We all react to 'market signals'...eventually

Gene Expression
By Razib Khan
Jan 21, 2013 12:34 AMNov 20, 2019 12:04 AM


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It looks like law school applications are finally declining precipitously. The specific issue here is that it's not necessarily easy to leverage a non-elite law school degree into a lucrative career (see the bimodal distribution of law school graduate pay) which makes servicing student loans (which can not be wiped out by bankruptcy) manageable. This is layered on top of the fact that many non-elite law schools seem to have been engaged in de facto marketing fraud in cooking-the-books on the prospects of their graduates for years. There have been many who have criticized Paul Campos of The Law School Scam, but I have plenty of anecdata to support his assertions in a qualitative sense. If you lack quantitative skills but have above average, but not stellar, verbal skills then loading up on $100,000+ debt in law school is not a path to riches (assuming you lack connections and are not on track to simply take over your family firm). But I don't think that this issue is limited to the legal profession. Rather, they are canaries in the coal mine. I was having a discussion with a friend who is an engineer at Intel a few days ago. His career is going well, and the firm is expanding its hiring (at least in his area). Nevertheless he frets about the fact that the market for his services is now going global, and there's the constant pressure to hustle, scramble, and maintain your edge. And this is coming from an MIT credentialed engineer! Anyone who has followed the woes of perpetual post-docs knows well that some of the same issues afflicting law may also hold for other classes of the highly educated. In the last quarter of the 20th century there was the phenomenon of the collapse of manufacturing as a source of employment, as opposed to productivity, in the United States. The short of it is that increased productivity combined with more economically competitive foreign labor made many American workers redundant. Though this caused some angst and concern, the reality is that it left the educated white collar segment of the population which is the pool from which the ruling class draws relatively untouched. In fact, while the working class was being immiserated the top half of the class distribution was benefiting from cheaper and higher quality goods and services. The logic of free capital, labor, and trade, was compelling in that many would benefit despite the sacrifice of the interests of the few. The key here though is that "the few" were people that the American elites had often only a tenuous connection with. Yes, some politicians did rise up from the laboring classes, but by and large the elites draw from the sub-elites, who gained from globalization. The evisceration of the working of the class was a regrettable, but abstract, issue for them. The next stage of globalization in the United States will be different. You can't squeeze blood from a stone, and the old working middle class is by and large gone. The numerically ascending service proletariat is frankly irrelevant in setting the terms of debate in our polity. Now the engine of globalization is going to reshape skilled white collar work. Professionals unprotected by licensing guilds, such as journalists and software engineers, have felt the force of this logic of increased productivity through technology and outsourcing of expensive labor abroad first. But I do not believe that even licensed professions, such as law, medicine, or civil engineering, will be insulated. In the piece above there is already reference to the export of low level legal services. The jobs of many paralegals and entry level attorneys are handled abroad at a fraction of the cost. Because medical schools are so much more expensive than law schools the number of graduates in medicine has been relatively stable for a generation. This despite the increase in population and demand for medical services. Though the medical guild can protect the monopoly on many services that it has for a time, I believe that labor shortages combined with sharply increased demand as the population ages is going to result in the diffusion of the provision of medical evaluation and care. Artificial intelligence diagnostic tools may in the near future begin to threaten the domain of general practitioners (older patients will always prefer humans, but I don't believe that this is necessarily the case with younger ones, and in our medical system older patients get what they want, so automated medical services will initially be restricted to low risk populations such as youth and young adults). What does this mean? Globally it means great gains in median wealth. In the United States though it may mean the shift away from the ideal and reality of a broad middle class society. Because of economic productivity driven by technology the bottom 75-90% of the American population will feel minimal material want. There will be food on the table and consumer gadgets galore. But they will lack the markers of relative affluence. For example, I see no prospect that air travel will become cheaper in the near future. So fewer and fewer Americans may have the means or inclination to travel abroad. In some ways this is a back to the past scenario, where the few controlled the levers of society, and the many were powerless. On the other hand there is a contrast, insofar as absolute deprivation will not be the norm. We may revisit in much more depth the old maxim that man does not live on bread and water alone. Addendum: Just to be clear, I think globalization has been good for humanity as a whole.

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