(See my previous entry Study, Study, Study! for comparison and contrast. My main point is that putting an expensive price tag on a college diploma cannot compare to raising the official status of education as such to the level of social obligation.)
…Now, this has not been some sarcastic anti-capitalist invective. I am merely re-introducing what has become known in economics as the “job-market signaling theory” of the American economist, Nobel Prize winner, Michael Spence (born in 1943), who was briefly first introduced in my Contradiction section’s entry The Greatest Economists Who Ever Lived.
The job-market signaling model constitutes a branch of contract theory (hopefully this is a self-explanatory concept). In Michael Spence’s model, “the potential employees signal their respective skills to employers by acquiring a certain degree of education, which is costly to them. Employers will pay higher wages to better educated employees, because they know that the proportion of employees with high abilities is higher among the educated ones, as it is less costly for them to acquire education than it is for employees with low abilities. For the model to work, it is not even necessary for education to have an intrinsic value, as long as it conveys information about the sender (employee) to the recipient (employer), and if the signal is costly.” (Quoted courtesy of the Wikipedia.)
Thus, here is how it works in socio-economic terms, translating education into its money equivalent. I am not repeating Michael Spence now, but making my own extrapolation from his theory to make it relevant to our previous discussion of education under capitalism and socialism. The cost of the individual’s education becomes a monetary commitment on his part, to sell a superior product to the potential employer, under the formula: the costlier investment = the better product, which the capitalist employer understands when put in such monetary terms.
It is true that in capitalist society, where money and success mean everything, such trifles as good education mean nothing, unless they can be reinterpreted in terms of the categories which are sacred to capitalism, that is, in terms of money and success. Considering further that success is ultimately evaluated through money, we are left with the only possibility to give at least some value to good education, which is to turn it into the kind of money function which alone can make it a desiderata for an aspiring capitalist.
Ironically, along these monetary lines of thinking it does not matter much whether you are a mathematician or a lawyer or a linguist or a musician. What matters most is how much money you have chosen to invest in your education. You will be of more value to, say, a reputable brokerage, as a world-class city planner from the MIT’s School of Architecture than as a business graduate from a state college in Iowa. And not because Cambridge sounds better than Des Moines, but just because Cambridge costs more than Des Moines.…Now, this has not been some sarcastic anti-capitalist invective. I am merely re-introducing what has become known in economics as the “job-market signaling theory” of the American economist, Nobel Prize winner, Michael Spence (born in 1943), who was briefly first introduced in my Contradiction section’s entry The Greatest Economists Who Ever Lived.
The job-market signaling model constitutes a branch of contract theory (hopefully this is a self-explanatory concept). In Michael Spence’s model, “the potential employees signal their respective skills to employers by acquiring a certain degree of education, which is costly to them. Employers will pay higher wages to better educated employees, because they know that the proportion of employees with high abilities is higher among the educated ones, as it is less costly for them to acquire education than it is for employees with low abilities. For the model to work, it is not even necessary for education to have an intrinsic value, as long as it conveys information about the sender (employee) to the recipient (employer), and if the signal is costly.” (Quoted courtesy of the Wikipedia.)
Thus, here is how it works in socio-economic terms, translating education into its money equivalent. I am not repeating Michael Spence now, but making my own extrapolation from his theory to make it relevant to our previous discussion of education under capitalism and socialism. The cost of the individual’s education becomes a monetary commitment on his part, to sell a superior product to the potential employer, under the formula: the costlier investment = the better product, which the capitalist employer understands when put in such monetary terms.
Mind you, being a Russian I have a serious problem relating to such a manner of justifying better education in capitalist society. By the same token, I would be having a problem with the judgment of a work of art not on its aesthetic and cultural value, but merely on the price it has managed to fetch at the latest international art auction. Not only will such judgment be inaccurate in many cases, but removing the human factor from it, and substituting it with a dollar figure, will be, well, dehumanizing, that is, demeaning to the human race. Furthermore, this kind of argument precipitously leads us to cross-disciplinary comparisons, and it may end up proving to us “beyond a reasonable doubt” that a stock exchange wizard possesses a greater value than the President of the United States, just by comparing how much money each makes in an hour.
No offence to Michael Spence, of course. On the contrary, he deserves much credit for exposing this side of capitalism so lucidly and impartially. After all, this is not about any particular individual, but about the soul (or perhaps its absence?) of capitalist society as such.
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