Read the Damn Book: Baumol Edition

Recently, Matthew Yglesias argued that the Baumol Effect required lowering educators wages. Foolishly, I took him at his word that the Wikipedia entry offered an accurate account of Baumol's argument. I may have done so because of his truly magnificent econ cred:

I’ve never actually taken an intro economics course. The best I can say is that I have read both the Krugman and the Mankiw textbooks and I think I understand the material well enough to be taken seriously by economics bloggers with PhDs and everything.

As it turns out, of course, I was wrong. Baumol's essay is titled "The Macroeconomics of Unbalanced Growth: The Anatomy of Urban Crisis."[1] In it he argues that increased productivity can led to increased wages so long as unions exist to see that the gains from reduced labor costs are translated into wage increases and that cities cannot overcome the problems of urban decay without increased federal subsidies for things like culture and education. He also rejects increased reliance on teaching technology to improve educators productivity as being kind of creepy. Mark Kleiman endorses Yglesias' misreading of Baumol's argument and insist that the way forward is more reliance on teaching technology.

This last point is especially unnerving. Kleiman argues, inter alia, that

[t]he future of education is for students to educate themselves, individually and in groups, with the help of computers, networks of computers, recorded media (including, of course, the greatest educational innovation of all, the printed book), and the skilled facilitation of a relatively small number of live helpers. If you think it’s impossible to get masses of young people to spend astounding numbers of hours on cognitively-demanding tasks, then how do you explain the success of the video-game industry?

And insists that

yes, that means universities, too. How many people, right now, are preparing to give a lecture tomorrow in introductory economics or organic chemistry? And how many of those lectures have more educational value than would a video of the best such lecture being given tomorrow? Or, better yet, a professionally-produced lecture on DVD, with hot-links to relevant materials?

While he (grudgingly?) admits that professors also create new knowledge, he seems confident that that difficulty can be got around.

Leaving aside the evidence that distance learning of the sort he advocates hasn't worked nearly as well as the video game industry in capturing the leaders of all of our tommorrows' imagination. How, one wonders, do we identify the "best" introductory lecture in economics?  Is it the one in which Keynes is right or its opposite? The one where Adam Smith loved capitalism or the one where Smith thought that market based economic exchange freed from the distortions of mercantilism but regulated to protect against nefarious businessmen did a better job of channeling  humanity's essential concupiscence into socially beneficial results?  What about the ever increasing difficulties in selected the best lectures on any subject in the disciplines of literature, history, sociology, anthropology, and so on.

Kleiman's position essentially constrains us to agree to transform our institutions of higher learning into a series of technical schools teaching only those subjects in which a command of a discrete set of facts whose mastery enables the holder to perform some activity or another, like designing a building's plumbing, and assumes that the discrete set of facts is now and forever perfect.

For if you eliminate more teaching positions, who is going to train to get a PhD and thus add to our shared stock of knowledge?  The market for academic positions has already cratered and the process of getting a PhD in any discipline and then a full time position is already as competitive as getting into professional sports; does Kleiman actually think that reducing the positions will solve that problem.

Right now my money is on Baumol in terms of the appropriate response to the effect, should it in fact exist, more subsidies and stronger unions while eschewing the mechanization of education because information isn't knowledge and a world in which students gain their understanding of complex issues from one great video game isn't one I'd want to occupy.

[1] You can find Baumol's text on the Intertubes with minimal googling.  You can also find Brian Champman's “Baumol’s Disease”: The Pandemic That Never Was," which discusses contemporary criticism and adds some of his own.