[FRIAM] of straw and steel

Fri Jul 2 21:33:06 EDT 2021

EricS, 

Have you looked at Sandel’s Tyranny of Merit or Wilkerson’s Caste?

If on thinks hard enough about “merit” it becomes deeply confusing.  The idea of Merit is something that I got on my own, right?  So working back from now to birth whence exactly did I get that merit.  Even what I got from my genes was random right.  At what point do get to embrace my merit as of my own making?  So far as me, myself, is concerned, it’s all luck all the way down. That is what the declaration of independence means when it says that all [humans] are created equal.  

Nick

Nick Thompson

 <mailto:ThompNickSon2 at gmail.com> ThompNickSon2 at gmail.com

 <https://wordpress.clarku.edu/nthompson/> https://wordpress.clarku.edu/nthompson/

From: Friam <friam-bounces at redfish.com> On Behalf Of David Eric Smith
Sent: Friday, July 2, 2021 7:47 PM
To: The Friday Morning Applied Complexity Coffee Group <friam at redfish.com>
Subject: Re: [FRIAM] of straw and steel

I think there is some version of this for college tuitions, too, though I am partly muddy-headed and what I say next will probably fail the logical map at some points.

The general idea is some combination of what is in Ginsberg’s book

https://www.amazon.com/Fall-Faculty-Benjamin-Ginsberg/dp/0199975434

but even more so in some article I read in J. Higher Ed or something (which I have not succeeded in finding and I need now for other projects), to the effect that:

1. There is been a massive cumulative re-allocation of money out of need-based grants and to merit-based scholarships over the past 40 years or so.

2. Sounds good, of course: who could be against rewarding merit.

3. Except that, de facto, what one largely rewards is preparation, which is a proxy for parental wealth and membership in one of the culture’s preferred classes, races, regions, or what-have-you.  The part of this that I am pretty sure is in Ginsberg is also fishing for parental wealth by building snazzy student centers, on-campus water parks, etc.  All that at enormous cost.  The punchline of all this is that WHEN THE BUSINESSMEN TAKE OVER THE CONCEPT OF THE UNIVERSITY, THE UNIVERSITY BECOMES A BUSINESS.  So, monies spent, such as tuition deferment whether called grant or scholarships, is in their worldview VENTURE CAPITAL.  (That was what was in the JHE article.)  And the return that venture capital is seeking is parental tuition money.

So how does this map to Glen’s EricC’s comments: The nominal tuition is very high (4x what it was in the 1970s, per faculty actually teaching or doing research).  That high tuition isn’t actually cost-received from most parents, because a significant fraction of it was spent either giving their kids scholarships, building water parks and student centers, or whatever.  However: if they had given it in need-based grants, they wouldn’t be getting _anything_ from the parents.  So in the businessman’s world, the investment gathered a maximized monetary profit, which was the criterion for how to make it.  

As in EricC’s point below, there will be some very rich parents with kids so lazy or dull that they aren’t well-prepared even with opportunities, so one can’t give them scholarships, and those will pay the sticker price.  Those are the ones who buy the article at $19, or medical products or services at list price.  High profit but small margin on them.

In all the recent and ongoing conversations about tuition jubilee or free college in the US, I worry that everything real and solvable gets ruled out before we ever start, because the above characterization of the real business model isn’t front and center.  Not very different for medical products and services (I am trying not to use the completely bleached expression “health care”), though that has been around long enough that a fuller story is not so uncommon to find.

It is right that we have mortgaged a whole generation of kids with unplayable tuition loans, and probably somebody should eat that cost.  Kind of like when German banks bought junk mortgage bonds in the US, they should actually have been allowed to fail for having not done due diligence, rather than being bailed out by a government that then had to get the money to float them by leaning on somebody else (the Irish, the Italians).  That of course doesn’t really work for the reasons correctly given in Minsky’s Ratchet

https://www.amazon.com/Stabilizing-Unstable-Economy-Hyman-Minsky/dp/0071592997

But the threat of it somehow should be used, while the problem is building, to keep the banks doing due diligence, and to stop the schools from hiking tuition and spending to profit on the margin, or medical products and services skyrocketing as a negotiating point against insurance companies, etc.  The system either gets fixed as a system, or not at all.

There must be a really great book somewhere, which gets the data and the economics better than I can, and also explains this clearly enough that it can be an everyman’s book.  It’s messy and a bait indirect, but it’s not so hard as to be incomprehensible.  Does anybody know such a book?  

Eric

On Jul 3, 2021, at 5:51 AM, Eric Charles <eric.phillip.charles at gmail.com <mailto:eric.phillip.charles at gmail.com> > wrote:

Something Glen's analysis,  there are MANY things in the modern economy that fit things model,  including healthcare.  

The insurance companies demand a steep discount in procedures.

The hospital's have costs to cover. 

The only possible consequence is to dramatically increase the sticker price.  There hospital doesn't expect someone to pay that much for a major procedure,  they expect bulk buyers (i.e., insurance companies) to drive buisness at ther bulk price. (If some random person does pay sticker price every so often,  all the better, but that's not ther primary goal.) 

Mattress companies, clothing stores,  etc. that have massive sales 3/4th of the year are doing the same sort of thing. 

See also my continuous complaints about the "Big Mac Index". Only a small % of Big Macs in the U.S. are purchased at sicker price.  The sticker price is primarily intended as something to discount off of. 

On Wed, Jun 30, 2021, 10:56 AM uǝlƃ ☤>$ <gepropella at gmail.com <mailto:gepropella at gmail.com> > wrote:

Maybe. But remember, despite the prescriptive linguists out there: a) "troll" is not an insult and b) it can be accidental.

All 3 of Russ' "people with grants", Barry's "rent seeking", and Pieter's "publishing profits are bad for science" responses are a trawler's delight! Rather than talk about the Strawman fallacy and it's variations, we're talking ... [sigh] again ... about capitalism and money.

Call it naivete if you want. But it was a very effective troll.

On 6/30/21 7:47 AM, thompnickson2 at gmail.com <mailto:thompnickson2 at gmail.com>  wrote:
> Oh, I see.  The point is to make getting the individual item so expensive that it just balances driving to the library (or doing ILL) with subscribing to the Journal.  It's pure manipulation; costs have nothing to do with it.  
> 
> Glen, I think you persistently confuse naivete with trolling. 

-- 
☤>$ uǝlƃ

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