Why Do People Hate Lawyers and Not Doctors?

By Graham Peterson

From one perspective, people should hate doctors and lawyers just about equally.

  • Doctoring and lawyering both train people in a dubious set of skills (many confess learning what they actually needed on the job).
  • They both benefit from professional organizations (cartels) supported by government licensing, that restrict entry.
  • Those entry barriers drive up fees that are already astronomical because people who come to doctors and lawyers are desperate.
  • They are two of the oldest professions, and old professions have a way of sneaking a lot of country club privilege into their proceedings.

In my view these are all reasons to have a pretty foul taste for both groups.  Now, they both provide a range of incredibly important services, and I think in any world they would command disproportionately high fees — saving people from jail and death is a big deal.

But consider that their importance gets used to justify the bulleted list of unnecessary (and actually damaging) institutional accoutrements above.  Competition among service providers, plainly, improves quality of those services.  Where, then, would we want lots of competition in society?  Doctoring and lawyering (and teaching).  Who cares if some knave has a monopoly on bubble gum?  We should be concerned about monopoly on health and legal care.

But these people argue that competition would actually degrade the average level of their services, and doctoring and lawyering are too important for that!

On its face, this argument is persuasive.  Both intuition and experience show that the marginal entrant to a market is often times worse at what she does than the incumbent.  The marginal entrant is a hack.  Hacks charge less, and take away the marginal customer, who doesn’t care for top of the line service.  So for many, it looks like professional cartels are in the interest of idiots who would otherwise go buy services from a second string newbie.*

But consider two objections here.  First, would billions of people be better off if Sears Roebuck had been granted a monopoly on the department store market in order to protect toaster buyers?  Or are we doing just fine now that Walmart, Target, and Nordstrom’s have segment demand into people who just want a $10 toaster, $30 slick looking toaster, and $150 deluxe stainless steel toaster oven?

A gradient of quality of products is completely appropriate in almost every case.  If you don’t believe the argument applies to medical care, I dare you to tell it to a broke parent who flew their child to Mexico to have a life saving surgery.

Second, new entrants don’t just provide hack versions of products: most new entrants in fact provide new products and services, or provide the old products and services in a new, more efficient way.  Cartels do not promote innovation because they do not benefit from it.  In fact they’ve been known to deliberately stifle it.  One of the most famous cases of successful planned obsolescence was a result of a cartel in light bulb manufacturing.

So like I said, people should really hate both doctors and lawyers for stifling innovation, forcing people to buy unnecessary services they don’t want, and raising prices — in two of the most important markets there are.

But why do people, nevertheless, feel like doctors are heroes and lawyers are snakes?

Well, doctors save people from nature, God, bad luck — and lawyers save people from other people.  No doctor is required to take nature’s side and argue that her harms are fair; the question is already settled that you don’t deserve to die.  The case is opposite with lawyers: for every defense lawyer their is a prosecuting lawyer, and prosecuting lawyers give lawyers a bad name.

So people don’t hate lawyers because of their stupid and harmful professional cartel.  And they don’t hate doctors for their cartel either.  But they ought to.

*This argument is currently popular among journalists and academics who are very nervous about all of the new entrants to the intellectual marketplace.

Why Don’t More People Exercise Their Outside Options?

By Graham Peterson

The lingo on the academic job market for non-academic jobs is “outside option.”  Economists of course regularly exercise their outside options, and it’s one of the reasons their salaries are so high.  People chalk it up to the demand side of the market: “if a bunch of banks wanted to hire me to run regressions I’d have an outside option too.”  But I think that is only a small part of the story.

I think the story starts, actually, with the supply side — with us — calling outside options outside options.  In this view of the world, there is the academy — a sacred and elite discussion club that initiates ought to be pious toward — and then there is the world outside, profane and boring and useless compared to writing transcendent research (that transcends from a JStor archive to a broken CV link).

What you actually see when you read about the economy, is that the middle class is hollowing because business are hiring foreign labor, and that there is a dearth of skilled employees here at home to fill the whiz bang New Economy positions.  Maybe that’s just a neocon story dreampt up to legitimate class oppression, but I don’t think so.

If there is a dearth of skilled employees and a glut of them in Ph.D. programs — what gives?  I think the explanation is cultural.  More simply: academics do not value thinking that goes on outside the academy.  And Heaven forbid, thinking that goes toward the production or service that make another person’s  life better (lo, even a misguided and wretched consumer’s).  Truly useful work involves preaching to 19 year olds about how screwed up their parents’ values are.

The Ph.D. skills in persuasion, giving presentations, careful reasoning, desktop publishing, institutional negotiation, and attending meetings (seminars) are applicable to margins outside the academy, but those who administer the academic cartel will continue to tell themselves that their enterprise is unique.  That tells graduates that their skills are useless anywhere else.  And that is not true.

If Ph.D.s want to raise their salaries — they’re going to have to start breaking away and forcing universities to compete with private industry for their skills.  I think most people miss that point at the individual level, because they think: “if I threaten to leave the academy, they’ll just laugh at me and watch me walk away.”  That is correct. Because that is what the values look like currently.

And that is what the economics looks like too: the first gal to leave will be the one at the end of the line (marginalism!), and nobody will lament the line getting shorter at first.  But they won’t be laughing when the line outside their doors starts getting appreciably shorter.

They’ll be firing deans and diversity officers, trying to free up money to hire the ethnographers who left to go help the Chinese build factories that achieve efficiencies by taking into account local customs in Africa, and communications Ph.D.s who left to go make business meetings more efficient.

What a terrible world that would be for the humanities and social sciences.  One in which skilled people, who spent a lot of time thinking carefully about humans before they went into the world, were able to make the economy a more human and agreeable place.

With Enemies Like These, Innovation Needs No Friends

By Graham Peterson

Paul Krugman just destroyed 70 years of research on economic growth accounting and economics of development, 50-60 years of the sociology of science, and 20-30 years of business school research on the importance of recombinant innovation and risk taking for institutions in a 300 word blog post.  I wish I were that smart.

Paul quotes a very nice piece from the New Yorker by Jill Lepore where she exposes some of the weaker case studies that launched the ca-raaazay fashion around innovation in business schools.  Fair play – the case studies do sound bad.  But Paul, without considering that there might be more to the intellectual interest in innovation than a few flimsy case studies, claims that the only reason interest took off is because talking about innovation made rich people feel good about their (otherwise undeserved?) wealth.

These are the kind of arguments that used to get me fired up when I was 22 and high as a kite, buying Adbusters Magazine from Rainbow Book Co-op in Madison, Wisconsin.  They’re not very good arguments.

Paul says that Silicon Valley is not happy about Lepore’s piece, and that proves she and he are correct.  “Look, this argument we’re making makes X group of people mad!  It must be right because they’re just getting defensive!”  Conspiracy theorists argue this way: “You see, you’re denying that the government controls your brainwaves because they’re controlling your brainwaves!”

Unfortunately for an otherwise great piece, Lepore makes essentially the same claim more elegantly in the New Yorker piece.  She mixes in some critical literary theory and claims that “innovation” only got rhetorically popular in the 1990s for the same reason that political economy did in the 18th and 19th century.  Because it helps rich people who benefit from modernity justify modernity.  This argument has been wrong since Marx slandered his colleagues for being lap dogs to the rich (I’m not being polemical — Marx was; the name calling and mocking is littered throughout Capital and The German Ideology).

The argument is wrong because the rich have always found ways to justify being rich (usually stupid on their face, like “God said so, so there, now shut up or I’ll kill you”).  And there have always been rich people.  But classical political economy emerged, and its descendants in modern business schools, in order to explain the puzzle of how all of a sudden people who had not traditionally been rich started becoming fantastically richer than their ancestors.

It’s difficult to imagine how a work-a-day community college instructor in 18th century Scotland, armed with the fees from his rhetoric courses, and the last name of a tradesman, represented the pinnacle of aristocratic self-congratulation.  Or how the musings of a merchant and financier, a class of occupation considered more suspicious than prostitution for most of history, did either.  But that’s apparently the ethical impetus behind Adam Smith and David Ricardo’s ideas.

And that’s, according to Krugman and Lepore, the only reason someone would believe in a modern idea, innovation, that’s otherwise well supported.   Because rich guys only need a few bogus case studies and a management zealot to ease their consciences on the back 9.

There are good reasons to doubt the veracity of most academic research, and the details of the case studies that Lepore mentions are some of them.  Taking cheap shots at class interests and making generalizations across professions constituted by thousands of people, and hundreds of years of history, based on a bad dissertation and some inflated management consulting, are not any of them.

Academic Heroism Is A Myth

By Graham Peterson

I came to graduate school drunk on the myths of academic heroism.  Hero mythology, note, betrays the aristocratic nature of the academy.  Knights ride in with their MacBooks and fealty to The Truth.  That is at least what one comes to believe as an undergraduate.  Then once given (and often times not) a generous stipend and allowed into graduate school, one quickly realizes that one’s fealty is to be principally aimed at The Guild.

It should be clear on immediate inspection that the academy is an aristocratic holdover.  We wear monastic robes for commencement ceremonies. We love our neo-gothic architecture. We love titles, rank, pomp, and address emails to one another in language that’s otherwise preserved only in moldy country clubs.  Importantly, though, these aren’t just superficial accoutrements.  The professorate continues to work, really, actually, on the model of a medieval guild.

It’s not just romantic imitation.  Modern universities in history were modeled on and during the same time period as medieval guilds.  Graduate students are not employees.  We are apprentices.  We don’t get paid at the margin.  We get a patron stipend.  Professors for years get called Assistant and Associate Professors, because assistant professors used to merely assist full professors, like research assistants today.  In Germany, many assistant professors still just assist.

The hierarchy is deep and long.  And wherever we find deep and long hierarchies, we find inviolable prestige and sanctity.  Wherever we find inviolable prestige and sanctity, we find tribalism, social conservation, and a lot of free wheeling abuse.

When graduate students whine about needless hazing rituals devoid of pedagogical or technical content, their mentors tell them, “you just have to get your union card.”  Now that’s dead serious — the professorate is a production cartel.  Production cartels are not famous for their diversity of opinion and institutional porousness (yet these are precisely the values professors profess).  Production cartels are infamous for increasing incomes while lowering output and product quality.*

There are entire cartoons and twitter feeds premised on what an inhuman hell hole graduate school is.  There are popular websites dedicated to professional gossip (production cartels aren’t great at internal criticism, so it stays underground).  I am not sure how many other industries there are in the modern economy whose labor markets look like this, or this, or this, and this, or this, nor this.  All of the catharsis is cute, until you consider the suicides, and the imposter syndrome — the nagging idea successful people have that they are frauds and will be found out and fail.  A syndrome isn’t an (individual, psychological) syndrome if everyone has it – it’s an institutional artifact.

Everyone’s hurt feelings aside, the academic cartel defeats exactly the goal of professional thought — liberal inquiry.  When people who are bad at their jobs can’t be fired, product quality suffers.  When it comes to the academy, “people who are bad at their jobs” translates to “people who are unthinking, dogmatic, and possess low evidential standards.”  It should frighten you that such people sit on hiring committees and can veto new hires.

Now, the academy, new as it was in the early modern period, was not originally conservative and dogmatic — it was innovative.  It posed a credible and successful threat to the ecclesiastical and political thought that had dominated forever.  But that was then and this is now.

The history of the academy is like that of General Motors.  It introduced necessary competition into the intellectual marketplace, and massively improved intellectual wares.  But as it grew successful its employees formed unions (tenure is a very recent invention) and its managers got in bed with the government.  Now the cars suck.  And the union spends most of its energies protecting its membership from meaningful criticism or performance review, and enforcing the party line.

Yes, a party line.  I don’t work for The National Review.  But anyone who believes that there isn’t a problem with political homogeneity in the American academy lacks a high-school comprehension of descriptive statistics.

The leftist bias in the academy is no conspiracy; it looks to me like a historical accident.  During the post-war education boom, the academic job market was a seller’s market.  Universities had to offer job perks, and tenure was one of those.  People had fresh memories of European intellectuals getting persecuted, and the idea that tenure would protect them was attractive.**  Coincidentally, a bunch of social movements in the 1960s made the academy look like ground zero for anyone who wanted to influence society.

In flooded progressives to the professorate right when Deans were begging for bodies and handing over the keys to hiring and firing.  So here we are, with distributions of left-to-right politics that meet and exceed 16:1 depending on the department.

The story I’m telling certainly isn’t the story academics tell one another about ourselves.  We are in it for the glory, the prestige, the honor and dignity of intellectual honesty and rigor.  Like soldiering.  As history shows, getting people drunk on self important glory is a great way to keep them acceding to homogenous power.  As recent history shows, selling homogenous power with the gloss of social progress is especially effective.

The hero myth legitimates the hierarchy by suggesting that anyone who holds the keys to the temple does so because she has won them on her merits.  Yet many professors were appointed to their position early in their careers, having demonstrated their merits with almost no work, thence given lifetime employment contracts, and absolved of any incentives to compel them to change their minds ever again.

The hero myth tells us that most of what the temple guardians know is right, that they fought hard and with persuasive evidence to become right.  But most of what we know in science and the humanities is wrong , and even more of it still undiscovered.  Anyway persuasion is rarely a function of evidence, and usually a function of sociology.

Our epistemic institution has a bad sociology.

Maybe it’s not so bad.  Dogmas and naked emperors can be a good thing: they force the innovator to amass enormous evidence.  Note what that would imply though.  It would imply that the dominant ideas in the academy are already supported by mountains of evidence.  But that would mean that there are in fact no dogmas or naked emperors.

A majority of ideas in the academy are supported by the caprice of social fashions and articles of faith, just like everywhere else in society. Many sea-changes in thought take place when a confluence of events readies people for a new theory (not new evidence).  The theory catches on; people promote the theory to fame; then eager initiates scurry around for a few decades attempting to amass evidence to confirm it.  Science is mostly a process of ex post group bias confirmation.***

A few true positives come out of that process, but (as any scientist will tell you) mostly garbage comes out.  The heroism mythology uses those few successes to lend authority to the rest of the thinly tested bullshit.  It’s why we have the pomp and ceremony and king of Sweden giving out gold medals to the few who get it right.

Now like I said, in a world in which the state and the church held a tidy cartel over knowledge, academics, the new entrant into the market, were a boon.  But in the world we live in now, of widespread literacy and education, and of resources outside the academy to support researchers and tinkerers, the academy has become the church.

The academy is salvageable, I suspect.  It will become increasingly challenged by non-academic private sector research groups.  Biotechnology is an example; it is massive and stays ahead of the academy.  Computer science is another.  Think tanks aren’t getting any smaller.

What is not getting us anywhere is legitimating the intellectual cartel as a place full of knighted, daring thinkers.  That story invites droves of initiates into martyrdom and disillusionment while being paid hand-to-mouth wages for their labor, selects those who already agree with the Union bosses and don’t take too many risks, and gives the the professorate a delusion of itself.  The self deprecating tweed jokes are only funny for so long.  It is time to seriously consider firing some professors, and taking away their rights to veto job candidates who sneeze the wrong way.

*The delicious irony of the professorial cartel is that much of the institutional mythology and prestige that legitimates its own goings on is the same mythology that legitimates academic administration, and administration has captured unholy rents as tuition prices have increased, leaving the professorate to cling to its indignation and wavering prestige.

**But think about it, really.  Let’s say the United States ends up like North Korea in 40 years.  Is the firing squad going to turn around and go home because professors have tenure?

***This ain’t such a bad thing, if you have a diversity of groups fighting with one another over the truth.  We do not currently have such a situation.


Incentives Matter . . . Again

By Graham Peterson

At my wingnut colloquia out at Mercatus Center and Liberty Fund, there is an interesting phenomenon – nobody uses the L word.  People rarely talk about liberty directly, nor freedom.  When people (rarely) ask if you identify as a libertarian at dinner, the mood of the comment is not unlike the way people sometimes ask (we hope with apprehensive grace) if someone is gay.

It’s not about identity – it’s about ideas.

It would also seem that academic libertarians have internalized the criticism of ideological bias among us.  We are a taboo, and we know it.  In some sense, this is a good thing.  Coming from all corners of the academy – where we’re minorities – we face incredible incentives to be self conscious about our own biases and to be open to debate.

Now it doesn’t always work out this way.  I for instance have become a notorious libertarian troll by getting defensive about accusations and ad hominem.  When you’re a perennial minority and face a lot of attacks, one strategy is to build up permanent defenses and become militant (this of course just confirms to outsiders that you are a nut job, and is the wrong road to go down).

But what is interesting to me, is that I do not see that the radical left in academics – my counterparts – face the same incentives I and mine do.  See, I know I’m crazy.  I know everyone thinks I’m crazy.  I have a great deal of insecurity about my craziness as such – it’s one of the reasons I think I, and other libertarian and conservative academics, troll their colleagues.  We’re trying to assert and reaffirm our ultimately shaky beliefs.

On the other hand, these incentives make me invest more in my beliefs, think more deeply, and be more critical of my thinking.  I think there is a distinct difference between radical leftists in the academy and the radical right.  Radical leftists for the most part live in a world where their colleagues believe at least some, and often most, of an attenuated version of their beliefs.

There is much more to any system of beliefs than the cost imposed by the number of other people in one’s social network who share the belief.  But nevertheless, this bit of network economics is an important consideration.

As a result I think the academic left should be more conscious of how influential their radical elements among them are.  Radical lefties face extremely low costs to believing insane things (take for example Herbert Marcuse’s argument that we ought to suspend free speech for groups who hold ideological hegemony).  And because people reason with cartoons of one another (you do too) the radical left often times defines the entire academic left.

Similarly, I think the academic right should be more conscious of how unrepresentative the radicals are.  And we really cannot blame them for their beliefs — if we paid as low a cost for being wrong as they do, we’d be much less careful ourselves.  Nor can we blame the moderate lefties for allowing the radicals to breed.  Moderate lefties want to maximize the number of social justice et al. arguments on the table in order to maximize the chances that a good one will pop out.  That means setting high tolerances for false positives.  And that means letting their radicals blather.

I feel very strongly that ideological bias in the academy is a real problem — but it’s one worth taking a breath and analyzing if we’re every going to correct it.

These statements are mine and mine alone — they do not represent Mercatus Center, Liberty Fund, or those of the staff, donors, fellows, or other affiliates of those organizations.