Thursday, July 30, 2015


Friday Fragments

There’s a piece making the rounds about Baumol’s cost disease that’s both smart and confused.  

It starts by implying that explanations of tuition spirals that draw on Baumol’s cost disease are mistaken.  But it sort of shifts ground halfway through, implying that it actually has been true until now, but that technical innovations will render it moot.

Then it claims that people use Baumol’s cost disease as an excuse not to innovate.  At that point, it’s both factually incorrect and in tension with its claims in the first part of the piece.

People who put stock in Baumol’s as a driver of cost increases -- and I am one who does -- often use that as an argument for innovation.  Either we change what we’re doing, or we’re locked into a cost spiral indefinitely.  Very few people just shrug at the prospect of an indefinite cost spiral.  (To be fair, Baumol himself sort of does in his recent book.  I took him to task for that.)  

Arguing that the status quo is structurally flawed is not arguing in favor of the status quo.  If anything, it’s creating space for innovations to thrive.


As a writer, seeing the phrase “the collected works of Donald J. Trump” in the Washington Post is sort of bracing.  It tends to generate a crisis of purpose.

Still, the review is worth reading.  I salute the author’s tenacity.


On the topic of disruptions, I’m thoroughly convinced at this point that the real estate industry needs to be disrupted.  Interstate moving is a nightmare.

Here’s an occupation waiting to be born: an event planner for long-distance moves.  Basically a project manager who knows the sequence of what needs to happen, and who can follow up on the cascade of phone calls, emails, and requests to fax (!) documents.  (My favorite was the request for a copy of a check I deposit two weeks prior.  I’d love to make a copy but, um, I deposited it…)  

The number of calls and emails with variations on “I need this obscure document faxed to me RIGHT NOW” is absurd.  Everyone acts like it’s the first time they’ve ever worked over distance.  That cannot possibly be true.  

On the bright side, though, I’ll finally be able to bid Comcast adieu.  There’s something deeply satisfying about that.


Program note: every summer, I take a week-long break from blogging.  Most years, it’s for a vacation.  This year, it’s for moving a house full of stuff.

Assuming catastrophe doesn’t strike, the blog will be back on Monday, August 10, once again reporting from New Jersey.

Once upon a time, a mortgage company wanted me to send them a document proving that I had no debts that weren't showing up on my credit report.
One time for a loan application we had to get my daughter to write a letter to the bank that the account in her name was actually hers. She was six - and wrote the note in crayon.
I am so sorry that nobody warned you to at least take a picture of that check before depositing it.

Once had a real estate transaction nearly derailed because the buyer cashed her paycheck and deposited the cash. Her lender demanded she prove where the cash had come from.
I agree that the article in question is flawed, but not for the reason you give.

The error in the article is that it confuses the cost for educating a good student (one who learns at the expected rate) with that of a student that repeats many classes. The innovation mentioned in that article is not "technical" (the author is clearly aware that the gains from technical innovation were obtained 40 to 50 years ago with larger classrooms and film or video recorded lectures) but pedagogical. Increasing learning at the same cost -- via more effective teaching -- will reduce some signficant fixed costs of a college and the net cost of an education. This is a valid point even if you don't believe those same learning gains can come from the next generation of teaching machines. However, the same benefits can be found from grade inflation, so it might not show up much unless you compare outcomes assessment with cost.

Whether learning can be done without any humans at all is the key question, and why you need to think quality rather than kind when it comes to "technology". I will mention that the investment side of this issue is whether a cheap IBM Watson computer combined with Pearson's learning data can replace people to a degree that previous innovations (starting with programmed learning and then PLATO) did not. However, on the cost side, the more signficant question is whether the cost of this will be lower than (say) video lectures plus grad TAs and, even more importantly, whether the difference will show up in the consumer price of the goods. There are pickup trucks today that are priced like they were made by Italian craftsmen rather than robots!
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