The problem with Geithner is not (just) Geithner

It’s a problem in the sociology of knowledge at elite professional schools.

Taking a step back, the Washington Post published a profile yesterday of Geithner that garnered a lot of attention from political bloggers who (rightly, in my view) lamented Geithner’s early obsession with the deficit as well as his outsized influence on economic policy. Some of the bloggers also noted that Obama holds ultimate responsibility for those decisions (including the appointment of Geithner in the first place), which is also appropriate. My contention is that those are not separate phenomena.

Both Geithner and Obama went to prestigious graduate professional schools. Geithner studied international economics at the Johns Hopkins School of Advanced International Studies  (SAIS), while Obama attended Yale Law. The previous president got an MBA at Harvard Business School. Those sound like entirely different sorts of training, but I’ve noticed at my own school that there is one prominent commonality across all of these sorts of programs – all of them learn a fairly similar form of economics, using fairly similar texts.

Moreover, because of a combination of constraints imposed by time and the students’ varying quantitative backgrounds, the version of economics they learn tends to have relatively little of the nuance of the more complicated models taught in doctoral economics programs (and yes, I know the assertion of nuance is debatable, but I’m speaking in relative terms here). Instead, the professional school version is forced by these constraints to present economic problems as having fairly straightforward solutions that are solvable in the context of a medium-difficulty problem set. And while the professors teaching the course will likely spend time on the financial crisis and its implications, as well as other shortcomings of the models they’re teaching, that information does not (yet) appear in most of these textbooks, which means it likely isn’t tested, which means those of us trained to be good little meritocrats will focus on what is in the textbook (for full disclosure, yes I am in graduate school, but not in one of these programs). And that material tends to be of the variety where you draw and calculate the area of neat little triangles to illustrate the dreaded efficiency-killing deadweight loss imposed by taxes, or in law programs you will likely study some variation of Posner’s Chicago-school Law & Economics work, etc.

I think it is hardly a coincidence that this is also the sort of thinking that the Serious People in Washington present given that most of them came up through the same system.

There is obviously variation here – I have no doubt that the advanced courses for specialists at public policy schools like SAIS, Harvard/Kennedy, Princeton/Wilson and Columbia/SIPA are more rigorous – and I want to be crystal clear about the fact that none of this is intended to point the finger at schools or the professors teaching these courses. I’ve had the good fortune to study with a couple of them, and they were uniformly excellent, especially considering the constraints I noted above. But the point remains that professional-school students tend as a class to receive a remarkably similar set of information about how the world and the economy work. And I would argue it’s a system effect that ends up imparting an implicit ideology without requiring anyone’s conscious decision to do so.

As for why this is important, this chart is from a paper by Acemoglu and Autor that will appear in the upcoming Handbook of Labor Economics. It recreates and updates the data from a similar chart in an earlier paper by Autor, Levy and Murnane Katz and Kearney (2008) and shows the distribution of income by education over time.

Source: Acemoglu & Autor (2010). Skills, Tasks and Technologies: Implications for Employment and Earnings

While college-educated people (CLG in the chart) have certainly done well relative to those with no/some college (HSG and SMC), the real gains have gone to the people with graduate degrees (GTC), who by the numbers are overwhelmingly those who went to professional schools.

I make no arguments about causality, but it is striking that we now have a class of professionally educated people who are both enjoying extraordinary returns to that education and who are also operating with a received set of economic views that to some extent valorize their good fortune as a rational market return to their superior skill. The general belief that government policy leans against the generally superior efficiency of the private sector and of markets – in other words, the Serious People trope – has also been instilled into people in that top trend line.

So to return to Geithner, given the above, I’m not convinced that his ouster would change things as radically as many hope. He’s a cadre, one of tens or even hundreds of thousands of them, each of whom has imbibed these same messages.

With special thanks to CC and SK for their feedback.

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7 Responses to The problem with Geithner is not (just) Geithner

  1. paper mac says:

    Hi Anchard. I’m a graduate student in the sciences myself, and I was a little surprised by this statement: “the real gains have gone to the people with graduate degrees (GTC), who by the numbers are overwhelmingly those who went to professional schools.” I hadn’t thought it through before, but I suppose I’d always thought of law and and business schools, pharmacy/med schools, etc, to be a relatively insignificant portion of graduate degrees awarded by comparison to regular graduate degrees. I’d be interested to see any stats you have on the matter, if available. I think “cadre” is good word for these guys, in any case- professional corporatist revolutionaries.

  2. Anchard says:

    Hi Mac – thanks for the comment, and for the interesting question. I’m realizing I may have a skewed vision of what “normal” statistics are in this case since it’s very US-centric. So with that said. I thought I would look up the numbers for Columbia University, since it’s both a major research institution that has a lot of traditional doctoral students (assuming this is what you meant by regular grad degrees) as well as a full complement of professional schools. Those stats are here:

    http://www.columbia.edu/cu/opir/abstract/enrollment_fte_school_all.htm

    The figures for full-time equivalent enrollment in 2010:

    Graduate School of Arts & Sciences: 4,930
    [1,010 of these are MA students, of which a good portion are in the Actuarial Studies and Statistics MA programs, which are professional]

    Professional Schools: 7,368
    [architecture, business, engineering, applied science, journalism, law, social work]

    Medical Center Schools: 3,494
    [medical, nursing, public health, dental]

    You’re right, it would be very interesting to see more aggregated statistics since n=1 is not exactly overwhelming proof. Another point to bear in mind – these are for enrolled students, not graduated students. Given the rising number of people who leave doctoral programs, I would think the ratio for graduates would be even more tilted toward professional schools.

    I’m in the midst of preparing a conference paper for next week so it would have to wait until after that, but I may take a look once that’s finished.

  3. Pingback: Two quick points on the sociology of economic knowledge at professional schools | aluation

  4. paper mac says:

    Thanks for the reply, Anchard. Interesting enrolment figures, I really had no idea this was the case. Thanks also for your clarification of the cadre remark, I wasn’t aware the term was used outside of the context of a professional revolutionary. Good luck with your conference!

  5. Pingback: The miseducation of the professional class | aluation

  6. Pingback: The other side of the story: what non-economists don’t see | aluation

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