Minda Corso

Baumol Part Deux in 2D-Your Cliffnotes To Eduwonky Enlightenment

In Uncategorized on October 3, 2012 at 5:45 pm

By: Dr. Matthew Ladner

So in our last nerdfest episode, we explored the idea that American K-12 has a severe case of Baumol’s disease- the tendency of labor intensive services to become more expensive over time without a corresponding increase in effectiveness. At some point we will explore some of excuses often weakly offered up in an attempt to explain this collapse in productivity of spending, but for now, we can do something more fun and explore just the weirdness of this trend. You may not have realized it, but the world is getting better and cheaper all the time. K-12 doesn’t have a mild case of Baumol’s disease; it is literally the MOAB (Mother of All Baumols).

Don’t believe it? It’s true that this tends to be a gradual process (except for when it is not) and thus may not seep into our conscious awareness very easily. It also conflicts with the deeply cherished good-ole days meta-narrative where we idealize the past and imagine the world is going to hell in a hand-basket because of _________ (fill in the blank here-I’ll go with the cancellation of Magnum P.I.).

Did you see the Sunrise this morning Baumol?

 

As it turns out, this is all bunk. What? You want proof? You are an awfully needy and demanding blog audience, but fine: here’s some proof. Economist Mark J. Perry took pages out of a 1964 Sears catalogue and did an adjustment for inflation in his AEI Blog Carpe Diem (which you should add to your daily reading list right now). Here is what an old giant piece of furniture television set cost in 2010 dollars:

Ouch- that antiquated 12 channels plus UHF piece of junk would set you back the equivalent of $5,300 or more today. Perry then asked the question- what could you buy in the way of electronics today with $5,300? Well how about this…

And also all of this….

So you can buy yourself an awesome flat screen television with hundreds of channels, HD and the rest in addition to a whole bunch of products that didn’t even exist in 1964 and far better and cheaper versions of the ones that did. You no doubt were just about to object that this is some sort of weird phenomenon that is isolated to electronics. Ah, well, not so much. All kinds of stuff are getting better and cheaper:

Agriculture is a traditionally labor intensive activity that has benefited from the introduction of technology. Despite modern farming techniques, food prices are going up all the time right?

WRONG!!!!!!!

So, in summary, the world is getting better and cheaper while American K-12 education has been getting much more expensive with precious little to show in the way of improved learning. Disadvantaged students are the primary victims of this productivity implosion in K-12, and will be the primary beneficiaries once we reverse the trend.

In the next exciting episode, we will explore just how K-12 became a MOAB (Spoiler Alert: politics!) and what we can do to improve matters.

Dr. Matthew Ladner is the Senior Advisor of Policy and Research for the Foundation for Excellence in Education.  He previously served as Vice President of Research at Goldwater Institute. Prior to joining Goldwater, Ladner was director of state projects at the Alliance for School Choice. Ladner has written numerous studies on school choice, charter schools and special education reform and coauthored Report Card on American Education: Ranking State K-12 Performance, Progress and Reform for the American Legislative Exchange Council.

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  1. […] Ladner’s sequel highlights some other economic examples outside example to show how productivity has benefited consumers massively. Read this piece, too, if for no other reason than to marvel at the creativity that challenges my little, growing edublogging ego. […]

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