Newfield’s The Great Mistake: The Big Picture (2)

Newfield’s The Great Mistake: The Big Picture (2)

The second “macro” setting for the disinvestment in public education that Newfield highlights is the disconnect (since 1970) between rises in productivity and rises in wages.  Since economic growth is driven primarily by two factors–increasing population and increasing productivity–the economy’s health is dependent on making workers more productive.  At least in the years from 1940 to 1970, when workers became more productive, their additional contributions to the economic well-being were registered fairly directly in higher wages.  And those higher wages tracked very closely with higher household incomes.

Starting in 1970, however, the link between productivity and wages was severed (as shown in the chart above).  There are various explanations for this long-term trend, including globalization driving wages down because jobs can be outsourced to cheaper labor in other countries; the generation of higher and higher percentages of GDP from the financial sector and correspondingly less from manufacturing; rising use of technology and its role, as contrasted to human labor’s role, in the productivity gains; and the loss of labor’s bargaining power in a post-1970s legal and political climate that tilted the field heavily in capital’s favor.

I will talk in my next post about a story we might tell to explain why things changed so drastically after 1970.  But the issue right now is how this economic change is connected to disinvestment in higher education.  For Newfield, the situation prior to 1970 was “the productivity bargain: capitalism would reward individual productivity with good wages, because increased individual productivity increased productivity overall” (284). At the same time, “The public benefit of college education was also clear.  As a larger share of a population acquired a higher level of education, the overall productivity of the society increased.  Since improved productivity is the only way to increase society’s real wealth, levels of education meant greater general prosperity” (284-5).  But since 1970 we live in a plutonomy, defined as an economy “where economic growth is powered by and largely consumed by the wealthy few” (283).

Facing these facts, there are two ways to go (or so it seems to me)–and I think Newfield doesn’t quite know which one to choose, so he offers versions of both.  The first path says most wealth is now produced (at least in the rich Western countries) by financial speculation.  I.e. capital generates (produces) more capital–and the traditional connection between productivity in a material sense and economic growth is severed.  The rich get richer through their investments, the poor get poorer because their labor power is no longer a source of wealth.  The disinvestment from public universities trends along with this society-wide destruction of the post-World War II (post-depression) middle class.  The top 10% (at most) catch the escalator up to wealth; the rest sink into an economic life worse than that known by their parents and grandparents. (And as Thomas Piketty has shown–as do Mitt Romney and Donald Trump–inherited wealth is the key to membership in that top 10%).  The elite private schools have enough slots to handle the 10%–and capitalism no longer needs to increase the productivity of the remaining 90%.  Thus it makes perfect sense, in the neoliberal world of finance capitalism, to disinvest from public higher education.  That disinvestment is just part and parcel of general destruction of the middle class.

But Newfield also presents what seems to me a much more plausible alternative narrative–one that raises serious consistency problems (however).  The old economic rules do still apply.  You can’t get real economic growth (as distinct from financial bubbles like the one the US had prior to 2008) without productivity gains.  And since education is the key to productivity gains, the US does need to keep seeing that more and more of its citizens get a high quality, post-high school, education.  The disconnect between productivity and wages has not been accompanied by serious falls in productivity.  Despite the sucky wages, the productivity of US workers keeps rising.  What we have gotten instead is the proliferation of “high skill, low wages jobs” (293).  The part-timers with PhDs teaching on our campuses, the contract workers in the tech industry.  We are not talking college BA baristas here; we are talking people who are putting their education to work, but getting paid a shitty wage to do so–and with no job security and few, if any, benefits.

In this scenario, the need for mass education still exists.  In fact, it in some ways requires the overproduction of educated, skilled workers.  It is just labor conditions and pay packages that have changed, not the connection between productivity and economic growth or the need of capitalism to increase continually productivity.  So, in this scenario, neoliberalism in inconsistent: its attacks on public education actually work against its economic interests.  Neoliberalism, in other words, is not a highly efficient and seamless monolith.  It is contradictory and pulls in various different directions.  I wouldn’t go so far as to claim it is planting the seeds of its own destruction, but it certainly isn’t a perfectly functioning perpetual motion machine either.

If the larger system still needs the educated workers, then how come we have seen a disinvestment in public education?  No single reason, I think.  But I do think short-sightedness, the inability to invest today for returns that will take some time to materialize, a short-sightedness driven (in part) by the phobia about taxes–along with the knee jerk hostility to all publicly provided or publicly subsidized goods–is much of the reason.  If the state of North Carolina is any indication, we can also add reflexive hostility toward institutions deemed “liberal” and “politically correct.”  There is no plausible economic case for destroying higher education.  Universities are clearly economic engines.  Just look at Boston, Palo Alto, Austin and North Carolina’s Research Triangle to see how universities generate wealth.  In short, the capitalists who want and need those high skill, low wage workers need a good education system.  But they also seem determined to kill the goose that lays the golden egg because they hate being taxed, because (as Paul Krugman puts it) they are thin-skinned enough to cry foul every time the liberal elites or the professors look funny at them, and because they are wedded (as discussed in the last post) to a market fundamentalism that is eternally blind to the damage done by privatization and that denies the very possibility of something like a “public good” existing.

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