Tuesday, February 18, 2014

 

Almost Recognizing



Every so often, when watching something on tv, I’ll sort of recognize an actor.  I’ll know it’s someone I’ve seen before, but won’t be able to place where.  I’ve been known to lose entire evenings trying to figure out who it is.  That feeling of knowing that I know, but being unable to call up the specifics, is a special kind of frustration.  It happens with actors, songs, or even famous quotations in unfamiliar contexts.  Shazam and Google sometimes help, but I try not to resort to them too quickly.  It feels like cheating.

Once in a while, I’ll get a similar feeling when I read or hear an idea.  It’s so foreign, and yet so obvious, that I can’t immediately decide whether it’s brilliant or crap.  I can’t shake the sense that there’s something there, even if I can’t quite place what it is. This piece by Mike Caulfield is like that.  (Hat-tip to Kate Bowles for highlighting it on Twitter.)

Caulfield suggests -- “argues” is too strong a word -- that extremely low labor costs in certain jobs actually deter innovation in those jobs, because the payoff for possible efficiency gains is relatively low.  To use his example, that’s part of the reason that technology has moved much more quickly to come up with tax-preparation software than with robots that can clean hotel rooms.  Preparing tax returns costs more per hour than making beds does, so the payoff for automation is greater.  In the hotel sector, there’s still enough cheap labor around that it hasn’t been worth innovating.  

He then applies the same logic to higher education.  As long as plenty of qualified people are willing to work for very low pay, he suggests, there’s no pressure for systemic innovation. If the cost of instruction were dramatically higher, the sector as a whole would have been forced to change its ways much more fundamentally. If labor is cheap enough, you don’t have to rethink how to deliver Intro to Psych.  If it gets too expensive, you’ll see the appeal of going with an entirely new model.

Hmm.

I like several elements of the idea.  It recognizes incentives, for one, and it avoids the all-too-common trap of assuming that the trend towards adjunct instruction is either just a failure of will or some sort of conspiracy.  The trend is an increasingly desperate attempt to keep an old model alive in ever-more-hostile conditions.  From the inside, it feels much more like a holding action than like some sort of assault.  This theory gives that feeling a context.  

As with many holding actions, there comes a point at which it makes more sense to try something else.  I’d rather have a hand in shaping what comes next, while the option still exists, than hold out so long that all agency is lost to an economic force majeure.

If the theory is substantially correct, then the option of a return to some sort of prelapsarian idyll is really off the table.  If the idyll were sustainable -- assuming it existed at all -- it would have sustained.  The decades-long holding actions have been ubiquitous precisely because the idyll is so appealing that almost nobody wants to admit that it’s gone.  

In other words, if Caulfield’s framework is largely correct, then there’s a choice.  We could embrace the two-tiered future, with the top tier shrinking and the bottom tier growing.  Or we could start looking at the underlying business model itself.  

I’m not sure whether the concept of low wages as innovation-stifler has a glaring hole in it, but it feels like it captures something fundamental.  Now I’m doomed to walk around for most of the day obsessing about it, as if trying to place some actor.  Wise and worldly readers, is there a flaw I’m missing?

Comments:
I've heard a similar theory advanced for why ancient civilization never experienced an industrial revolution, despite having the mechanical skill to construct things like the Antikythera mechanism and the aeolipile; the availability of ample slave labor meant that there was little incentive to mechanize.
 
I know it isn't good form to fight the example, especially without reading the piece, ... but the specific example cited here certainly can have another explanation.

Software for tax preparation is essentially using a computer to solve equations that are defined by answering a set of logical questions. (I think "no brainer" is the DD lingo.) It's an easier problem to solve than cleaning a hotel room by a robot. In other words, cost cannot be the only factor. Paying a CEO is much more expensive than paying an accountant, yet we don't have CEO-replacement software.

There does seem to be some logic to the argument, though. I try to teach my students in engineering design to focus on the most expensive aspects of a process when they are trying to identify efficiencies and opportunities for cost reductions. Turning off office lights in world headquarters at night will not have a significant impact on the profits or losses of GM.

So is the old option off the table? Either someone has to pay for its costs, or lower costs must come from somewhere else. Continuing to think toward a more sustainable model does make sense.
 
And yet there has been all sorts of innovation, some so old it has been forgotten even when (like PLATO) it technically still exists. Some (especially PLATO) are cheaper to reinvent, since the original was government funded and hence lacks the profit of a proprietary system and was not written in a modern computer language. I think the ones that can possibly replace human teachers are too new to have been considered when the U of P was developed.

Even the labor issue is not as simple as described in that article. I know that some full-time (yet not tenured and hence adjunct) instructors are paid similarly to CC faculty but teach huge lectures so the (higher paid) t-t faculty are free to do research and teach small honors seminars or upper division classes and bring fame to the university. They are backed up by another layer of grad TA labor that actually talks to students 1-on-1.
 
On the one hand, there's the induced innovation model from economics, in which the nature of invention, and its labor-saving bias, reflects relative prices. On the other, there's the complexity of the capital being conceived of. A bed-making machine for a hotel has more mechanical requirements on it than a Mars explorer.
 
Part of what would support the "1/3 of people not working" suggested as a solution in the article is a high tax rate on wealthy people and all of their sources of income (imagine if the capital gains rate was the same as the income tax rate - just imagine!) This would allow the government to supply high quality childcare, maternity leaves, healthcare, usable public transportation, and early retirement. Your argument about needing to decouple the cost of healthcare from employment is an aspect of this argument in that it recognizes that some of the uncontrollably increasing cost of labor is the cost of benefits. If benefits didn't matter as much, you could pay all of your faculty crap wages and you wouldn't have to worry about the social justice issues that the current system brings up. Why do we need money? I spend most of mine on healthcare, childcare, retirement, and my mortgage. If those things were subsidized and I could commute on public transit in a reasonable amount of time, my major expenses would be covered and I could probably afford to work as an adjunct.
 
For a more detailed exposition of Caulfield's hypothesis, see this by Ryan Avent in The
Economist:
http://www.economist.com/blogs/freeexchange/2014/02/labour-markets-0
 
"imagine if the capital gains rate was the same as the income tax rate - just imagine!"

That would be the 1986 Tax Reform Act, enacted with bipartisan support and signed by President Reagan. At the time, I was puzzled by the fact that they kept the distinction between long-term and short-term capital gains in the Tax Code--what was the point when they had the identical tax rate, the same rate as ordinary income? But it didn't take too many years before the rates diverged again. As rates on ordinary income rose, capital gain rates (long term) were first protected, then reduced to promote economic growth.

I believe that things that can be automated will be automated, eventually. Education can be far more automated than it is today. Open Courseware is a first step. Even the low pay of adjuncts is very high compared free.
 
Why do I cringe every time someone uses "deliver" as a synonym for "teach"? There's so much more to teaching a class -- teaching students -- than "delivering" content. This is true, I would argue, regardless of the subject. If you hire people who only deliver content, something akin to what happens when one inserts a DVD and plays a documentary, you are shortchanging students in a most profound way.
 
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