Visualizing The Economics of Education

[Xerographica]

Our education system sucks. In order to understand why... it helps to look at education from the perspective of economics. Unfortunately, because our education system sucks... we should probably first take a quick look at some basic economics...

In this drawing I'm buying the book Toleration from the author... Andrew Cohen. In reality I didn't buy it from Cohen in person... I bought his book on Amazon. Amazon made it stupid easy for Cohen and I to trade with each other.

Most people tend to think of payment as compensation. But in reality, it's actually communication. Money is one way that we communicate with each other. It's an extremely effective way to communicate because actions speak louder than words. When we give somebody a dollar, we're giving them a unit of volume. This is why in the drawing there's a megaphone near the dollars that I'm giving to Cohen.

So Amazon isn't just facilitating trades... it's facilitating communication. The more people who buy Cohen's book... the larger his megaphone...

This drawing should give you an idea why J.K. Rowling's megaphone is larger than Cohen's megaphone.

Now let's take a look at the economics of education...

Any given elementary/middle/high school consists of parents (consumers), producers (teachers) and an intermediary (principal). Each parent gives the same amount of money to the school... and the school gives the same amount of money to each of its teachers. This means that every teacher has the same size megaphone.

The problem with this system is that not all teachers are equally effective. As you can see in the diagram, they don't all produce the same amount of value for parents. They aren't all Jaime Escalante.

The solution is to unbundle teachers...

This diagram isn't as pretty but you should get the idea that more dollars/volume would be given to the teachers who produce more value. The best teachers would have significantly larger megaphones than the worst teachers.

Can you guess which system a terrible teacher would prefer? The many-one-many system? Or the many-many system? Would terrible teachers prefer it if teachers were "sold" in a bundle or "sold" individually?

These diagrams also clearly show us why school vouchers really aren't that effective.

With the many-one-many system a school is one product within a market. But with the many-many system a school becomes a market with many products. Each school would become a market within a market. Schools would facilitate trades between consumers (parents) and teachers (producers). This means that schools would facilitate communication between parents and teachers.

We can also think of a many-one-many system as monolithic and a many-many system as modular. The benefit of a modular system is that you don't have to throw the baby out with the bath water. For example, if your computer monitor breaks then you simply replace your monitor. You're not forced to replace fully functional components. You just replace an inferior (broken) component with a superior component. This is why modular systems facilitate marginal improvements.

Let's get back to J.K. Rowling. It should be pretty straightforward that her megaphone wouldn't be as large as it is if she could only trade with people in the UK. Would it make sense to limit literary exchanges by geography? Nope. So we really wouldn't want to limit educational exchanges by geography either. Parents in America should be able to trade with teachers in the UK. This probably doesn't mean that they'd send their kids to the UK. It just means that exceptional UK teachers would have megaphones that were large enough for their voices to reach America. Which is easy enough to accomplish with live video feeds.

While the actual logistics are kind of fun to try and work out... the important part to understand is that we can greatly improve education by facilitating trading/communication between teachers and parents. Let's make it stupid easy for parents to give the best teachers, wherever they are, the largest megaphones.

[Russels Orbiting Teapot]

Interesting post.

I think there's three ultimate issues here:

1: It's really hard to properly value teaching, as the person paying for it is not the same person as the one experiencing it.
2: It's really hard to match up a system like you propose with the societal goal of making sure that everyone is provided with an adequate education.
3: Video conferencing is great, but it removes the chance for one on one, fully personal interaction that many children need to learn. Children need to be able to have their questions answered directly. They need to feel personally validated when they accomplish something. I'm not sure that the medium of video can really facilitate this to the degree that we need, at least for younger children.

[Xerographica]

1: It's really hard to properly value teaching, as the person paying for it is not the same person as the one experiencing it.

2+2=? or 3x3=? or how do you spell cat? are pretty easy ways to measure whether you, as a parent, are getting the most bang for your educational buck. We run into problems when parents aren't free to boycott teachers who fail to produce results.

With a modular system, the size of a math teacher's megaphone would be a pretty good measure of effectiveness.

2: It's really hard to match up a system like you propose with the societal goal of making sure that everyone is provided with an adequate education.

If you have an argument for how it's beneficial for both defective teachers and effective teachers to have equally sized megaphones then I'm all ears.

3: Video conferencing is great, but it removes the chance for one on one, fully personal interaction that many children need to learn. Children need to be able to have their questions answered directly. They need to feel personally validated when they accomplish something. I'm not sure that the medium of video can really facilitate this to the degree that we need, at least for younger children.

It should be up to the parent whether they put their children in a physical or virtual classroom. But it certainly doesn't seem beneficial to limit access to extraordinary teachers.

Plus, children would be able to ask questions in virtual classrooms. They would simply post their questions in the class "thread". Other kids could "vote" the most valuable questions to the top of the thread using real money (pennies, nickles, dimes, quarters). The teacher would respond to the most valuable questions. And students would get paid for asking valuable questions. For additional info... see Thumbs Up vs Quarters Up and find the section about how Bryan Caplan hates bad questions.

[Russels Orbiting Teapot]

2+2=? or 3x3=? or how do you spell cat? are pretty easy ways to measure whether you, as a parent, are getting the most bang for your educational buck. We run into problems when parents aren't free to boycott teachers who fail to produce results.

With a modular system, the size of a math teacher's megaphone would be a pretty good measure of effectiveness.

What about subjects that are not as easy to evaluate as mathematics and basic spelling and grammar? What about subjects where the teacher is expected to impart information that the parent does not understand personally, or that the parent disagrees with ideologically? What about parents who object to their children learning anything that would challenge their preferred ideology?

If you have an argument for how it's beneficial for both defective teachers and effective teachers to have equally sized megaphones then I'm all ears.

I'm sorry, did you want to discuss this rationally or did you want to put words in my mouth? What you're talking about is obviously a real problem, but your proposed solution has problems that you need to address. I'm not here to take an ideological standpoint, I'm here to try to work towards a solution.

It should be up to the parent whether they put their children in a physical or virtual classroom. But it certainly doesn't seem beneficial to limit access to extraordinary teachers.

I agree. Personally I think a mix of the two models would be most appropriate for the near future. Video conferences facilitated by local teachers.

Plus, children would be able to ask questions in virtual classrooms. They would simply post their questions in the class "thread". Other kids could "vote" the most valuable questions to the top of the thread using real money (pennies, nickles, dimes, quarters). The teacher would respond to the most valuable questions. And students would get paid for asking valuable questions. For additional info... see Thumbs Up vs Quarters Up and find the section about how Bryan Caplan hates bad questions.

An interesting idea, but it seems like it would create a situation where children who asked questions that their peers understood but they did not might get ignored.

[Xerographica]

What about subjects that are not as easy to evaluate as mathematics and basic spelling and grammar? What about subjects where the teacher is expected to impart information that the parent does not understand personally, or that the parent disagrees with ideologically? What about parents who object to their children learning anything that would challenge their preferred ideology?

When parents don't understand the topic... they should be able to have their child independently tested. A third opinion so to speak. But again, the size of megaphones are communicating effectiveness.

When parents disagree with a topic... they are going to tell their children to disregard it anyways and/or have them home-schooled. Kinda like how my family told me to disregard evolution.

I'm sorry, did you want to discuss this rationally or did you want to put words in my mouth? What you're talking about is obviously a real problem, but your proposed solution has problems that you need to address. I'm not here to take an ideological standpoint, I'm here to try to work towards a solution.

If I had to put words in your mouth... it's only because you made a claim, or inferred a claim, that you didn't bother to substantiate. You said that there was a problem with modular education because something about unequal access to education. So I challenged you to explain how kids benefit from a monolithic system where defective teachers are given just a large a megaphone as effective teachers.

An interesting idea, but it seems like it would create a situation where children who asked questions that their peers understood but they did not might get ignored.

The questions that made it to the top of the question/comment thread would be moderately valued by a larger percentage of students or highly valued by a smaller percentage of students.

A teacher can only answer so many questions. The point of a quarters up system for questions would be for the students to help the teacher prioritize which questions to answer. If somebody asks a question because they weren't paying attention... which always happens... then other students wouldn't spend their money on that question... and the teacher wouldn't answer it. Most likely another student would answer it in the thread itself.

[Russels Orbiting Teapot]

When parents don't understand the topic... they should be able to have their child independently tested. A third opinion so to speak. But again, the size of megaphones are communicating effectiveness.

When parents disagree with a topic... they are going to tell their children to disregard it anyways and/or have them home-schooled. Kinda like how my family told me to disregard evolution.

Telling your children to disregard something often doesn't work, and I disagree with our current state of homeschooling as a way to deny your children access to the facts.

If I had to put words in your mouth... it's only because you made a claim, or inferred a claim, that you didn't bother to substantiate. You said that there was a problem with modular education because something about unequal access to education. So I challenged you to explain how kids benefit from a monolithic system where defective teachers are given just a large a megaphone as effective teachers.

What I said was that it's difficult to assemble a system that allows this and also provides equal access to education to the rich and poor. I would rather have a functional system that is non-optimal than a system that is optimal on paper but cannot meet an important goal, that of ensuring that children from poor families don't fall through the gaps. Does your system work if I don't assume a completely libertarian economy, and rather like government support for things like public education?

The proper way to respond is not to challenge me to defend the current system, but to come up with a way for your proposed system to overcome the problem.

[Republic of Coldwater]

I do like the idea of virtual education, and using the power of the internet to supersede the geographic boundaries of the pre-internet age, but I do not know if this can be adapted en masse. The issue is that there are only so many good teachers out there, but far more demand for good teachers (obviously), so I don't know how we would be able to ensure that everyone can get that good teacher. This will inevitably lead to huge amounts of scarcity, and through the law of supply and demand, higher costs.

In the future, I would expect computers and robots to take care of teaching. No longer are they restrained by natural human thought and emotion, and would ensure that there is efficiency in teaching within the classroom. No more absent days or substitute teachers, only a good teacher that can bring good to students.

[Forsher]

Any given elementary/middle/high school consists of parents (consumers), producers (teachers) and an intermediary (principal).

Which makes pupils inputs, yes? Therefore, I think, you can see why diminishing returns is a severe issue...

A teacher can only answer so many questions. The point of a quarters up system for questions would be for the students to help the teacher prioritize which questions to answer. If somebody asks a question because they weren't paying attention... which always happens... then other students wouldn't spend their money on that question... and the teacher wouldn't answer it. Most likely another student would answer it in the thread itself.

The problem, though, is that a teacher that doesn't answer all questions has failed in their role. Sometimes, obviously, the answers are going to involve a little work on the part of the asker but education systems are there for everyone for a reason.

I'm going to assume you've never heard of things like Piazza or Facebook groups. Piazza is used by some lecturers (who we'll assume, rightly or wrongly can be substituted for teachers) for the express reason of allowing oversight in terms of avoiding the blind leading the blind situations (10% of a class makes the same wrong answer in a test despite being sat in 12 different locations because one person was wrong) and filtering out trolls (maybe the wrong answer was promoted deliberately). However, this is the only real edge that Piazza has over most Facebook groups (many lecturers have ethical objections to participating in them; it's search function would work if people weren't complete thickos and used it since they don't it's not worth mentioning as an edge in this context). So, if you reach a situation where there isn't a reasonable expectation of answers coming from lecturers/teachers as well as from students/pupils its utility goes way down (to the point where you stop getting good questions). This happens because of expectancy theory of motivation: people don't expect that the reward for putting in the effort to ask is worth it.

So, in this sense, there are three problems:

All questions should be being answered.
You can't trust the quality of pupil derived answers.
Not having all/nearly all questions answered reduces question quality.

However, these add up to a fourth problem:

To avoid those issues (the existence of which renders the system unfit for purpose), you need a lot of teachers otherwise almost all the time will be spent answering questions and not much teaching (this works for people old enough to grasp enough from textbooks/readings/videos but, in all honesty, that's often a crap way of teaching people).

And this is before we get up to the really big problem... it's not enough to listen about something or even talk about something, you always need to do it and you always, for their to be any real gain from the exercise, some sort of review from it. Participation marks are useless.

I do like the idea of virtual education, and using the power of the internet to supersede the geographic boundaries of the pre-internet age, but I do not know if this can be adapted en masse.

Provided you have reliable internet equipment and have enough money to avoid issues associated with depreciation (treating computers/devices as capital inputs here), it's entirely possible. That doesn't mean it's a good idea. In fact, as you can tell from extension of the above, there are a number of flaws.

The issue is that there are only so many good teachers out there, but far more demand for good teachers (obviously), so I don't know how we would be able to ensure that everyone can get that good teacher. This will inevitably lead to huge amounts of scarcity, and through the law of supply and demand, higher costs.

In theory, you can allow teachers to specialise. You get one person, you only need one person per language, to cover the material. All other teachers can then specialise in dealing with pupils in smaller situations (which still requires knowing the material). You have to, eventually, have roughly a classroom sized number of learners per teacher because otherwise you're not just going to get diminishing returns to scale, you'll almost certainly actually end up with negative returns (i.e. you can only add in so many pupils before the teacher just has too much to do and can't possibly provide an adequate service to all of them... which, again, they need to).

In the future, I would expect computers and robots to take care of teaching. No longer are they restrained by natural human thought and emotion, and would ensure that there is efficiency in teaching within the classroom. No more absent days or substitute teachers, only a good teacher that can bring good to students.

If you ever create an AI that can not only think like a person (or in a way that resembles it so closely we can't tell the difference) but also replicate the human experience in human-to-human contact, then you could do this. Before that day (which is almost certainly impossible, the thinking bit probably is) then you can replace teachers in this fashion.

[Xerographica]

What I said was that it's difficult to assemble a system that allows this and also provides equal access to education to the rich and poor. I would rather have a functional system that is non-optimal than a system that is optimal on paper but cannot meet an important goal, that of ensuring that children from poor families don't fall through the gaps. Does your system work if I don't assume a completely libertarian economy, and rather like government support for things like public education?

I'm not a libertarian... I'm a pragmatarian. But you really don't need to assume a pragmatarian economy. A modular education system is better even if you want to assume our current system of government.

Public education would get the same exact amount of money. The only difference is that effective teachers would get more money than defective teachers. And "effectiveness" would be determined by the parents themselves.

Right now with public education... the government gives the money to schools... and the schools give the money to teachers. With a modular education system... the government gives the money to parents... and parents decide how they allocate their money among all the teachers in the world.

Do you think that any math teachers are going to get filthy rich? If so, then it's because a lot of parents gave them money.

For example, let's say that 300 million parents give a lot of money to a math teacher in the UK named Mr. Potter. Why would so many parents give Mr. Potter so much money? Probably because he effectively taught math to 300 million kids. How did he do it? Maybe he wrote an entertaining but educational book. Maybe he created an interactive website. Maybe he created a fun video game. The sky's the limits when it comes to ways to teach kids math. But clearly Mr. Potter is only going to get filthy rich if the math education he produces is accessible to kids around the world. Just like J.K. Rowling only got rich because people around the world could buy her books. Parents aren't going to pay for a math education that their kids don't have access to.

With the current monolithic educational system... parents can't give their education money to Mr. Potter. So the megaphone of the best math teacher in the world is the same exact size as the megaphone of the worst math teacher in the world. That makes just as much sense as J.K. Rowling's megaphone being the same size as the megaphone of the worst story teller in the world.

A modular system would benefit poor kids a lot more than it would benefit rich kids. This is because with the monolithic system rich parents are going to spend additional money in order to supplement their kids' education. Rich kids aren't going to fall through the cracks with a monolithic system... but poor kids certainly are. With a modular system though... poor kids are going to have equal access to the best math education in the world. They aren't just going to have access to the best math education in their town... or the best math education in their state... or the best math education in their country... they are going to have access to the best math education in the world.

In no case does anybody truly benefit from Mr. Potter's megaphone being a lot smaller than it really should be.

[Confederate Ramenia]

What I said was that it's difficult to assemble a system that allows this and also provides equal access to education to the rich and poor. I would rather have a functional system that is non-optimal than a system that is optimal on paper but cannot meet an important goal, that of ensuring that children from poor families don't fall through the gaps. Does your system work if I don't assume a completely libertarian economy, and rather like government support for things like public education?

I'm not a libertarian... I'm a pragmatarian. But you really don't need to assume a pragmatarian economy. A modular education system is better even if you want to assume our current system of government.

Public education would get the same exact amount of money. The only difference is that effective teachers would get more money than defective teachers. And "effectiveness" would be determined by the parents themselves.

Right now with public education... the government gives the money to schools... and the schools give the money to teachers. With a modular education system... the government gives the money to parents... and parents decide how they allocate their money among all the teachers in the world.

Do you think that any math teachers are going to get filthy rich? If so, then it's because a lot of parents gave them money.

For example, let's say that 300 million parents give a lot of money to a math teacher in the UK named Mr. Potter. Why would so many parents give Mr. Potter so much money? Probably because he effectively taught math to 300 million kids. How did he do it? Maybe he wrote an entertaining but educational book. Maybe he created an interactive website. Maybe he created a fun video game. The sky's the limits when it comes to ways to teach kids math. But clearly Mr. Potter is only going to get filthy rich if the math education he produces is accessible to kids around the world. Just like J.K. Rowling only got rich because people around the world could buy her books. Parents aren't going to pay for a math education that their kids don't have access to.

With the current monolithic educational system... parents can't give their education money to Mr. Potter. So the megaphone of the best math teacher in the world is the same exact size as the megaphone of the worst math teacher in the world. That makes just as much sense as J.K. Rowling's megaphone being the same size as the megaphone of the worst story teller in the world.

A modular system would benefit poor kids a lot more than it would benefit rich kids. This is because with the monolithic system rich parents are going to spend additional money in order to supplement their kids' education. Rich kids aren't going to fall through the cracks with a monolithic system... but poor kids certainly are. With a modular system though... poor kids are going to have equal access to the best math education in the world. They aren't just going to have access to the best math education in their town... or the best math education in their state... or the best math education in their country... they are going to have access to the best math education in the world.

In no case does anybody truly benefit from Mr. Potter's megaphone being a lot smaller than it really should be.

That sounds really nice, do you know if any work is being done on this? How exactly might the very best teacher's work be made accessible to all students?

[Xerographica]

That sounds really nice, do you know if any work is being done on this?

As far as I know, this is it. The people in this thread are the only people in the entire world doing any work on this idea.

How exactly might the very best teacher's work be made accessible to all students?

Digitally! Just like the very best economist's work is accessible to all students...

The manufacturers first supply the neighbourhood, and afterwards, as their work improves and refines, more distant markets. - Adam Smith, Wealth of Nations

By opening a more extensive market for whatever part of the produce of their labour may exceed the home consumption, it encourages them to improve its productive powers, and to augment its annual produce to the utmost, and thereby to increase the real revenue and wealth of the society. - Adam Smith, Wealth of Nations

Coincidentally I just read this today... Math. America’s Real Enemy

In addition to the way the class is structured, Sarhoogi credits his professor, Scott Guth, with helping him pass. “Scott is the best math professor I’ve ever had in my life,” Sarhoogi said.

If Sarhoogi could allocate his education money... then we can reasonably guess that he'd give some money to Scott Guth. This would give Guth a larger megaphone. If other students agree with Sarhoogi that Guth is an excellent math professor... then they'd give some of their education money to Guth as well. This would give him an even larger megaphone.

Of all the professors at Mt. SAC... will Guth end up with the largest megaphone? Maybe? If so, then Mt. SAC would be pretty smart to live stream Guth's classes. This would allow everybody in the world to decide for themselves whether Guth truly is the best math professor. The more people that agreed with Sarhoogi... the more money that Guth would receive... and the larger his megaphone would become.

Eventually Guth could end up earning $1,000,000 per year. This would make him the first math teaching superstar. And you know what happens when it's possible to make a million dollars teaching math? We end up with better math teachers.

This is how it looks with the current monolithic education system...

The person in the middle is Frank. Right now he's a high school student. Not only does he love math... but he also loves teaching math to all his friends. And he's extremely good at teaching math because, as a direct result of his tutoring, all his friends love math.

As you can see in the drawing... Frank can do what he loves and is extremely good at (teach math) and he'll earn at most $50,000 per year. Or, because he's so good with numbers, he can manage a hedge fund and earn $10 million dollars per year.

What are chances that Frank will become a math teacher? They aren't so great. Why aren't they so great? Because people don't grasp basic economics. And why don't people grasp basic economics? Because our education system sucks. As a result, here we are! The only people in the world doing any work on a simple but extremely effective solution to our education problem.

In order to fix our education system all we have to do is allow parents to decide which teachers they give their education money to. This will bring the best teachers to the attention of other parents. And that's all it really boils down to. Using money to communicate and signal to each other where there's value.

[Tahar Joblis]

What I said was that it's difficult to assemble a system that allows this and also provides equal access to education to the rich and poor. I would rather have a functional system that is non-optimal than a system that is optimal on paper but cannot meet an important goal, that of ensuring that children from poor families don't fall through the gaps. Does your system work if I don't assume a completely libertarian economy, and rather like government support for things like public education?

The proper way to respond is not to challenge me to defend the current system, but to come up with a way for your proposed system to overcome the problem.

Where our present system does badly (and all cringing and moaning aside, it doesn't actually do that badly) is in exactly that part: Giving equal access to education to the rich and poor. There are enormous gaps in school quality that are fueled largely by socioeconomic difference.

The person in the middle is Frank. Right now he's a high school student. Not only does he love math... but he also loves teaching math to all his friends. And he's extremely good at teaching math because, as a direct result of his tutoring, all his friends love math.

As you can see in the drawing... Frank can do what he loves and is extremely good at (teach math) and he'll earn at most $50,000 per year. Or, because he's so good with numbers, he can manage a hedge fund and earn $10 million dollars per year.

What are chances that Frank will become a math teacher? They aren't so great. Why aren't they so great? Because people don't grasp basic economics. And why don't people grasp basic economics? Because our education system sucks. As a result, here we are! The only people in the world doing any work on a simple but extremely effective solution to our education problem.

In order to fix our education system all we have to do is allow parents to decide which teachers they give their education money to. This will bring the best teachers to the attention of other parents. And that's all it really boils down to. Using money to communicate and signal to each other where there's value.

TBQH, Frank should expect, rationally, to earn little if any more if he becomes a hedge fund manager, because the odds are he's just going to bounce around a while, not crack into the industry's insiders, and then end up working some unrelated office job somewhere with significantly worse benefits than a teaching job.

In the US, for example, in terms of total compensation per hour, teaching rivals "management, business, and financial," with much better security and hirability.

Of course, what matters isn't what teachers actually take home; what matters is what Frank is told teachers take home, and how easy Frank thinks it is to become a hedge fund manager.

[Xerographica]

Of course, what matters isn't what teachers actually take home; what matters is what Frank is told teachers take home, and how easy Frank thinks it is to become a hedge fund manager.

Frank can't make a truly informed decision without accurate information. If wages don't accurately communicate society's valuations... then this increases the chances that Frank's career choice will create less, rather than more, value for society.

This is why we should unbundle teachers. It's also why we should eliminate the minimum wage...

Like I said, the point of payment isn't to compensate... it's to communicate. If what we pay doesn't accurately communicate our valuations... then society's limited resources are going to be inefficiently allocated.

What do you think about my drawings? Should I quit my day job and become an artist? Should you quit your day job and become a musician? The chances that we will incorrectly answer these important questions increases as the accuracy of society's communication decreases.

[Russels Orbiting Teapot]

This is why we should unbundle teachers. It's also why we should eliminate the minimum wage...

So we should encourage more people to fulfil the shortage of unskilled labor by allowing the wages provided to unskilled laborers to drop?

[New Werpland]

I do like the idea of virtual education, and using the power of the internet to supersede the geographic boundaries of the pre-internet age, but I do not know if this can be adapted en masse. The issue is that there are only so many good teachers out there, but far more demand for good teachers (obviously), so I don't know how we would be able to ensure that everyone can get that good teacher. This will inevitably lead to huge amounts of scarcity, and through the law of supply and demand, higher costs.

In the future, I would expect computers and robots to take care of teaching. No longer are they restrained by natural human thought and emotion, and would ensure that there is efficiency in teaching within the classroom. No more absent days or substitute teachers, only a good teacher that can bring good to students.

(what a bad idea)

[New Werpland]

This system can't and wont work for obvious reasons, students and even parents can make pretty shitty decisions. I know of a college philosophy professor who let his students watch movies all day, and guess what he was fricking popular! The education system shouldn't be a market, it's a place where people are taught, and students by definition don't know.

[Geilinor]

This system can't and wont work for obvious reasons, students and even parents can make pretty shitty decisions. I know of a college philosophy professor who let his students watch movies all day, and guess what he was fricking popular! The education system shouldn't be a market, it's a place where people are taught, and students by definition don't know.

It could work better, but the talk about it being "broken" or "not working" is hyperbole.

[Xerographica]

So we should encourage more people to fulfil the shortage of unskilled labor by allowing the wages provided to unskilled laborers to drop?

Ouch. If there's a shortage of unskilled labor... then why would the wages drop? Let me share some basic economics. If there are more jobs than workers then wages go up. If there are more workers than jobs then wages go down.

The point of wages is to accurately communicate whether there's a surplus/shortage of jobs/workers. Because if there's an unskilled worker in Mexico... then we really want him to correctly answer the question of whether he should stay or go. If there are too few jobs and too many workers in Mexico... then wages in Mexico should accurately communicate this. How? Because the wages would be low. If there are too many jobs and too few workers in the US... then wages in the US should accurately communicate this. How? Because the wages would be high.

Consider the following drawings...

Is this a better market? Nope. Andrew Cohen's megaphone ends up being a lot smaller than it really should be.

Is this a better market? Nope. Andrew Cohen's megaphone ends up being a lot larger than it really should be.

The amount of money that I pay for Cohen's book should accurately communicate how much I value it. And how much I value it will largely depend on whether I perceive that there's a shortage or surplus of books on the topic of toleration. Because if I perceive that there's a shortage of books on the topic of toleration... then I really want my payment to accurately communicate my perception.

The amount of money that Sarhoogi pays to Guth should accurately communicate how much he values the excellent math education that Guth has supplied. And how much Sarhoogi values the math education he has received will largely depend on whether he perceives that there's a shortage or surplus of excellent math education. Because if he perceives that there's a shortage of excellent math education... then he should really want his payment to accurately communicate his perception.

Should you post more or less on this forum? Should you post more or less on another forum? If forum members can't use their pennies, nickles, dimes and quarters to communicate their demand for your threads... then this decreases the chances that you'll put your time to its most valuable uses.

Again... the point of payment isn't compensation... it's communication. Society works better when we accurately communicate with each other.

[New Werpland]

This system can't and wont work for obvious reasons, students and even parents can make pretty shitty decisions. I know of a college philosophy professor who let his students watch movies all day, and guess what he was fricking popular! The education system shouldn't be a market, it's a place where people are taught, and students by definition don't know.

It could work better, but the talk about it being "broken" or "not working" is hyperbole.

Of course it could work better. But it's the teacher's unions that are to blame, not the Absence of competition.

[Nirvash Type TheEND]

Two words. Preferred suppliers. $8 for a 4 pack of expo markers? Get that shit out of my face.

[Xerographica]

This system can't and wont work for obvious reasons, students and even parents can make pretty shitty decisions. I know of a college philosophy professor who let his students watch movies all day, and guess what he was fricking popular! The education system shouldn't be a market, it's a place where people are taught, and students by definition don't know.

The college philosophy professor was popular... therefore... he'd receive a lot of money in a modular education system? Because... popularity is a good proxy for demand? And you learned this... where?

I totally agree though that people can make shitty decisions. But if there's a problem that can be fixed... then we don't increase our chances of fixing it by sweeping it under the rug. What makes most shitty decisions shitty is that they were based on shitty information.

For example, right now you're deciding against a modular education system. Why are you making this shitty decision? Because of shitty information. You incorrectly believe that popularity is a good proxy for demand. And now I have the opportunity to correct your shitty information.

Demand isn't cheap talk... it's when people put their money where their mouth is. If you don't believe me... then here you go... Episode 614: Two Radio Guys Walk Into A Bar. See if you can figure out which economics joke is relevant.

[Russels Orbiting Teapot]

So we should encourage more people to fulfil the shortage of unskilled labor by allowing the wages provided to unskilled laborers to drop?

Ouch. If there's a shortage of unskilled labor... then why would the wages drop? Let me share some basic economics. If there are more jobs than workers then wages go up. If there are more workers than jobs then wages go down.

The point of wages is to accurately communicate whether there's a surplus/shortage of jobs/workers. Because if there's an unskilled worker in Mexico... then we really want him to correctly answer the question of whether he should stay or go. If there are too few jobs and too many workers in Mexico... then wages in Mexico should accurately communicate this. How? Because the wages would be low. If there are too many jobs and too few workers in the US... then wages in the US should accurately communicate this. How? Because the wages would be high.

You continue making good points that actually fail to refute mine. If your premise (that there was an unskilled labor shortage) was true, then we would expect wages for unskilled labor to rise above the minimum wage, rendering it an irrelevant formality. If your premise is correct, why has this not occurred.

Again... the point of payment isn't compensation... it's communication. Society works better when we accurately communicate with each other.

When every form of wage available to a person is less than what is required for them to survive, is the communication that they should lay down and die?

[New Werpland]

This system can't and wont work for obvious reasons, students and even parents can make pretty shitty decisions. I know of a college philosophy professor who let his students watch movies all day, and guess what he was fricking popular! The education system shouldn't be a market, it's a place where people are taught, and students by definition don't know.

The college philosophy professor was popular... therefore... he'd receive a lot of money in a modular education system? Because... popularity is a good proxy for demand? And you learned this... where?

I totally agree though that people can make shitty decisions. But if there's a problem that can be fixed... then we don't increase our chances of fixing it by sweeping it under the rug. What makes most shitty decisions shitty is that they were based on shitty information.

For example, right now you're deciding against a modular education system. Why are you making this shitty decision? Because of shitty information. You incorrectly believe that popularity is a good proxy for demand. And now I have the opportunity to correct your shitty information.

Demand isn't cheap talk... it's when people put their money where their mouth is. If you don't believe me... then here you go... Episode 614: Two Radio Guys Walk Into A Bar. See if you can figure out which economics joke is relevant.

Unfortunately this all leads me to this conclusion.

Economics is for Donkeys.

I don't see how "Mr Incompetent Philosophy teacher MD" would be excluded by the magnificent modular education system, and only the best and most virtuous teachers would be in high demand. "Mr Incompetent Philosophy teacher MD" was not only popular but in high demand for students, meaning everyone took his class for an easy A, and to have fun doing nothing. On this Modular education system I don't see why people wouldn't go to rateyourmodularteachers.com and give "Mr Incompetent Philosophy teacher MD" an A on easiness, and promoting "Mr Incompetent Philosophy teacher MD" so that he would get plenty of students and cash.

[Sociobiology]

Any given elementary/middle/high school consists of parents (consumers), producers (teachers) and an intermediary (principal). Each parent gives the same amount of money to the school... and the school gives the same amount of money to each of its teachers. This means that every teacher has the same size megaphone.

except the consumer is not the parent, it is the student, someone who often if give the choice will not consume it. the market is broken by its very nature because it must be collectively distributed and there is a massive lag between the service and the ability to assess the service. Instead of trying to muddy things with analogies you might try actually explaining your points.

The problem with this system is that not all teachers are equally effective. As you can see in the diagram, they don't all produce the same amount of value for parents. They aren't all Jaime Escalante.

The solution is to unbundle teachers...

how?

This diagram isn't as pretty but you should get the idea that more dollars/volume would be given to the teachers who produce more value.

no it would go to the teachers teaching the students with the richest parents. We don't accept the idea that the poor should have worse teachers. Also the middle man is not the principle, it is the parent. The consumer does not know if the product is quality by definition. The parent is acting as a proxy but can only assess the effect on other consumers with a massive delay and a huge popularity bias.

[Republic of Coldwater]

I do like the idea of virtual education, and using the power of the internet to supersede the geographic boundaries of the pre-internet age, but I do not know if this can be adapted en masse. The issue is that there are only so many good teachers out there, but far more demand for good teachers (obviously), so I don't know how we would be able to ensure that everyone can get that good teacher. This will inevitably lead to huge amounts of scarcity, and through the law of supply and demand, higher costs.

In the future, I would expect computers and robots to take care of teaching. No longer are they restrained by natural human thought and emotion, and would ensure that there is efficiency in teaching within the classroom. No more absent days or substitute teachers, only a good teacher that can bring good to students.

(what a bad idea)

Whats wrong with AIs teaching students. They no longer have to be restrained by the issues of normal humans, and they would be efficient, can be ready to help students at any time, and potentially simultaneously teach numerous classes, which cater to the different needs and learning styles of the children.