Three Views of Education as an Associative Good

The Posner-Becker blog had a good discussion of education rankings 2 months ago. I was particularly struck by Posner’s observations on the self-fulfilling prophecy aspect of rankings:

The effect of college ranking on the education industry is unclear, but my guess is that it is negative. . . .Given the high costs of actually evaluating colleges, employers and even the admissions committees of professional and graduate schools are likely to give weight to a school’s rank, and this will give applicants an incentive to apply to the highest-ranking school that they have a chance of being admitted to (if they can afford it). The result will be to increase the school’s rank, because SAT scores and other measures of the quality of admitted students are an important factor in a college’s ranking. That increase in turn will attract still better applicants, which may result in a further boost in the school’s rank. The result may be that a school will attract a quality of student, and attain a rank, that is disproportionate to the quality of its teaching program.

Henry Hansmann wrote an interesting piece on this phenomenon, calling education an “associative good,” since, “when choosing which producer to patronize, a consumer is interested not just in the quality and price of the firm’s products, but also in the personal characteristics of the firm’s other customers” (emphasis added). Hansmann concludes by wondering if “the increasing technological sophistication of our society, which is fueling the trend toward stratification among the elite educational institutions, will someday produce technologies that make it less important for elite higher education to be a residential experience, and hence remove much of the associative character of higher education.” Franklin Snyder offers evidence that blogging is one such technology.

But don’t underestimate dominant interests’ passion for rankings, cautions McKenzie Wark (whose bookpage for the source I’m quoting interestingly fails to mention it was published by Harvard University Press). He claims that “Education is organized as a prestige market, in which a few scarce qualifications provide entree to the highest paid work, and everything else arranges itself in a pyramid of prestige and price below. Scarcity infects the subject with desire for education as a thing that confers a magic ability to gain a ‘salary’ with which to acquire still more things.” In other words, the rankings are the purest form of artificial scarcity. . . . a precious commodity in an era when the diminishing scarcity of resources that meet basic needs limits their contribution to economic growth. Wark worries that education will “split[] into a minimal system meant to teach servility to the poorest workers and a competitive system offering the brighter workers a way up the slippery slope to security and consumption.”

I’ll expressly disclaim endorsement of any of these three theories. I just find it interesting how the staid and sober observations of a Posner can resonate with Wark’s radical theory, once we interpose the “associative goods” concept.

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