Concerning reform

What do banks, oil companies, public schools, and universities have in common?

What do banks, oil companies, public schools, and universities have in common?

On the one hand:

1. They have important and complicated work to do.
2. The country is better off if that work is done well than if it is done badly.
3. The people inside them generally know more about how to do that work than outsiders know.
4. One thing that gets the work done well is the professional self-esteem of the people who do it, and their enforcement on one another of standards of good performance.
5. Holding those people, and the institutions they work for, up to public abuse and scorn probably doesn’t help the work get done.

On the other hand:

1. Those people and institutions have interests distinct from the interests of the consumers and the broader society.
2. Unless subjected to external (market or regulatory) pressure, the institutions will be governed primarily for the comfort of their managers rather than for optimal performance. The conditions of optimal performance are not identical to the conditions that make the people inside the institutions happiest.
3. Some claimed professional knowledge is ideology, in the strict Marxian sense: a set of ideas developed (not, usually, self-consciously) to enhance and defend a set of interests.
4. Some claimed professional knowledge is false, and knowledgeable but disinterested outsiders can see how those institutions could get their work done better.

So we should expect that:

1. It will be necessary on an ongoing basis to subject the functioning of those institutions to external scrutiny and pressure for reform;
2. Scrutiny and pressure for reform will be resisted, using the usual arguments of futility, perversity, and jeopardy;
3. Some but not all of those defensive arguments will be correct;
4. “Reform” proposals driven primarily by hatred of the institutions and their employees will be least likely to lead to actual improvement and most likely to damage the institutions and degrade their performance.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

18 thoughts on “Concerning reform”

  1. With corporations, you can smash them and replace with the former mid-size corporations in the market segment. The rump can be sold off.

  2. I see the logic of your argument and don't really disagree with anything you wrote, but will still object to having schools listed with banks, oil companies and universities. Schools — well, public schools, and I'm guessing that's what you meant — are a public service provided by a form of democratically elected local government called the school board.

    When you list them with private entities like banks and oil companies, you are, albiet in a subtle way, reinforcing neoliberal talking points. I'm reminded of a worksheet my sixth grader brought home this spring. It described the Public Sector as "businesses owned and operated by the government."

    I don't think I have to explain to you why it's dishonest and almost a form of propoganda to describe the public sector this way, and to pretend there's no such thing as a public good. For if the doings of the public sector are merely "businesses," then why have the government provide them, why not have everything privatized?

    That's the slippery slope I see here.

  3. well and government (not very much schools) is mostly operated for the benefit of the managers of the corporations, not the managers of the government.

  4. "…will be least likely to lead to actual improvement and most likely to damage the institutions and degrade their performance."

    Who cares? Will they win elections?

  5. Ohio Mom:

    Public schools provide a public service (not, technically, a "public good": that's something like clean air). That doesn't mean they're not subject to the same iron laws of bureaucracy that affect every other sort of enterprise. The school boards, if they do their job, can provide some of the external pressure needed to keep any enterprise working for its clients rather than its managers. Their record in that regard is so-so at best.

  6. "The school boards, if they do their job, can provide some of the external pressure needed to keep any enterprise working for its clients rather than its managers."

    Too bad the clients can't apply the pressure directly.

  7. Ohio Mom,

    I'm not so sure. I think the example you mention is another case of the conservative arguments don't even make sense on their own terms, yet progressives can't seem to see it.

    It seems to me that the fundamental interaction to business is that I need other people to do stuff for me so what can I do in return for them. This interaction does not need to be cutthroat capitalism, it is better for all if it is not. Nearly all such trades are going to be positive sum, both parties are better off, so it can be perfectly friendly. There need be nothing brutal about business. And yet what do we see around us.

    The thing with seeing government as a business, is what does it do for which it can charge money. It seems to me that government provides a host of really valuable services for which it ought to be charging money. Copyright protection is, according to the content industry, really valuable. Incorporation is a form of insurance against investment loss and is, as such, really valuable. The broadcast and telecommunications industries depend upon the federal government licensing the radio spectrum. I could go on. The problem I see is that we are charging way to little for these services. It is not that we need to tax the rich per se, it should not be punishment for being rich. Rather we should be charging for the services we provide. And that amounts to running it like a business. If government were charging for these services, rather than giving them away, it would seriously curtail the degree of corporate entitlement, the excess money into lobbying and other such stresses on our society.

    What to do with the money? I would suggest, given the things that the government does, that we would want to spend it on having a well educated, generally healthy, stable, secure and prosperous population and an infrastructure of transportation, communication and power distributions.

    Who owns this business? I'd say the citizens of the US own it jointly. Essentially it is itself a corporation in which each citizen has a share, all shares are voting shares and the shares are not trade-able nor transferable. You can't accumulate them. So we the people ought to be charging more for the services we provide (at least those services which are used to generate revenue) and spending it on the things I mention. In this view most of the things you would refer to as public goods, can also be seen as the things needed to run the business. My point is definitely not to disparage the concept of the public good but to suggest that thinking of the government as a business need not decrease the value of those things.

    Basically, if viewed sensibly I believe that consistent and coherent view of the government as business can only lead to liberal policies.

  8. I had a long talk with my father (career high school teacher, retiring in 2 years, bless his soul) this morning. He's off tomorrow on a flight to a week-long training seminar in project-based learning. We talked about the various reform proposals floated over the years, and how in the end it never fails to come down to a sort of synchronicity at the local level: administrators, teachers, parents, etc. all clicking in just the right way. But switch out some of the pieces and the entire structure falls apart. He recalled talking to a friend of his who's been teaching for 3 decades and who agreed that, as far as what goes on in the classroom, nothing's really changed. In his area of Seattle, the kids are still all black. Still an incredible achievement gap.

    I understand the point on bureaucracy.

    But what occurred to me is that there's one really big difference between education, at least at the earlier levels, and the rest. Well any other field, really. And we've *kind of* understood this as a society. We're beginning to use language that hints at it. It was the driving acknowledgment behind NCLB.

    Education has the power to end social stratification. The end of class. The end of poverty. The end of criminal justice. The end of *a lot*. In fact, so much we're afraid to even really try and imagine it. It seems too big. It seems, well, unimaginable. But all the social research tells us it is absolutely possible. There are examples of it happening in schools around the country. The problem is scale, among plenty others. But if they can do it, there's no reason to think it can't be done for all children.

    The constitution points us in the right direction. Many major court cases have been fought over this very issue. Proposition 13 in California was built on it. The question was never if it was right to do it, but whether we could. Well, we can.

    But we need a paradigm shift in thinking. *This* is where education needs to be thought of apart from any other sector, business or public. Education needs to be thought of less like a resource, or a public good, and more like a pillar of civilization; as an essential for life akin to air, food or water. As such, we need to take a serious look at how we deliver it unto each soul that enters our nation.

    This is not how we currently view it. Not by a long shot. Take any two kids in America, from opposite ends of the socioeconomic spectrum, and look at what services get provided them by a public school. There is very little difference. Aside from some federal Title I money to pay for crappy lunches and a reading specialist, you get very little. Considering the vast differences in human and social capital that the two children have access to, the attempt at equity is almost absurd. You rectify this imbalance, you have social dividends that we can't even begin to dream about.

    But yeah, aside from that, oil and finance are pretty similar, 🙂

  9. @Eli: Yes. In Michigan (and I think in other states too) the failure on the left was to fall for the right's gambit in agreeing to shift to state supported schools rather than have each district supported by its local residents, with all the gross property tax differences that resulted. By given level state funding to kids in Okemos and Grosse Point and Detroit, you've enshrined a structural level of inequality that is astounding.

    I've fantasized about using those studies of "learning assets" to imagine a system that says "We budget so that every school can afford to provide the same quality of education — and that means spending a lot more in the schools that primarily serve the poor."

  10. Mark: "“Reform” proposals driven primarily by hatred of the institutions and their employees will be least likely to lead to actual improvement and most likely to damage the institutions and degrade their performance."

    It depends on how deep the rot is. In any plausible picture of the world, we will continue to need oil companies, public schools, and universities, and civil incrementalism is generally the way to go. Indeed, the sharp criticism of BP has sensibly been directed at its top managers, not its field engineers, whose mistakes probably resulted from cost-saving pressures from the former.

    The outsiders on your list are the banks. It really isn't clear that investment banking as practised today by Goldman Sachs and company does provide a useful public service in the way of liquidity and deal-brokering that outweighs the huge systemic risks, bubble-pumping and oligopoly profits that accompany the modest benefits. The culture of pride, greed and entitlement is highly resistant to change. I fear that shock and humiliation may be the only way to bring about change – after the next disaster, as the chance has been missed for this one.

  11. It occurs to me that the following neo-Marxian analysis of investment banking is apt. Given M = money, and C = commodities, Marx analyzed the flow in industrial capitalism as M-C-M, and contrasted this with C-M-C, which he claimed was the flow in pre-industrial capitalist economies, and as far as humans were concerned, the preferable flow. In recent decades we've seen financial fiddlings take a larger and larger share of our GNP. So it looks like now its M-M-M, all the way! And so where industrial capitalism was creating real wealth (even if in Marx's view by exploiting the real source of that wealth), the investment bankers and their ilk are not even doing that.

  12. In discussions of reform, there's often a pretense to agreement about ends where none, in fact, exists. (More people than say so are just hostile to the concept of common public education, or oil production.) This may both entrench & further obscure the underlying disagreement. Might it be better to clarify disagreement about purposes directly before turning to how best to serve them?

  13. Mark: "“Reform” proposals driven primarily by hatred of the institutions and their employees will be least likely to lead to actual improvement and most likely to damage the institutions and degrade their performance."

    Oh, crap – it really depends on how well-defended the abuses of the organizations are. In the case of BP, we've seen that producing one of the worst oil spills (in the developed world), if not *the* worst, *might* have adverse consequences for the company that *might* be felt for more than a couple of years. We saw what happened with the Exxon Valdez, which that company successfully dealt with by stalling, and paying for injustice.

    A similar situation applies to something that you are familiar with – criminal justice, particularly drug laws. There's an incredibly strong background level for harshness, regardless of what works (in fact, a strong level of 'screw what works, we want to hurt people'). The people trying to reform the system are working uphill.

    You are lumping radically different factions together.

  14. I have worked, at one time or another, for several of a "bank, oil company, public school, or university". Like everybody else, I would like to jump on Mark's “'Reform' proposals driven primarily by hatred of the institutions and their employees will be least likely to lead to actual improvement and most likely to damage the institutions and degrade their performance.”

    In my experience, reform proposals driven by populist hatred are unlikely to have any effect, apart from adding a few more compliance workers to the payroll. Populist hatred is deontological. The lobbyists for the hated will happily accept deontological stigma, as long as it has no consequential effects. Since the haters don't care about consequences, everybody walks away happy.

  15. I don't think anyone likes criticism, so I don't see how these sectors are different from any others, or from individuals in general. We still need the feedback, of course, but let's not pretend that there are these magical people or sectors where there isn't a pushback. That's just human nature.

    But I agree that intentions and emotions behind the reform efforts really matter. I could see it with welfare "reform," where no one bothered to put in the money to track people and see what happened to them after they got cut off. This was because the authors did not care about that. The only real point was to make the cuts, declare themselves a new kind of Democrat, and go home. (Bunch of bums.)

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