Tuesday, October 27, 2009

The Hypocrisy of "Money Doesn't Matter"

Last week, I wrote the following:

"If money doesn't matter in education, why are all of the most expensive colleges among the nation's elite?"

I got quite a bit of pushback in the comments, and it wasn't really a very thoughtful comment, so I think it's appropriate to take more than one sentence to explore the issue.

First, a little background: One of the main battles in education is around funding.  All sorts of people have a personal stake in the funding of schools -- from employees who want a salary boost to homeowners who want a tax break.  An awful lot of the reforms that have been pushed for schools (particularly smaller class sizes and higher teacher pay among others) cost an awful lot of money.  As result of both the fact that spending more on schools deprives other people of the pleasure of that money and the fact that we want our schools to be both efficient and effective, people began to ask whether money mattered in education (see here, for example).

Now, I don't think that every person who's against more school funding as a solution actually means that more money will never matter -- regardless of how much or how it's spent.  Indeed, there are any number of qualifications that can be added into the statement (see here, for example).  Eric Hanushek, perhaps the researcher most often associated with the phrase, is on the record as saying agreeing with the statement that "only a fool would say money doesn't matter."  Most people would agree that spending more money won't necessarily improve schools and that, indeed, spending more money often doesn't improve schools.  We can find all sorts of examples of expensive reforms that didn't pan out, and every cliche lover realizes that "throwing money at the problem" won't solve it.  But, at the same time, most are willing to recognize that it's not impossible for money to make a difference if it's well-spent.  The problem is less with the argument once it's fully laid out and more with how people interpret and act on the phrase.  To blindly insist that "money doesn't matter" is not only foolish but often hypocritical.

As I was insinuating in my one-sentence thought, an awful lot of people believe that the wealthiest, most expensive colleges are also the best.  If we look at a list of the colleges and universities with the largest endowments, it's pretty clear that the wealthiest institutions are the ones we consider elite.  And an awful lot of people aspire(d) to attend these colleges, have attended these colleges, or have paid for their children to attend these colleges.

Regardless of whether or not these schools are actually better, the perception that they are -- and the actions resulting from that perception -- say an awful lot about our society and our beliefs.

Views of private K-12 schools are somewhat similar.   Last year the NY Times ran a story on prep schools that included a list of those with the largest endowments.  I'm no expert, but I recognize a number of the schools on the list.  The bottom line is that parents are willing to spend money -- lots of money (over $30,000 per year, not including room and board, in some cases) -- to send their kids to the most prestigious private schools.

Well, actions speak louder than words.  Clearly, our society believes that schools with more resources are better.  Therefore, anybody who argues that money doesn't matter in education and then brags about their degree from Harvard is a hypocrite.  And anybody who argues that boosting spending at their town's schools cannot make a difference and then writes a check for their kid's tuition at Peddie is also a hypocrite.  Anybody who truly believes that money doesn't matter shouldn't participate in their school bake sale or donate money to their alma mater.

Now, I don't think it's that simple.  Like I said before, the intellectual leaders of the "money doesn't matter" school of thought would make more nuanced arguments.  But the general public doesn't often pick up on nuance.  And the result is that a lot of people repeat the talking points without realizing there's more to the argument.  And then those people become hypocrites.


Finally, let me address a few points that others have made or that I anticipate they will make:

1.) One commenter claimed that schools are like cars because spending more money than one would on a Camry cannot result in the procurement of a better car.  Which is demonstrably false.  Spending more money than one would on a Camry means that one can procure a car that can go 0-60 in the blink of an eye (Porsche), get 50 miles per gallon (Prius), or climb a mountain (Hummer), for example.  In this case, the definition of "better" was conflated with the definition of "necessary," and that type of confusion can destroy a debate.  I don't need my car to climb a mountain or go 0-60 in 4 seconds (though I would like to use less gas).  I can afford to buy myself an adequate car, and I don't feel like I need anything else.  My car meets my needs.  But spending more money could buy me a car that's faster, stronger, safer, more efficient, and/or better at hauling things.  So while I don't think that spending more money is necessary, it's not without utility.

We can make a similar argument with schools.  It might not be necessary for a school to hire only teachers with doctorate degrees, cap class sizes at 5, and operate 12 hours per day 300 days per year -- but it would probably make the school better.  In short, the question "is it worth it?" is separate from the question "will it make things better?"

2.) Prestige undoubtedly has a lot to do with why people spend a lot of money on schools, cars, or other goods.  If somebody thought they'd receive equal educations at Harvard and East Cupcake University and money were no object, which one would they choose?  Most would choose the former, if for no other reason than because other people would be more impressed by it.  But therein lies the rub: somebody has to think something is better for it to be more prestigious.  If everybody thought that BMW made horrible cars, who would pay the premium to buy one?

Besides, whether or not more money actually makes a school (or car) better isn't really germane to the argument.  The point is that most people think that more money = better school, and their actions are proof.

3.) Yes, I consider virtually all of the colleges near the top of the largest endowment and highest tuition lists to be elite.  There are about 3,000 or so colleges in our country, so I'd say at least the top 300 or so should be considered elite.  I find the idea that only the top 25 or so are really elite to be . . . well, elitist.

4.) Yes, it's okay for people to argue that public schools are doing fine with their current spending levels but that they should be allowed to spend more on their kid.  If you don't think the city collects recycleables often enough, you're allowed to pay an outside company to come collect them more.  Everybody always wants more for their families.  The distinction that I'm drawing is that one cannot simultaneously want more for their families and argue that getting more doesn't matter.  It just doesn't make sense.

15 comments:

Claus von Zastrow said...

I'm with you. People who claim that money doesn't matter should live by their words. That seldom happens.

Rachel said...

The distinction that I'm drawing is that one cannot simultaneously want more for their families and argue that getting more doesn't matter. It just doesn't make sense.

I think very often the logic (such as it is) is that one's own kid is smart, and hardworking, and will be able to appreciate the benefits of a fine education, but most other people's kids really can't.

Ze'ev said...

“it's not impossible for money to make a difference if it's well-spent.”

This is certainly a statement I agree with, but this is not a very important statement. The important statement is the answer to the question: How LIKELY it is that money will make a difference. The answer is, that beyond certain minimum level which we in the US have passed long ago, the likelihood that it will make any significant difference is exceedingly low. US spends more per student than almost any nation in the world in purchase-parity adjusted dollars, except for an outlier like the tiny and rich Luxemburg. For a long time we have been spending at a level that any additional money is more likely to be wasted or spent on fluff than on anything that will have any impact on learning. That is why all the studies in the US indicate tiny to nil correlation between spending and outcomes.

”Well, actions speak louder than words. Clearly, our society believes that schools with more resources are better.

No question that the majority of our society believes so. In fact, all societies do. But it doesn’t necessarily make it true. As to being a hypocrite in the case you describe, it may or may not be true.

”Now, I don't think it's that simple. Like I said before, the intellectual leaders of the "money doesn't matter" school of thought would make more nuanced arguments. But the general public doesn't often pick up on nuance. And the result is that a lot of people repeat the talking points without realizing there's more to the argument. And then those people become hypocrites.”

Please carefully check the dictionary. You keep missing the point that one cannot be hypocritical if one doesn’t realize that “there’s more to the argument.” At worst one is ignorant of the truth.

to be continued ...

Ze'ev said...

”One commenter claimed that schools are like cars because spending more money than one would on a Camry cannot result in the procurement of a better car. Which is demonstrably false.”

Unfortunately you still keep mangling the argument. Under the assumption that a car is needed for normal transportation, which I explicitly made, there is indeed no functional difference between a Camry, a Jaguar, or a Porsche. Except for price. In fact, the 1990s Jaguar used to be a much worse car--it constantly used to break down--at much higher price. A perfect example of the importance people attach to prestige rather than to value. As another example, consider flying business class versus first class on a plane—at about twice the price, what is the incremental value of the first class ticket except prestige?

”We can make a similar argument with schools. It might not be necessary for a school to hire only teachers with doctorate degrees, cap class sizes at 5, and operate 12 hours per day 300 days per year -- but it would probably make the school better. In short, the question "is it worth it?" is separate from the question "will it make things better?"

The questions are indeed separate, but more money does not necessarily make things “better.” Jaguar was one example. School operating 12 hours a day may actually be worse – children need to spend some time with their families too, even if you perhaps don’t think so. But to learn what actually happens when schools have too much money, I suggest you read about Kansas City with their Taj Mahal facilities and terrible performance: http://media.hoover.org/documents/0817947817_103.pdf

”If everybody thought that BMW made horrible cars, who would pay the premium to buy one?”

Remember the Jaguar. Remember all the females that buy designer handbags that are often functionally unusable.

Besides, whether or not more money actually makes a school (or car) better isn't really germane to the argument. The point is that most people think that more money = better school, and their actions are proof.”

Indeed many do. But you constantly conflate people’s beliefs with actual facts. So please make up your mind whether your argument is that people are misguided and we need to placate them anyway, or that more expensive things are necessarily better? You argue both points all the time.

”3.) Yes, I consider virtually all of the colleges near the top of the largest endowment and highest tuition lists to be elite. There are about 3,000 or so colleges in our country, so I'd say at least the top 300 or so should be considered elite.

I really don’t care too much what you consider to be elite. You effectively say that since they are expensive they must be good, which just few moment back you admitted that may not be true. In other words, you just placed yourself with the uniformed prestige-driven masses. Why should we pay any attention to what you say?

The top 100 tuition (for 2008-09) list that started all this drivel spanned 34K to 44K a year. Rice University at 30K, Berkeley at 9K for residents and 29K for Non-Residents, University of Virginia at 9K (R) and 30K (NR), University of North Carolina/Chapel Hill at 6K (R) and 21K (NR) , College of William and Mary at 9K (R) and 25K (NR). All these are better places than Skidmore or Tulane, that are among those “top 100” by price.

”Everybody always wants more for their families. The distinction that I'm drawing is that one cannot simultaneously want more for their families and argue that getting more doesn't matter. It just doesn't make sense.”

In fact, it makes a lot of sense. One may be willing to put a lot of personal money in one’s family (private yacht, private jet, mink coat, Van Gogh picture, Caribbean vacations) without immediately requiring that everybody gets the same things funded by the public. You exhibit a singular lack of comprehension when it comes to distinguishing between private funds and public funds, or of the laws of supply and demand.

KDeRosa said...

Corey, I'm going with ze-ev on this one.

I don't think the car analogy is, well, completely analogous.

The automobile industry operates in a mostly competitive market. Marginal dollars spent tend to yield marginally better automobiles (sometimes that benefit is added prestige).

In education, governmental interference has distorted the market at all levels, though less so atthe post-secondary level. Basically all the sellers of education are acting like little monopolists and are engaging in rent seeking bahavior. This is clearly the case at the secondary level and below because of the market power exerted by public schools. At the post-secondary level the abundance of state and federal aid and Griggs v. Duke Power's prohibit on IQ testing has turned college into an increasingly expensive race-to-the top signalling game.

At leastthat's my theory. The usual caveats apply because the research is still emerging.

Anonymous said...

This is all irrelevant. The real heft of the "money doesn't matter" point isn't that money literally never matters, but that you can't improve education across the board by throwing more money at it, any more than your local community college (or state university) is suddenly going to turn into Harvard just by raising an extra million dollars. They're still not going to be competing for faculty or students with Harvard. So the "money" point matters when silly politicians equate spending more money on public schools as "supporting better education."

Besides, you're getting causation backwards. Harvard is great not because it costs a lot of money; rather, it has the ability to charge a lot of money (and to raise a huge pile of money) because of its long and prestigious history.

Corey Bunje Bower said...

Ze'ev: a first-class seat is better than a coach seat. It's not necessary -- it's a waste of money, in my opinion -- but it's still better.

Anonymous: I never wrote that charging more tuition makes a school better, I wrote that "our society believes that schools with more resources are better."

Anonymous said...

Then the charge of hypocrisy is just completely wrong. It's perfectly consistent to think that 1) high-spending institutions tend to be correlated with quality (perhaps because high-quality institutions attract rich people); but at the same time 2) giving more money to low-achieving institutions, in the absence of any other reform, isn't going to do a damn thing to make them like the high-achieving institutions.

Corey Bunje Bower said...

That's not the hypocrisy. The hypocrisy is when people say money doesn't matter and then spend money on themselves and/or their kids. When actions belie beliefs, it's hypocrisy.

Anonymous said...

But when people say "money doesn't matter" in the sense that I gave (i.e., believing that just giving bad schools more money will result in richer schools that are still bad), it isn't even remotely hypocritical for them to spend money on sending their child to a genuinely good school (which, by the way, is going to be good for lots of reasons other than the money spent there).

In the world of music, imagine someone who says, "Money doesn't matter that much; U2 is rich, yes, but if you gave more money to all the bands in the world that suck, they wouldn't improve at all, let alone become as good as U2." But then imagine that the person spends $200 on tickets for a U2 concert. Is that person a hypocrite? By your logic, yes.

But I say no, not in any way whatsoever. It isn't hypocritical to spend money on a good band yourself, even while believing that spending money isn't the CAUSAL factor that makes the band good.

Corey Bunje Bower said...

It'd be hypocritical if somebody said that money doesn't matter when looking at a guitar -- that a cheap one is as good as an expensive one . . . and then went and shelled out hundreds of dollars to buy the best guitar possible to play.

That's the correct analogy.

Anonymous said...

Well, then you're arguing with a phantom. No one says, "Any cheap school is identical to any expensive one." The "money doesn't matter" point is that bad schools aren't going to be improved just by giving them more money (and, as a corollary, that the good school got that way from its high-quality teachers, students, and alums, not just by buying a nice fitness center or by wasting lots of money on central administration).

Anonymous said...

Or, to use your guitar analogy, the "money doesn't matter" point is that a crappy guitar doesn't magically transform itself into a great guitar just because the guitar store raises the price and demands more money for it.

And there's absolutely nothing hypocritical about saying both that: 1) paying more money for the same crappy guitar doesn't make it a good guitar; 2) paying the actual value of a good guitar is worth it.

Anonymous said...

the "only a fool" comment was actually made by Judge Howdy Manning in a Leandro opinion.

Corey Bunje Bower said...

oops -- I've corrected it