Sunday, August 25, 2013

Accelerated Learning in an Era of Decelerated Earning

Frank Pasquale

There are two basic responses to an economy as depressed as ours. In a neoclassical paradigm, the central problem is that certain people have become too expensive.  They demand too much in wages, education, and health care.  Coddled by food stamps and subsidies, they refuse to take low-paying jobs. Wealthy owners and managers are the ultimate arbiters of value.  They can recognize valuable labor and will pay for it. If significant numbers of people remain unemployed, it's because they have assigned too high a value to their own abilities.

The neoclassicals also have a theory of adjustment and positive change.  Once low-productivity workers realize the sobering truth of their own diminished value, the market for labor will clear.  Moreover, reduced wages won't render them starved or homeless. For the neoclassicals, the decline of purchasing power of, say, the bottom 99% of the economy has a salutary, deflationary effect on the price of staples.  If the poor can't afford bread, its price will decline.  Knock out the tax break for employer sponsored insurance, and health costs have nowhere to go but down.

Another school sees the commanding position of the wealthy as a problem to be solved, rather than the grounding framework of economic life.  In this, more Keynesian, paradigm, government ought to redistribute some income from rentiers at the top of the economy to those who presently cannot afford food, education, health care, and housing. The Keynesian recognizes the stickiness of certain prices, and how disruptive (indeed, deadly) the situation can become if, say, income falls much faster than food prices.

For those opposed to austerity, the primary problem is not "how do we make labor-intensive services purchased by the 99% who are losing out in our economy ever cheaper." Demanding endless wage cuts plays into the liquidationist illogic of the Ourobouros: people who benefit in their role as consumers end up losing out as producers.  A shopkeeper may at first be thrilled to see a teacher's union broken (anticipating lower property taxes), only to find that teachers no longer have the money to shop at his store.

Balancing Cost-Cutting and Quality Maintenance in Health and Education Policy

The Affordable Care Act mixes both conservative and liberal perspectives.  The "Cadillac Tax" on insurance is going to reduce the purchasing power of "small businesses and employers with a high proportion of sick workers." Medicare cuts loom.  But premium subsidies are available to boost the ability of many of those making less than $45,000 or so to buy health insurance.

For higher education, a similar tradeoff is emerging.  The President has supported income-based repayment programs, a vital aid to purchasing power. With his (off the cuff?) recommendation of lopping a year off law school, he appears serious about reducing costs, too. But just as "meat ax rationing" in health care has had some unexpected, very negative, consequences, we should avoid a stampede to accelerated learning without some kind of evidence base.  Waivers and experimentalism could help develop that.  The goal shouldn't be universal access to a mere "drive through U.," delivering diplomas worth little more than the paper they're written on. Just as a Medicaid insurance card barely means anything if it doesn't guarantee reasonable payment to providers, the law degree's value will erode if legal education becomes unprofessional or unduly abbreviated.

Unfortunately, diminishing the value of a law degree may be precisely the point of accelerated learning. In the paradoxical labor economics of neoliberalism, the worker's lost wages are the economy's gain.  To be more precise: it's a windfall for the shareholders and top managers at firms that hire attorneys. Judge Jose Cabranes was quite explicit about this when he pushed a 2-year degree in 2012.  The third year would be an apprenticeship in his model, and "firms could hire apprentices at lower salaries than first-year associates, train them in practices, and bill them out at rates clients would be willing to pay."  One wonders if the Judge's next proposal will be to repeal FLSA strictures on unpaid internships? There'd certainly be many more clients willing to pay nothing. That simple deregulatory step could solve under-employment in a snap.

On the other hand, let's not be too quick to label the current scramble to change law schools as either "deregulation" or "reform."  What we are seeing in higher ed now, as we've seen in health reform many times before, are changes in financing rules that will help certain constituencies and hurt others.  Just as the Frists and Rick Scott found ways to make fortunes from the changing economics of health care, for-profit firms are angling to get rich from law school "disruption."

A serious effort to improve the living standards and life chances of young people will need to do far more than rush them through college and law school.  Elizabeth Warren is right to point out the bizarre disparities between the federal government's treatment of banks and its treatment of students.  Rather than investing in students, the government is directly profiting from them: the CBO estimates it will "generate $184 billion in profit for new loans made this fiscal year through 2023" (with a record $51 billion profit this year alone).  Rates should be lower, and terms of repayment should be more generous and forgiving.

In the 1930s, we had a WPA and CCC that acted as a de facto jobs guarantee.  Why not allocate federal funding to supplement all those no- or low-paid internships? It would be a better investment than many of the biggest ticket items in the federal budget.

The usual suspects will inevitably reply: America doesn't have the money for that.  But we're not broke.  Rather, we're suffering from a broken social contract where productivity gains aren't shared, and corporations avoid taxes while sitting on a massive cash hoard. Let's not pretend that students will suddenly succeed in that rigged game once educators "get with the program" and corporatize their approach to learning.  If the only rationale for accelerated learning is accelerated earning, why not solve the problem directly?  Nobody in "This Town" will get a high-priced lobbying gig for proposing such an idea, but that's what the academy is for. And that's also why it's on the chopping block.

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