The foundational assumption of economics is that goods are scarce: there is not enough of every thing in the world to supply to every person in the world. The post-Fordist economy has posed some interesting challenges to this assumption, with infinitely reproducible digital media. I’m more interested by the challenges posed by understanding other sorts of information as goods: like, say, education. So one question would be: is a college education a scarce good?
It’s a rhetorical question, really. Not everyone who wants a college education gets one; of course it’s scarce. (I’m afraid I don’t buy the argument that anybody who really wants to go to college can do so, any more than I buy the argument that poor people want to be poor.) So I’ve been reading N. Gregory Mankiw on the topic of scarcity and rationing, and Mankiw leads me to ask, How is education rationed?
This connects back to the stuff I was talking about in yesterday’s post about the connection between productivity and standard of living: a more educated workforce will be more productive, and have a higher standard of living, and therefore access to better schools, and so on. And so the rationing of education is connected to the rationing of a certain standard of living (which, while not a good per se, is certainly scarce), and — of course — to socioeconomic class. (A question I’ll look at later: is class “rationed,” and if so, how?)
Some factors that affect the rationing of college education: money (at the most obvious level, tuition), standardized achievement tests, family background. There are others. Mankiw argues that “Free markets ration goods with prices” (120) and that “the rationing mechanism in a free, competitive market is both efficient and impersonal” (119), or, in other words, prices are the ideal way to ration goods, and price ceilings are inefficient because they cause shortages and distort the market. He gives several examples — gasoline rationing during the OPEC crisis in 1973, water rationing in a drought, rent control in New York City — to attempt to bolster his claim that price ceilings harmed everyone, and that a free and open market with no price restrictions would have been a better way to go in all cases.
Mankiw’s position is an easy one to maintain, as long as you’ve got money. In all cases, he ignores the plight of those who are priced out of the market. Apparently, poor people don’t need gasoline, housing, or water. Certainly, I’m oversimplifying, but in service of the point that price ceilings spread out the misery equally, via shortages: without price ceilings, the poor bear the entire burden of the market’s misery. This doesn’t bother Mankiw very much, which is unsurprising, since Mankiw is a Harvard economist making a very nice salary. Nor is it surprising that Mankiw’s position is fairly common among economists. Since we’re talking economics, I say we look at some numbers from the Department of Labor’s Occupational Outlook Handbook. According to the handbook,
– there are 134,000 economists in the U.S., with a median annual income of $64,830.
– there are 976,000 accountants in the U.S., with a median annual income of $43,500.
– There are 221,000 mechanical engineers in the U.S., with a median annual income of $58,710.
– There are 585,000 computer programmers in the U.S., with a median annual income of $57,590.
– There are 149,000 librarians in the U.S., with a median annual income of $41,700.
– There are 1.3 million postsecondary instructors in the U.S., with a median annual income of $46,330.
– There are 3.9 million secretaries and administrative assistants in the U.S., with a median annual income of $31,090.
– There are 4.2 million building cleaning workers in the U.S., with a median annual income of $17,180.
– There are 457,000 correctional officers in the U.S., with a median annual income of $31,170.
– There are 1.2 million carpenters in the U.S., with a median hourly wage of $15.69.
– There are 909,000 farmworkers in the U.S., with a median weekly income of $309.
The above numbers, to me, indicate something about the ease with which economists advocate doing away with price ceilings: it’s going to affect a lot of other people more than it affects economists, and asking economists to worry about how those prices affect other people is like asking politicians to worry about campaign finance reform. So my question for Mankiw might be: who would you like to price out of the market first? Building cleaning workers don’t really need to buy gasoline, do they? As far as you know, they all take the bus anyway, right?
This is where I see the reason for so much of the rhetoric of authenticity in composition’s discussions of class: most of the people wanting to talk about class have wanted to talk about class because it’s had a material effect on their lives. It’s easy for Mankiw to talk about free markets because material conditions don’t affect his life in the same way that they affect the life of a farmworker or a building cleaning worker.
(And isn’t it telling that the two lowest-paid occupations in that list are the only two with the word “work” attached to them?)
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