Links to Consider
Andreessen and Horowitz on higher ed; Joseph Politano on new business formation; Michael Huemer on passivity vs. activism; Lorenzo Warby on Pournelle's Law
Marc Andreessen and his partner Ben Horowitz discuss higher education. Pointer from Tyler Cowen. It’s a two-hour podcast, and if that is too long for you, I would say that the essential take-away is that:
American colleges and universities offer an outstanding bundle of services. There are good reasons that they obtained a position of prestige in our society.
In recent decades, they seem to have done everything possible to squander that position. Accordingly, the system seems increasingly ripe for disruption. In bundled industries, disruption usually takes the form of unbundling, so entrepreneurs should be thinking along those lines, rather trying to start competing universities.
They spend the bulk of the podcast making the case that the universities are in free fall. They do not really have time to delve into the potential for disruption.
As universities lower their standards for admitting students, and as grade inflation allows anyone to get a degree, the value of the credential is falling. Horowitz claims that employers have started to notice. And everything else in the college bundle, from the economic value to students to research to public policy advice to moral leadership, has been rapidly degrading.
There are interesting nuggets throughout. One that I recall is that Horowitz says that managing an enterprise as complex as a university requires systems thinking, and top university officials often lack that skill. And even if they did, Horowitz points out that power at a university is very diffuse. The various players in the university are not constrained by norms to listen to and take direction from the university president.
The issues of race and gender relations require really careful thought, but instead the administration just reacts to whatever pressure is most salient. Several years ago, I wrote an essay about how the Ivy League threw open its doors to women without in any way preparing for the tensions that would emerge at the outset. The 1971 book Women at Yale (not to be confused with a more recent book Yale Needs Women, which might be just as good, but I just haven’t read it) shows how poorly the transition there was handled. Race issues on campus require even more delicate handling, and that has always been lacking.
Another nugget from Horowitz is that student athletics plays an important long-term role for the school. He says that by far the biggest donors to colleges and universities are alumni who played on sports teams. Sports does the most to emotionally bond the student to the institution.
the rise in business applications has been followed by a significant increase in actual company formation and new business hiring throughout the US. Plus, that boom in firm creation has been coupled with a nationwide rise in entrepreneurship and self-employment, one that goes well beyond just the growth of the gig economy. The bad news is that the new business boom now appears to be slowing down somewhat—alongside the rest of the US labor market.
He points out that data on new business formation appears with quite a lag. But we now know that the pandemic eventually resulted in a surge in small start-ups. This is the genius of American capitalism. Patterns of specialization and trade get broken up by a shock, but new patterns form as entrepreneurs start new firms.
Back in September, Michael Huemer wrote,
In brief, the human body is a very complex mechanism. Fixing it requires detailed and precise knowledge of its workings and the nature of the disorder affecting it, knowledge that no one in 1799 possessed. Without that knowledge, almost all interventions are going to be harmful.
Society is kind of like that, and today’s politicians are kind of like medieval doctors. Their solutions to social problems are based on prescientific theories and emotionally driven guesses, which is why almost none of them work. In the Middle Ages, you were usually better off avoiding the doctor. Today, we’re usually better off avoiding government solutions to social problems.
That complexity helps to explain why it is hard to overcome The Null Hypothesis, which is that policy interventions tend to produce little or no results when rigorously evaluated.
And social justice activists are, if anything, less sound in their thinking than government officials. That is why I get so frustrated with universities that encourage social activism. They should be doing the opposite. Pointer from the Aporia podcast.
In the Andreessen-Horowitz podcast, Horowitz says that if he were running a university he would make it customer focused, meaning it would emphasize satisfying students. Be careful what you wish for, Ben.
SciFi writer Jerry Pournelle picked up an evolutionary pattern:
Pournelle’s Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people: those who work to further the actual goals of the organization, and those who work for the organization itself. Examples in education would be teachers who work and sacrifice to teach children, vs. union representative who work to protect any teacher including the most incompetent. The Iron Law states that in all cases, the second type of person will always gain control of the organization, and will always write the rules under which the organization functions.
Ameliorating social ills is the original purpose of the welfare state. Colonising social pathologies maintains and expands the welfare state. Without powerful countervailing pressures, the welfare state evolves from a mechanism to address social ills into a mechanism for colonising social pathologies.
Profit-seeking firms are under pressure to solve people’s problems. If you don’t solve a problem that your customer faces, and someone else does, you can wind up out of business. In government and the non-profit sector, the incentive is the opposite. If the problem goes away, then your source of funding could dry up.
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Combine the Huemer analogy with Pournelle's Iron Law, then consider that public employees frequently play an outsized role in determining local election outcomes due to the ol' "concentrated benefits, diffuse costs" problem, and what you're left with is a medieval doctor whose incentive is to poison the patient as badly as possible without outright killing him. Isn't democracy a wonderful thing?
"The issue[] of race... relations require[s] really careful thought..."
Why is that? If Harvard and other top schools admitted applicants based solely on test scores and grades, black students would drop to less than 1% of the student body. When you say the problem requires "careful thought," I think you mean you're squeamish about this outcome. But there are more dumb whites (< 100 IQ) than blacks, and absolutely no one cares that good colleges exclude them.
Please explain why it matters that this would disproportionately affect black people. I suspect you will have to rely on an argument based on the necessity of protecting black amour-propre (i.e., tribal pride), which, again, no one cares about in the case of whites.