The financial crisis of late 2007 and its aftermath highlighted the scourge of unemployment and underemployment. While the cascading effects of economic insecurity continue to ruin millions of families and individuals already on the margins (not least because of the painfully slow recovery of jobs), perversely, many commentators interpret these violent fluctuations as functional to capital accumulation and, circuitously, to increased prosperity. As a New York Times business columnist argues:
Pruning relatively less-efficient employees like clerks and travel agents, whose work can be done more cheaply by computers or workers abroad, makes American businesses more efficient. Year over year, productivity growth was at its highest level in over 50 years last quarter, pushing corporate profits to record highs and helping the economy grow. (Rampell 2010)
The image is one of daring corporate masters moving courageously into the future while labor remains mired in mud, unequipped to contribute productively to the great technological future that lies ahead. In the echo-chamber of mainstream economics and mass media, the incessant refrain is therefore that workers must become more “flexible” by improving their skills either through schooling or (re)training (Blau & Kahn 2002). In the aptly titled new volume, Class Dismissed, John Marsh, professor of English at Penn State University, provides a cogent, accessible analysis of the education-as-panacea argument—and rather quickly shreds it to pieces.
Marsh did not come to study the intersection of education and economic inequality as a critic who simply dismissed outright the prognostications of human capital theory.1 Rather, he was one of the precious few (these days) working-class youths that benefited from state programs created to increase educational access. In contrast to conservative critics, Marsh does “not argue that too many students are going to college…, that the United States has overinvested in higher education…, that more young should enter the trades rather than attend college…, or that since college” doesn’t teach many useful job skills a degree merely indicates to employers that a worker is smart, hard-working and conformist; nor that a college degree is a bad return on investment (19). For Marsh, it was involvement in a well-intentioned effort devoted to increasing the access of low-income adults to post-secondary education that eventually led to a stark realization: the program had given only “false hopes to [most] students,” and, “even worse, false comfort to the community” (13).
Marsh is also no economist. Yet, in the words of David Orrell (a mathematician and one of many non-economists now entering the fray), modern “economics is an ideology,” so “being trained in it is effectively a way of closing your mind” (Orrell 2010: 7). Marsh thus represents a growing chorus of critics that (one hopes) will further shake up the study of economics across the country.2
The organization of Class Dismissed, while not immediately clear, is instructive. In the first two chapters Marsh draws out the logic of commonly repeated arguments—first on the incidence and pernicious results of economic inequality, and then on the specific impact of education on the latter—and debunks them with clear, unassailable evidence. The next two chapters investigate the link between education and opportunity historically in the US, carefully distinguishing the ideological predispositions of workers and owners and highlighting significant legislation that eventually led to the rapid rise of college graduates after World War II. In the final chapter, Marsh synthesizes the empirical reality and historical lessons, which effectively reverses the direction of causality vis-à-vis education; and then surveys alternate options.
While details of the astonishing growth is US income inequality have become a matter of broad public debate with the meteoric rise of the “99%,” recent work investigating differential health and social costs internationally still stands out. “Name your social measure,” Marsh relays, “and more equal countries do better than less equal ones: life expectancy; levels of trust in others; women’s status in society; percent of national income devoted to foreign aid;…drug use; homicide rates; infant mortality; math and literacy scores; percentage of population completing high school;…imprisonment; social mobility,” etc. Despite the fact that even mainstream media are being forced to confront this reality, the reigning assumption in the US is that “education, and often enough education alone, will reverse increasing inequality and boost the poor out of poverty” (62-64).
In the next chapter—sardonically titled, “Which Supply Side Are You On?”—Marsh zeros in on a fundamental, yet oft-neglected, question concerning education and jobs. No one would deny that advising a given individual to go to college is reasonable. But does it also make sense to “offer a whole class of people—say, the poor or low income or unemployed” the same advice? “Will it enable the rise of all or even most of them? An individual can learn his or her way out of poverty and inequality. Can the nation?” (67). Superficial acceptance of the correlation between education and earnings appears to settle the question immediately, supporting the contention that skill-based technological change has created new and more sophisticated labor markets to which only a college degree will grant access. Yet, if occupational statistics reveal that most jobs the US economy is poised to create over the next 5 years will not require a college degree (71), why does this correlation remain so widely accepted?
As the chapter title implies, neoclassical causality runs in only one direction: from the interaction of individual choice-maximization and a given technical composition of production, to macroeconomic structure. Where convenient, “exogenous” factors—i.e., wars, legislation, natural disasters, etc.—may be brought into the analysis to help explain anomalies but the bedrock of neoclassical theory is microeconomics. In the case of widespread income inequality, then, the basic tendencies of the economy—lackluster growth, insufficient private job creation, financial crisis, etc.—recede into the background and a myopic focus on the mismatch between workers and capital takes center stage. Ultimately, the causes of the macroeconomic malaise are to be found by tracing phenomena back to the “rational,” self-interested decisions of individuals as they confront various constellations of production.
From this perspective it should be obvious why education has tended to crowd out nearly all other explanations for the rise of inequality. If the forces of production are assumed only to have improved—indeed, by leaps and bounds and at an astounding pace—the only explanation is that somehow workers have either been unable or unwilling to keep pace, decreasing the potential of the economy and, consequently, reducing incomes. Quite conveniently, this explanation lays blame at the feet of workers, and to some extent the state (e.g., in its failure to improve the educational system), but removes attention completely from economic elites, or the economic system more broadly.
Unfortunately, the stubbornness of empirical reality renders such convenient theories rather useless, as exemplified by Marsh’s methodical deconstruction of the nuanced relationship between education, poverty and earnings. Among the more salient facts presented by Marsh is the incidence of increasing polarization within the ranks of college graduates. The increased income of a relatively small educated elite has occurred at the expense of the rest of college graduates and high-school graduates, whose incomes have stagnated or declined since the late 1970s (76-77). These patterns imply that much of the “wage premium” is captured not by the increasing supply of college-educated workers, but by the owners and managers of major corporations.
As Marsh surveys the repeated attempts of twentieth-century reformers to address inequality by “improving poor people,” one gets the sickly feeling that history is doomed to repeat itself. The “war on poverty” initiated in the 1960s “amounted to an only slightly more sophisticated version of the nineteenth-century faith in improving poor people” (144). “Despite changes in presidential administrations,” Marsh concludes,
despite stark economic recessions and jobless recoveries, despite stagnant poverty rates and increasing economic inequality, and despite decades of educational reform and efforts to increase access, not much, I daresay nothing, has changed. Yet education occupies as much, if not more, of a role in debates about poverty and economic inequality as it ever did.…the shift to a global, post-industrial economy only made appeals to education that much more urgent.
Marsh’s analysis adds credence to the view, expressed by many others (e.g., Lafer 2002), that wage determination is primarily political, not economic. This is evidenced by the fact that education, when considered alongside the numerous factors for which it serves merely as a proxy (e.g., race, gender, parental income, unionization, etc.), loses much if not all of its explanatory power (82). Marsh goes so far as to argue that the “loss of bargaining power of the average worker” (183) has facilitated the rise of global trade, the decline of labor unions, and the rise of the stinking rich. While one might quibble with some of the prescriptions, we can be thankful that someone has once again taken the time to investigate the education charade thoroughly.
R. Jamil Jonna
Ph.D. student in sociology
University of Oregon
Blau, Francine D. and Lawrence M. Kahn. 2002. At Home and Abroad: US Labor-Market Performance in International Perspective. New York: Russell Sage Foundation.
Lafer, Gordon. 2002. The Job Training Charade. Ithaca: Cornell University Press.
Orrell, David. 2010. Economyths: Ten Ways Economics Gets It Wrong. Mississauga, Ontario: John Wiley and Sons.
Rampell, Catherine. “In Job Market Shift, Some Workers Are Left Behind.” New York Times, May 12, 2010.
1. Popularized most recently by economist Gary Becker, this theory identifies the “aptitudes—knowledge, skills, health, and values—that reside, or come to reside, in people themselves” as “human capital” (Marsh 2011:144). The distribution of human capital is assumed largely to determine an individual’s “marginal productivity,” and hence the level of his or her compensation.
2. See the Open Letter sent by 60 Harvard economics students to Professor Greg Mankiw after a walkout protesting “the biased nature of Economics 10,” which “contributes to and symbolizes the increasing economic inequality in America.”