One aspect of this issue I haven't seen emphasized enough is that abundance not only makes people better off, it makes them more liberal-minded, tolerant, and generous-- and scarcity does the opposite of all those things. Benjamin Friedman's "The Moral Consequences of Economic Growth" is the key historical text here. Really seems like if you want to create the cultural foundations for people to expand their circles of concern, overcome prejudices, be more open to helping those in need, etc, you should be more focused on creating the abundance that we know is a powerful tool for laying those foundations.
I had no idea about the US position of physicians per population or the residency scarcity. I've never heard this point brought up in healthcare debates. Or in discussions about fighting healthcare inequity. Thanks for highlighting this.
The natural condition of man is poverty. Victorian England was the richest society that had ever existed and yet 80% of Victorian families lived on the equivalent of less than $8,000 a year. The most important fact about modern America is that we can grow 100 bistros of corn and acre and a singe combine operator can harvest 25 acres in a hour. In a long day of work, he can harvest enough calories to feed a small town for a year.
99% of human history has been consumed by the struggle for subsistence. In the last 150 years, growing food has become so easy that producing calories is a trivial problem and we burn corn to power cars. The ease of producing calories means that the remaining nutrition problems really are distributional (getting healthy calories and protein to poor people) but this state of affairs only exists because of miraculous productivity gains.
I 100% agree that the goal of political economy should be making housing, education and health care as abundant as food. Let’s license some foreign doctors stat and let Indian radiologists read US scans.
I wish progressives were a bit more skeptical of "tax medallion leftism", by putting a bunch of regulation to protect specific existing jobs, rather than thinking bigger picture. You see a fair amount of "people in this occupation deserve a living range, so we need a high barrier to entry."
I'm hoping the tighter labor market helps push back on that temptation.
If you want an online-only university one (essentially) already exists: The UK's Open University.
£5000 (about $7000) year in tuition, fully funded solely from tuition alone. Fees are per-class, so you can do it part-time and pay less per year and take more years.
The only in-person classes are residential schools for practical classes - e.g. labs for science students.
Courses are normally marked partly by submitting assignments (like any other class), partly by multiple choice tests taken online, and partly by formal examinations that require you to go to a test centre. Note that there are already test centres all over the world - run by companies like Pearson - that allow a variety of people to take different tests side by side, so this is just another line of business for those centres.
They were originally "distance learning", where you got mailed a packet of information on a weekly basis and mailed back your assignments, but they moved online well over a decade ago.
All about this stuff. To my memory, this was/is pretty standard center-right think tank opinion on many of these topics. We were supposed to be the supply side people at least until Trump.
Universities are tricky. What we have is a signaling problem. Universities are not so much in the business of teaching people, but of certifying quality for employers. As we’ve gone from 10% of the population getting degrees to 50%, there is still a top 10% that top employers want, the rest is just the 13th grade.
Hopefully as universities move away from standardized testing, that a separate market for something like an IQ test can provide a cheaper and more useful alternative. Would save a lot of money if we could just have an SAT score and bypass the need for 4 years of expensive partying.
Matt, you should check out what Georgia Tech is doing with their online masters programs. There are actually several of these, very highly rated/ranked, while allowing something like 10x more graduates compared to the on-campus program. They’re not the only one, but they’re pioneering here.
Also I just wanted to say I could not agree more with this post, the energy one, and the new center party one. So when are you going to put these things together into the new center party platform, and how can we make it happen? :)
I'd like to see a billionaire establish a regular private research university and put it in a city that could really benefit from having one, like Detroit. We haven't seen that happen since, what, Carnegie Mellon? Not counting oddball schools like Ave Maria or Olin College.
It seems like there are two kinds of abundance: that from technological change and productivity improvements, and that from overruling rentier groups and transferring benefits to a larger population. In the first, we get smartphones, cheap solar energy, and falling costs of cars; in the latter, we get more housing, more doctors, and a bigger Harvard class size.
Benefiting from the first one is great, but is largely out of our control. Getting the second one benefits the many over the few, but is hard because of the entrenched interests that grow in a successful society, as Mancur Olson brilliantly laid out in "The Rise and Decline of Nations." And while I think we all decry their narrow, parochial interests, in truth it's a lot easier to do when we're the ones who stand to benefit and not the ones who are targeted for losing some of what we have. I think it would behoove all of us to think in what ways we ourselves are rentiers as well, and how we would react if it's our turn in the barrel.
Agree with most of this, but there are a couple of things missing:
- Congress failing to increase the number of residencies has nothing to do with not wanting to spend more money, it's due to the lobbying power of existing doctors. It was that same lobbying power that compelled Congress to spend more money by doing "doc fix" legislation for a decade before repealing the Medicare growth caps completely. The difficulty in modernizing medicine away from artisanal practices is also due to these entrenched interests.
- Expanding higher education is unlikely to bring the price down - there is plenty of room at low-tier schools and community colleges. Anyone who wants to go to college can. The problem is that college acts very much like a luxury good where status is a very important factor.
- And the regulatory and lobbying capture is just as present in higher education. I agree that we shouldn't be subsidizing schools that don't expand, or are wealthy enough to stand on their own. But the government isn't run by philosopher-kings, it's run by bureaucrats and politicians who listen to influential and organized "stakeholders" more than anything else.
"On higher education, we’re stuck between the left saying “spend more” and the right saying “spend less” with very little interest in trying to do something different."
This I agree with completely and it's been the main reason why I don't identify with or support either party. It's not limited to higher education - partisans on either side are simply not interested in effective governance.
I am curious about scarcity and how it relates to quality, and how do you balance abundance with costs and profit.
One of the advantages of capitalism is the intrisic motivation to provide services is motivated by profits.
For instance, becoming a Doctor is a long, arduous and demanding road, but at the end of it, most Doctors are compensated pretty well. They are compensated well because the demand for them outweighs the supply. Now it occurs to me that medical school is artificially limited and there are probably plenty of excellent potential Doctors out there who don't go to medical school because of the cost, or just no openings. But at some point, is there a point of diminishing returns. As you get more Doctors, does their compensation go down? Do we end up with the scenario where the top candidates decide to go into molecular biology to make more money? Do we start graduating Doctors with less skills? What is the balance. Obviously, Europe has managed to find the right balance, but there are other countries in the world where a Medical Degree might not have the same amount of requirements as we expect our Doctors to have?
The same thought go to higher education. Colleges and Universities are such a complicated situation. Because I work for a German company, and used to live there, I will use them as an example.
Germany has a lot less 4-year and 2-year college graduates that the United States does, but overall their expertise and competence at any given occupation exceeds our average, at least from what I experience.
The price of University and College in the United States is a problem, but I think our whole system is a problem. State and regional colleges in the US appear to attempt to mirror the same sort of curriculum, majors and experience that we see at our elite schools.
You go to Harvard to get a degree in History, but you can also get one at Boise State. However the demand for History majors is such that the a Harvard History major is going to have a lot more options than one from BSU. (I actually know nothing about the quality of BSU's history program. I am sure it is excellent in its own right).
If anything, I think one of the problems with our higher education system is an overabundance. I wont find the link, but I have read several studies/articles that talk about how a signficant number of college graduates go into jobs where a degree is not absoluely required.
Meanwhile, we have a shortage of certain specialities that require some technical education, but are unable to meet all the demand. For instance, my daughter is completing a Mechatronics program at the College of Western Idaho (community college), and the program can't pump out graduates fast enough.
I am strongly on the side of College is nothing but a signaling mechanism for most jobs, though Noah Smith recently posted about a study that shows this might not be absolutely true.
Let's just say we magically come up with enough money to put everyone through college for free. If nothing else changes, I really don't see how we come out any better. If anything, we might come out worse as people take longer in life to sort themselves out into the most efficient use of their labor and skills.
I actually have a Bachelors Degree of Science from Southwestern Collge in Kansas that I completed mostly online while I was in the Military. I thoughougly enjoyed it, and I learned a lot, but I am not naive enough that it prepared me to compete with a Computer Science major from the University of Idaho in the job market. I chose it because the program was realatively easy to complete while in the Miiltary, and because I though having a Bachelor of Science in Computer Programming would sound impressive to employers from a wide range of companies, even when it wasn't required.
Truthfully, my degree does me no good at all. I work with people who are as equally qualified as I am that only had on the job training and certification. I am the go to guy for computers and software, but that is more out of natural talent than anything I learned from my degree.
I just don't think online education can offer the same quality of instruction to anyone but the most motivated of self-learners.
The idea of free public Universities is a good one, but they would only be as good as their selection rate. Though they aren't free, the Maritime Universities offer a good equivalent. The graduates of the Maritime Universities have excellent job prospects, but they are selective in who they take in.
And always, since selectivity is a prequisite, there is inevitable issues with equality and diversity, given the unequal outcome of our K-12 public schools.
Housing though is probably the one thing that a simple losening of regulations would fix. Even if the costs were reduced, as long as the administrative burdon was reduces, companies would still make enough profits to put up more housing. The housing issue needs to be solved at the local level, zoning must come first.
"And while the government can’t force the rich private institutions that sit atop the higher ed hierarchy pyramid..." This is mostly not true. The federal government spends a lot of money on private universities (through federally sponsored research), so it has considerable leverage over them. Private institutions will almost certainly obey a law that says "If you want federal research dollars, you have to do this.", unless it is a really really weird law. They can pay less than six figures the Associate Dean of Literally Doing Nothing to compensate.
Matt, this question seemed obvious to me but maybe because I consume a ton of healthcare (bipolar disorder) and have a lot of friends and family in the sector- do you have any thoughts on the increased ability of physicians assistants and nurse practitioners to perform a lot of the functions of doctors, including prescribing medication? Could that be a lever for increasing the supply of health care as well? (Especially since medical school spots are also very limited, with a lot of people moving to the Caribbean to do it for that reason)
I've asked someone at AEI (American Enterprise Institute) if they ever considered founding AEU, since they sort of have the faculty part built up. He said yes, but that it was just too heavy a lift. Presumably, if they had a benefactor sufficiently committed to the project, it would be a lighter lift.
One aspect of this issue I haven't seen emphasized enough is that abundance not only makes people better off, it makes them more liberal-minded, tolerant, and generous-- and scarcity does the opposite of all those things. Benjamin Friedman's "The Moral Consequences of Economic Growth" is the key historical text here. Really seems like if you want to create the cultural foundations for people to expand their circles of concern, overcome prejudices, be more open to helping those in need, etc, you should be more focused on creating the abundance that we know is a powerful tool for laying those foundations.
I had no idea about the US position of physicians per population or the residency scarcity. I've never heard this point brought up in healthcare debates. Or in discussions about fighting healthcare inequity. Thanks for highlighting this.
The natural condition of man is poverty. Victorian England was the richest society that had ever existed and yet 80% of Victorian families lived on the equivalent of less than $8,000 a year. The most important fact about modern America is that we can grow 100 bistros of corn and acre and a singe combine operator can harvest 25 acres in a hour. In a long day of work, he can harvest enough calories to feed a small town for a year.
99% of human history has been consumed by the struggle for subsistence. In the last 150 years, growing food has become so easy that producing calories is a trivial problem and we burn corn to power cars. The ease of producing calories means that the remaining nutrition problems really are distributional (getting healthy calories and protein to poor people) but this state of affairs only exists because of miraculous productivity gains.
I 100% agree that the goal of political economy should be making housing, education and health care as abundant as food. Let’s license some foreign doctors stat and let Indian radiologists read US scans.
I wish progressives were a bit more skeptical of "tax medallion leftism", by putting a bunch of regulation to protect specific existing jobs, rather than thinking bigger picture. You see a fair amount of "people in this occupation deserve a living range, so we need a high barrier to entry."
I'm hoping the tighter labor market helps push back on that temptation.
If you want an online-only university one (essentially) already exists: The UK's Open University.
£5000 (about $7000) year in tuition, fully funded solely from tuition alone. Fees are per-class, so you can do it part-time and pay less per year and take more years.
The only in-person classes are residential schools for practical classes - e.g. labs for science students.
Courses are normally marked partly by submitting assignments (like any other class), partly by multiple choice tests taken online, and partly by formal examinations that require you to go to a test centre. Note that there are already test centres all over the world - run by companies like Pearson - that allow a variety of people to take different tests side by side, so this is just another line of business for those centres.
They were originally "distance learning", where you got mailed a packet of information on a weekly basis and mailed back your assignments, but they moved online well over a decade ago.
“Saw the movie so let’s talk about the book” is really the essence of slow boring. Love it!
All about this stuff. To my memory, this was/is pretty standard center-right think tank opinion on many of these topics. We were supposed to be the supply side people at least until Trump.
Universities are tricky. What we have is a signaling problem. Universities are not so much in the business of teaching people, but of certifying quality for employers. As we’ve gone from 10% of the population getting degrees to 50%, there is still a top 10% that top employers want, the rest is just the 13th grade.
Hopefully as universities move away from standardized testing, that a separate market for something like an IQ test can provide a cheaper and more useful alternative. Would save a lot of money if we could just have an SAT score and bypass the need for 4 years of expensive partying.
Matt, you should check out what Georgia Tech is doing with their online masters programs. There are actually several of these, very highly rated/ranked, while allowing something like 10x more graduates compared to the on-campus program. They’re not the only one, but they’re pioneering here.
Also I just wanted to say I could not agree more with this post, the energy one, and the new center party one. So when are you going to put these things together into the new center party platform, and how can we make it happen? :)
Matt do a deep dive on the new billionaires tax. Why not just do a far more aggressive estate tax? Seems to have far fewer implementation/court issues
I'd like to see a billionaire establish a regular private research university and put it in a city that could really benefit from having one, like Detroit. We haven't seen that happen since, what, Carnegie Mellon? Not counting oddball schools like Ave Maria or Olin College.
It seems like there are two kinds of abundance: that from technological change and productivity improvements, and that from overruling rentier groups and transferring benefits to a larger population. In the first, we get smartphones, cheap solar energy, and falling costs of cars; in the latter, we get more housing, more doctors, and a bigger Harvard class size.
Benefiting from the first one is great, but is largely out of our control. Getting the second one benefits the many over the few, but is hard because of the entrenched interests that grow in a successful society, as Mancur Olson brilliantly laid out in "The Rise and Decline of Nations." And while I think we all decry their narrow, parochial interests, in truth it's a lot easier to do when we're the ones who stand to benefit and not the ones who are targeted for losing some of what we have. I think it would behoove all of us to think in what ways we ourselves are rentiers as well, and how we would react if it's our turn in the barrel.
Agree with most of this, but there are a couple of things missing:
- Congress failing to increase the number of residencies has nothing to do with not wanting to spend more money, it's due to the lobbying power of existing doctors. It was that same lobbying power that compelled Congress to spend more money by doing "doc fix" legislation for a decade before repealing the Medicare growth caps completely. The difficulty in modernizing medicine away from artisanal practices is also due to these entrenched interests.
- Expanding higher education is unlikely to bring the price down - there is plenty of room at low-tier schools and community colleges. Anyone who wants to go to college can. The problem is that college acts very much like a luxury good where status is a very important factor.
- And the regulatory and lobbying capture is just as present in higher education. I agree that we shouldn't be subsidizing schools that don't expand, or are wealthy enough to stand on their own. But the government isn't run by philosopher-kings, it's run by bureaucrats and politicians who listen to influential and organized "stakeholders" more than anything else.
"On higher education, we’re stuck between the left saying “spend more” and the right saying “spend less” with very little interest in trying to do something different."
This I agree with completely and it's been the main reason why I don't identify with or support either party. It's not limited to higher education - partisans on either side are simply not interested in effective governance.
I am curious about scarcity and how it relates to quality, and how do you balance abundance with costs and profit.
One of the advantages of capitalism is the intrisic motivation to provide services is motivated by profits.
For instance, becoming a Doctor is a long, arduous and demanding road, but at the end of it, most Doctors are compensated pretty well. They are compensated well because the demand for them outweighs the supply. Now it occurs to me that medical school is artificially limited and there are probably plenty of excellent potential Doctors out there who don't go to medical school because of the cost, or just no openings. But at some point, is there a point of diminishing returns. As you get more Doctors, does their compensation go down? Do we end up with the scenario where the top candidates decide to go into molecular biology to make more money? Do we start graduating Doctors with less skills? What is the balance. Obviously, Europe has managed to find the right balance, but there are other countries in the world where a Medical Degree might not have the same amount of requirements as we expect our Doctors to have?
The same thought go to higher education. Colleges and Universities are such a complicated situation. Because I work for a German company, and used to live there, I will use them as an example.
Germany has a lot less 4-year and 2-year college graduates that the United States does, but overall their expertise and competence at any given occupation exceeds our average, at least from what I experience.
The price of University and College in the United States is a problem, but I think our whole system is a problem. State and regional colleges in the US appear to attempt to mirror the same sort of curriculum, majors and experience that we see at our elite schools.
You go to Harvard to get a degree in History, but you can also get one at Boise State. However the demand for History majors is such that the a Harvard History major is going to have a lot more options than one from BSU. (I actually know nothing about the quality of BSU's history program. I am sure it is excellent in its own right).
If anything, I think one of the problems with our higher education system is an overabundance. I wont find the link, but I have read several studies/articles that talk about how a signficant number of college graduates go into jobs where a degree is not absoluely required.
Meanwhile, we have a shortage of certain specialities that require some technical education, but are unable to meet all the demand. For instance, my daughter is completing a Mechatronics program at the College of Western Idaho (community college), and the program can't pump out graduates fast enough.
I am strongly on the side of College is nothing but a signaling mechanism for most jobs, though Noah Smith recently posted about a study that shows this might not be absolutely true.
Let's just say we magically come up with enough money to put everyone through college for free. If nothing else changes, I really don't see how we come out any better. If anything, we might come out worse as people take longer in life to sort themselves out into the most efficient use of their labor and skills.
I actually have a Bachelors Degree of Science from Southwestern Collge in Kansas that I completed mostly online while I was in the Military. I thoughougly enjoyed it, and I learned a lot, but I am not naive enough that it prepared me to compete with a Computer Science major from the University of Idaho in the job market. I chose it because the program was realatively easy to complete while in the Miiltary, and because I though having a Bachelor of Science in Computer Programming would sound impressive to employers from a wide range of companies, even when it wasn't required.
Truthfully, my degree does me no good at all. I work with people who are as equally qualified as I am that only had on the job training and certification. I am the go to guy for computers and software, but that is more out of natural talent than anything I learned from my degree.
I just don't think online education can offer the same quality of instruction to anyone but the most motivated of self-learners.
The idea of free public Universities is a good one, but they would only be as good as their selection rate. Though they aren't free, the Maritime Universities offer a good equivalent. The graduates of the Maritime Universities have excellent job prospects, but they are selective in who they take in.
And always, since selectivity is a prequisite, there is inevitable issues with equality and diversity, given the unequal outcome of our K-12 public schools.
Housing though is probably the one thing that a simple losening of regulations would fix. Even if the costs were reduced, as long as the administrative burdon was reduces, companies would still make enough profits to put up more housing. The housing issue needs to be solved at the local level, zoning must come first.
"And while the government can’t force the rich private institutions that sit atop the higher ed hierarchy pyramid..." This is mostly not true. The federal government spends a lot of money on private universities (through federally sponsored research), so it has considerable leverage over them. Private institutions will almost certainly obey a law that says "If you want federal research dollars, you have to do this.", unless it is a really really weird law. They can pay less than six figures the Associate Dean of Literally Doing Nothing to compensate.
Matt, this question seemed obvious to me but maybe because I consume a ton of healthcare (bipolar disorder) and have a lot of friends and family in the sector- do you have any thoughts on the increased ability of physicians assistants and nurse practitioners to perform a lot of the functions of doctors, including prescribing medication? Could that be a lever for increasing the supply of health care as well? (Especially since medical school spots are also very limited, with a lot of people moving to the Caribbean to do it for that reason)
I've asked someone at AEI (American Enterprise Institute) if they ever considered founding AEU, since they sort of have the faculty part built up. He said yes, but that it was just too heavy a lift. Presumably, if they had a benefactor sufficiently committed to the project, it would be a lighter lift.