‘Splain Me

I’m with Tyler Cowne about President Obama’s plan to reduce the cost of education:

I would find it helpful if this proposal would outline the core, underlying theory of market failure in higher education, and then how these ideas would fix it. It is difficult for me to put that argument together in my mind. I do get the intuitive reason why “aid should be tied to outcomes.” But presumably students, who already have by far the most at stake in choosing a college, already allocate their own dollars and aid dollars on the basis of outcomes. If that process isn’t broken, this plan seems to address a pseudo-problem. If that process is broken (misguided students?), we need to know whether this plan really will fix the kink in the system. For instance if students cannot right now choose the schools offering the best expected outcomes for them, this plan seems to work mighty hard to get the schools to do the choosing for them, but in reality only ends up putting the students into tougher and less appropriate institutions. Can you spell “remedial”? In any case, under these assumptions, it would seem to be the students who need the fixing, not the schools.


Overall the ideas here strike me as underdeveloped in terms of logic.

Is the idea behind the rating system to frighten schools into lowering their prices? I really don’t get it. Other than at the margins how will this plan lower the cost of higher education? Please explain it to me.

Lord knows I have no objection to higher education costing less but it seems to me that the problem of college costing too much has a simple solution and one I’ve proposed before: a high quality, accredited online program, free of charge or at least inexpensive, available to anyone who’ll do the work.

Of course, if our actual problems are that the top schools are the top schools because they’re selective, select students who have high earning potential when they walk in the door, and expensive or that our educational system’s greatest problem isn’t the outputs (students with degrees) but the inputs (the capabilities of the students when they enter college) or that we aren’t producing enough jobs for people with any level of education, even that won’t help much.

46 comments… add one
  • jan

    Seems like the overall plan is strong in the micromanagement department, and weak on actual substance and problem-solving. I feel on-line education is a good adjunct to mitigating educational costs, as well as easily accessing education around one’s own schedule — especially a person who is self-supportive and working.

  • TimH

    As a pretty recent college graduate, I’ve been hit by really high university costs, which I financed through a mixture of scholarships, grants, and a lot of debt. I DID sign up for it, though, so see no reason to complain.

    I agree with you and Prof. Cowen on this one: I just don’t get it. If anything, the program could punish students for going to the “wrong” school. My gut feeling is that Obama is trying to reign in semi-sleazy practices at for-profit schools, without attacking them directly. (For-profit schools have gone online quicker, and are popular with veterans, stay-at-home parents, etc.)

    My girlfriend attended a for-profit college, and I so I’ve seen some of their “underside.” She has had a tougher time finding jobs, private debt at much higher interest rates, and so on, when compared to me. I’ve thought, a lot, about what policies could be enacted to prevent what happened to her, and make education more affordable.

    I think Obama is using some form of the solutions I’ve thought of, which are to use federal student loans as a kind of “big stick.” My solutions, though, were to either make colleges guarantee that federal loans could finance 100% of costs, or prohibit schools from using private and federal loans mixed, or cap all loans (even private loans) to the federal rate (both private and federal are nearly impossible to discharge in bankruptcy).

    My preferred option, though, is to make all students finance school through debt, not in fixed dollar amounts, but as a percent of their income over some period of time. You’d need to make it un-opt-outable (though, of course, the wealthy could simply give their recent grad the money), and considerations would need to be made for times of unemployment or when back in grad/professional school, but you could make it work. (This was experimented with under Clinton, but failed because it wasn’t made mandatory).

  • PD Shaw

    A possible explanation is that the market failure is the result of the influence of U.S. News & World Report rankings, which I believe have a number of inputs which encourage spending without necessarily any benefit to the student. To the extent that higher education is a positional good (which I unquestionably think it is at least in part), then an arm-race is created, which creates a lot of waste. Particularly problematic are efforts for schools to move from 21 to 20 or 51 to 50, which are practically meaningless.

    We cannot ban USNews from ranking, but we can try to create a government endorsed alternative with practical implications that moderate the damage. That said, I’m not sure this is quite the approach to finding practical measures of value, particularly given that students of wealthy parents will get relatively high paying jobs wherever they go. I think it would be very interesting to look at salaries five years after college, compared with parent income in the initial financial aid application across various schools and degrees.

  • TimH

    PDShaw, there are so many ways of ranking schools – and so few are good. For a large segment of the population, though, rankings don’t matter: Accessibility and knowledge does. Community colleges may be locally known, and then there are ads (frequently for for-profit online colleges) on billboards and buses. I’ve met a lot people in their 20s who were first in their families to attend/graduate college. How did they pick? “It was nearby,” or they saw an ad.

    The other thing this proposal doesn’t address is the slow transformation of apprenticeships into paid-for college degrees. For example, the hotel industry used to be somewhat meritorious: You could work your way up from changing linens to a comfortable (upper?-)middle class salary as a manager over a career. Now, management is only for those who have (and paid for) hospitality degrees. They’ve “outsourced” the cost of educating managers to the employees (and worse, prospective employees who might never get hired).

  • I think it would be very interesting to look at salaries five years after college, compared with parent income in the initial financial aid application across various schools and degrees.

    The subject has been studied extensively. IIRC there’s a close correlation except at the very highest and very lowest income levels.

  • jan

    Interesting comments TimH, especially from someone having current experience with managing college education expenses.

  • michael reynolds

    Oh, my: I agree with Jan.

    This thing smacks of the kind of small-bore, marginal stuff Dick Morris used to favor for Mr. Clinton. The actual solution to college costs is right there in front of us: I like to call it, “the internet.” Online courses, e-books, it’s not hard if the goal is actual education as opposed to credentialing by some snob school.

    I think it will take a while to adjust. Things always take longer than I think they should. But you know, not everyone buys a BMW, there are a whole lot of Honda Accords out there and they make a lot more economic sense.

  • PD Shaw

    @TimH, underlying many of these issues is the question of what is the value of secondary education. There are various theories I’ve seen and they tend to range from:

    Productive theory, college creates valuable skills and knowledge.
    Trainability, a college degree identifies the recipient as someone capable of being educated in the work, regardless of whether that degree relates to the work.
    Relative (positional) values. Helps the employer decide whom to hire — The college graduate is relatively better than the high school graduate.
    Social signalling, a college degree signals to the employer that the graduate has been socialized to similar norms as the employer.

    An education could have elements of all these. In your example, I don’t have any problem with hotels outsourcing general training to educators; if the students is obtaining productive skills that he can take to other employers, perhaps he should pay for it. The downside to the apprenticeship regime is that if your master is a jerk you may have nothing you can show for your training that you can communicate to the next master/employer. OTOH, depending on the cost of education, at some point the arrangement has the appearance of a requirement that all resume have a thousand dollar check attached in order to be reviewed. Such a requirement reduces the work of identifying an employee and communicates dedication to the offered job.

    The point I would make is that the government has an interest in increasing the skills of its citizens, but it does not have an interest in any of these other attributes of higher education. Some aspects are repugnant to social equality. The University of Amsterdam has ongoing studies that seek to find ways to identify which of these aspects are prominent at least in different country’s educational programs. (I believe Germany has more “productive” aspects, while England has a strong strain of “socialization,” for instance) That would be the general direction I’d like to look to.

  • michael reynolds


    That’s a thought-provoking comment, especially this:

    the government has an interest in increasing the skills of its citizens, but it does not have an interest in any of these other attributes of higher education.

    Indeed. Interesting.

    If we start looking at college as

  • michael reynolds

    (Okay, don’t know why that posted early.)

    a means of ensuring the socialization for, and trainability by, an employer, it begins to seem like a hell of an expensive way to accomplish a relatively modest goal.

  • Red Barchetta

    I didn’t even know he had released a “plan.” I scanned Cowen’s summary. Rube Goldberg would be proud.

    But I have a question – and I’m serious; this isn’t snark – what in his ideology or actions of the past 5 years would make you surprised he would come up with such a thing?

  • Of the explanations provided so far I think that Michael’s is the kindest:

    This thing smacks of the kind of small-bore, marginal stuff Dick Morris used to favor for Mr. Clinton.

    I really can’t explain it at all. Here are some other possibilities.

    – it’s “cargo cult progressivism”. Since successful people have college degrees, you can make people successful by giving them college degrees. If that’s the general idea, why not eliminate the middle man? Just give everybody a college degree. Other than it would make the president’s most ardent supporters unhappy.

    – it’s politics at the expense of pragmatics. The means doesn’t really have anything to do with the end. But now he’s got a plan. And it’s one that involves hiring a bureaucracy. Who will have good prospects for future job in college administrations.

    – they haven’t thought about measuring the results. My guess is that the results would be too small to measure and probably be overwhelmed by the cost of implementation.

    I’m still searching for an explanation. None of those seem quite right to me.

  • jan

    Matt Taibbi has written a detailed critique entitled Ripping off Young America: The College Loan Scandal. In it he offers no partisan excuses or niceties, and simply opens up on how disingenuous all this college ‘help’ is, especially in the larger fiscal picture for young people.

    On May 31st, president Barack Obama strolled into the bright sunlight of the Rose Garden, covered from head to toe in the slime and ooze of the Benghazi and IRS scandals. In a Karl Rove-ian masterstroke, he simply pretended they weren’t there and changed the subject.

    The topic? Student loans. Unless Congress took action soon, he warned, the relatively low 3.4 percent interest rates on key federal student loans would double. Obama knew the Republicans would make a scene over extending the subsidized loan program, and that he could corner them into looking like obstructionist meanies out to snatch the lollipop of higher education from America’s youth.

    According to Taibbi, it’s all about political maneuvering, versus honest management of an on-going and growing student loan problem.

    Basically, no where has this administration truly addressed the culpability and long term duress that student debt burdens young people with. And, this latest college tour and it’s proposals, seem no more than window dressing for what ails one’s affordable access to higher education, or perhaps a well-placed distraction to take the media eyes off more pressing problems.

    It kind of reminds me of a critical care charge nurse, with a full house of critical patients, sitting casually at a desk talking about the hang nail problem in room 209, downstairs. Here we have tons of issues being bantered around in Congress, a debt ceiling battle looming next month, the ME a hot bed of chaos, the domestic front looking not too good,, just to name a few, and the President is going around the country talking to college students! What’s wrong with this picture?

    This criticism is not induced by my partisanship, either. For if the same behavior was being exhibited by a President Romney, I would be even more critical that someone I voted for would be such a lame-brain, low priority, laissez faire leader!

  • michael reynolds

    It’s telling that Huffpo and MSNBC seem to be largely ignoring it.

    The real solution will involve a whole lot of people losing their jobs, a lot of colleges closing and a handful of publishers losing very profitable markets. There are entire cities that exist only because they have a college.

    Not to mention the fact that parents will have to start walking back all that “College is the be-all, end-all,” talk.

    And of course HR departments would have to admit that they haven’t known what the hell they were doing for at least the last couple of decades.

    I began noticing a change back during my brief college months as we moved away from college-as-education to college-as-credential and even college-as-job training. Neither my wife nor I connected college to employment per se, and I don’t think anyone else I knew at the time did, either. I was the only one in my circle who had ever had a real job. College and work were not directly linked in our minds. With benefit of hindsight I had no idea what the hell I was doing there which may explain why I split. (As we used to say.)

    But this is all just one small part of what I believe is a profound societal shift which neither Jan nor Red will like much. Anyone who thinks the future is either small ‘l’ or capital “L” libertarian is smoking some really good weed. (As we also used to say.)

  • If by “libertarian” you mean “anarcho-capitalist”, I’m in complete agreement with you. If by “libertarian” you mean libertarian, you may also be right but I hope I don’t live to see the future you’re describing.

    The opposite of “libertarian” is “tyrannical” or maybe “coercive”. Not “socialist” or “welfare state” or “mixed economy”. All of those are quite compatible with libertarianism.

  • steve

    I proposed the online idea to my son and his 2 roommates. Math majors at a good school, plus my son the physics major. One Korean, one Chinese and my son. They thought that maybe 10% of students had the right combination of motivation, discipline and smarts to benefit from online courses. They thought it might work for first year basic requirement courses. I mostly agree. I think it would also work for courses that you take after you graduate and start working, finding out what you really need to know. To me, it sounds like a clever, money saving plan imposed from the top-down. It would take major cultural changes to make it work.

    AS I have said before, for the top level schools you are fighting against market forces when you try to lower prices. You have a fixed number of schools perceived as elite, and with the addition of international students, you have (at least) doubled the number of qualified students who want to attend. You then have the next tier that are elite wannabes who price the same as the elites, trying to attract students with amenities. You then have most of the rest (excluding community colleges) and they are going up due to admin costs and housing, trying to attract students/parents with the add ons. Schools that are not offering these things are not enrolling students. As long as that is the case, dont expect prices to drop.


  • PD Shaw

    @steve, it also doesn’t help that the pricing of private schools are not very transparent. A number of schools have raised their price, suggesting that higher education is a luxury good, the more you spend (or someone spends on your behalf) the higher the perceived value. But those schools also increased their financial aid packages, so few actually were paying the sticker price. The schools instead are using the details from the financial aid packages to pick the price each student can bear, depending on how desirable that student is for rankings. Sounds too much like healthcare pricing.

  • michael reynolds

    The opposite of “libertarian” is “tyrannical” or maybe “coercive”. Not “socialist” or “welfare state” or “mixed economy”. All of those are quite compatible with libertarianism.

    Libertarians would not agree. Ask Rand Paul if libertarianism (or liberty itself) are compatible with a socialist welfare state.

    I see that we have a lot of people working at jobs that don’t pay enough to allow them to live without government subsidy. I’m told that’s just the way it is, business model and all, but that is socialism. I see the capabilities of computers advancing even as they grow cheaper, smaller, more ubiquitous and I think more and more humans will have less and less ability to compete. At the same time we’re competing with overseas workers. And now here we are admitting that the great panacea, college, isn’t really curing the disease.

    So what we’re talking about is a future where the lucky few ride high, the unlucky mass declines, and yet all have a vote. That doesn’t feel to me like a trajectory that leads to anything Rand Paul or Drew are going to like.

  • PD Shaw

    Here is a study on the effects of rankings. From the abstract:

    “Using admissions data for top-tier institutions from fall 1998 to fall 2005, we found that moving onto the front page of the U.S. News rankings provides a substantial boost in the following year’s admissions indicators for all institutions. In addition, the effect of moving up or down within the top tier has a strong impact on institutions ranked in the top 25, especially among national universities. In contrast, the admissions outcomes of liberal arts colleges—particularly those in the lower half of the top tier—were more strongly influenced by institutional prices.”

    While strongest in those liberal arts colleges, price increases create positive outcomes for schools:

    “Interestingly, increases in tuition also contributed to improved admissions indicators, even though tuition is not necessarily connected with institutional quality. This finding seems counterintuitive in terms of a purely economic perspective, which would suggest that consumers would gravitate toward the institutions that provided the greatest benefit for the lowest cost. Clearly, then, students and/or parents must view high tuition as reflecting some positive aspect of institutions, whether it be prestige, quality, or a combination of the two; moreover, this effect is powerful enough to overcome the financial burden that higher tuition can impose. Perhaps reflecting a cognizance of this dynamic, some colleges have increased tuition substantially in their efforts to become elite institutions.”


    Market failure?

  • michael reynolds

    It’s like a wine list. Most people don’t make a fetish of wine education so they look at price. No one orders the 5.99 glass. They order the 14.99 glass if they can afford it, or the 8.99 glass as a compromise. The price subs for a more nuanced comprehension of quality.

  • Libertarians would not agree.

    I think your view of libertarians is too limited. I don’t follow either Rand Paul or his dad much since I don’t live in either Kentucky or Texas and I’m not a Republican but I suspect that he has strong objectivist leanings. Objectivists tend towards anarcho-capitalism.

    My erstwhile colleague at OTB, Alex Knapp, who now writes mostly at Forbes.com is another, completely different sort of libertarian. Just as, say, Steve Verdon is farther right than I am, Alex is farther left. But they’re both libertarians. Not every libertarian is a Tea Party supporter and not every Tea Party supporter is a libertarian.

    I’m not a libertarian; if pragmatism weren’t so discredited I’d describe myself as a pragmatist. IMO libertarianism is a good value for informing one’s political views but is a poor thing to be one’s political views.

  • Red Barchetta

    I’m glad you commented that, steve. I’m dubious of on-line. I have 3 degrees from 3 very different institutions at 3 very different times. Purdue engineering. Illinois Institute of Technology masters engineering and University of Chicago business.

    Purdue was formative years, plus the Manhattan Project prof I’ve commented on before. No internet experience could top that. Period. Full stop. IIT? On line might have worked. Fracture mechanics is, well, kind of mechanical. Chicago? Finance w/o Gene Fama or Ken Fisher? Economics w/o Kevin Murphy?

    No chance. Just no chance is internet even close.

    How many people want to walk into steve’s ER and hear “I learned how to stop this potentially fatal bleed on the internet?” I’ve watched the cervical fusion and ulnar nerve transposition surgeries I’ve had on the internet. Hell, I even “got” the different approaches and mechanical procedures. But the internet, really?

    And spare me the “technique” and apprenticeship arguments. You can read Joyce on the internet. You can read the Cliff’s notes. You can read about replacing spark plugs. But you can’t duplicate Firing Line or that PBS show where a prof conducted what amounted to a class case study with senior people on some thorny issue. You need to walk into the fire, not Google it.

    Dave is, as always, more charitable than I. Obama is engaging in pure politics. The campaign goes on. The governance and real executive action is in the toilet.

  • jan

    “No one orders the 5.99 glass.”

    I do.

    My husband describes me as a “cheap date,”” because I cost so little to maintain and be content. I’ve never felt comfortable in expensive restaurants, preferring, instead, the setting of comfy cafes where locals come and hang.

    Consequently, when I order the house sauvignon blanc at my favorite place in the world — an old outdoor dining deck looking out onto a fishing pier and isolated beach cove — I’m in bliss, without any need to eyeball the $6 price as a taste test to measure it’s worthiness.

  • michael reynolds


    I think you’re a bit behind the times. Interaction is possible on the internet. Questions can be posed and answered. (Like they are here.)

    My 16 year-old’s education comes via the internet far more than through his classes, and believe me it’s a very interactive experience with Reddit, Facebook et al playing parts. The top-down teacher-student thing is fine, but hardly the end point. I never found it much use.

    Anyway it’s just not sustainable in a world where the user controls the timing of virtually everything — except for absurdly-scheduled classes. Why should we all have to go to a location at a specific time and sit in a row? And then be done at precisely the same time so that we can march to the next appointment with education? It’s just ridiculous.

  • michael reynolds


    I think at that point the term libertarian loses a lot of meaning. Hell, I can call myself a libertarian. (Actually more of a libertine.) The LP and the majority of people calling themselves libertarians oppose redistribution of wealth as a matter of core principle.

  • PD Shaw

    @michael, if you tweak your “wine” analogy a bit, higher education somewhat resembles the glass of wine you might buy on a first date, where uncertainty is high and first impressions are important. Or perhaps its the glass of wine you might allow someone else to buy for you, instead of the glass you would pay for yourself.

    My bottom-line though is that there is no incentive right now for the most successful schools to change anything, and the rest of the schools have no incentive to do anything that would jeopardize their US News and World Report ranking, and in neither case is there currently an incentive to reduce costs.

  • sam

    “The LP and the majority of people calling themselves libertarians oppose redistribution of wealth as a matter of core principle.”

    That’s because, in their innermost, they believe that John Donne was north for south wrong.

  • jan

    On line education versus a brick and mortar one depends on not only the course study pursued but also the temperament of the person.

    I think many undergraduate classes, and those fitting into a general liberal arts curriculum, can be easily accessed, having educational satisfaction, on line. Science classes, though, where labs are required not so much. Also, people deriving an online education have to be motivated and capable of independent study skills. When my son dabbled in college, he didn’t like Internet classes, as he felt deprived of the face to face social interaction and comradery of classmates. Also, he is easily distracted, and sitting at a computer screen lost it’s appeal over time.

    A friend of mine, though, got her BA totally via the internet. In fact, when she took some classes with me a few years ago, in a real university setting, it was off-putting for her being surrounded by real interacting students.

  • michael reynolds


    That’s all true, but it’s also cart-and-horse. We’ve been trained to see as normal a world where education is top-down and specific in time, place and curriculum.

    Don’t forget, we’re positing a world where college is not necessarily for everyone, which I extrapolate to mean that we are talking about college only for the more capable and motivated students. The indifferent student would presumably be less of an issue. In any event, spending billions to accommodate the unmotivated seems not exactly conservative.

    Probably 90% of what I know about history came via books, websites, podcasts, movies, documentaries and various online thread-chasing expeditions. In fact, what I learned in school was mostly useless hagiography and had to be overwritten. (None of which makes me anything close to an actual historian, obviously.) And it happened because I cared about the subject.

    90% of what I know about writing came from doing it. Not to say that school doesn’t help some writers. I’m having my ass handed to me sales-wise by a girl fresh out of college who went to school in part on my books. (Nothing makes you feel quite as old as hearing that, by the way.)

    Everything my son knows about computers and software came online. A lot of what my daughter and I are doing with her interest in cooking is in our kitchen, with some very useful online help.

    This idea of education as a sort of bolus we swallow over a set number of years before moving on is just one of several possible approaches to education. And I don’t think it’s the most economical or the most effective, unless what you’re after is a degree of regimentation of thought.

  • Ben Wolf

    The original libertarians emerged from the anti-statist left in the late 18th-19th Centuries. They sometimes referred to themselves as libertarian socialists or libertarian communists and believed that any concentration of power (whether private or public) must be continually challenged and justified, otherwise it would eventually be used to destroy individual liberties. Unlike Marxism it was non-utopian, accepting that institutional power was inevitable to some degree, but must be strictly limited and always watched with suspicion.

    Outside the U.S. libertarianism is still largely associated with the left but as I recall, in the 1950’s Murray Rothbard bragged about successfully hijacking the term for the American libertarian right.

  • Ben Wolf

    Here’s an interesting quote from Rothbard in his magazine, Left and Right:

    Libertarians of the present day are accustomed to think of socialism as the polar opposite of the libertarian creed. But this is a grave mistake, responsible for a severe ideological disorientation of libertarians in the present world. As we have seen, conservatism was the polar opposite of liberty; and socialism, while to the “left” of conservatism, was essentially a confused, middle-of-the-road movement. It was, and still is, middle-of-the-road because it tries to achieve liberal ends by the use of conservative means…. Socialism, like liberalism and against conservatism, accepted the industrial system and the liberal goals of freedom, reason, mobility, progress, higher living standards for the masses, and an end to theocracy and war; but it tried to achieve these ends by the use of incompatible, conservative means: statism, central planning, communitarianism, etc.

  • Ben Wolf

    I hope Dave will forgive me, but I’m in a bit of a Rothbardian mood:

    “Every element in the New Deal program: central planning, creation of a network of compulsory cartels for industry and agriculture, inflation and credit expansion, artificial raising of wage rates and promotion of unions within the overall monopoly structure, government regulation and ownership, all this had been anticipated and adumbrated during the previous two decades. And this program, with its privileging of various big business interests at the top of the collectivist heap, was in no sense reminiscent of socialism or leftism; there was nothing smacking of the egalitarian or the proletarian here. No, the kinship of this burgeoning collectivism was not at all with socialism-communism but with fascism, or socialism-of-the-right, a kinship which many big businessmen of the twenties expressed openly in their yearning for abandonment of a quasi-laissez-faire system for a collectivism which they could control…. Both left and right have been persistently misled by the notion that intervention by the government is ipso facto leftish and antibusiness.”

    -Rothbard, Egalitarianism as a Revolt Against Nature

  • Ben Wolf

    And here at the end of the third paragraph, Rothbard pinpoints exactly the contradiction that today’s right libertarians fall prey to, the sma contradiction which ensnared libertarian socialists:

    “In short, Russell Kirk, who claims that Socialism was the heir of classical liberalism, and Ronald Hamowy, who sees Socialism as the heir of Conservatism, are both right; for the question is on what aspect of this confused centrist movement we happen to be focussing. Socialism, like Liberalism and against Conservatism, accepted the industrial system and the liberal goals of freedom, reason, mobility, progress, higher living standards the masses, and an end to theocracy and war; but it tried to achieve these ends by the use of incompatible, Conservative means: statism, central planning, communitarianism, etc.

    Or rather, to be more precise, there were from the beginning two different strands within Socialism: one was the Right-wing, authoritarian strand, from Saint-Simon down, which glorified statism, hierarchy, and collectivism and which was thus a projection of Conservatism trying to accept and dominate the new industrial civilization. The other was the Left-wing, relatively libertarian strand, exemplified in their different ways by Marx and Bakunin, revolutionary and far more interested in achieving the libertarian goals of liberalism and socialism: but especially the smashing of the State apparatus to achieve the “withering away of the State” and the “end of the exploitation of man by man.” Interestingly enough, the very Marxian phrase, the “replacement of the government of men by the administration of things,” can be traced, by a circuitous route, from the great French radical laissez-faire liberals of the early nineteenth century, Charles Comte (no relation to Auguste Comte) and Charles Dunoyer. And so, too, may the concept of the “class struggle”; except that for Dunoyer and Comte the inherently antithetical classes were not businessmen vs. workers, but the producers in society (including free businessmen, workers, peasants, etc.) versus the exploiting classes constituting, and privileged by, the State apparatus. 

     Saint-Simon, at one time in his confused and chaotic life, was close to Comte and Dunoyer and picked up his class analysis from them, in the process characteristically getting the whole thing balled up and converting businessmen on the market, as well as feudal landlords and others of the State privileged, into “exploiters.” Marx and Bakunin picked this up from the Saint-Simonians, and the result gravely misled the whole Left Socialist movement; for, then, in addition to smashing the repressive State, it became supposedly necessary to smash private capitalist ownership of the means of production. Rejecting private property, especially of capital, the Left Socialists were then trapped in a crucial inner contradiction: if the State is to disappear after the Revolution (immediately for Bakunin, gradually “withering” for Marx), then how is the “collective” to run its property without becoming an enormous State itself in fact even if not in name? This was a contradiction which neither the Marxists nor the Bakuninists were ever able to resolve..

    Having replaced radical liberalism as the party of the “Left,” Socialism, by the turn of the twentieth century, fell prey to this inner contradiction. Most Socialists (Fabians, Lassalleans, even Marxists) turned sharply rightward, completely abandoned the old libertarian goals and ideals of revolution and the withering away of the State, and became cozy Conservatives permanently reconciled to the State, the status quo, and the whole apparatus of neo-mercantilism, State monopoly capitalism, imperialism and war that was rapidly being established and riveted on European society at the turn of the twentieth century. For Conservatism, too, had re-formed and regrouped to try to cope with a modern industrial system, and had become a refurbished mercantilism, a regime of statism marked by State monopoly privilege, in direct and indirect forms, to favored capitalists and to quasi-feudal landlords. The affinity between Right Socialism and the new Conservatism became very close, the former advocating similar policies but with a demagogic populist veneer: thus, the other side of the coin of imperialism was “social imperialism,” which Joseph Schumpeter trenchantly defined as “an imperialism in which the entrepreneurs and other elements woo the workers by means of social welfare concessions which appear to depend on the success of export monopolism…”

    -Rothbard, Left and Right Spring 1965

  • Ben Wolf

    Oops, didn’t mean to type the same passage twice. Sorry.

  • steve

    Michael- I suspect your kid was primed to dislike conventional education methods. Please note, I am not saying it cannot work. I think some small percentage of kids could do it, and get good results. I think a lot of kids could do it, and get crappy results. Most kids dont have the motivation and discipline for it. Perhaps that can change if this method of learning is introduced earlier. Maybe we just need to get better at it. All three of my budding math geniuses have taken online courses. The kind where you can interact online with the teacher and other students. All three gave it thumbs down compared with traditional classes. I guess I should also point out that those kinds of classes wont save very much.


  • steve

    PD- I think I agree with almost everything you are saying here. Guess I stayed in Pittsburgh too long. Almost long enough to like Iron City beer. Almost.


  • michael reynolds


    There will be a long period of adjustment, but in the end it’s not much different than the notion that we all prefer to view movies while sitting in a theater with other people. We do some of the time. But more and more we watch them at home.

    Or books. Just a few years ago I was hearing we’d never give up good old paper, and we haven’t, but the growth is in e-books, and the convenience and cost will eventually tell. Or television, which we were conditioned to believe was specific to a time and place, and can now be any time and any place. Or shopping where we were told that people would always insist on the communal shopping experience.

    Case after case people make the argument that tradition will win out over technology, but it doesn’t. Just like the big old luxurious transatlantic steamers lost out to cramped airplanes. These things reach a tipping point when the old and comfortable just suddenly gives way. Horses vs. cars. Cash vs. credit cards. A free bank teller vs. a three dollar ATM. Vinyl vs. CD vs. download. Sooner or later the whole go sit in a room at precisely 8:45 and stay there for 45 minutes to learn algebra thing will go away.

  • jan

    Don’t forget, we’re positing a world where college is not necessarily for everyone, which I extrapolate to mean that we are talking about college only for the more capable and motivated students. The indifferent student would presumably be less of an issue. In any event, spending billions to accommodate the unmotivated seems not exactly conservative.


    Perhaps I am being unclear in my posts, as you and I do not disagree on the issue of education. When I discuss on-line classes, it is for those who desire knowledge or a degree at probably the most reasonable cost available. However, I agree with you that the need for college is not for everyone. And, considering the prohibitive cost for elite institutions of learning, it oftentimes is not worth it, for as you said, “the unmotivated.”

    I’m smiling again as I’m typing because you ‘sound’ a lot like my son, in that he has found college not to be his calling. We saved money, from infancy forward, so he could have a higher education. But, he has always been an avid reader, watched documentaries, tooled around the internet, absorbing what he knows by searching and pondering the world around him, as a rebellious/independent and very intellectual person. Even as a child I called him Ben Franklin, who achieved what he did through a 2nd grade education and then engaged in his own pursuit of knowledge through books etc. — essentially self taught.

    Initially I was disappointed that Jake dissed college. Now, it seems like it was a good call, on his part — at least during this stage of his life. Anyway, Michael, ironically we seem to have agreed on a few points recently, and I am totally on the same page with you regarding this matter.

    Now, on to the topic of “redistribution of wealth!” I couldn’t help but throw that in for old times!

  • I hope Dave will forgive me, but I’m in a bit of a Rothbardian mood

    Actually, I’m grateful to you. Those are exactly the points I was trying to make.

  • steve

    OT. The CIA now says they planned the Iran coup.



  • michael reynolds

    I thought you would like to know, Ben, that apparently the phrase, “I’m in a bit of a Rothbardian mood” has never been used before on the internet. I checked.

  • Ben Wolf


    One thing I have watched with bemusement since the end of the Bush Administration is the rapid increase in the number of people describing themselves as “conservative libertarians”, who will repeatedly express their hatred for the Left and socialism while embracing religion, aggressive war and pro-elitist economic policies. It seems to stem from the same tendency toward historical amnesia we see throughout American culture. We seem to have a knack for forgetting anything that happened more than ten seconds ago.


    As my ex-wife once told me, I have an aptitude for saying things no one ever wanted to hear, which goes a long way to explaining the ex part.

  • steve

    Ben- I totally agree with the conservative-libertarian part. I participate on a couple of libertarian blogs. They routinely extol people like Thomas Sowell who is a pro-war, pro-torture, anti-immigration guy. They think Jonah Goldberg is a swell guy because he occasionally says he dislikes taxes and big government, while also spouting nationalism and being a supporter of the Ledeen principle.


  • steve

    Ben- You are correct about the conservative-libertarian thing. I participate in a couple of libertarian blogs. They embrace people like Sowell and (yuk) Jonah Goldberg, even though they are pro-war, pro-torture nationalists.


  • Andy

    I did my undergrad at a big state school (University of Colorado). My graduate work was all done online. Personally, I think they are different animals and one can’t replace or isn’t “better” than the other. I think a hybrid approach is best which allows a lot of flexibility to account for differences in student ability and circumstances.

    On libertarianism, there are a lot of definitions out there and it’s increasingly a muddled term like “conservative” and “liberal” in an American context. Aspects of libertarianism appeal to me, but IMO libertarian thought is most useful as a tool for criticism. I wouldn’t want most libertarians actually running the country.

  • jan

    Andy’s use of the word ‘hybrid’ is succinctly what I was describing above – where some courses are better suited to be taken as an internet class, ie. history, psychology etc, than others’ such as science classes requiring labs.

    IMO, ‘hybrid’ could also be applied to many people’s political identity. This may be why so many are re-registering in the category of ‘independent.’. Their views cross over between fiscal iand social issues, between all ideologies – D, R, as well as L.

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