Milton Friedman's Twist on Hayek

Milton Friedman's Capitalism and Freedom has succeeded Boaz as my political bedtime reading. In my political readings thus far, I have been impressed and educated by Hayek's careful analysis of socialism, aggravated by Von Mises' sloppy analysis of liberalism, and much provoked to thought by Boaz's modern presentation of libertarian principles and their applications. Friedman, however, has been less exciting. Reading Friedman reminds me of reading Shakespeare and remarking on all the 'cliches'. Perhaps Friedman's impact on our current economic thinking has been so strong that his analysis now seems commonplace. I was, however, struck by an observation in Chapter II: The Role of Government in a Free Society. Friedman notes that government action, unlike market action, imposes conformity. The greater the scope of government action, the more areas in which people are forced to conform. Extending the range of the imposed conformity too far works to undermine social cohesion and generate conflict. This is reminiscent of Hayek's assertion that the massive legislation required to implement socialist economic policy is incompatible with democracy: the vast scope of the legislation makes it exceedingly unlikely that a majority can agree on any economic plan, leading socialist proponents to circumvent the democratic process in order to impose their program. (Of course, our current congressional leadership has obviated this obstacle by the simple expedient of convincing the Democratic majority to vote for enormous bills without actually reading them.) Friedman transfers Hayek's assertion from the House and Senate to the electorate: the greater the number and impact of government intrusions into citizens' lives, the more likely any given individual will be strongly opposed to some aspect of government action, with possible consequent disruption of society.

While I find Friedman's extension of Hayek's assertions intriguing, I have not seen much evidence of consequent social disruption. The Tea Party movement suggests that large numbers of Americans have decided that government intrusion into their lives has indeed exceeded their tolerance. Observe, however, that the response is political rather than social. I am not sure what form social disruption is supposed to take, although visions of rioting and striking French workers come to mind. Of course Europeans accept with little protest dramatically greater government control over their lives than Americans endure. Their history, however, differs from ours; in particular, they have never experienced the degree of individual liberty that Americans have long enjoyed and taken for granted. A great conservative fear at the time of the passage of Obamacare was that Americans could be lured into the same servile attitude towards the government.

When wondering how much government intervention American voters will tolerate, one is led to ask to what extent voters accept government impositions simply because they are advocated by their 'team' (i.e. political party)? In the same vein, as most of us ask as soon as we become politically aware, why are attitudes toward homosexuality, immigration, carbonophobia, class warfare, etc. linked? Presumably people choose their positions on issues based on their party affiliation at least as often as they choose their party affiliation based on their stands on issues. Perhaps the rise of the unaffiliated voter is important to consider in this context. As government reach expands, political parties must take stands on an ever wider variety of issues. Perhaps it is becoming ever harder for many Americans to affiliate with either major party; there are simply too many axes of potential disagreement. Unfortunately, opting out is a poor choice. The unaffiliated have little impact at the primary level; so, they share responsibility - through inaction - for the poor choices we often face in general elections. Once again I am led to appreciate the increased voter participation represented by the rise of the Tea Party movement. If the Tea Partiers are successful in rolling back government overreach (admittedly a long term project), then an amusing consequence could be a rise in voter identification with both parties. When the Republicans and Democrats no longer need to take stands on whether it is better to allow a hip replacement at age 70 instead of state of the art cancer drugs at age 75, it will be easier for voters to find a party with which he has no deal breaking disagreements.

"Let all things be done decently and in order."

Both Democrats and Republicans exhibit peculiarities in their candidate selection. Democrats have strong servile tendencies. They like to elect aristocrats, and they refer to their elected representatives as 'rulers'. With the name Kennedy, any charlatan is eligible for Democratic nomination to high office. The Bush dynasty shows the GOP shares this tendency to a lesser degree. The Democrats swoon for their candidates; their candidates "make their knees weak." Before the Tea Party, on the other hand, the GOP often seemed to regard nominations as a reward for services rendered; there almost seemed to be a queue, with candidates 'entitled' to the nomination, simply because they were, by some measure, next in line. How else can you explain nominating candidates like Bob Dole or John McCain, who seemed embarrassed by political principles?

Perhaps the 'reward for services rendered' interpretation was naive. As I became more active in the local GOP this year, I learned to appreciate the great power of name recognition in seeking support from an often uninterested electorate. Perhaps the 'next in line' were simply the best known.

The rise of the Tea Party promised an overthrow of the queue. In primary after primary, the 'entitled' GOP candidates were rejected. Unfortunately, in my county GOP, I have witnessed precisely the entitlement mentality that I had naively speculated was the source of Bob Dolian candidates. An important function of our county organization is to endorse candidates in nonpartisan races. In one nonpartisan race we considered recently, we had two Republicans competing. Our evaluation committee reported that one candidate had previously held the position, but was removed from office after committing a criminal offense. The other candidate was new to politics but boasted the sort of business and professional background which usually appeals to GOP voters. I was the only vote opposing the candidate with the criminal background. His appeal? He had more experience.
It was uncharitable to hold his prior offenses against him. I was unaware that the county GOP was a charity. I was appalled. After the meeting was over, I realized that not only were we rejecting a promising new candidate, but that our endorsement of the criminal could potentially cast doubt on all our endorsements of strong candidates. What happens to our credibility when a careful voter sees that we recommend criminals?

I felt culpable afterwards for failing to successfully convince my fellow Republicans. I have learned that the manner of argument suitable for faculty debate is not very successful in political forums. Oh well, maybe next time.

Crypto vouchers and For-Profit Colleges

This weekend I had so many deadlines piling up on me that I decided it was the optimal time to research the for-profit colleges, which have been crowding the educational policy sector of the blogosphere of late. Many conservatives and libertarians, while deploring the distortions caused by government funding of (for-profit and traditional) college education, express an interest in the for-profit education sector - an interest which I suspect is nurtured by their distaste for the liberal academics dominating traditional universities.

I had no prior knowledge of for-profit colleges other than the emails they occasionally send me asking me to recommend potential math faculty to them. My biases are what you might expect - I assumed that these were just diploma mills providing little or no education. My research topic was : what does a math major look like at a for-profit? My research tools went no further than Google. I only looked at a few of the larger for-profits, such as Phoenix and DeVry.

My first discovery was that the larger for-profits I examined are amazingly opaque. You cannot find the lists of courses readily available on traditional universities' web sites. Faculty lists at Phoenix are arranged by college rather than by department, meaning you have to sift through a data dump, if you want to determine who teaches math. Even finding what math courses they offer is difficult. Every query on their website seems to offer different answers. I felt like an accountant hired to assess Enron. The only consistent answer to my queries was : every math course I found was no higher than the level of courses offered by a large public high school; the descriptions sounded lower level than what you would find at a good public high school. Conclusion: within my area of expertise and my narrow investigation, these schools are essentially high schools.

This discovery puts the discussion of government funding of for-profit education in a rather different light. We should really view it as a vast federal government experiment in educational vouchers for private high schools. I have long advocated state funding for voucher programs; federal funding is perhaps constitutional overreach. I think this program, if continued, would be greatly improved if it was extended to all private high schools, and not restricted to those labelling themselves as universities. This would allow students to use the tuition money to obtain an excellent education before college.
(My apologies to all those for-profit colleges of higher quality than the handful I probed.)

Marriage Buffet: A Solution in Search of a Problem

I generally prefer to steer clear of social issues here, especially as a mathematical perspective does not often add illumination to them. Discussions of same sex marriage, however, always lead to the question: what harm does it cause? The answer I most often hear is that legalizing marriage between same sex couples will degrade the institution of heterosexual marriage. My attempts to analyze this answer thus far leads only to the creation of spherical horses.

In order to understand the threat to marriage posed by a government action, we first must consider marriage's relation to the government. Libertarians often argue that government should play no role in matters as inherently personal as love and marriage. A natural libertarian position might then be that the government should recognize no marriage - heterosexual or straight. In fact, libertarians often argue that marriage should exist solely as a religious sacrament. I think this argument is attractive on the surface, but fundamentally incorrect.

Every libertarian I have read asserts that government should protect citizens' property rights. Consequently, the government must prevent fraud and help enforce contracts. From my perspective, the most important contract most people enter into is the marriage contract. Unfortunately, the terms and conditions of the contract have become so weak and vague that it is now essentially ceremonial. Question: does this loss of a clear marriage contract fundamentally degrade the institution of marriage? One way to approach this question is to ask what form an optimal marriage contract should take. What sanction does our society impose - what sanction should it impose - on the man who blithely discards his wife of twenty years and three children, replacing her with a younger lady who catches his eye? Should inability to conceive or bear children constitute grounds for dissolution of a marriage? I don't pretend to have answers for such questions and doubt a satisfactory single answer exists in our pluralistic society, but if a couple is be able to agree to the answer before they wed, then why shouldn't the government help enforce that contract like any other? Of course prenuptial agreements exist, but are generally considered distinct from the marriage contract. Perhaps the Catholic and Presbyterian churches should each offer their own approved marriage contract. Perhaps the Sierra Club and National Public Radio could offer their own approved standard marriage contracts too, each with its own list of duties, grounds for dissolution, and penalties for violation. If corporate America can impose noncompete contracts, why can't similar terms be included in a marriage contract: if you leave without grounds, you can't remarry for n years. The possibilities are endless and entertaining to contemplate.

Unfortunately, I do not see what current difficulty such a buffet of personalized choices remedies. I suppose that many engagements would terminate short of marriage when the loving couple is unable to agree on what type of marriage they are entering. When I began toying with the idea of more specific and varied marital contracts, I was thinking of the negative effects of the current very loose divorce laws. However, I'm not sure I would want my spouse to remain with me out of fear of contractual penalties rather than from delight in our mutual companionship. (Of course, someone else may feel differently, in which case the lack of resonance of the idea with my personal situation actually supports the argument for more species of marriage.)

So, I haven't managed to shed any light on any of the questions raised. Classes have begun here. Perhaps I will have to wait until the next class break to actually solve any (nonmathematical) problems.

Extracting Splinters or No Mathematician Need Apply

For the second time in my life I have been asked to leave a volunteer organization. Ouch. The chairman of our local GOP splinter group, the NXC GOP, has requested that I never again attend one of their meetings. This has been the occasion of much hilarity at home and in my county GOP organization.

The first time I was evicted from a political organization, I was a young assistant professor in my first tenure track faculty position. I joined a group of conservative faculty members who met regularly to discuss politics. The leader of the group was a chain smoking Polish emigre professor, who was obsessed with communism and the USSR. We met in his house just a few blocks from campus, its walls yellowed by the never ending plumes of smoke rising from his cigarettes. I was as happy to discuss the USSR as the next person, but it was not my sole interest in life. I pushed to broaden our discussion and activism (in this group, I recall the activism never graduated beyond tongue wagging) to include other issues. In particular, I broached the issue of educational vouchers. Professor Chimney was initially casually dismissive of my suggestion but was subsequently shocked to see that most of the group expressed interest. At the meeting he suggested I research vouchers and lead a discussion at our next meeting. A few days later he called me up and said he did not want 'country club' Republicans like me at his meetings and invited me to leave his group, which I did. Never before or since have I heard the claim that interest in educational vouchers was a defining feature of 'country club' Republicans. Nonetheless, as the group never actually did anything other than talk, I did not mind my forced exit.

Two decades later I have been dismissed from another political group. I have been attending meetings of the Northern X County GOP (NXC GOP). The chairwoman of the NXC GOP is a former campaign director for the loser in the GOP congressional primary in my district. As I have written before, her candidate was an unappealing nativist whose possible nomination I considered harmful to the local GOP. I believe that her goal is to create an organization which can rapidly transform into a campaign organization for him should the current GOP nominee lose. She is hostile to efforts to aid the duly nominated candidate and always structures the NXCGOP's efforts so that they exclude our congressional candidate. With less than a month and a half left before the election, her agenda for our last meeting was the recruitment of candidates for the 2011 municipal elections. (She had neglected to observe that half her membership did not even live in the city limits and therefore could not even vote in the municipal elections.) I have been attending these meetings with the goal of keeping the group in the GOP camp. I frequently announce opportunities for its members to participate in canvassing and other services for our duly nominated candidates. I did not believe the chair wished to make her hostility to the nominated congressional candidate explicit to the group's members, who are not generally partisans for the loser. This left me with room to promote our nominee. Last Thursday, I apparently exhausted her patience. At the beginning of the meeting, I observed that I had not seen many members of the group canvassing on Saturday mornings. The room turned to ice, but little more was said on the subject, except for the reasonable observation that many of the members were working on other campaigns (but for 2012?). I thought no more of it until the next morning when I received an email :

Thank You for showing an interest in our organization. Regretfully, you and the
NXC GOP are not a good fit. We respectfully request that you not
attend any future NXC GOP meetings.

Oh well, at least she didn't accuse me of being 'country club'. My family and the county GOP have been ribbing me ever since. My family observes that I am the only one they know who was threatened with violence by a high school teacher after disagreeing with him on a school advisory committee. So, perhaps my willingness to disagree with people (endemic in the mathematics community) also played a role in my latest expulsion. Luckily, I can counter with the observation that I was not expelled until I brought my wife to a meeting. (She attended her first NXC GOP meeting last Thursday). Perhaps her attendance precipitated my forced departure. She has agreed to test this hypothesis if the county organization gives me too many assignments. If I become overburdened, she has offered to attend her first county meeting and see if this leads to expulsion number 3.

Walking the Streets: First Time Canvassing

The last two Saturday mornings I have been walking the streets of my precinct with lists of Republican voters with a history of skipping midterm elections. My assigned task is to ring doorbells and encourage the targeted voter to pledge to vote early; secondarily, I provide information about our congressional candidate. The goal of early voting is simple. During the early voting period, the GOP congressional campaign checks its list of each day's voters against its list of all GOP voters, especially pledged early voters. Volunteers then email or call to harass pledged voters who are procrastinating. The more voters who vote before election day, the easier the Get Out The Vote effort on November 2nd.

My first time out, approximately half of the voters I visited answered their doors. I assume many more were there but did not answer a stranger ringing their doorbell. I often refuse to open for visitors bearing clipboards; so, I can't fault others for ignoring me. I decided it was a bad idea to ring twice after this produced a few women not yet dressed for the day and obviously annoyed at being pulled to the door dishabille. I won no new voters at those houses. Those who did answer their doors (on the first ring) were almost uniformly enthusiastic. They pledged to support the GOP candidate. They pledged to vote early. When probed, however, they were unable to identify their polling sites; so, subsequent monitoring appears to be desirable. The exception to the enthusiasts were the Democrats who had moved into the houses of some Republicans on our lists. Of course, I didn't encourage them to vote early (or at all). They were all polite, however, and did not harass the poor volunteer.

The next Saturday I hit the streets again. The targeted neighborhood looked economically depressed compared to the previous week's walk. This time very few doors opened, and nobody pledged to vote early. Most had never even heard the name of our congressional candidate. I have no idea whether the difference between week one and week two was random, a function of the calendar, or a function of socioeconomic differences. I'll collect a few more data points in the coming weeks before I offer an opinion. Like the previous week, everyone was polite, including the Democrats living in former Republican houses. I had a few amusing interactions. At one house, I asked if Mrs. Jone's lived there. The woman who answered the door thought for a minute and then said, 'No, I don't think so - not really.' I wondered what partial state of residence could make the question subject to internal debate. At another house, I asked the elderly grey haired woman who answered the door if she was Jane Smith. She said no, and then called: 'Momma. There's someone here to see you.' Henceforth I'll reserve 'elderly' for the white haired. At the last house on my list, the door was answered by a portly bare chested (and bellied) man, who told me his wife was a Republican, but he was registered as a Democrat. He said, 'I'm actually a Republican, but have to register as a Democrat for personal reasons.' In a liberal town like ours, it's easy to imagine his reasons, including a desire to prevent politics from hurting his business prospects. Perhaps he contracts with the government. I didn't probe but left curious.

Unsurprisingly, my doorstep spiel became more fluent with each new house. By the time November rolls around, I will be so comfortable with cold calling strangers that I can become a vacuum salesman should I ever have to quit mathematics.

How much is a college diploma worth?

Recent weeks have produced a constant stream of articles and blog posts attacking the value of a college diploma. Given the low quality instruction my children endured at various points in their middle and high school careers, I can at least recommend many colleges as a good place to get a decent high school education. To support their assertion that college diplomas are overvalued, the blog discussions generally cite anecdotes of college graduates who are waiting tables or are otherwise underemployed. The terms of the discussion are always too vague to support a coherent argument; so, let's see if we can add clarity to the noise.

A quick internet search yields the following useful Wall Street Journal data on salaries by college major.

Undergraduate Major	Starting Median Salary	Mid-Career Median Salary		Mid-Career 10th Percentile Salary	Mid-Career 25th Percentile Salary	Mid-Career 75th Percentile Salary
Accounting	$46,000.00	$77,100.00		$42,200.00	$56,100.00	$108,000.00
Aerospace Engineering	$57,700.00	$101,000.00		$64,300.00	$82,100.00	$127,000.00
Agriculture	$42,600.00	$71,900.00		$36,300.00	$52,100.00	$96,300.00
Anthropology	$36,800.00	$61,500.00		$33,800.00	$45,500.00	$89,300.00
Architecture	$41,600.00	$76,800.00		$50,600.00	$62,200.00	$97,000.00
Art History	$35,800.00	$64,900.00		$28,800.00	$42,200.00	$87,400.00
Biology	$38,800.00	$64,800.00		$36,900.00	$47,400.00	$94,500.00
Business Management	$43,000.00	$72,100.00		$38,800.00	$51,500.00	$102,000.00
Chemical Engineering	$63,200.00	$107,000.00		$71,900.00	$87,300.00	$143,000.00
Chemistry	$42,600.00	$79,900.00		$45,300.00	$60,700.00	$108,000.00
Civil Engineering	$53,900.00	$90,500.00		$63,400.00	$75,100.00	$115,000.00
Computer Science	$55,900.00	$95,500.00		$56,000.00	$74,900.00	$122,000.00
Drama	$35,900.00	$56,900.00		$36,700.00	$41,300.00	$79,100.00
Economics	$50,100.00	$98,600.00		$50,600.00	$70,600.00	$145,000.00
Education	$34,900.00	$52,000.00		$29,300.00	$37,900.00	$73,400.00
Electrical Engineering	$60,900.00	$103,000.00		$69,300.00	$83,800.00	$130,000.00
English	$38,000.00	$64,700.00		$33,400.00	$44,800.00	$93,200.00
Film	$37,900.00	$68,500.00		$33,900.00	$45,500.00	$100,000.00
Finance	$47,900.00	$88,300.00		$47,200.00	$62,100.00	$128,000.00
Forestry	$39,100.00	$62,600.00		$41,000.00	$49,300.00	$78,200.00
Geology	$43,500.00	$79,500.00		$45,000.00	$59,600.00	$101,000.00
History	$39,200.00	$71,000.00		$37,000.00	$49,200.00	$103,000.00
Industrial Engineering	$57,700.00	$94,700.00		$57,100.00	$72,300.00	$132,000.00
Journalism	$35,600.00	$66,700.00		$38,400.00	$48,300.00	$97,700.00
Marketing	$40,800.00	$79,600.00		$42,100.00	$55,600.00	$119,000.00
Math	$45,400.00	$92,400.00		$45,200.00	$64,200.00	$128,000.00
Mechanical Engineering	$57,900.00	$93,600.00		$63,700.00	$76,200.00	$120,000.00
Music	$35,900.00	$55,000.00		$26,700.00	$40,200.00	$88,000.00
Philosophy	$39,900.00	$81,200.00		$35,500.00	$52,800.00	$127,000.00
Physics	$50,300.00	$97,300.00		$56,000.00	$74,200.00	$132,000.00
Political Science	$40,800.00	$78,200.00		$41,200.00	$55,300.00	$114,000.00
Psychology	$35,900.00	$60,400.00		$31,600.00	$42,100.00	$87,500.00
Religion	$34,100.00	$52,000.00		$29,700.00	$36,500.00	$70,900.00
Sociology	$36,500.00	$58,200.00		$30,700.00	$40,400.00	$81,200.00
Spanish	$34,000.00	$53,100.00		$31,000.00	$40,000.00	$76,800.00

One source gives the median high school salary as $32,000 for adults aged 25-34, a weak approximation to 'midcareer'. I suspect a better approximation to the Journal's midcareer category would add several thousand dollars to this.

Assuming the high school versus college data is roughly comparable, it is easy to see that for most college graduates who are now midcareer, the college degree is certainly strongly correlated with greater earning power. (Of course, we cannot exclude the possibility that for this cohort, the college degree is a proxy for a lower bound on their IQ.) With the exception of a few fields like education and religion, it should take little more than a decade or so to pay back college costs (including the cost of delaying entrance into the work force). The data becomes more interesting when we look at the bottom 10% of earners (by major) among college graduates. We see that for many majors, including Anthropology, Art History, Education, English, Film, Music, Psychology, Religion, Sociology, and Spanish, occupants of the lowest decile do not recoup the cost of the college degree.

Let's make a strong assumption that the bottom 10% of wage earners in each major are roughly the same group as the bottom 10% of students in the major (defined by some incredible nonexistent linear measure of academic ability). Of course, this assumption has terrible holes, for example, women who temporarily drop out of the workforce to raise children. Nonetheless, we will assume until otherwise informed that the correlation between poor student performance and lower subsequent wages is strong. We further assume that the majority of people who did not attend college would have been weaker students than those who did. Similar caveats obviously apply to this assumption, but I suspect it is accurate on average. We then see that the push to encourage higher rates of college attendance for students who would have been unlikely to attend otherwise, is likely to lead to poor economic results for the majority of those new students, if they major in the Arts or Humanities. On the other hand, the above data is brighter for those who choose to major in Engineering, Math, Physics, and Economics. Even the 10th percentile of earners with degrees in these majors have room to recoup the costs of college. So, if one discovers a subset of students who have strong mathematical skills but would not traditionally attend college, then perhaps they should be encouraged to attend. Otherwise, the push to continue to enlarge the population of college students does not appear likely to be economically rewarding for lower performing students.

We see that the loud corner of the blogosphere that asserts that a college degree has lost its value is obscuring the main issue. A college degree in many fields is strongly correlated with subsequent higher earnings, but our above commonsense (but unproven) assumptions suggest that the more precise statement is: for good students a college degree in many fields is likely to lead to higher earnings. For weaker students, it is likely to be a money pit.