The Nordic Theory of Everything (part 2)

February 8, 2018

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Anu Partanen does a good job critiquing the American mindset that pits individual liberty against “Big Government” or the “welfare state.” She argues that a system of social supports available to every citizen is actually liberating, contributing to more rather than less freedom, independence and opportunity. Of course, if critics of the Nordic countries could show that such a system makes people lazy and underachieving, that would undermine her argument.

Individual and national excellence

The American system does produce a lot of high achievers, with its relentless emphasis on competition and its concentration of rewards at the top of the distribution. The price we pay for that is leaving so many people behind, the slogan of “no child left behind” notwithstanding. By placing more emphasis on cooperation and the public good, Nordic countries are noted for a high standard of general excellence.

Partanen describes Finland’s educational system as “one of the highest-achieving public education systems the world has ever seen.” Finnish students consistently rank near the top in international assessments of reading, math, and science. Finnish schools accomplish this without lengthening the school day, assigning much homework, or skimping on less academic subjects like arts and crafts.

Finland rose to the top in international rankings by deliberately tackling educational inequalities that were once worse than in the United States today. It succeeded in reducing the disparities among schools in funding and educational outcomes, as well as the performance gap between different kinds of students. It raised standards for teachers, requiring at least a a master’s degree from the elementary level on. It promoted teaching excellence by supporting rather than attacking teachers, making the profession so attractive that “teacher-training programs are among the most selective university majors in the country.”

In contrast, the United States creates large resource disparities by relying on local property taxes to finance public education. It has a much higher rate of child poverty, many more underfunded schools, and a widening gap in test scores between rich and poor students. Educational reforms emphasize more testing, closer monitoring to identify poor teachers and underperforming schools, and more public support for private or privatized schools for students fortunate enough to attend them. Consistent with our competitive approach to things, such reforms help a few students while so far failing to produce much increase in excellence across the board.

In higher education, American universities are known for their excellence in research, but less for their undergraduate instruction. When the OECD’s Programme for International Student Assessment included university graduates for the first time in 2013, Finnish students scored among the best in the developed world, while Americans were below average.

Partanen does not prefer the Nordic model in all respects. She continues to admire certain aspects of American culture:

If I could choose, I’d want my child to have the best of both worlds. From Finland I would take the affordable, relaxed day care, highly educated teachers, high quality of all neighborhood schools, and lack of tuition. From the United States I would take the diversity of student populations and the systematic and inspiring way that the best American schools encourage students to express their individuality, think for themselves, and communicate their opinions and skills to others without self-consciousness or unnecessary timidity.

With regard to excellence in health care, Partanen says that world-class health care is available in both the U.S. and Finland, but is available to more of the population in Finland. There it is a universal service like public education, while here access depends much more on what you can afford. She cites a 2011 Commonwealth Fund study comparing developed countries on quality, access, efficiency, equity, and healthy lives, as well as on death rates from preventable or treatable conditions. “The United States ranked dead last.”

The pursuit of happiness

If Finland surpasses the United States on many objective indicators of well-being, why are Americans noted for being more upbeat and optimistic? Although Partanen does express some admiration for that “all-American optimism,” she thinks there is something a little compulsive and phony about it. We tell our children that everyone is special, and they can be anything they want to be, but then we expect each of them to rise above their peers and become a super-achiever through their own effort. In our winner-take-all system, you’d better be a high achiever, or you risk joining the ranks of the left-behind. So you embrace the can-do spirit and resist admitting defeat.

…In the absence of the kind of true security that comes from things like being able to pay your bills, having affordable health care, knowing your children will get a good education no matter what, or being able to take time to rest, all you can do is either give in to depression or try to build your own personal well-being bubble—with yoga, meditation, diets, and keeping your thoughts in check. That—or eating fast food and burying your worries with the TV remote.

The U.S. also has a huge self-help industry to sell you the means of personal success, from SAT prep courses to seminars on how to get rich in real estate. So corporations profit, even as Americans dream of what they may never have.

Finns have much lower expectations for standout success, and Partanen admits that they can take this attitude too far. They can emphasize equality to the exclusion of uniqueness. Perhaps they underestimate what some individuals can accomplish, as much as Americans overestimate it. But the upside of that pessimism is that Nordic citizens are less tolerant of social conditions that impede the development of whole classes of people. “They are quick to demand real changes that improve their external circumstances.”

Trying to find some middle ground, Partanen suggests combining American positive thinking with Finnish realism. For Americans, that means recognizing that individuals do have great potential, but they need supportive social structures and policies to help them fulfill it.

Toward a stronger economy

Defenders of the American system like to treat some of its worst features–notably, the extreme gap in wealth and income between social classes–as unavoidable side effects of a dynamic and growing economy. We must reward the biggest winners, even if there isn’t enough left over to provide other people with a decent life. The Nordic societies undercut that argument, since they have achieved economic growth and general prosperity with far less inequality.

The United States and Nordic countries both “rank among the most business-friendly nations in the world,” but accomplish this in different ways. U.S. businesses benefit from weak unions, low minimum wages, loose regulation, and, Partanen argues, government assistance to the poor. She points out that American taxpayers subsidize the fast-food industry by providing over half its workers some form of public assistance, so they can survive on low wages. Nordic businesses may have to negotiate with better organized workers, pay higher wages, and provide more family leaves, but they get workers who are on the average healthier, better schooled, and less stressed.

As in other books I’ve reviewed lately, human capital is key here. “…The Nordic nations have cultivated the single most valuable resource a society can have in the twenty-first century: human capital. That dynamism, innovation, and prosperity result should come as no surprise.”

There was a time after World War II when business was booming, unions were strong, and most Americans believed that business and labor could prosper together. Somehow we have gotten into a zero-sum mindset, believing that worker gains can only come at business’s expense. Investors interpret a modest rise in wages as a sign that the economic expansion is coming to an end, so it’s time to dump stock. The Nordic countries seem to have a better grasp of a basic truth–that if a country wants its people to prosper, it has to invest in them. The investment can pay off in higher productivity and a larger economic pie to be shared by all.


Kids These Days

January 31, 2018

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Malcolm Harris. Kids These Days: Human Capital and the Making of Millennials. New York: Little, Brown and Company, 2017.

This is an unusual book, a portrait of a particular generation’s experience, interpreted in the context of a changing capitalist society. I found it reminiscent of Paul Goodman’s Growing Up Absurd from the 1950s, a book that resonated with many young Baby Boomers. Here the focus is on the Millennial generation, who were born between 1980 and 2000 and make up today’s young adults 18 to 38. Malcolm Harris himself is one of them.

Here he describes the book’s goal:

The only way to understand who we are as a generation is to look at where we come from, and the social and economic conditions under which we’ve become ourselves. What I’m attempting in this book is an analysis of the major structures and institutions that have influenced the development of young Americans over the past thirty to forty years.

Harris is not a social scientist, but just a “committed leftist and a gifted polemicist with a smart-aleck bent,” according to one reviewer. He provides no deep analysis of capitalism, but makes a broad claim that the frenetic quest for profits is now bringing society to some kind of breaking point:

Lately, this system has started to hyperventilate: It’s desperate to find anything that hasn’t yet been reengineered to maximize profit, and then it makes those changes as quickly as possible. The rate of change is visibly unsustainable. The profiteers call this process “disruption,” while commentators on the left generally call it “neoliberalism” or “late capitalism.” Millennials know it better as “the world,” or “America,” or “Everything.” And Everything sucks.

The burden of this supercharged capitalism is falling most heavily on Millennials. They will either by crushed by it, as America becomes some sort of fascist dystopia, or else lead a revolution against it. Harris sees little middle ground.

Human capital and hypercompetition

For Harris, the key to understanding what is happening to the younger generation is the idea of human capital. “We need to think about young people the way industry and the government already do: as investments, productive machinery, ‘human capital’.” Human capital is the economic value placed on the capacity for future work. New technologies can reduce that value by making existing capacities obsolete, most obviously when manual labor is replaced by machinery. But future workers can enhance their value by acquiring new capacities, enabling them to master technologies or provide some essential human input. This puts young people under pressure to become one of the value-enhanced winners instead of the devalued losers.

Isn’t this just the same old competition for success that has been a hallmark of modern society? Harris obviously sees it as more than that. As the development of human capital has become more extensive and more costly, paying for it has become a systemic problem. Society is currently organized in such a way that the benefits of human capital formation go primarily to capitalist organizations and their shareholders, while the costs fall primarily on individuals and their families. Investment in human capital is good for society, but it is risky for individual employers, since they do not normally own their workers and their future labor. Workers can leave and take their newly acquired human capital with them. So employers find it more profitable to hire workers who are already capable–or nearly capable–of doing the job; or just replace workers with robots, whose future labor they do own.

The intensified competition for good jobs becomes more than an individual competition to demonstrate merit. It is a competition among families to raise the most accomplished children they can, with the most expensive educations and all the trimmings–the music lessons, science projects, field trips, SAT prep classes, and so forth. Families of limited means are at a big disadvantage.

The paradox of productivity

In theory, the higher productivity resulting from new technologies and skills could lead to higher wages and/or more leisure. If people are more productive, why shouldn’t they enjoy a higher standard of living? And why shouldn’t the most tech-savvy generation be on its way to the highest standard of living of all? There’s little sign of that so far. “As it turns out, just because you can produce an unprecedented amount of value doesn’t necessarily mean you can feed yourself under twenty-first-century American capitalism.”

The problem goes to the heart of the capitalist system. Producing more per hour doesn’t translate into higher pay per hour if the extra output and its economic value belong solely to the employer. In that case the employer gets the benefits, in the form of higher revenues and lower labor cost per unit of output.

On the one hand, every kid is supposed to spend their childhood readying themselves for a good job in the skills-based information economy. On the other hand, improvements in productive technology mean an overall decrease in labor costs. That means workers get paid a smaller portion of the value they create as their productivity increases. In aggregate, this operates like a bait and switch: Employers convince kids and their families to invest in training by holding out the promise of good jobs, while firms use this very same training to reduce labor costs.

We may wonder why competition among employers for good workers doesn’t force them to raise wages. It does, but mainly in specialized occupations where needed skills are actually in short supply. What is remarkable is how little wages have risen in recent decades, even for college graduates. “Wages for college-educated workers outside of the inflated finance industry have stagnated or diminished, with real wages for young graduates down 8.5 percent between 2000 and 2012.” What seems to be working in favor of employers is a system that delivers a large enough supply of human capital to hold wages down, while making families bear the costs of developing that capital.

Harris notes that men and women have experienced this situation differently. “Median wages for men (50th percentile) have remained stagnant, at nearly $18 per hour, while median wages for women have increased from $11.28 in 1973 to $14.55 in 2009.” Women’s improvement in labor force participation and wages is a mixed blessing. Putting wives as well as husbands into the labor force is one way for families to try and get ahead. But it places the burden on families to work harder instead of on employers to pay better. “All work becomes more like women’s work: workers working more for less pay. We can see why corporations have adapted to the idea of women in the labor force.”

To summarize:

Technological development leads to increased worker productivity, declining labor costs, more competition, a shift in the costs of human capital development onto individual competitors, and increased productivity all over again. Millennials are the historical embodiment of this cycle run amok….

Education: The labor of enhancing one’s labor

One of my graduate school professors used to say that the social function of higher education was not to produce and disseminate knowledge, but to keep young people out of the labor force so they could serve the economy as needed consumers rather than unneeded producers. Maybe that made sense at a time when people were enjoying the new prosperity and leisure of the post-Depression, postwar era. Having recently achieved good wages and a shorter work week, unions weren’t eager to see a horde of young people enter the labor force and drive wages and working conditions down.

Harris’s take on youth and education is very different, and probably more relevant to our times. Not only are a large percentage of young people in the labor force already–70% of college students, for example–but they are working very hard at their own human capital development, primarily for the benefit of their future employers. As a result of the economic conditions described, “Every child is a capital project.”

…It’s cheaper than it used to be to hire most workers, and extraordinarily hard to find the kind of well-paying and stable jobs that can provide the basis for a comfortable life. The arms race that results pits kids and their families against each other in an ever-escalating battle for a competitive edge, in which adults try to stuff kids full of work now in the hope that it might serve as a life jacket when they’re older.

In theory, new information technologies ought to make it easier to learn. My generation could have saved many hours digging for information in the library if we could have accessed a whole world of knowledge on a laptop (not to mention the time we could have saved on a term paper if we had word processing). Paradoxically, Harris reports that American children spend more time in school, more time on homework, and less time on unsupervised play than they used to. And they are producing a lot: “Nongrade measures of educational output–like students taking Advanced Placement classes or tests, or kids applying to college–have trended upward….” Grades have risen too, and Harris is not so quick to dismiss that as mere grade inflation.

A government study reported that “the number of applicants to four-year colleges and universities has doubled since the early 1970s, [but] available slots have changed little.” That form of intensified competition allows schools to raise tuition and fees dramatically. Only part of this increase is due to reduced public funding, since the increase by private schools is almost as great. The additional revenue has not gone into instruction; on the contrary, the ample supply of graduates seeking academic employment has allowed colleges to hire more lower-paid, part-time and temporary teachers. Instead it goes mainly toward administrative salaries or amenities to attract well-heeled students.

What this all amounts to is a clear tendency for both public and private colleges to behave like businesses, passing off a lower-quality product at a higher price by tacking on highly leveraged shiny extras unrelated to the core educational mission. Stadium skyboxes, flat-screen monitors, marble floors, and hors d’oeuvres for the alumni association. Consultants of all flavors and salaried employees to make sure it’s all efficient. Competition hasn’t improved the quality of higher education, it has made colleges more like sleepaway camps or expensive resorts.

Because they are defined as students rather than real workers, students can be made to work very hard for someone else’s profit. College sports generate substantial revenue, but not for the athletes, who regularly spend thirty to forty hours a week on their sports without being paid. Many students try to enhance their credentials with unpaid internships, although research has found no more than a slight impact on job offers.

Even the time spent on social media can be seen as exploitable unpaid labor. “These technologies promise (and often deliver) connectivity, efficiency, convenience, productivity, and joy to individual users….” Older adults may see them as a frivolous form of leisure. But they are also a way that young people self-publish their creative work and build an audience for it. That also generates profits for others, most obviously for the big companies that run the sites, but also for record producers that are spared the costs and risks of developing talent themselves. They can wait and see who is becoming popular, and only then offer a recording contract.

Not only do students get little immediate reward for their hard work, but most of them have to borrow against their future earnings to finance their higher education. They have to indenture themselves to obtain an enhancement in earning power that may or may not materialize. If their schools educate them poorly–and some for-profit schools seem to make that part of their business model–borrowers are still on the hook for the money. Excessive debt is one of the reasons why today’s young adults have relatively low net worth, not just in comparison to today’s older adults, but also in comparison to young adults of an earlier time. Between 1983 and 2010, net worth dropped 21% for the 29-37 age group.

Overall, Malcolm Harris finds that the pressure to develop their own human capital has forced Millennials to compete harder for a limited supply of rewards. What they get for their harder work is the mere promise of a higher standard of living–someday. So far at least, someday has not arrived.


The New Geography of Jobs (part 2)

October 17, 2014

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Enrico Moretti makes a good case that where a worker lives still matters, and that job opportunities are unevenly distributed across metropolitan areas of the United States. The best jobs in the innovation sector of the economy are to be found primarily in a small number of thriving metropolitan areas.

I find Moretti less convincing when he addresses more general economic questions, such as how many good jobs the new economy can create. He presents a rather rosy view of job creation that would be contested by other authors.

How much opportunity?

Moretti cites the spectacular growth rates of certain kinds of jobs, such as in software, scientific research and development, and pharmaceuticals. But even in these areas, the absolute numbers of jobs are not as impressive as the growth curves (which tend to rise steeply when they are starting from close to zero). Moretti says that the innovation sector can be the main engine of economic growth without providing a majority of the jobs, but one would still like to know how much it can grow beyond its estimated 10% of jobs today, considering that manufacturing jobs used to employ 30% of the labor force.

Moretti asserts that “2.6 jobs are typically created for every one destroyed,” but he doesn’t suggest a time frame for that process or explain why job creation has been so sluggish and unemployment so high during this particular transition.

Consistent with his rosy view of job creation, Moretti regards the concentration of good jobs in certain metropolitan areas as a temporary state of affairs:

Just like people, industries have life cycles. When they are infants, they tend to be dispersed among many small producers spread all over the map. During their formative years, when they are young and at the peak of their innovative potential, they tend to concentrate to harness the power of clusters. When they are old and their products become mature, they tend to disperse again and locate where costs are low. Thus it is not surprising that the innovation sector— the part of the economy that is now going through its formative years— is concentrated in a handful of cities.

Cities that have fallen behind can catch up by means of a “big push: a coordinated policy that breaks the impasse and simultaneously brings skilled workers, employers, and specialized business services to a new location.” Apparently this is only theory, however, since “looking at the map of America’s major innovation clusters, it is hard to find an example of one that was spawned by a big push.”

I would suggest that the jury is still out on whether the information society can create as many well-paid, full-time jobs as the manufacturing society in its heyday. The last book I reviewed, Jeremy Rifkin’s The Zero Marginal Cost Society, argues that it cannot. Rifkin believes that the information age is calling into question the whole idea of the paid job as defined by capitalism. The fact that knowledge is so easily shared may place a limitation on how much it will be bought and sold in the marketplace. When people can access the ideas of the most renowned scholars on the Internet for free, how many intellectuals will be paid to think?

I accept the assumption that as machines do more of the routine work, people will be liberated to engage in more creative activity. The question is how much of that creative activity will take the form of paid work. Maybe we will do less paid work in the aggregate, but distribute what paid work there is more evenly.

Why inequality?

Moretti’s take on inequality is consistent with his belief that the demand for qualified employees is ample, and the problem is on the supply side. In other words, the system is a meritocracy, with low pay and unemployment resulting from inferior qualifications. The way to remedy that is to invest more in education and/or admit more educated immigrants. (He notes that highly skilled immigrants can be job creators rather than job stealers because of their contribution to innovation and its economic multiplier effects.)

This meritocratic view is contested by other economists, notably Thomas Piketty in Capital in the Twenty-First Century. (See my review, especially Part 3.) In his view, the distribution of income depends not just on merit but on institutional factors, such as the organization and bargaining power of unions and the influence of executives over their own compensation. The widening pay gap between executives and other workers cannot be accounted for by a widening education gap. The distribution of income also depends on the share of national income going to owners of capital, which has been rising recently (from a range of 15-25% in rich countries in 1970 to a range of 25-30% recently). This happens when the return on capital remains high although the rate of general economic growth has slowed. Getting ahead through wage growth becomes harder compared to profiting from accumulated wealth.

Moretti makes a contribution to economic geography, but his general view of the job market never gets beyond the conventional wisdom to address the more interesting controversies.

The New Geography of Jobs

October 16, 2014

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Enrico Moretti. 2013. The New Geography of Jobs. Boston: Houghton Mifflin.

Economist Enrico Moretti has a surprise for those who think that advanced means of communication and transportation have rendered the geographic location of work unimportant. The world is so connected, so the theory goes, that the same activity can be carried on almost anywhere. A factory can be located in Birmingham or Bangkok, and a software designer can work in a downtown office or a rural cabin. Moretti, on the other hand, contends that location matters, that the innovative work that drives today’s economy clusters in geographic centers of innovation. As a result, “Your salary depends more on where you live than on your resume.”

Moretti starts his book with the story of a young engineer who made a very consequential move in 1969. Seeking a more peaceful environment, he moved from Menlo Park in Silicon Valley to Visalia in a more agricultural area. In those days, the two places were statistically rather similar, but after forty years of change, they represent the geographic diversification Moretti is discussing. While Menlo Park exemplifies the thriving, high-tech, high-education center of innovation, “Visalia has the second lowest percentage of college-educated workers in the country, almost no residents with a postgraduate degree, and one of the lowest average salaries in America,” along with a high crime rate.

This is not an isolated phenomenon. Moretti calls it the “Great Divergence”:

A handful of cities with the “ right” industries and a solid base of human capital keep attracting good employers and offering high wages, while those at the other extreme, cities with the “wrong” industries and a limited human capital base, are stuck with dead-end jobs and low average wages. This divide— I will call it the Great Divergence— has its origins in the 1980s, when American cities started to be increasingly defined by their residents’ levels of education.

Moretti acknowledges that some forms of convergence are occurring as well. As poorer countries develop, many of them are becoming more similar to richer countries. Traditionally poorer regions such as the American South are also converging with other regions in many respects. But within countries and regions, some cities–such as Austin, Atlanta, Dallas, Durham and Houston in the South–are emerging as the affluent and educated centers of innovation, while others are being left behind.

From production to innovation

“Over the past half century, the United States has shifted from an economy centered on producing physical goods to one centered on innovation and knowledge.” Moretti notes that even in hi-tech areas such as computers, production jobs are declining, and job opportunities are mostly in the more professional, technical and managerial areas. We haven’t stopped making things–US manufacturing output is actually increasing, and locally made goods are often very fashionable–but manufacturing can no longer provide employment for tens of millions of people.

According to a study of companies in twelve industrialized countries, some firms are much more successful than others in finding a place in the new economy. The more successful ones “buy more computers, spend more on R & D, take out more patents, and update their management policies.” They don’t just produce what any number of other companies could produce; they lead in innovation, creating the jobs in what Moretti calls the “innovation sector.” He estimates that it currently includes only 10% of the jobs, but it is increasingly the “driver of our prosperity.” That’s because it is the major source of productivity gains, and it has a powerful multiplier effect that creates other jobs, especially in both professional and nonprofessional services. He calculates that five additional local jobs are created by each new high-tech job. Not only that, but the presence of many highly educated, highly paid workers in a metropolitan area boosts the productivity and wages of other workers in that area. As a result, even workers without college degrees are better off living in an area where many residents are well educated.

Geographic concentration

Why are the innovative companies and jobs clustered in a such a small number of metropolitan areas? A striking example is Seattle, which has benefitted greatly from Microsoft’s decision to move there from Albuquerque in 1979. The presence of one big hi-tech firm attracted others, such as Amazon, and had many other unforeseen consequences. For example, former employees of Microsoft have started 4,000 new businesses, most of them in the local area. Before the move, the percentage of college-educated workers in Seattle and Albuquerque differed by only 5%; today the difference is 45%!

Traditionally, the location of cities has depended on natural advantages such as harbors or access to natural resources. Since centers of innovation depend more on human capital, their location depends more on creative interactions among human beings. Once someone starts the creative ball rolling–a major university helps–then innovative activity feeds on itself in many ways. Moretti identifies three “forces of agglomeration” that foster the growth of an innovative center:

  • Thick labor markets: A labor market that already contains a lot of highly educated labor attracts more employers who need that labor, and vice versa. The more specialized the skills needed, the harder it is to find them outside of a major innovation center.
  • Specialized service providers: Innovative companies need specialized services such as “advertising, legal support, technical and management consulting, shipping and repair, and engineering support.” As those develop, they help create an entire “ecosystem” supporting innovation.
  • Knowledge spillovers: New ideas foster other new ideas to create a stimulating cultural environment that benefits all. In that way, education has a “social return” that benefits many others besides the holder of a degree. Moretti notes that this is a strong reason for society to share the costs of education, since it shares the benefits.

In the United States today, Silicon Valley is the #1 innovation cluster, followed by Austin, Raleigh-Durham, and Boston. The ten metropolitan areas with the largest share of college-educated workers are Stamford (CT), Washington, Boston, Madison, San Jose, Ann Arbor, Raleigh-Durham, San-Francisco-Oakland, Fort Collins-Loveland (CO), and Seattle-Everett.

One downside to living is these areas is the cost of housing, which is driven up by the competition of well-paid workers for proximity to good jobs and schools. This is another factor maintaining the geographic divergence between areas with different educational levels. Today the educated are more mobile, since they have the money, skills, and information to go where the opportunities are. Less educated workers can also benefit from the higher wages of thriving metropolitan areas, but only if they can reside there in the first place.

The divergence of places extends to many aspects of public and private life. Metropolitan areas that differ in educational and income level also differ in average life expectancy, family stability, political participation and resources for charitable giving. For example, men in some poorer metropolitan areas in the U.S. have life expectancies comparable to those of poor countries.


Higher Education in America (part 3)

October 11, 2013

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The second of Derek Bok’s “urgent priorities” for higher education–besides increasing the number of students earning college degrees–is improving the quality of instruction. While most of the highest-ranking universities in the world are in the United States, that in itself does not establish the quality of American undergraduate education. “The impressive global rankings of American universities reflect the accomplishments of only a handful of institutions, and even the high regard in which the latter are held is largely due to the excellence of their research rather than the quality of education they provide.” Bok fears that an increase in the number of degrees granted could come at the expense of quality. “Efforts to increase the percentage of young Americans with college degrees (and lower the costs of educating them) are attracting far more high-level attention than attempts to maintain and increase the amount they learn along the way.”

The diversity of institutions described earlier makes it hard to achieve a generally high standard of quality. For-profit colleges have come in for special criticism. They specialize in providing job preparation for students of modest means who rely heavily on federal grants and loans to pay the tuition. Critics charge that they recruit students too aggressively by overselling what they offer, then leave too many students underprepared and overindebted. “Six years after entering a for-profit institution, students are more likely to be unemployed and out of school than students of similar qualifications who entered not-for-profit institutions.”

Results for community colleges have also been somewhat disappointing. Although two-thirds of their students start out with the intention of transferring to a four-year college, no more than one-fourth actually do so. “The most careful study to date suggests that even six years after entry, only 36 percent of students entering community colleges have either earned an associate’s (two-year) degree or gone on to graduate from a four-year college.”

As economic inequality continues to worsen, “America could easily end up with a two-tier structure of undergraduate education: an expensive, quality tier primarily for those who can afford it, and a low-cost, heavily vocational education of marginal quality for all the rest.”

However, Bok sees lots of room for qualitative improvement in the comprehensive four-year colleges as well. He believes that a movement is already underway to implement new methods of instruction based on a growing body of research about what works. In particular, he welcomes a movement away from lecturing, “a method repeatedly shown to be one of the least effective means of developing higher-level thinking skills or helping students to achieve a deep comprehension of challenging subject matter.” Instead, professors should “spend much of the time in class having students grapple with problems raised by their readings.”

Bok also sees great pedagogical potential in online education. Students can interact online with their instructor and one another, access source materials more easily, conduct experiments and participate in simulations. Instructors can monitor online discussion groups and assignments and adjust their teaching accordingly. Much of this potential remains to be realized however. As it stands now, only the most highly motivated students complete online courses very often; teachers haven’t resolved how to prevent cheating and give reliable grades; and a portion of the population still lacks broadband access. Effective design of online courses is also a big challenge. Bok quotes Lawrence Bacow: “To date, no sustainable platform exists that allows interested faculty either to create a fully interactive, machine-guided learning environment or to customize a course that has been created by someone else….”

Another concern is what students are actually studying, considering the range of goals that higher education is supposed to achieve:

For almost a century, undergraduate education in the United States has pursued three large, overlapping objectives. The first goal is to equip students for a career either by imparting useful knowledge and skills in a vocational major or by developing general qualities of mind through a broad liberal arts education that will stand students in good stead in almost any calling. The second aim, with roots extending back to ancient Athens, is to prepare students to be enlightened citizens of a self-governing democracy and active members of their own communities. The third and final objective is to help students live a full and satisfying life by cultivating a wide range of interests and a capacity for reflection and self-knowledge.

Bok clearly regards the liberally educated person as both a better citizen and a better worker. He cites research demonstrating the value that companies and business leaders place on general abilities like “thinking critically, communicating effectively both orally and in writing, acquiring a sensitivity and concern for ethical issues, and learning to understand and work effectively with people of different cultures, backgrounds, and races.” He is concerned about the amount of coursework undergraduates complete in vocational specializations, citing research indicating that science and engineering majors show declining proficiency on many of these abilities over the course of their education.

Bok then questions whether traditional college course requirements are serving the objectives of higher education very well–so many credits in a major, so many credits of electives, “leaving only the limited time left over to achieve all the other purposes the faculty chooses to adopt.” That time left over is often spent meeting a “general education” requirement by taking a smattering of survey courses in various departments. The system works for the faculty, since each academic department in guaranteed a certain audience for its courses, but maybe not as well for the students. “It is possible that some of the requirements agreed to by the faculty are uneasy compromises that threaten to produce the worst of both worlds–making enough demands on students’ time to represent a burden but not enough to afford much chance of actually achieving the hoped-for results.”

Having recently reviewed Robert Samuels’ critique of higher education, I find it interesting to compare his perspective to Bok’s. They agree on a number of things: that universities often spend too much money on things that are marginal to educational quality, that the things that really matter are often less visible and harder to measure, that the time students are required to devote to their studies has been dropping, that an emphasis on research sometimes detracts from undergraduate instruction, and that instruction relies too heavily on the lecture method.

Samuels goes on to make a much stronger charge, that undergraduates are being fundamentally shortchanged, since tuition is going up but the portion of revenue spent on undergraduate instruction is going down. Samuels seems more concerned than Bok that the percentage of undergraduate classes taught by traditional tenure-track faculty has fallen to about one-third, and that many of the part-time and adjunct instructors who have replaced them are less qualified in academic degrees and experience. Bok is more ambivalent about this trend, saying on the one hand that “the use of part-time instructors…has also been found by some analysts to contribute to grade inflation, higher dropout rates, and other adverse effects on quality,” but on the other hand that “student course evaluations find that part-time and adjunct professors are usually rated at least as highly as the regular tenure-track faculty.”

If we place a high value on both Ph.D. programs and years of postdoctoral study and teaching experience, don’t we also have to worry about turning more classes over to less credentialed and experienced teachers, whether the students can tell the difference or not? I believe in course evaluations, and I believe that students can tell if teachers are organized, clear in their presentations, and fair in their testing, among other things. But the depths of a professor’s knowledge is much less obvious to them. I received surprisingly good evaluations as a young teacher called upon to teach subjects I knew very little about. I taught from a much more substantial knowledge base in my later years, but I’m not sure that my students knew enough to tell the difference.

Another issue where Samuels is more critical than Bok is class size. The non-lecture methods recommended by both writers require professors to give much more attention to the students’ individual thought processes, by engaging students in class and evaluating their oral and written arguments instead of just grading standardized tests. But only Samuels explicitly calls for smaller classes to facilitate such engagement.

Of course, highly qualified professors teaching small classes cost money. Both authors would like to reduce the costs for students, but Samuels is more willing to call for increased spending on undergraduate education to help bring this about. In a way it is easier for him to do so, since he believes that undergraduates are currently being overcharged in order to subsidize research and graduate education. One result is the production of more Ph.D.’s than can find the jobs they’ve been trained for, since the same universities that train them prefer to hire cheaper labor instead. So while Bok would improve the quality of instruction primarily through pedagogical and curricular reforms, Samuels would accomplish it more through a fairer redistribution of educational resources.