequality in access to preparation for higher education as well. Certainly it seems weird to single out the Ivy League when its schools with smaller endowments where money directly purchases educational success.
soru 09.13.11 at 9:11 pm
Really can’t see any chance of a revolution in China, given:
1. they have a professional, all-terrain military that is not going to be meaningfully challenged by any civilian or tribal groups.
2. life experience of everyone who would be making the decisions is that sending in the tanks led to 20 years of peace and prosperity. So a split in the military on that topic is not plausible, at least until everyone who remembers Tiananmen is retired.
3. outside intervention is not something anyone at all would consider on the cards.
Perhaps they will choose to liberalise western-style. But surely far more likely is that they will further develop and formalise their existing system. Something like a limited franchise democracy, where the franchise is granted not by race or property, but by service and loyalty.
As far as I know, that is not something which there is a modern precedent for. Even if it does end up being inherently contradictory, it seems likely those contradictions could take generations to manifest.
Watson Ladd 09.13.11 at 10:51 pm
Soru, I think that once the party creates a limited caste of citizens explicitly people will be angry. From the Hundred Flowers campaign onwards there has been a demand for a government responsive to its citizens. As the economic conditions begin to worsen, this will lead to increased unrest.
StevenAttewell 09.13.11 at 11:27 pm
Quiggin’s piece if anything understated the situation. Richer yet lower performing seniors attend college at higher rates than students who score an entire quartile higher yet who are poorer almost all the way up and down the scale.
Moreover, financial aid can also be a smokescreen for increasing inequality of access – as in the case with the University of California. The Blue/Gold program, which President Yudof touts as the reason why year-over-year double-digit tuition increases won’t touch the middle class, is in reality not more than a bandaid. Expecting students to earn and save $4000 a year for tuition and take out $5000 a year in loans, on top of regressive family contributions is not a solution.
Soru 09.13.11 at 11:56 pm
@4 no doubt there will be anger. And if they were Bruce Banner, that anger would be politically relevant.
Turning green and crushing tanks is an unlikely mechanism for political change, but the alternatives are scarcely more plausible.
Really, the only way for things to end well is for party cadres to look at the west, and see something they would positively like to be. That would require a change to the prospects, image and reality of the west that would stretch the sunny disposition of a sunflower in a solarium.
Watson Ladd 09.14.11 at 1:30 am
Education costs are spread over 18 years, and don’t have to be payed if the child dies. So the poor family just needs to save 3% of its income for 18 years. Also $20,000 in debt might seem like a lot: but if you are confident of being able to have a significantly higher income as a college graduate it is worth it. Furthermore, that’s only 15% of income for 25 years, or less if you decide to work in the public sector. I’m not really seeing the financial impossibility here: while a 15% of annual income is rough, and 25 years is a fairly long time for it, it also pays down the amount of the loan, so very few people will be on the hook the full 25 years. Sure: free would be a lot better, and slashing at the UC administration would do some wonders. I’ll probably wage a similar anti-fee battle at the UofC in my abundant spare time.
Now, the second and third quartile of students do not attend UC. They attend private four year schools. These are not need blind, and don’t have a lot for aid. So they contribute heavily to the problem. If the schools in the elite group take only first quartile children (a simplifying assumption) and second rate schools take second rate children, then a sharp drop in the fortunes of the poor in admissions is probably due to something the second rate schools do. The first rate schools are responsible for that 2% of dumb jocks who get in on the basis of money, so they don’t have entirely clean hands. But I bet more of those are at some schools then others, and probably those where someone with those credentials can expect to graduate.
StevenAttewell 09.14.11 at 1:50 am
1. Most poor families do not have 3% of their income to save.
2. $20000 in debt assumes that the student in question can earn $4,000 a year over living expenses, that parents can kick in at the presumed level, and it doesn’t cover campus fees, textbooks, health care, and other costs. And “if you are confident of being able to have a significantly higher income” isn’t necessarily the case at the moment, as rates of student defaults show. In any case, we have to ask – is it a good idea for young people to start out with substantial debts at a time when they should be building up equity?
3. The quartiles are a problem for higher education as a whole.
Watson Ladd 09.14.11 at 2:21 am
@Steven: Well, they have to save 10% or go to jail for tax evasion. Thank you Congressional Democrats for preserving Grandma’s retirement at the cost of Jimmy’s education.
At a deeper level we have a society composed of age cohorts that cost money, earn money, cost money again, and die. The question that needs to be asked is how do we move money from where it is made in time to where it is consumed, keeping in mind that those who consume more in the form of education will probably earn more. One way is human capital contracts: those who are earning money pay money to purchase some percentage of labor power that will produce money when they can no longer. Another is loans and deposits. While you might think that taxation isn’t either of these its very similar: we are taking money from those who are currently producing it to support the next generation. However, some in the next cohort are better able to pay for gains they will mostly realize themselves then others. So it looks like any fair system will be means tested, although it probably would be significantly more progressive then the UC system above.
StevenAttewell 09.14.11 at 2:32 am
“Thank you Congressional Democrats for preserving Grandma’s retirement at the cost of Jimmy’s education.”
Facetious.
1. “Over all, the report found, published college tuition and fees increased 439 percent from 1982 to 2007 while median family income rose 147 percent.” That’s not a tenable system for middle class families, let alone working class families, whose median income has not risen as much.
2. Progressive taxation is a much more preferable alternative to means-testing, both on political and policy grounds.
John Quiggin 09.14.11 at 3:02 am
@Watson Ladd – you appear to be assuming, as well as points raised above
(a) 1 child per family,
(b) no other requirements for saving
Add in a second child going to college, and your low-income family, even saving at the average rate for all households (around 6 per cent) has nothing at all to cover medical catastrophes or unemployment, let alone think about buying a house or having more than Social Security to retire on.
StevenAttewell 09.14.11 at 3:52 am
I was also going to add, we’ve had a couple recessions in the last 18 years, along with significant crashes in the value of the stock market and the housing market. Might put a dent in people’s savings.
praisegod barebones 09.14.11 at 10:09 am
Watson Ladd@2, soru@3
I’m very puzzled as to why financial aid for college students or its absence is likely to bring about (or forestall) an economic collapse in China. Presumably there’s some complicated story about how domestic debt might impact on international financial markets, but…can someone join the dots for me here?
Watson Ladd 09.14.11 at 10:47 am
@John: Okay, so we need redistribution. I’m not going to argue with that. Unfortunately schools are spending less and less money on professors as compared to administrators. Any increase in state support is likely to lead to quite a bit going to grow the administration, and supply side subsidies are doing exactly what you would expect. What we need is a bargin: in exchange for the state paying the tuition, schools agree to be tuition free and to accept constraints on the growth of administration.
soru 09.14.11 at 11:02 am
@13
I understand the standard operating procedure is to read the first 20 words of an article, then comment. Not a high standard, but one it is nevertheless possible to fail to meet.
Nababov 09.14.11 at 11:16 am
“Unfortunately schools are spending less and less money on professors as compared to administrators. ”
Perhaps it’s because they’ve been forced to operate in an environment where managerialism, tight bottom lines, ROI goggles and “sponsorship engagement” are seen as more necessary than actual…y’know…learning and stuff.
I mean the decision to turn higher education into adminstration-driven profit centres first and foremost was not generated internally.
Metatone 09.14.11 at 9:22 pm
Worth noting that the Chinese army is not really a unitary body, there are strong regional tensions inside the army, reflecting the ambitions of various generals. That is a possible source of instability.
Witt 09.15.11 at 12:32 am
So the poor family just needs to save 3% of its income for 18 years.
Are you aware of the enormous range of means-tested government programs and benefits that this family would now be ineligible for? Assets of more than about $4K are strictly forbidden in many cases.
So the poor family “just” needs to save 3% of its income, plus abandon all hope of utilizing other programs meant to make them less poor, or at least make their poverty less miserable and life-threatening.*
*E.g., LIHEAP.
David 09.15.11 at 2:21 am
“Taken together, the Ivy League and other elite institutions educate something less than
1 per cent of the US college-age population, just about enough to fill all the slots
in the top percentile of the income distribution.”
As a parent of a high school senior now going through this excruciating process, I just wanted to point out that more and more of the top tier schools are increasing their foreign enrollment, so that 1% is, in fact, shrinking, making the “struggle” for admission even more intense.
Watson Ladd 09.15.11 at 2:00 pm
Oddly, its the Republicans who have fought against these cliffs in eligibility. Does anyone remember what Milton Friedman actually stood for?
David, why should the slots in the best schools in the world be reserved for Americans?
Steve LaBonne 09.15.11 at 4:59 pm
As soon as those schools relinquish their tax-exempt status I’ll be willing to discuss this point.
Jack Strocchi 09.18.11 at 11:12 am
Watson Ladd @ #20 said:
Oh I don’t know, its a puzzlement. Maybe Franklin and Jefferson scribblings might offer a few clues as to why venerable institutions, the patrimony of the nation, might establish preference for that nation’s citizens, whose forebears actually endowed those institutions:
Let the democratic nation state be as arbitrary and reactionary and un-meritocratic as you like. It still has three forms of legitimacy going for it that other social organizations, so beloved of the Davos push, don’t: popular accountability, cultural identity and traditional legacy.
Watson Ladd 09.18.11 at 8:03 pm
Steve, we don’t demand that Doctors Without Borders operate with a US first policy. Why should we demand that of schools?
Jack, when foreign students were winning the US the war I don’t remember complaints. The best in the world will go wherever they can work with who they want, which is why gentile scholars left when Hitler rose to power. The best students from abroad go home only because they aren’t wanted here, and the INS is a PITA to deal with.
Jack Strocchi 09.19.11 at 1:25 am
Watson Ladd @ #23 said:
Ahem…Teller, von Neumann, Szilard, Fermi, Bethe, von Braun and Einstein were not “foreign students”. They were Herr Professors, of the “monster brain” variety. Moreover they were not globe-trotting job-hoppers. They mostly came to the US to were flee and fight tyranny, and they signed on for the duration.
If I were an American I would not have a problem with Ivy League universities talent-scouting and head-hunting the best professors in the world. But in this case the subsidy is going the other way, from other peoples patrimony to the US.
Its “not even wrong” to compare the Los Alamos crew to the current batch of F1 and H-1B visa applicants, fresh of the plane from Shanghai.
Watson Ladd 09.19.11 at 1:37 am
So if they can poach talented professors, why not talented students? Of course, that Oppenheimer was a beneficiary of this never entered. How many New Yorkers do you think have US ties before the second generation? Cultural identity is meaningless: the city that America loves to hate which is shown in every cop show, our cultural capital, is deeply enriched by the 18 languages the subway map is printed in, the wide range of languages which people speak in the streets, and the enormous array of foods. What’s the american cultural identity when stripped of chinese food, pizza, bagels, and beer?
Jack Strocchi 09.19.11 at 6:37 am
Watson Ladd @ #25 said:
Because poaching proven talented professors for employment at elite universities generally improves the national interest, especially in the freakish case of the Mettle-European intellectual diaspora and WWII-Cold War. Whereas poaching unproven talented students for enrollment at elite institutions will generally harm the interests of aspiring native-born students who miss out on places.
It also harms the interests of the nation that nurtured the foreign students. And possibly puts the squeeze on affirmative action places. Politics in the post-Cold War era is mostly Who?/Whom?
The national interest is no different in principle to the church, club, faculty, company and family interest. A certain amount of exclusivity is in the established member’s interest. Why is this obvious fact so hard for liberals to understand?
Watson Ladd said:
Don’t you mean LA? For sure in NYC’s glory days the mean street rivalries between white ethnics (Irish, Italians & Jews) made city life interesting. But what that has to do with feeding more foreign student cash cows into the maws of the Ivy League is a mystery to me.
These days Manhattan Kultur is mostly white – a la SATC. Very few new immigrant/foreign students can afford to buy/rent into Manhattan’s pricey private real estate market. The Tower of Babel subway signage is helpful to tourists visiting the theme park.
And why is an integrated national cultural identity “meaningless” whilst differentiated global cultural identities are supposed to be, by implication, more meaningful? That doesn’t even make sense as meaning comes from the coherence of values.
In any case Manhattan’s unique character comes mostly from its architecture which has a very particular cultural identity – they don’t call it Gotham City for nothing. And the Jews, who have now found a more sacred sanctuary – they obviously didn’t get your memo on the meaninglessness of national cultural identity.
Watson Ladd said:
As if America had no cultural identity prior to the Ellis Island era. Have you heard of the WASPs? I realise they became extinct c 1965 but there is abundant fossil evidence of their presence under-foot and above-ground.
Why is it that all debates about cultural identity are supposed to be settled by an appeal to gastronomic diversity? As if provision of an authentic smorgasbord was the first duty of the statesman. We need some kind of analogue to Godwin’s Law to prohibit this lame debating tactic.
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