Friedman Will Never Get It

    Sigh. You know, it does get a bit tiring to have to repeat oneself--even when I'm wrong. On this one, I'm not wrong. It's Tom Friedman, the messianic columnist of the grey lady of 43rd Street, who lives in another world.

    Anyone who reads his columns--and his books--will know that he has a fascination with the idea of "education is salvation" in the 21st Century economy. Today, he has yet another column (you have to actually subscribe to the paper to read it because what he has to say is oh so special...I'd give it away for free) in which he goes on and on about 21st Century schools and the big competition between countries to be first in education.

    I won't bore you with most of what he has to say because it's summed up in his final paragraph:

My guess is that we're at the start of a global convergence in education: China and India will try to inspire more creativity in their students. America will get more rigorous in math and science. And this convergence will be a great spur to global growth and innovation. It's a win-win. But some will win more than others — and it will be those who get this balance right the fastest, in the most schools.

    I've said for a long, long time that I have no objection to education--sure, let's all know a lot more. But, the truth is that the real challenge to people around the world is the question of wages. Wages, not education, is the central question facing workers everywhere. If the smartest fellow in the bar is weighed down by five degrees but can't get a job that gives him health insurance and more than $9 an hour, what is the great value of education?

    Indeed, remember the point I made yesterday regarding the deal between GM and the UAW--it signals the continuing elimination of the kinds of jobs that provided decent wages and benefits. Or as a friend of mine put it, if the corporate world was the United Nations, GM would be Sweden--an increasingly isolated example of what it means to give people a decent standard of living.

    I find it funny that on the very same page today Paul Krugman has a column in which he talks about the real problem: inequality.

We don't have detailed data for more recent years yet, but the available indicators suggest that after 2003, incomes at the top and the overall level of inequality came roaring back. That surge in inequality explains why, despite your best efforts to talk up the economic numbers, most Americans are unhappy with the Bush economy.

I find it helpful to illustrate what's going on with a hypothetical example: say 10 middle-class guys are sitting in a bar. Then the richest guy leaves, and Bill Gates walks in. Because the richest guy in the bar is now much richer than before, the average income in the bar soars. But the income of the nine men who aren't Bill Gates hasn't increased, and no amount of repeating "But average income is up!" will convince them that they're better off.

Now think about what happened in 2004 (the figures for 2005 aren't in yet, but it was almost certainly more of the same). The economy grew reasonably fast in 2004, but most families saw little if any improvement in their financial situation.

    If you want a better idea of the real underlying problems we face, Krugman is always a better guide (though I've not agreed with him on trade--he, too, is for so-called "free trade" though I think he's shifted on that a bit, too). Friedman just doesn't live in the real world--or doesn't choose to acknowledge the elephant in the room.

    If you want to know the real story of the global economy, read Jeff Faux's book, featured here to the left in recommended books.

Comments

[D Flinchum]

More good books: "Strapped - Why America's 20-and-30-somethings Can't get Ahead" by Tamara Draut; "The Culture of the New Capitalism" by Richard Sennett; and "Generation Debt - Why Now Is a Terrible Time to Be Young" by Anya Kamenetz. I just picked up the last one but it was reviewed recently in conjunction with "Strapped".

[GusRP]

Its not just wages, its legacy costs, cummunity responcibilities and employee and employer relationships. When a company decides to move overseas its not just cutting costs by lowering wages, its cutting costs by dumping legacy, community involvement (taxes, eniviromental responcibilities, etc.) and making thirdworld citizens commodities rather than employees!

[steve]

What Friedman, and others who see education as the panacea, do not account for is what Iris Marion Young calls "credential inflation."

She points out that "the promise of education as a ticket to the top of the division of labor is not fulfilled because the hierarchical system permits only relatively few positions of privilege, and the credentialing system functionsas a gatekeeper to these positions" (from "Justice and the Politics of Difference").

In a heirarchical division of good jobs, it is not clear that an increase in education creates good jobs for everyone who has gotten more education.

[D Flinchum]

" the credentialing system functionsas a gatekeeper to these positions"

These positions as well as others. A large number of college graduates work in jobs that do not require a college education because that is the best job they can get. Having a college degree is a plus in getting hired in these jobs so fewer non-college people are hired. These non-college people then have to compete for even lower-skilled jobs. With college becoming even less affordable for any but the comfortable middle class and above, we'll see more income inequality.

[jack]

I shall never forget a Milton Friedman video.
Friedman is standing in a little shop in Hong Kong, trumpeting the virtues of an Unfettered, Unregulated Marketplace, and touting Hong Kong as a supreme example of prosperity, and why it happens.

Unbeknownst to Friedman, behind him on camera, for sale in the shop, - Elephant Ivory Tusks.