There is an effort to erase student loan debt and I'm mad as hell about it ...

The problem isn’t CEO culture, or any recent shifts towards productivity and efficiency. The problem is, and always has been, capitalism. Which, mind you, is a kick-ass system for creating wealth, but not so much for distributing it. John Stuart Mill laid out the differences between the creation of wealth, which he saw as being dictated by hard facts, technology, and hard limits (no matter how much you will it, that machine won’t work any faster or that corn ripen any sooner), while the distribution of wealth was entirely within the control of a society. Smith’s capitalist model was predicated on constant growth, growth that would continuously expand the need for economic activity (including labor) and would continue to make everyone rich. Ricardo pointed out the dangers of automation and mechanization, though; even in a growth economy, if someone can substitute more efficient machines for people, they would. Ricardo weaseled his way out of actually working through the problem by, you guessed it, postulating high growth that would create new jobs for those displaced by the machines.

But the problem is still the same–capitalism exists to make money for individuals. Not to provide jobs. Not to, directly, contribute to society. :Society benefits because, as long as the rocket is going up, there’s plenty of wealth for everyone (including the nation). But that benefit is, and always has been, a by-product of the system, not the goal of the system. Marx’s approach, to make the goal of the system social benefit, faltered because the only way to pay for it was to, first, have a wildly successful capitalist economy–which, um, no one wanted to dismantle to institute the workers’ paradise, for some reason.

What we have today is nothing really new conceptually, though the scope, scale, and implications are pretty astronomical. Business exists to make money for its owners. Labor is a cost. The prime directive is to lower costs. Ergo, lowering labor costs, often by getting rid of as many workers as possible, is not just good business, it’s written into the DNA of the system. We just assumed that because it benefited society to have most people with productive jobs and good standards of living, the system would value those things too. But the system never gave a rat’s ass, not on its own. We had to push, prod, and regulate it into doing so. Sure, a fair number of business people, big and small, understood the broader, long-term benefits of stable work forces, a widely distributed body of consumers with adequate to ample means rather than a few hyper-consumers, and the like, but these businesses did so at their peril. Once the stockholders see that they are actually losing on their ROI by not outsourcing, offshoring, automating, etc., then all hell breaks loose.

So if you want to change this thing, you need to bring capitalism to heel using the power of the state. Which, itself, is a dangerous and tricky thing to do, but it’s sort of an either/or situation.

Well the change is globalization. I’m still not 100% convinced ‘classical’ economics really takes into account globalized markets, and often I see economics referencing employment or inflation in a void, as if disconnected from the global economy. But now there is huge untapped potential in semi-skilled labor worldwide at cut rate prices and this throws the whole economy off kilter. The mobility of capital is also a significant aspect of this as well, enormous financial transactions can be made in real time world wide and almost frictionless…ly. But productivity and efficiency gains are a proximal reason why large companies manage to be much smaller than they used to be for a similar work load even for those industries not directly impacted by globalized labor.

The perils facing labor between then and now is quite different, and somewhat striking, though, and is why technocrats not-so-secretly despair of industry and long for the days when everyone is a tattooed creative with a 3d printer - and why for the last few decades education loans have ballooned, as ‘education’ is the vague, handwavy solution to competing with Asian and Latin American labor. In the past labor aspired to unite workers worldwide into an industrial proletariat; today the “solution” seems to be to shut out the cheap labor to protect your expensive labor. There are hipster parallels today; “Fair Trade” ect., but it’s wishwashy and more about guilt than organizing, about a sticker on a package than actual commonalities between classes cutting across nationalities. Pretty clearly these mercantilist tendencies seem to go against the grain today but also require a strong state that actively intervenes on behalf of its citizens to the detriment of worldwide trade - something no American administration has seriously considered in the post-Cold War world on a large scale beyond a few “national security” industrial sectors. The opposite actually seems to be the default; that the speed of markets are such that even active government regulation is challenged to stay abreast of the rapidly changing developments worldwide. Yet growth uber alles in the West, since debt without growth is an economic shipwreck. Hence bottlenecking trade would reduce growth would reduce tax income would increase debt would… best not rock the boat now.

As for capitalism being the problem - sure. But we need a new set of voices, a new paradigm, that addresses globalization in a new and different way than in the past. So many people today see global trade as a necessary, humanitarian good; the best way to lift people out of poverty. The asymmetry of labor conditions worldwide makes it hard to see on what basis labor organizes beyond nationalist tendencies or even what a successful labor movement would demand. When protecting Western jobs causes third-world poverty, liberalism is tongue tied. What’s the answer? Who do we protect? Since there’s no good answer it seems the answer today is that it’s best not to even address it. When the answers are uncomfortable the problem must be with the question.

Yeah, in a nutshell. Globalization is the predictable (some would argue inevitable, though there are differences of opinion there) result of the hegemony of market economics. And yeah, most classical economic theories came of age long before globalization became so omnipresent, and the intensity with which globalization applies the dynamics of capitalism across the board is unprecedented.

I’ve always come down more or less on the side that says globalization is something we have to deal with, not try and roll back, but I’m just as flummoxed by the problems you raise as anyone else. We want affordable goods that contribute to quality of life, but we also want (more) equitable distribution of wealth and don’t want to prosper on the backs of the downtrodden. We want a variety of stuff that simply can’t be met by purely domestic industry, but we are concerned about the impact on the places that actually make the things we want. Hmm, maybe the issue is centered on the type of economies we have now–consumer economies. Classical economics didn’t and couldn’t envision the sort of the disposable income that even what we call the poor in an advanced Western nation can muster. Maybe it isn’t possible to sustain a global lifestyle of middle class consumption without screwing over a substantial part of the planet. But is the solution a universal mediocrity where no one is terribly lacking, but no one is particularly prosperous, either? Or do we have to redefine what we mean by happiness and success? Dunno.

So economics in general can’t predict advances. I mean there is an entire misquote on it being the dismal science for a reason. Economics didn’t predict the invention of tractors, or airplanes, or cargo ships. It didn’t predict WW1 or WW2 either. What does that mean exactly? The way trade works, on a basic level, hasn’t hugely changed. Just because there are more players and larger volumes doesn’t mean the model is incorrect.

What are you suggesting the ideal communism that never actually turns into the ideal?

Huh? I’m…unsure where you are going with this, or, really, what the hell you’re even talking about. The conversation you’re quoting a bit from had to do with the historical evolution of economic thought, and the difficulty if not impossibility of predicting how things are going to change in the future. And the way trade work has changed immensely, unless you reduce it to just the idea of “buy low, sell high,” and even that was not always the given mantra. Check out ancient and even early Christian economic philosophies, which are extremely skeptical of making a profit via trade.

No one here has said the model–and I assume by that you mean market economics–is incorrect; everyone agrees it’s a fabulous wealth producer, in general. What the model never did was guarantee any particular distribution of wealth once created. Models that did guarantee distribution specifics–like communism–failed because they couldn’t produce the wealth necessary to have anything to distribute.

So the problem ends up being, you have a market economic system that kicks ass in making money, but that money ends up usually going where it does not necessarily help society, or you have a system that theoretically channels the wealth to meet the needs of society, but can’t manage to actually generate any wealth. In practice, capitalism ends up being the better choice, because even if it has no structural imperative to help society the spillover from prosperity, however poorly distributed, has historically been enough to carry society along. What’s under discussion is whether that is true any more, with the ubiquity of globalized markets and a much, much greater pool of people that need to be distributed to.

You can choose to be angry with me; that is, after all, your choice, or hear me out. I believe based on the upper portion of this conversation it had to do with capitalism or as you put it:

So if not capitalism… what?

As for economic modeling or market modeling or whatever you want to call it, when you study those systems they tell you that limitation. Every. Single. Time. The best modeling acknowledges that the past is a poor indication of the future. The future you can predict reasonably well but there isn’t a good way to predict tractors, the internet… airplanes. Again, what would you suggest we use? We don’t have a way to peer into the future. There is just a a general idea that the further out you forecast, the less accurate that forecast will be.

Heh, I’m not offering alternatives. I’m offering observations. If you want solutions, look elsewhere. I don’t have them.

If not capitalism, what? Hell if I know. That question has zero to do with the observation that capitalism does not exist to provide jobs, but to make money. I’ve yet to hear anyone dispute that observation. The real question to ask is, how do you make a capitalist system take job creation and maintenance into account along with wealth creation? The answer is probably something to do with social control, that is, government, but there might be other ways.

Which is why I mentioned communism. On paper, communism offers a lot of what you’re you talking about. If you just look at the idea, well it mostly fits. If you look at practice, mostly not.

It’s kind of like the old saying right, democracy is the worst kind of government except for all the other ones. We might say capitalism is the same as our political system but only… sort of. We don’t have a straight capitalistic system as it is. The government, different levels of, do get involved with, regulate or outright own portions of the economy.

I think it is a natural challenge to have anyone who says capitalism “is the problem” to turn around and say, what do you suggest then? If forecasting is not accurate what are you suggesting, not even attempting it. We know forecasting is limited. Anything outside of say six months starts to get dicey. It’s kind of looking at tomorrow’s weather forecast vs. the 10 day. We should still try and do it. It’s not as incorrect as often as it might feel like it is because most people don’t look at the forecasts that were right…they ponder the ones that were wrong.

Fair point. Though, the first step to identifying solutions is, well, identifying the problem, and if people won’t see that the existing system is structurally responsible for many of the problems they want to solve, they won’t begin to come up with any workable alternatives. It’s just as natural to say that anyone who responds to a statement about capitalism being the problem with a “well, what else should we do?” is simply saying “ignore the problems and continue doing what we’re doing.” There are many alternatives to the current market system, most of which involve mixed systems like the European social democracies implemented, but with the benefit of more productive economies and hindsight as to what they did wrong in the seventies. What is certain is that without recognizing the problem, there won’t be any impetus to create solutions. And most right wing analyses refuse to even consider that the market system is in any way negative or responsible for any problems.

I’m not sure what we’re talking about in terms of “forecasting,” as the only thing I’ve mentioned in that respect is broad, meta-level conceptual foresight in terms of how total systems might work in the future. I know zero about, or have much interest in, tactical, short term economic forecasting. In terms of broad looking ahead, I definitely think we need to look at the trends in how economies work or don’t and how changes seem to be happening, and think of ways to get ahead of the curve as it were.

I’m not suggesting that we ignore the problem so much as consider what we’re labeling as capitalism in the first place. K-12 is largely not privatized. Approximately 91% of students go to public K-12 schools. If we go back to the original topic, would we suggest that universities should be more public like K-12… although you’d be hard pressed to find a group that is hugely happy with K-12 either.

As for forecasting… well define meta-level conceptual foresight. It sounds like… forecasting. Forecasting is an attempt to predict the future. Economics can have macro level long-term forecasts… there are a lot of very talent individuals who do this all day long. We just know that… they can’t predict Katrina, 9/11 or WW2. You can call it whatever you like, and there are several methods you can forecast for a variety of purposes. The validity of that forecast is still going to be challenged as more and more time goes by.

Education reform is a different story. I’m really talking about the economic system, which determines why people go to college and what they expect to get out of college. It’s a whole 'nuther conversation about how college should be run, but it’s pretty clear that for-profit schools (the capitalist version of education) don’t work well, and everybody knows it.

But the issue here, in the end, even if it’s about student debt, is why people rack up debt in the first place. And that is directly tied to the economy of market capitalism which has very goals than do the individuals getting degrees. But I don’t think there’s much debate about that overall. The system is a market capitalist system. It doesn’t exist to create jobs for people, with or without college degrees. But it’s the system you graduate into. Hence, that’s why we’re talking about it. Makes no difference whether you like it, loathe it, or have 100 ways to fix it, it is what it is, and that’s the starting point for a conversation about what to do to insure broad, productive employment of people.

I think we’re talking at cross purposes about forecasting–I never really intended to comment on economic forecasting per se. I was simply noting that it’s rather unreasonable to think that Smith, Ricardo, or Mill for example could have foreseen today’s globalized neo-liberal world. I’ll leave it at that.

I am guessing you don’t mean this literally because most of the schools in this country are not for profit schools. As for not working well, well that’s not entirely true is it? If it was true we wouldn’t have so many students from countries that are closer to the model you are talking about coming here in stead. That’s part of an argument about visas after all, that we have these bright young people coming to the country and maybe we should try and keep them rather than have them all leave back home. I am not presenting an argument for or against that but merely pointing out our current system doesn’t work well for everyone, but it does work well in some areas.

As for forecasting, I don’t dive into that anymore since you don’t want to, but I would encourage you not to think modeling is limited because they can’t predict a trip to the moon. That’s a known limitation but it doesn’t invalidate their theories.

Don’t worry, all S and all M pays like shit.

Um, I was speaking of the for-profit schools, like Trump U. and Phoenix, etc. , not working properly. The usual model for higher ed is not-for-profit, which is fine.

Yeah some of those have issues. What about a university like Standford? I mean they’re not just expensive, the rank no.1 in a number of measures and have some pretty impressive programs you can’t find at the public schools. And the loan/debt problem is still found out the public universities anyway.

For profit and private aren’t the same thing, though, we have to remember that. Most private schools are non-profits.

Yep you’re right. They are private but non-profit. Capitalism is as much about private ownership as it is profit though. I thought you wanted to remove the capitalism from education which would suggest the need to remove the private ownership.

The legal notion of not-for-profit only means that owners are expecting a divident. It doesn’t mean the not-for-profit administrators aren’t profiteering to pay themselves fat salaries.

In higher ed, it has very important and different meanings. It means that the institution is not in business to make money, but to provide a service, and its revenues are expected to cover expenses and invest in its future viability. The question of salaries of administrators is pretty much a separate entity. Everyone at a not for profit college makes money, often pretty good money. Are we going to say it would only be a real not for profit if no one got paid? Profit for the institution is not at all the same thing as its employees making a living. People work for the Red Cross, the United Way, your local food bank; they get paid, too.

Never said “remove the capitalism from education;” I only said that education as we’re discussing it exists within the framework of a capitalist system. Private “ownership” of a not for profit institution haslittler to do with capitalism, even if people can make a good living off of it. And I put ownership in quotes because true not for profit colleges and universities aren’t owned by any person, generally. They are governed by boards of trustees, and have certain legal existences for fiduciary reasons, with officers appointed by the board, but there is generally no one who “owns” it. The board has the authority to shut it down, or perhaps transfer it to another entity, though I’m not sure if that happens, even.