Tuesday, February 07, 2006

Planned economies and graduate students 

Watching the SOTU speech last week, as it does every time I watch it, always produces a few groans. More during Clinton than Bush, more during Bush than Reagan, but even for the Great Communicator there will be one or two proposals that will lead to eyerolling and an Omigosh (or worse.) I admit, however, that I probably didn't do this during the SOTU at a point where I should have, and Lew Rockwell corrects me.
Once in every second-term presidency, the chief executive lectures the country about the impending disaster of a shortage of mathematicians and scientists. People think: oh no, we'd better get on the stick and create some in a hurry!
OK, Bush didn't exactly say that. What he said was that we are short of math teachers that are good enough to get our test scores up to levels that compare with those in other industrialized economies. But Bush's solution to this is to create more demand for math and science majors by training 70,000 teachers and encouraging scientists to come to the classroom. But, Rockwell points out, don't markets determine whether we have enough scientists?

Let's say the president made a huge stink about the shortage of teeth cleaners, web designers, dancers, or piano tuners. We might more clearly recognize the error. Professions are things chosen by individuals as they follow market signals. If there is a shortage, the wages of the people with these specializations would go up, thereby drawing more people into the profession. People would rush to study teeth cleaning and the like. This influx of new labor would push wages down again. When the wages get too low, people leave these professions and find others.

Thus does the market for labor specializations work rather well, here, there, and everywhere. Wages aren't the only consideration for why people go into some fields and not others, but it is a major factor. The market provides a helpful signaling mechanism to assist people in the development of certain skills. Shortages and surpluses resolve themselves.

Rockwell continues by pointing out the wages for these majors are quite high enough so that there are no shortages in the field. There's no evidence that the price system isn't working, so why used a planned economy solution?

A point that Rockwell misses, though, is that there's no evidence putting more money in science and math education will help unless something is done to reduce the use of licensing as a barrier to entry in teaching. Alternative licensure rules have always rubbed the teacher unions wrong, and the Bush Administration needs some credit for seeking to overcome barriers to getting those rules relaxed. But there is a chokehold on these rules in state legislatures that continue to dance to the tune of the public education establishment. Even if there was a shortage -- which Rockwell doubts -- there's no assurance the increased scientists supplied would reach the classroom.

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