Tuesday, March 14, 2017

Educating the future

Our college president asked my economics colleagues and me to weigh in on a LinkedIn article about big-picture economic trends and higher education.

Artificial intelligence is getting better and better at replacing humans in areas that we had viewed as out of the reach of computers. Wages since 2000 have been uncoupled from corporate profits, shrinking as a share of GDP while profits rose. And education will move from a cottage industry that's light on technology to a relatively small number of "education companies" utilizing technology to the max.

We're having a snow day (which might turn into two) so I had time to turn my hand to a response.

The article can be looked at as two parts. The first is a prognosis of what the economy will be like, and therefore what the job market will be like. The second is a discussion of the future of higher education within that context.

I think the "prognosis" part has pretty wide agreement among economists. The stagnation and decline in routine manual and routine cognitive employment are merely the next step in the Industrial Revolution. Mechanization mostly eliminated the importance of human (and animal) muscle power, moving humans over to "control" functions, whether manual (operating a machine that was powered by something other than your strength) or cognitive (including "routine" things like many office tasks 60 years ago). Now AI is reducing the importance of the human ability to control an object or to make a decision, as long as that control or decision-making can be routinized.

In the case of mechanization, there were shifts in the distribution of wealth, but there was also a huge increase in average wealth, and most people were able to move into work that required the control and decision-making abilities of the human mind, even if those applications were "routine."

With this next step of automating anything that can be routinized, it remains an open question how far the displaced workforce will be taken up into non-routine tasks, whether those are cognitive or manual.

Along the dystopian path, many of us turn out to be economically unnecessary and nothing is done about that, and so we end up with a hypertrophying of the 35-year process we've already experienced of economic stagnation for 90% of the population and rapidly increasing wealth for a small minority.

The non-dystopian path has a paternalistic variant and a more market-based one.

The paternalistic version involves a universal basic income, as mentioned in the article, along with truly universal health insurance and access to education based less on ability to pay than it is at present. The idea is, If society is getting increasingly wealthy, why shouldn't we be able to provide everyone with not just food and shelter, but some fundamental services like health and education?

Obviously our current political climate is pointed 180 degrees the other way from that. And even though I'm a supporter of those ideas in principle, they do involve difficult questions connected to immigration and the fact that, while the world as a whole is much richer than it was 50 years ago, there are still a few billion who live in unspeakable poverty; if a basic income is administered by national governments and different nations have massively different levels of wealth, you get into some really tricky issues as to just why it is that one country has so much more wealth than another.

The market-based variant of the non-dystopian path sees a continuation of the transition that happened with the Industrial Revolution. Employment continues to grow in non-routine cognitive and manual work, fast enough to eventually absorb the bulk of the people displaced from routine jobs.

Along this market-based path, there are two questions relevant for Hartwick, the first having to do with wages. The author presents data on the uncoupling of profits and wages as shares of GDP, which is a really bad indicator for the future of Hartwick (and, less parochially, a really bad indicator for the future of society). That trend is an exacerbation of the 35-year history I mentioned above of increased concentration of wealth. That means a shrinking pool of families with the means to pay for the kind of education we're good at providing. Colleges with a strong enough combination of status and reputation will do OK or even thrive, because there are families in the pool with ever-increasing wealth. But despite the good job that we do, I don't think we're high enough on that ladder of status and reputation to prosper working in the way that we have been. So we and other colleges similarly situated are scrambling over the few households with the magical combo of not making it into the prestigious schools even though they're good students, and also not being left behind economically.

If the overall economic climate is unfavorable for us, and essentially beyond our control, the other question is how we should best respond, which brings us to the author's prognosis for higher education, as it becomes a somewhat larger share of GDP and and goes from being a "cottage industry" with a negligible presence in capital markets to a consolidated market with 100+ "education companies" having a major presence in capital markets.

It seems obvious to me that there's no way we can possibly compete directly in that consolidated education marketplace of the future. The EdCo's will have economies of scale, access to financial capital, and an ability to automate more of the educational process. (I'm assuming we're going to be calling "education companies" EdCo's, so I thought I'd go ahead and start using the awful term now.) The very technology that is squeezing wages for a significant portion of college graduates will be used by EdCo's to displace humans from whatever parts of the educational process they feel can be routinized, allowing them to hold down costs for their students, which will be crucial, given the wage squeeze they'll be facing when they graduate.

But there's a contradiction here. If you're going to escape the jaws of the wage squeeze, you have to be as non-routine as possible. Can a routinized EdCo provide an education that equips you for the fundamentally non-routine parts of the future that you need to aim at?

And there's our niche, our opportunity. We can be the ones helping students grow into adults who are simultaneously well informed and flexible, already having started working on problems that need to be addressed. We do that by stepping up how we integrate our educational program with the community around us, getting students (and ourselves) in the habit of thinking about problems from a fresh perspective, in innovative ways.

I see a possibility of success along that path. Otherwise, it's pretty challenging.


  1. This is very interesting. I've been seeing a lot of things written by a lot of people with varying degrees of expertise in economics, who have been predicting THE END ... of neoliberalism, of capitalism, etc. I just started reading Give A Man A Fish: Reflections on the New Politics of Distribution by James Ferguson, who points out in the introduction that there are already some countries in the global south that are going the route of simply giving people a basic income. It is possible that we may be closer to the basic income scenario than we realize, although right this minute it feels entirely politically impossible.

    As for Hartwick, it seems to me that another avenue might be to marry critical problem solving skills with more technical background. One of the things I learned while I was doing workforce development in Oneonta is that parents always want their kids to get BAs, which often translate into $30K jobs in office administration, while there remains a crying need for the technicians who can operate and repair those ever-increasingly complicated machines that are replacing humans in ever-increasingly complicated tasks. The technicians are currently AS degree level but it won't be long before they'll need BAs anyway.

    Your thoughts?

    1. Hi Dawn,

      I can't imagine a basic income flying here any time soon, but then I couldn't imagine Trump squeaking in either, so my imagine is obviously impoverished (though let me tell you, it was a hell of a lot nicer place to inhabit than where we are now).

      That's an interesting thought about technical training, and the marrying of it with critical problem solving skills. I suppose that sort of job would be an example of non-routine work since there is (at least for now) something inherently unpredictable about how things stop working, and therefore the need for a human to work at the problem through application of his/her creativity and ability to figure out something inherently new.

      But then again, not having been educated in a technical field, I would think that a good training in, say, robot repair inherently involves a large dose of critical problem-solving skills. After all, you're faced with the problem of "this thing isn't working," and you have to assess the available evidence to determine a most likely diagnosis and then work out a likely effective solution.

      I say I wasn't educated in a technical field, but I did spend 6 years in music school studying trumpet, and there too you have to bring to bear critical problem-solving. "I keep getting this passage wrong. What is the source of my difficulty? What way of practicing it is likely to help me surmount that?"