Not all that Glitters is Gold

People gravitate towards things that are both good and free. Outside, however, of things that are provided by God or nature (whichever you prefer), combination of ‘good and free’ easily can turn out to be ‘glitter’ that lacks character of gold.

Whenever I am in a retail store and a product I already enjoy is on a two-for-price of one sale, naturally I take advantage of the promo. Sometimes, I take advantage of such a promo in relation to a product that I had not, up until that time, consumed. Whenever I take advantage of such promos in relation to a product that I already enjoy, it is guaranteed that I arrive at greater satisfaction from acquisition of twice as much at the same price. Whenever the promo is in respect of a product I had yet to have consumed, there is not guarantee of greater satisfaction — regardless of the financial saving, it still may turn out that I do not enjoy the product.

Saving money on a product in respect of which you have yet to establish any level of satisfaction does not, in of itself, guarantee arrival at satisfaction.

College Education is a good thing, yet not a thing for everyone — not everyone enjoys college level book learning. Some people, rather naturally, prefer to spend their energies on tinkling with stuff, as such desire to be artisans, or to work in manufacturing. If society would practice some self discipline and refrain from characterization of people who live in recognition of their preferences and abilities as failures, and if society would empower choices of such persons in respect of professions, fewer of young people who do not have desire for college education would, out of peer or parental pressure, press on to a college education.

In the setting of remuneration for plumbers at about $48,000, and that of a college professor at about $67,000, Norway declares that there is dignity in choice of plumbing as career, and dignity in the decision not to progress to college.

Perhaps you are conditioned to believe that college education is source of progress in society. It is true that college education is important. Several new studies (see here, and here, and also here) demonstrate, however, that absent a high quality of elementary and secondary education, college education does not enhance welfare of society. In fact, if stock markets lean only towards the sorts of companies that produce technologies, the sort of which mostly employ college graduates as employees, stock markets become inimical to general welfare of society.

Another one of highlighted studies establishes that the sort of ‘diffusions of innovation’ (migration of an innovation from one context to another) that are generated by manufacturing innovations are better suited to workings of stock markets than the sorts of innovations that transpire in context of say, Windows 8 being transformed into Windows 10. Combined, the studies establish that an economic activity that has become somewhat of a pariah in American society — manufacturing innovation activity — is important for maintenance of economic welfare, maintenance of stock markets that function right, and mitigation of exacerbation of income inequality.

Turns out that, combined, a high quality elementary and secondary education, and manufacturing innovation activity are more important for welfare of society than, combined, tertiary education, and innovation that revolves around (app) coding activities.

But then some raise issue of working conditions in manufacturing facilities, and how compared to say, Google offices, manufacturing floor spaces do not feel quite as homely or inspiring. There also they say, is the matter of the pay.

While paths to the answers to questions raised are not simple, the answers, in of themselves, are simple.

First, let America be at the forefront of redesign of manufacturing floor spaces, such that persons who work in manufacturing feel good when they set out to work. Such efforts can commence with any new manufacturing innovations that come into play going forward.

Second, let manufacturing pay be decent pay.

So then, engage in new and advanced manufacturing initiatives that allow for certain kinds of manufacturing floor spaces.

But then, how exactly to manage careers of persons who opt into manufacturing. In presence of not much of a career path — this because only so many are able to become supervisors or floor managers — how exactly are persons who opt into manufacturing to derive a career path from such a choice?

Again, while the paths to the answers are not simple, the answers, themselves, are simple.

First, secretaries work as secretaries for 30 years, see their pay increase from say, $22,000 per year to say, $66,000 per year, and as their pay increases, get to work different sorts of tasks with different sets of people. If manufacturing workers are versatile, as such are, after a stint of a couple of years at some segment of the manufacturing floor, able to switch to a related segment of the manufacturing floor, like secretaries they get to work with different people, and get to tackle new skills, all of this while experiencing increases to their remuneration.

Versatility of workers in manufacturing is predicated on a high quality of elementary and secondary education.

Second, a manufacturing patent takes about 20 to 25 years to expire. Subsequent to its expiration, the risk of competition from other technologically advanced countries can force a company to relocate production overseas, with outcome new technologically advanced jobs are created in less developed countries. The reasoning for the offshoring is simple. In the moving of the jobs overseas, the company gets not to lose the export market to cheaper competition. Better to share the profits with some innovators in another country than lose it all.

What ought to be done better is setting up of a ‘sinking fund’ at timing of setting up of a company whose product is protected by a patent, which, with just 1% of annual profits over the course of 20 to 25 years, provides, at timing of offshoring of production, monies for funding of social services to the affected town, and provision of severance pay to all that are affected by movement of manufacturing production overseas in response to natural loss of patent protection.

The question then is:

Is 20 to 25 years not long enough for America to come up with yet another technologically advanced innovation, which requires workers in a particular manufacturing industry to learn new skills, such that they transition from making of ‘more obsolete’ technology A, to making of ‘newfangled’ technology B? In presence of such a technology, an employee who chooses to learn the new technology has part of his or sinking fund applied to any education that is necessary for working the new technology, and has the rest rolled over for his or her benefit as part of retirement benefits.

In presence of the ‘sinking fund’ regulation, increase in focus on nationalism is combined with offshoring that celebrates a global worldview, that is, interest in welfare of persons who live in other countries.

Nationalism can, without contradiction, be combined with maintenance of a global worldview.

In presence of arrival at some new innovation, only those not willing to continue in the labor force voluntarily lose jobs. Everyone else gets to learn new skills. Further, arrival at a newfangled technology implies increases to remuneration that are funded by each of higher productivity and higher product utility. With respect to higher product utility?

Every time I only had to work a rug cleaner as part of efforts at keeping my home, which then was filled with four young children, clean, I thanked God that I did not have to depend on a broom for the objective.

A rug cleaner is more expensive than a vacuum cleaner, which also is more expensive than a broom.

But then, relative to cleaning of a rug or carpet, a broom does not do as good a job as a vacuum cleaner, and absent application of a rug cleaner once in a while, eventually a vacuum cleaner loses its effectiveness.

Higher product utility deserves a higher price, as such implies, or ought to imply higher wages for workers in manufacturing.

Free college education will induce lots of young people who rather would prefer to make a good living in manufacturing consider themselves failures for not being willing to take advantage of free college education. Simultaneously, it is guaranteed that free college education will result in three adverse outcomes, namely: (i) a deterioration to the quality of college education; (ii) a decrease to wages and wage growth, which already are lower than they ought to be; and (iii) splintering of the workforce into those who paid to go to college and earn more, and those who had it free, as such are deserving of less of pay, resulting in exacerbation of income inequality in America.

The end outcome? Young people seeking to avoid a feeling of shame arrive at (i) a worse product, (ii) worse benefits, and (iii) worsening of satisfaction with life that is induced by deterioration to income inequality, clearly a dystopian outcome.

Compare then benefits of a return to celebration of manufacturing innovation activity, namely: (i) availability of a well paying alternative to progression to college; (ii) availability of a career path; (iii) progression from one set of skills to another; (iv) incomes that increase with technological progress; (v) the sort of satisfaction with life that comes from having done what one thought best to do; (vi) young people in small towns who, in presence of the sinking fund incentive, are willing to build a career in their towns, with outcome there is mitigation of rural-urban flight.

People are interested in free college education, only because education is a good thing, and acquisition of a good thing at little to no cost seems, on the face of it, a good idea. Financial economists know, however, that, typically, there exist trade-offs to acquisition of a good thing at no charge. While the average citizen or resident may not be aware of such trade-offs, it is responsibility of financial economists, such as myself, to bring such trade-offs to attention of any who are willing to listen.

America has not been down the road of free college education before. Combination of good and free that seems plausible in notion of Free College Education is not reality, is an illusion.

In Norway, all of the economy runs on principle of government as arbiter of all spaces that exist in society. Isolation of education from rest of society as context for ‘government’ in the USA is an artifice that, with rest of society running on a private sector agenda, is nothing but fools gold.

If you add Brine to Water, you do not get a new substance, you just have Brine and Water mixed together.

If America will return to a model in context of which Elementary and High School education prepare students for life, as opposed to preparing students for college, with outcome spending on pre-college education increases, as opposed to being cut all the time, we arrive at a right solution to the problem that is quality of education in today’s America. For those who choose to go to college, and who have to borrow for it, there is a solution to the problem that is educational loans, which is better than the current morass of ideas.

Free College Education is not the solution to America’s problems, rather is glitter that does not qualify as gold.