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One of the most important things we do as members of an intellectual community is assist in peer review.  As important as it is, reviewing papers is one of the tasks that receives the least amount of attention in graduate school training.  We certainly learn how to critique in grad school, but, as you’ll see by the editors’ comments below, critiquing is not the same thing as reviewing. Most of us learn how to be reviewers simply by doing it.  While there will never be a definitive how-to manual for reviewing, I thought it would be nice if our field could identify some of the best practices in reviewing. With that idea in mind, I asked a number of current and former editors at journals in organizational theory and sociology to comment about what they think makes a good review.  This post includes their thoughts.

You’ll notice that the editors seem to agree on several important points (e.g., be constructive!), but there is some variation as well.  Some of the editors make very specific and useful points about what reviewers should and should not be recommending in their reviews. Rather than summarize, I’ll just let you read it for yourself. I’ve put their responses in no particular order.

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Part 1, Part 2, Brayden discusses consumer advocacy and credit markets.

In this final chapter, I move to critiquing Capitalizing on Crises. Since most of this post will be spent on criticism, I want to make clear that I think this is a good book. For me, the book offers two major contributions to economic sociology. First, it documents that there has been a little noticed, but extremely important, shift in the American economy – the financialization of profits. Second, it makes the important case that banking regulation and monetary policy were subject to strong pressures from interest groups. Financial policy was less about optimizing global welfare and more about solving a series of political problems. These insights, I suspect, will be a lasting contribution to economic sociology and political economy.

Now, to the heckling…

1. Critique: A central argument was that Regulation Q created a shift in profits. This may be true, but it is not obvious to me. In general, raising the price of money – ending Q meant you have to loan out deposits at a higher rate to cover higher payments to depositors – means that people will take fewer loans, and thus suppress demands for goods. In other words, getting rid of Q, and other rules, created an incentive to issue more financial instruments but it simultaneously created downward pressure in the economy.This suggests to me, at the least, that some mechanism in addition to banking regulation might needs to be considered. For example, a Krugmanite explanation might focus on taxes and redistribution of income – dividends and interest are taxed way lower than wages and salaries, which creates an incentive to shift. These alternate hypotheses need to be picked up and discussed more thoroughly. This was done do defend the financialization episode, but not the mechanisms linking various Federal policies to shifts in corporate profits.

2. Fed-centrism: The close, historical reading of Fed decisions is a really great feature of this book. Anyone who believes that the Fed is run by a bunch of a-political technocrats should read this text. This isn’t to say that the Fed eschews economic theory. Rather, the governors are subject to enormous political pressures. If nothing else, this book is a great political sociology of the late 20th century Fed. At the same time, I wondered if there is some selection bias. Does the focus on the Fed and the Treasury draw attention away from other factors in the economy that might be driving financialization? In other words, if we were in a decomposition of variance framework, how much financialization would be accounted for by Fed and Treasury decisions?

3. “With political incentives, discretion’s a joke.” That’s a line from the second Keynes/Hayek rap video and it encapsulates how I felt after reading the historical chapters of the book. In each case, with maybe the exception of the monetary policy discussion, the issue is that top down regulation of the economy became undone when subjected to a wave of political pressures. What does this say about policy in general? At the very least it is consistent with a public choice view of the world, where political institutions respond to voter or interest group pressures and not ideal policy discussions. I imagine this story would make radicals of all types comfortable. The neo-Marxist might say that yes, maybe capitalist economies can be properly regulated, but it’s a politically hopeless endeavor. The libertarian, after reading this book, would view financial policy as another example of Stiglerian processes at work, with the regulated capturing the regulators. The mainstream, who views regulation of the economy as a proper and natural function of government, are left with an empty bag,  the edifice of cherished New Deal banking policy melting under the demand for easy credit.

So that’s it – thanks for reading this semester’s book forum! Send me email, or post in the comments, suggestions for the Fall.

A while back, I reviewed “The Flight” by Byran Malessa. That book was about one family’s escape from Germany in 1945. Bryan has written a sequel called “The War Room.” The book is fiction, but draws heavily from his own life. The major theme is growing up the son of a German migrant and being ashamed. The books deals with a lot of hard themes, such as the legacy of Nazism, race in the South, and sexual identity.

There’s a lot to recommend the book. The books reads very smoothly and one quickly identifies with the main character. The exploration of German American identity is crucial and interesting, as the war forced America’s largest ethnic group to go underground. America is an unacknowledged German state. Another distinctive feature of the book is that the main character picked up competitive cycling as a career for a while. One gets a solid account of how people lose themselves in sport, as well as a gripping presentation of a subject that most Americans know little about.

I’ll finish with a personal note. This book is Bryan’s response to his life. In the epilogue, he describes his time at UC Berkeley, where I met him, and his experiences in Ethnic Studies classes. He, apparently, had a very hard time relating his experience to his Chicano and African American class mates. Unsurprisingly, they found it hard to accept that there was something very problematic in being consciously German American in 1990s America. This book is his way to explaining this issue.

As for myself, I had a different experience at Berkeley. I observed Ethnic Studies from a distance, before I was interested in sociology. Memories of the students in those classes remained for years, leading me to wonder about the origins of these academic programs. Later, I’d write my own book on the topic, asking how such an ethnically conscious institution could survive in a post-Civil Rights society. Our two books, fiction and social science, still show that there’s still a lot to be written about how American formulate the heritage.

Every time I log on to the world, there’s more evidence that the Tea Party movement’s moment is passing.

We see the strength of American social movements in their organizations, their ideas, and their activities.  (We’ve covered much of this over the past few months, here, here, here, and here–and elsewhere.)

On this last point, the signs of decline are hard to ignore–and opponents are quick to point them out.

At ThinkProgress, Alex Seitz-Wall posts a list of Tea Party demonstrations, this year and last, noting much smaller turnouts and even fewer rallies.   Are we getting to the bottom of the tea pot?

(There’s a similar story, with numbers and sources, at there’s a similar story, with numbers and sources, at the anarchist site, Infoshopnews.)  And here’s a table Moveon posted:

Demonstrations and rallies are only part of a social movement’s repertoire, but for a movement, the  numbers game is unavoidable–and unwinnable over even the medium haul.

The frequent, and sometimes relatively large, demonstrations Tea Partiers staged over the 2010 set a baseline of comparison that activists will be hard-pressed to surpass.  Organizing large demonstrations takes a lot of time and money, and getting people to turn out requires a sense of urgency and efficacy.  It’s not always the appropriate priority for a social movement.

Republicans, expressing more and less credible fealty to Tea Party ideals (not always well-defined), made huge electoral gains in 2010, and now are trying to find ways to deliver on their promises.  Much of the politics has moved indoors.

Meantime, the Tea Party’s rather ill-defined agenda has allowed elected officials to run with it off in different directions.  Rep. Paul Ryan’s budget, which included the end of Medicare as an entitlement, is one direction that hasn’t commanded enthusiasm at the grassroots. Senator Rand Paul voted against it.  And Senator Paul, who claims, with some credibility to have been a Tea Partier even before the Party started, has been working against the renewal of the Patriot Act and funding America’s current wars–not positions that have generated much enthusiasm from his Republican colleagues in Congress.

When you have an institutional ally, taking to the streets seems less urgent, particularly when there are alternative ways to pursue politics, like lobbying and campaigning.  Right now, the most important alternative for Tea Partiers seems to be the unfolding campaigns for the Republican Party’s presidential nomination.  Most of the hopefuls are trying to find ways to demonstrate their commitments to Tea Party voters within the Republican Party primaries, without hampering their ability to tack to the center during a general election campaign.  It’s not pretty.

Most people try to find the most direct and least disruptive way to get what they want from politics.  For most of those who supported the Tea Party last year, it’s no longer through large rallies.  Organizers know this–or should–and try to find ways to take advantage of what their supporters do want to do.  Sometimes, it’s local politics; sometimes it’s national campaigns; sometimes it’s just giving money.  We’ll watch to see how much of any of these alternatives is actually happening.

When the turnout at the grassroots diminishes, the Tea evaporating, what’s left will be more intense, even bitter.

Gil Scott-Heron: 1949-2011.

Much has been discussed about the Walmart case and ASA Amicus Brief in the postings and comments on the orgtheory [with subsequent posts 1, 2] and scatterplot blogs. Little, however, has been said about the literature review in the ASA Amicus Brief, though it spans a little more than half the main body of the Brief. Some have even suggested that the only thing the Brief does is take the position that the methods that Bill uses are those of science and sociology in particular. Clearly it does much more. [In providing the analysis below, I want to be quite clear that I am not making any claims about what people’s motives were in writing and submitting the ASA Brief.  Laura Beth has been quite clear about hers and I believe her.]

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Political scientist Brendan Nyhan, friend and occupier of my former office at Michigan, has a provocative working paper on political scandals: Scandal Potential How political and media context affect the president’s vulnerability to allegations of misconduct. The abstract says it all:

Political scandal is typically portrayed as the direct result of misbehavior by public officials, but scandal should instead be understood as a widespread elite perception of misbehavior whose occurrence is also influenced by political and media context. I provide a theoretical argument for why the contemporary US presidents should become more vulnerable to scandal as (a) their approval ratings among opposition party identifiers decline and (b) congestion in the news agenda decreases. Using new data and analytical approaches, I find strong empirical support for both claims.

Key phrase: scandal is co-produced by the opposition. Recommended.

“Scarcely any political question arises in the United States that is not resolved, sooner or later, into a judicial question.” This is a tag from Alexis de Tocqueville’s monumental Democracy in America, published well over 150 years ago.

This is only half the story, however, as scarcely any judicial question arises that isn’t, sooner or later, turned into a political question.

Activists on the left and the right are often unduly focused on the courts, generally expecting far too much from judges, and then invariably overly outraged when they’re disappointed.  I think a lot of this has to do with a mythic misunderstanding of the most familiar Supreme Court decision in America, Brown v. Board of Education.

The most appealing way to understand that iconic decision is to see a Supreme Court, led by the politically savvy Earl Warren, recognized a social injustice (racially segregated schools) and an error in Constitutional interpretation (Plessy v. Ferguson), and fixed them both with a unanimous decision.

Activists love that version of the story, because it suggests that justice will prevail, even in the absence of popular support, political resources, or sustained activism.  This is the wrong reading of Brown and the history of segregation in America, and teaches exactly the wrong lessons to activists today.

Today’s lesson is that a judicial decision doesn’t end the political conflict.  (Steve Boutcher and I published this argument in longer form a few years ago.)

This week, courts handed down decisions that pleased and infuriated political activists.

Wisconsin circuit court judge Maryann Sumi struck down the extremely controversial provision in the state’s budget that eliminated almost all collective bargaining in the state.  It wasn’t about the content of the legislation; rather, in the haste to handle a resistant Democratic minority, the legislature’s Republican majority violated Wisconsin’s open meetings laws.  (On the political battle, see earlier entries, including here.)

But that case will percolate up through Wisconsin’s courts to an increasingly politicized state supreme court, which might rule differently.  Even if not, Governor Walker still enjoys substantial majorities in the state legislature–although recall elections are on the horizon–and can pass the bill again.  It’s not that the respite provided by the court doesn’t matter, it’s just that it doesn’t end the larger political battle.

Meanwhile, the United States Supreme Court upheld a provision in a 2007  Arizona law that provides strict penalties for employers found to hire undocumented workers.  They’re required to use E-Verify to vet their workers.  The 5-3 ruling turns on technical assessments of E-Verify’s reliability and interpretations of the text of the Immigration and Reform Control Act of 1986.  On these points, and on many others, the well-educated and well-intentioned Supreme Court justices differ.

This ruling IS NOT about Arizona’s more recent, and even more provocative immigration legislation, nor does it provide a reliable prediction of how the Court will rule on that issue–when it reaches the Court.  The laws are different, and the personnel and politics of the Court could easily be different by the time that case is argued.

Of course, it’s not just the immigration issue percolating up to the Supreme Court.  This week, a federal judge in Virginia ruled that corporations can make direct contributions to political campaigns.  Activists also wait, with a mix of optimism and dread, for cases about same sex marriage and mandatory health insurance to reach the Supreme Court, scrutinizing every sigh in oral argument and looking for signals.

No judicial decision on any of these matters is going to put the issue to rest; rather, it will provide a target and stepping stone for, uh, more politics.  Brown appeared at a relatively early point in the modern civil rights movement’s history–before Rosa Parks refused to move, and lots of contested politics followed.  And lots of schools remained (and remain) essentially segregated, if not by statute.  Nor did Roe v. Wade resolve the issue of abortion rights; it provided a basis for much more litigation, activism, and very polarizing politics–up to, at least, this point, nearly 40 years later.

The savvy activist knows that the judiciary is a place to make claims, and that a decision (good or bad) can be useful in raising money and mobilizing the base.  But it’s only one place.

As Fabio described, Greta Krippner’s book seeks to explain how our economy came to increasingly rely on finance as a source of profit.  For Krippner most of the important action takes place in the state. By the 1970s the common view was that there was only so much money to go around.  Legislators had taken on the role of allocating scarce capital to various divisions in society.  The question for them became how to distribute capital so as to avoid being blamed for negative outcomes. Political expedience – specifically, seeking to avoid the “unpalatable task” of giving credit access to particular groups – ultimately drove legislators to embrace deregulation as a political solution to the problem of growing discontent with America’s economy. The real source of the deregulation movement in Krippner’s story is the masses that politicians seek approval from to get reelected. At its core, Krippner’s account is about the unintended economic consequences of political pluralism.

Two important historical factors shape Krippner’s political analysis.  The first was that politicians wanted to avoid major social conflicts that put them at risk of being blamed for bad economic outcomes. Politicians need their constituents’ approval to stay in office.  When the economy was booming, legislators were lauded for their “management” of the economy, but when the economy faltered they were suddenly vulnerable to criticism. The second factor was that capital had become scarce (or at least legislators believed it had become scarce) in the 1960s. When economic times were booming in the post-war years and economic growth appeared limitless, the masses were happy because the supply of capital was abundant. However, post-war growth inevitably dissipated, and citizens could no longer sustain the affluent lifestyle they associated with the American dream. Buying an affordable house, sending the kids to college, and other costly ventures would become out of reach for many Americans if credit was not available. Americans were not passive in their discontent. During the early 1970s consumer movements sprung up throughout the country. One of the leaders of that movement, Ralph Nader, actively campaigned to repeal Regulation Q, which put limits on credit availability and restrained many consumers from getting access to credit. The answer, believed many in the consumer movement, was to allow for variable interest rates and give the consumer the freedom to choose the terms of their loans while also generating better returns on savings. On its surface this seemed like a win-win for everyone. Deregulating interest rates would expand credit availability, while also allowing banks to get more creative in their offerings to potential borrowers. In retrospect we  know that this deregulation also accelerated inflation and suppressed production. This had the effect of pushing more of the economy into financial markets and fueling asset price bubbles.

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Abdul Alkalimat has collected links to about 100 comments & essays on Manning Marable’s new book on Malcolm X. Here they are:

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When Democrat Kathy Hochshul won a normally Republican Congressional seat in special election in upstate New York, all of the party regulars weighed in with their distinctive spins on what this means or doesn’t mean for the elections coming up in 2012.  (This is normal politics; take a look at the glee with which Republicans greeted the election of Senator Scott Brown in Massachusetts.)

The Democrats are having an easier time of it, arguing that Republicans in competitive districts are going to have to spend a lot of time explaining their votes for Paul Ryan’s budget, particularly the conversion of Medicare into a voucher plan subsidizing private insurance.  Critics are quick to note that this will save money only if coverage is restricted and that most people are unlikely to be able to afford to buy the coverage Medicare now provides.

Understandably, voters–who generally support Medicare–are upset.  The Republican answers [a) we won't change anything for anyone over 55; b) this is the only way to save Medicare; or c) the Democrats are worse] haven’t worked so far.  Rep. Ryan says this is because Republicans haven’t been clear and steady enough–and the Democrats are attacking them with tv ads.  (Shocking!)

The Republican Party’s leadership has so far enforced discipline on this budget–only four House Republicans voted against the budget; only five Senate Republicans voted against it.  But candidates will make their own calls as they interpret the tea leaves of this special election and the many polls that will follow.

Social movements in the US are closely tied to mainstream politics and parties.  The Tea Party reminds me of a number of movements on the left, animated by mostly middle-class, educated, white people who are normally engaged in mainstream politics.  I’ve made comparisons with the nuclear freeze movement in the recent past.

Over time, social movements can enforce something of a veto within a political party, most successfully in national elections.  Although a few Democrats who oppose abortion rights and a few Republicans who support them get elected to the Senate, it’s hard to imagine that a candidate for the presidential nomination could win with the wrong position for her party.

Many movements are easier for candidates to fudge.  In 1984, six of the seven Democratic candidates supported a nuclear freeze, in accord with a strong political movement and strong popular support (consistently over 70%) (much stronger, in polls, than the Tea Party).  But they coupled their support for a freeze with other positions that contradicted it–like advocating new nuclear weapons systems.  In effect, they defined a freeze they could support without alienating people who might otherwise vote for them.

Is the Tea Party really tagged with the Ryan Budget and the end of Medicare?  (In Orwell’s terms, this is ending Medicare to save it.  Or was that Lt. William Calley?)  If so, that’s a rough spot for the movement which expressed other, more popular, goals.  If so, candidates seeking to cultivate movement support in the primaries are going to have a lot to explain to independent voters once they win nominations.

While the freeze was organized around a specific policy proposal that institutional supporters redefined and diluted, the Tea Party’s core goals were never so sharply articulated–and there’s a great deal of conflict among national Tea Party groups–and between those organizations and grassroots groups–on just what the movement is about.  (Ask about immigration or social issues to see.)

By hanging the Republican Party and the movement on a very specific–and very unpopular–program, Paul Ryan and the Republican leadership have served neither very well.  I’m certain Democratic consultants are grateful.  The open question at the moment is whether movement activists or Republican regulars will be the first to defect from the proposal.  (I’d bet on the movement.)

I spent last night reading through all the comments on orgtheory and scatterplot. My key goal in writing my initial post was to get a discussion going about the role of sociology in the courts and the particular problems involved. I guess I succeeded! My interest in the Walmart case was only secondary and I discussed it, the ASA Amicus Brief, and Bill’s expert report because it was current, was potentially important, and exemplified many of the issues that I thought needed to be discussed. I did not write it to attack the ASA as Sally Hillsman has accused me of in an email to the Council. Truthfully, I do not know enough about what was done to know whether I would believe it to be unproblematic or not. If the Council, the ASA members’ elected representatives, had the time to seriously consider the matter, read the materials involved, appreciated the issues, and voted to submit an Amicus Brief to the Supreme Court, then I think I and others should not complain. Of course the Mitchell et al. paper does attack the ASA brief, but on scientific, not procedural grounds. [I should also note that Sally’s claim that I offered Laura Beth the opportunity to publish her reply to Mitchell et al. in SMR and withdrew that offer is factually incorrect. I withdrew the offer for her to write a quite different paper, for quite defensible reasons. All that said, what will go in the SMR special issue is still evolving.]

In reading through all the comments last night I was amazed by the number times various people said I said particular things (using their words, not mine), and claimed that I thought various things (with no access that I am aware of to my mind). Amy’s post is perhaps the extreme example of this. In an actual court proceeding this may be appropriate. I don’t think it is appropriate for blogging, assuming the goal should be to try to understand each others’ thinking–why they believe what they think is reasonable–and that by hearing what each other thinks, we might improve and deepen our own thinking. Let’s not put words in people’s mouths or thoughts in their heads. If a position someone has taken is important for a point you want to make then quote the person. If you believe someone thinks a particular thing and that is why they are taking the position they do, then ask them whether that is what they think. More generally, as Laura Beth has asked, let’s keep it as diplomatic as possible. In doing so, this will vastly increase the likelihood of having a constructive dialogue.

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The American Community Survey has great data on college major, employment, and income. A research group at Georgetown has analyzed this data to show correlations between college major and income. Let’s get straight to it:

• Math and computer science (as a group) tops it off at $98k.
• Studio art, some esoteric types of engineering, and some kinds of youth counseling have the lowest incomes and high unemployment.
• Among the social sciences, econ is on top ($70k) while soc is at the bottom ($45k).

The report by Jeffrey Carneval, Joeff Strohl, and Michelle Melton,  is here (it’s 182 pages – so a slow download). Some correlations are real supply and demand. Nuclear engineering, which has very high unemployment, reflects a shrinking industry. Art is well… art. There’s selection effects as well. Having taken a math major myself, I can attest that topology isn’t useful in the labor market, but it probably acts as strong signal. There are also personality selection effects. Most sociology majors could earn more money, but they insist on service oriented jobs, like teaching and social work, that suprress their wages.

A few years ago, Tom DiPrete gave a talk at the ASA meetings about the history of the Columbia program. One very interesting section of the talk, in my view, was a description of the social research institute as it was run decades ago. What caught my ear was that the institute took on all kinds of projects from the private sector. That suggested a question: why don’t more sociologists do research based on projects paid for by the private sector?

A few possible  answers:

1. Soc programs actually do lots of private consulting (e.g., Ron Burt’s data is often drawn from research done for private interests), I just don’t know about it.
2. It’s easier to stick to to existing data sets like GSS or Census than take on private projects with uncertain outcomes.
3. Private industry doesn’t care for what sociology can offer.
4. Private industry doesn’t want to share its data for academic analysis.
5. Sociologists are allergic to working with private groups for ideological and/or stylistic reasons.
6. This concept simply hasn’t occurred to most sociologists.
7. Private groups don’t realize that sociologists can do cool research for them.
8. Just added: Conflict of interest.

Any other ideas? Does anyone with experience in consulting care to add something?

Underlying the debate about the ASA amicus brief is a fascinating theoretical question about the link between organizational culture and discrimination. I don’t want to wade into the specifics of the WalMart case – I’m much less informed about the case and the brief than are many of the commenters – but I think it’s worthwhile to think more generally about how one could establish empirically that an organizational culture leads to discrimination. What is the theoretical link between culture and discrimination and what kind of empirical evidence would you need to show this link? I’m also going to steer away from the legal interpretation of discrimination. My reason for writing this post isn’t to discuss employment law; rather I’m just interested in what we think about this from a social science perspective.

Organizational culture is a broad term that identifies differences between organizations in practices, beliefs, values, and symbols. Organizational culture consists of the unwritten rules of the game that organizational members rely on to get stuff done, make decisions, etc.  Culture shouldn’t be equated with the formal structure or demographic composition of the organization, although the two may co-vary. For example, a formal hiring policy isn’t part of an organization’s culture.  Organizational culture is also distinct from the broader set of institutional forces – norms, logics, etc. – that shape all organizations in a field.  We often imagine that organizational culture consists of distinguishing features of organizations.  I don’t think this is a necessary feature of organizational culture, but identifying the distinguishing features of a culture may be necessary from an empirical perspective if you want to demonstrate a causal link between culture and discrimination.

So what are the possible mechanisms that link culture to discrimination? Here are just a few possible mechanisms:

• Informal selection criteria – what are the informal, shared criteria that members of the organization use to hire and retain employees (e.g., see Lauren Rivera’s work on hiring in professional firms)? Do these criteria favor some classes of individuals over others?
• Values – Does the organization have a value system (e.g., collectivist or individualist) that promotes the development of in-group biases? Do these biases lead to unfavorable evaluations of people who are not a part of the in-group?
• Selection practices  and settings – irrespective of job performance, how and where are decisions about hiring and retention made? Are those decisions made in places or using activities that vary in their appeal to certain classes of people? For example, if retention depends on your liking of golf, the organization would naturally favor retaining or hiring people who play a lot of golf.
• Beliefs or personality traits – does the organization favor beliefs or personality traits that are disproportionately found among a certain class of people (e.g., beliefs about working overtime)? For example, if the organization favors aggressive behavior, then the organization would tend to hire and retain people who have this personality trait.

Once you’ve identified theoretical mechanisms, I think there are three parts to empirically verifying a link between culture and discrimination.*  You first want to show that these elements of culture actually vary across organizations. If your claim is that a particular kind of culture is especially discriminatory, then you want to be able to show how that kind of culture varies.  If you can’t show variance across organizations, then you really can’t establish that any single cultural element leads to more bias than another. Second, you want to show that individuals with the same characteristics receive differential treatment in hiring and retention in different organizational cultures. Ideally, you’d like some sort of natural experiment where you took the same individual and had them apply for a job at organizations that varied along the different cultural dimensions. Alternatively, you’d show how roughly equivalent individuals are treated differently in hiring and retention, depending on the type of culture. Finally, you need to be able to make the case that cultural bias in hiring/retention decisions is independent of job performance.  It may be that individuals who have certain beliefs are going to perform better in that organization than individuals who do not share those beliefs. If this is the case, than cultural competence may be the cause of outcome differences rather than superficial preferences.

I imagine this last empirical criterion is the most controversial because of feedback processes within the organization. It may be that individuals differ in performance because an organization’s culture inhibits the employees’ development. For example, if women are given fewer leadership training opportunities because they are not given access to the same socialization settings as men, then you could still show that the culture indirectly shapes discrimination.  This would essentially require a fourth step of empirical verification. Does culture mediate discrimination by constraining the kinds of opportunities that employees of a certain class have for advancement? If you can show that this is the case, then you can still empirically demonstrate a causal link between culture and discrimination.

* Demonstrating causality in social science is notoriously difficult to do. At best we can show that X is one of the causes of Y. Usually we are only capable of showing that we have good reasons to think that  X might be one of the causes of Y.

Part 1.

Last week, we began our discussion of Greta Krippner’s new book “Capitalizing on Crisis.” Greta’s book documents the fact that corporate profits are more likely to come from finance than non-finance, which is a huge claim about the American economy. Part 1 of the book forum reviewed that basic finding. Her second argument is that this is the “financialization” of corporate profits is due to a series of political decisions in the 1960s, 1970s, and 1980s. That’s what we’ll talk about today.

So let’s jump into the deep end. Krippner’s argument is that political pressures made policy makers drop “Regulation Q.” Q was a banking regulation that allowed the Feds to put a ceiling on interest paid on deposits. Regulation Q was phased out in the 1980s and finally abolished in the 2010 Dodd reform. Ok, so why is Q so important? Well, it meant that there was a clear demarcation between two types of banking: deposit banks, where average folks park their money, and investment banks. There was also a policy making dimension to Q. As long as people parked their money in checking and savings accounts, the Feds could control spending and credit by controlling the interest paid on these accounts. Greta’s biggest argument is that the dismantling of Q made it possible for the business world to shift to borrowing and loaning money as primary form of income, thus prompting financialization. We’ll dig into this in the last part of the forum. But this week, we’ll focus on how and why Q was abolished.

The argument is that the need for credit create public choice pressures. Or to put it in rational choice terms (don’t shoot me, Greta!), the median voter, and the banks themselves, found Q and its consequences very inconvenient. There were multiple interest groups who kept hacking away at Q until it was finally weakened in the 80s and completely dropped in 2010. In additions to the banks, much emphasis is placed on various industry groups, who could not get enough credit, as well as consumer protection groups, who wanted the option of a regime with more expensive loans *and* higher rates of return for bank deposits.

For Greta, the Q episode (not this Q episode)  is one step in a process where banks and American business get more and more wrapped up in credit markets and security deals. The next chapter explains how foreign markets were used by the Reagan administration to deal with fiscal limits, and the penultimate chapter explains how monetarist economic theory was used by the Fed to affect business cycles in an unpolitical way but ended up financializing the American economy even more. What ties the Q episode, Reagan’s debts, and monetarism together is that there are responses to social or political crises that ended up shifting the economy in an unexpected way.

I’ve spent this entire post merely summarizing the book. I did that to give the reader a flavor of what the book is like, but also because the book is fact filled historical writing that needs to be unpacked. Now let me conclude with a few observations, and next week we’ll dive into longer commentary and criticisms. First, this book provides one more reason to focus on consumer protection groups as a prime driver of economic policy change in the 1970s. See Isaac Martin’s book on tax revolts. Second, this is a very anti-Krugman version of recent economic history. It wasn’t income tax reform that made the rich richer. Rather, it was a combination of interest group politics, Fed policy decisions, and new economic theory. Third, where was the political coalition that stood behind the Glass-Stegal regime? The forces against Glass-Steagal, Q and the rest of the system are prominent, but where were the defenders? Since much of the book’s evidence is Fed-centric. this view might be expected.

Oh look, some evidence that inflammatory claims in something written by Satoshi Kanazawa may not rest on the deep structure of reality or spring from his special ability to speak uncomfortable truths, but may instead arise from an inability to analyze AddHealth data properly. I for one am stunned.

Economic journalist Tim Harford has a nice column on interesting books he’s read. He focuses on Charles Perrow’s classic “Normal Accidents” – an orgtheory favorite. Here’s what Tim says:

He is a sociologist, but got very interested in unintended consequences, and from looking at those, got very interested in technological disasters. For him, at the time he published the first edition of this book, Three Mile Island [the nuclear core meltdown in Pennsylvania in 1979] was the definitive one. It prefigured Chernobyl. And then he revisits the subject at the end of the 1990s. The book goes through awful accidents in complex systems and explores why they happened – the human failings that go into them, the systemic consequences, the fact you could have a very small error that propagates and propagates. It’s quite a technical book, but it’s wonderful and completely compelling.

I originally read the book because I wanted to write about a particular accident. My sister is a qualified safety engineer, and she gave me a bunch of safety engineering books. But as I read Perrow’s book, I realised that it could have been written about the financial crisis. That was really shocking to me – this realisation that these banks and their interconnections were, in many ways, the same kind of system as a nuclear reactor, or at least had very important similarities.

Check out the whole column.

Many many many Christians, readers have pointed out, are not worried about the Rapture tomorrow–despite the confident predictions of some committed co-religionists.  While some of the faithful have quit jobs to prepare–and to alert others of the coming judgment, other committed Christians are expressly continuing to live their lives as before, going to school, work, or even church.  People within the same families have vastly different expectations about what’s going to happen tomorrow, and who’s going to be hanging around the house the day after.  (See the New York Times, “Make My Bed? But You Say The World is Ending.”)

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Amy Myrick is a doctoral student in sociology at Northwestern University. Amy completed her JD from Northwestern University Law in 2009. Amy helped draft the Amicus Brief filed by the ASA about the Wal-Mart case and is a coauthor with Laura Beth Nielsen on related papers.  The following is a response to Chris Winship’s earlier post about the Amicus Brief.

Wal-Mart attacked Sociology.  The ASA responded. 

An important overlooked point for those who think the ASA should have abstained:  the ASA decided to file a brief in this case to defend sociology at large, not to defend Bill Bielby or his conclusions.  Wal-Mart’s Supreme Court brief – widely read and reported in both academic and non-academic circles – attacked not just the expert in this case, but sociology’s basic legitimacy in a way that demanded a response.  Wal-Mart claimed that because women employees could not identify a specific discriminatory policy, they had to rely on “statistics, sociology, and anecdote.”  Wal-Mart then derided each of these sources of evidence, devoting an entire section of its brief to the discipline that ASA helms and to which we all belong.  At minimum, Wal-Mart picked the fight.

Wal-Mart then used an article from a law review (not peer-reviewed) to summarize what sociology “does” and is incapable of doing, even adopting a term – social framework analysis – that sociologists do not own, and that fails to capture sociology’s actual capabilities.  According to Wal-Mart, “Dr. Bielby’s social frame-work analysis fails because it lacks a reliable, scientific basis for linking general research to the corporate setting.”  This assertion does two things:  it labels sociology with legal jargon and claims that, per methodological shortcomings, its cumulative research has no “scientific” value in court.

Had ASA not filed a brief, Wal-Mart would have been allowed to redefine sociology as part of a sham triumvirate that has nothing “scientific” to say about corporate practice in cases like this.  Walking away would have been an embarrassing surrender.  The ASA brief is clear that it aims to show how sociology can make supported claims about how particular cases are likely to work based on cumulative research, and that reliable methods govern this process – in other words, this is science.  Bielby comes in only in reference to whether or not he used those methods.  In the ASA’s own words:

“While we offer no opinion on the substance of Dr. Bielby’s testimony or conclusions, we stress that the methods through which he reached these conclusions are widely accepted and are the bases for research published in the top peer-reviewed social science research journals.”

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There’s an interesting post at Econlog that mentions Kruschev’s aversion to war, especially after he lost his own son in WWII. The discussion turned to the issue of deterrence and atomic bombs. The interesting observation is that most conventional weapons do not deter wars. The trenches, machine guns, and poison gas of WWI didn’t really make people think twice about WWII, which brought even more destruction. The threat of *millions* of deaths doesn’t make people back down, so why did nuclear weapons, specifically, seem to lead to less overall conflict between major powers?

My theory is psychological. War making is tied to an over estimation of one’s own abilities and an under estimation of the enemy. People think “my weapons are so great, and my enemies are so lame.” Even if the enemy is overwhelming, many people still resort to a vast over estimation of their own chances at survival. Hitler famously thought of some last ditch plans, even as the Soviets were shelling Berlin. The Emperor of Japan was willing to let the Japanese people suffer a million casualties as they tried to repel an inevitable American invasion. In other words, most wars allow both sides to invent a self-deceptive story of victory, even in the midst of obvious defeat.

So why nukes? Well, my theory is that it is the only weapon that effectively destroys this long shot hope with all certainty. Nuclear weapons instantaneously destroy cities and post-1945 weapons will leave decades of poisonous radiation. And there is no way to effectively prevent this. Even a Star Wars style shield won’t stop thousands of warheads, or a notorious “suitcase” nuke.There is no heroic last ditch effort in nuclear war. It’s outcome is immediate and obvious.

It’s sad, though, when the moral boundary between trench warfare and nuclear warfare is merely the speed of the carnage.

People protest in opposition to something.  When those opponents promise something particularly egregious, it’s easier to convince your supporters of a real threat and the necessity of taking to the streets.

That’s why social movements activate their opponents.  Every potential success for one side is a cause of mobilization and fund raising on the other side.

When some evangelicals have determined that the day of rapture approaches, quitting jobs to get their lives in order, secular folks have seen an opportunity to put their views forward.  Ambreen Ali (Roll Call) reports that activists who want to take God out of government are using Harold Camping’s prediction of Rapture this weekend to demonstrate their claim: religion is a bad guide for decisions on matters of public policy.

If true Christians remain on Earth next week–or at least in the United States, the secularists will trumpet their superior judgment and try to build on their more accurate prediction (life on Earth will continue).  Odds are with the secularists this time; Camping predicted the rapture at least once before–in 1994.

In this case, it’s not an opponent’s threat so much as its foolishness that allows organizers to mobilize their base.

Is this also the case with Rep. Paul Ryan’s budget proposal?

Last week liberal activists appeared to heckle House Majority Leader Eric Cantor, who was speaking at Virginia Commonwealth University.  They challenged his (and his party’s) support for a proposal that would turn Medicare into a voucher program.  Politically, this bill is likely to be as big an embarrassment as the specific prediction of the end of days.  Democrats are going to talk about it whenever they can.

Republicans are going to try, desperately, not to talk about it.  When former Speaker of the House Newt Gingrich kicked off his presidential campaign by criticizing the bill, he was quickly and severely chastised by his party, from the leadership to the grassroots.  Gingrich had said that the Medicare proposal represented a radical change that wasn’t good for the country.  He was right, but he backed off the position quickly, seeing that he had hurt his chances at generating activist support at the grassroots and campaign funds from Republican interests.

One version of the Tea Party is becoming a veto force within the Republican Party, filtering out heterodox ideas that actually might play better with mainstream America than Tea Party orthodoxy.  This happens through the long long primary process, in which prospective candidates for the Republican presidential nomination have to demonstrate their vigorous attention to the most committed of the activist zealots at the grassroots.

Primaries for other offices are also a contest in which the issue activists can win.  Voter turnout is low in primary elections, skewed to the most committed in each party.  By launching primary challenges, movement activists can keep their issues visible, and can try to force conversions among elected officials.  So, Republican Indiana Senator Richard Lugar, a conservative in any other election (and he’s won six Senate elections), is facing a primary challenge from Richard Mourdoch, whose chief qualification is signing an anti-tax pledge that Senator Lugar has, thus far, refused to sign.

The primary challenge might convince Lugar to change his mind–or it might replace him with a purer alternative.   (Tea Partiers had already signed a letter asking him not to run for a 7th term.) Either way, it makes it easier for Democrats to play to the center of the political spectrum.  For social movements, it’s the purity versus pragmatism dilemma that social movements in America always confront.

For Democrats, the increased influence of electoral enforcers and filters within the Republican Party appears like an unexpected gift.

Via Duke Library’s Kevin Smith, an update on what academic publishers want from the Georiga State Copyright Case that’s now coming to trial:

… amongst that deluge of paper is a truly frightening document, the proposed injunction that the plaintiffs are requesting if they win the case. I have always known that there was a lot a stake for higher education in this case, but the injunction the publishers want would be a nightmare scenario beyond even my most pessimistic imaginings.
First, if this injunction were adopted as proposed, it would enjoin everyone at Georgia State, including students, who would seem to largely lose their fair use rights by virtue of enrolling at GSU. It would apply to e-reserves, faculty web pages and any learning management systems in use or adopted in the future. It would make GSU responsible for every conceivable act of copying that took place on their campus …
Not only would GSU have to micromanage each faculty member’s choices about how to teach every class, they would also have to give the plaintiff publishers access to all of the computer systems on campus so that they too could examine each professor’s decisions.
I can only imagine the angry reaction of faculty members if this requirement were actually imposed on our campuses; they might finally rebel against the exploitation they suffer from these “academic” publishers. …
Permission fees are the real purpose here, of course. The goal is to drive more and more money to the Copyright Clearance Center, which is the only source of permission mentioned by name in the draft injunction. … I believe that compliance with this order, were the publishers to win their case and the Judge to adopt the proposed injunction, would be literally impossible. For one thing, the record keeping, monitoring and reporting requirements would cost more than any institution can afford, even if they were technically possible …Yet you can be sure that if those things happen, all of our campuses would be pressured to adopt the “Georgia State model” in order to avoid litigation.
This proposed order, in short, represents a nightmare, a true dystopia, for higher education. We can only hope, I think, that Judge Evans is clear-sighted enough, and respectful enough of what Congress intended when it passed the 1976 Copyright Act, not to adopt this Orwellian proposal, even if she finds in favor of the plaintiffs. No judge likes to issue an order that cannot be obeyed, and this one would be so far outside the stated policies of the United States in its copyright law that an appellate court could, and likely would, overturn it purely on those grounds.

As Kevin says, the plaintiffs are unlikely to be granted such a far-reaching injunction. But the request makes it clear—if further clarification were required—how they see their interests, and how far removed those interests are from the academics who, in addition to teaching courses that incorporate material from scholarly journals, also edit, referee, subscribe to, subsidize, and provide all the content of these journals almost entirely for free. Scholarly publishing is a canonical case of Information Feudalism. If there is anywhere one would want to see the scythe of disintermediation cut through the fields, it’s here.

When Arizona adopted SB 1070, a bill that would mandate police investigation of people suspected of being in the country illegally, Eva Longoria announced the bill was unconstitutional.  With MALDEF’s (Mexican American Legal Defense Fund) Executive Director Thomas A. Saenz, she briefed Hollywood professionals on the bill and its implications.

Longoria has a bachelor’s degree (in kinesiology, from Texas A&M Kingsville), but is not generally recognized as a constitutional authority.  She is better known as a television star, but lately, she’s been talking about a lot more.

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Note: Chris is a professor of sociology at Harvard University and the Harvard Kennedy School of Government and, since 1995, he has edited Sociological Methods and Research, which is a peer-reviewed scholarly methodology journal. SMR content is also available on the SMRblog.

The current employment discrimination case against Walmart raises the important question of whether social science, and sociology in particular, can effectively participate in court cases and at the same time maintain its scientific integrity. If the answer is yes, there is then the further question of what criteria need to be met for scientific integrity to be maintained. These are important questions requiring discussion, even debate. But first some history.

By early fall, if not sooner, the Supreme Court will make a key decision in the largest employment discrimination suit in history: Dukes v. Walmart.  Oral arguments in the case were heard on March 29. The suit itself, involving a class of as many as 1.5 million women, alleges that Walmart has systematically discriminated against women in its salary and promotion decisions. Potentially, billions of dollars in damages are at stake. The question before the Court, however, is not whether Walmart in fact discriminated against its employees but rather whether such a large case, involving women working in varied circumstances in thousands of different stores and involving different supervisors can be thought to constitute a single class and thus whether the class should be certified.

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I’ve decided to start twittering again. It’ll mostly be orgtheory links, but also occasional links & commentary on social science research, with a few more fun links. @fabiorojas

Fifty years ago this month, the Freedom Riders put their bodies on the line to test their right to integrated interstate travel and accommodations.

Starting tonight, PBS is running a compelling documentary of the events, featuring interviews with many of the key participants, including heroes and villains.  It’s striking to watch the camera juxtapose interviews of seniors with old stills of their younger selves, changing the world.

We should  all know the  story; it fills a few paragraphs in many public school textbooks.  But seeing the veterans talk about their commitments and their fears produces an appropriately visceral appreciation of their courage.  It reminds us about how much the world has changed–and how much it can still change.

There’s much to think about here.  At the moment I want to raise only the issue of misguided optimism.

The  first Freedom Rides were a controversial tactic within the civil rights  movement, organized by the Congress of Racial Equality, a pacifist group that grew out of the Fellowship of Reconciliation.  The first Freedom Riders thought, mistakenly, that they might be taunted and suffer harassment, but that the most likely outcome was a symbolic demonstration of their right to travel anywhere in the United States.  In interviews, they now say they were unprepared for the extreme beatings, nor did they imagine that Southern whites would set a Greyhound bus on fire while police stood by.

Had the first Freedom Riders known just how dangerous it would be, might they have made another decision?

It’s hard not to think of the democracy activists in Tahrir Square, in Tienanmen Square, in the shipyard in Gdansk, and in the prison at Robben Island.  All were unduly optimistic about their prospects of changing the world, and about their personal safety.  Somehow, they continued after they were disabused of this optimism.

Once the first round of Freedom Riders had been badly beaten, taken off the buses, and ultimately sent home, subsequent waves of Freedom Riders followed, the first from Nashville, which had just seen a successful sit-in campaign that desegregated the lunch counters.  The Nashville activists boarded the buses with eyes open, having written their wills the night before.

The civil rights movement united around the Freedom Rides after the tactic had proven much scarier and more dangerous than CORE anticipated–just as other activists had feared.

It’s hard not to wonder how much important history starts with a fundamental miscalculation about personal danger and political efficacy.  Oddly, this courageous optimism can create new possibilities.

I have bipartite network data. But some individuals claim to be linked to many, many organizations. So almost all orgs are connected to each other. How can I ask UCINET to make two orgs linked iff # of co-memberships > X, where X is some threshold?

What makes a study interesting? Is it the problem (e.g., financialization; boycott success) or is it the theoretical question that the problem is meant to address? For many organizational theorists, I would expect the answer would be the theoretical question. Organizational research, and much of sociology for that matter, is driven by making contributions to theory, no matter how small or seemingly mundane is the problem itself.  I don’t think that’s necessarily a bad thing. Teppo and I called this blog orgtheory and not orgresearch for a reason. We like theory. I like the big abstract puzzles that seem pointless to outsiders but that keep many of us up late at night.

The emphasis on “big theory” poses some constraints for getting published in our field. Some, including Don Hambrick, have lamented this trend as the feeling is that it causes scholars to push beyond their data and to make claims that are unjustified.  Scholars, the critics claim, have replaced theorizing with a “theory fetish.” Whether they intend to or not, scholars sometimes turn theory turns into neat packaging without any real attempt to integrate or replicate.

But not all areas of scholarship are equally focused on “big theory.” Some subfields pride themselves for doing little theory and instead examine the “big problems.” Take demography as an example. Nope, not much theory there, but the problems (e.g., changes in the divorce rate; immigration patterns) are big. Of course, it’s not as if demographers are just descriptive. They are interested in explaining problems and may use a little theory as they search for mechanisms that explain the big problems at the heart of their analysis. It’s just that the starting point for their analysis is more about the problem than the theory. Being able to shed light on a really big problem is given more weight in the review process than making a big theoretical contribution.  Although demography may be on the extreme side of the continuum, I think that some branches of historical sociology and strategy research are like this as well.

Why are demography and strategy research more problem oriented than economic sociology or organizational theory? My sense is that it’s because there is more consensus in those subfields about what the big problems are. Demographers may not agree with one another about which theories matter, but they do have high consensus around what big problems they ought to be interested in explaining/solving. This is similarly true in strategy research. You can pinpoint strategy’s focus to one set of DVs – performance.  If you can shed some light on explaining this problem – how to improve financial performance – I don’t think it really matters what theory you use or if you have much of a theory at all. But in organizational theory, there is much less consensus about what the big problems are, and so we instead focus on generating consensus around what the big theoretical questions are.  It turns out that there are a handful of big theoretical questions (e.g., institutional change; network effects vs. cognition) but people who are in the subfield develop a sense for what these are and then figure out how to develop research projects to address those questions. Sometimes, and probably way more often than is useful, scholars start with the topical problem and then, after they’ve done some analysis or finished their ethnography, try to cram their research problem into a theoretical question. Sometimes it works and sometimes it doesn’t. When it doesn’t work, the resulting paper has all of the problems associated with “theory fetish” – e.g., superficial contribution, weak mechanisms.

Is there a place for more problem-oriented research in organizational theory? I’d like to think so. But to get there we need to start talking more about what the big problems are in the organizational world and to get over the false idea that “little theory” is bad.  Little theory doesn’t mean no contribution at all; it just means that we arrive at them as a consequence of a detailed examination of a big organizational/social problem.  I take Jerry Davis’s and Greta Krippner’s books as great examples of problem focused work that also happen to make nice theoretical contributions along the way. I think we need more research like this.

This semester’s book forum is dedicated to Capitalizing on Crisis: The Political Origins of the Rise of Finance by Greta R. Krippner. The book addresses an important development in the American economy, the heavy reliance on finance for profits. The book makes a political argument. Financialization is not the outcome of an unfettered market process, nor is it some development hoisted upon this country by Wall Street. Rather, it is the unintended consequence of policy decisions made by Federal officials in the 1960s, 70s, and 80s in response to a number of political and economic problems.

The book forum will begin this week with a discussion of the book’s main empirical claim, which is that America now has a financialized economy. Next week, I’ll discuss the three policy making episodes that Krippner focuses on and the last week will be a number of critiques, comments, and alternative interpretations.

So let’s start with financialization. On page 27, Greta provides a simple definition – an increasing reliance on finance for profits. I like this definition. Aside from it’s simplicity, it implies a null hypothesis – that profits are still made through manufacturing or non-financial services.This null hypothesis is then attacked in chapter 2, which presents, and defends, a few key trends showing that non-financial firms have gotten more and more of their profits and/or income from financial instruments. Greta provides a now classic example. Auto companies used to make most of their profits by selling cars. Now, most of the profit comes from financing car loans.

I’m not a political economy specialist, or a macroeconomist, but this argument appears consistent with a lot of what we’ve discovered in recent years about the wide spread securitization of all kinds of loans and the amazing growth of the finance sector. It’s also consistent with a recent economic literature on income distributions showing that the the very top (>99%) of the income distribution is now defined by banking and finance rather than manufacturing. In the past, the super rich were captains of manufacturing and services, or they simply owned tons of land and were rentiers. Now, they are much more likely to be hedge fund managers. These analyses are based on recent IRS data files. If you are interested in a nice summary, listen to this interview with Daron Acemoglu and go to 15:57 where he discusses the data used in that research.

Let me conclude with a comment on where Greta is “coming from.” This book is squarely in the radical political economy camp. The book is strongly rooted in various arguments in critical social theory (e.g., Habermas’ theory of legitimation crisis is invoked) and world systems theory. Thus, the market economy is viewed as an inherently dysfunctional system where crisis is endemic. Financialization is the outcome of a response to earlier rounds crisis in the American capitalist system.

However, the book doesn’t quite go in the direction of old style elite theories, which Brayden discussed at length a few weeks a go. The book gives elites great power but saddles them with nasty feedback loops and unintended consequences, nor does it accord them an unwarranted unity of purpose. So this account will look way different than what might be offered by a political scientist or a macroeconomist. or even an unreformed Mills follower. But I think that is a good thing. These other accounts either natualizes what are essentially political decisions, or assumes too much agency in a complex multi-level system. The radical point of view is correct in that state building exercises are essentially about social control and coalition building, which entails market formation, a view, appearing in various guises from Polanyi to Fligstein.

I’ve updated my website. Same format, but I’ve updated the following, for the first time since 2006 (!):

• Biography – updated description of my research.
• Research – every paper & working paper, plus links to selected media coverage.
• Teaching – same grad school advice, but I added my undergrad courses.
• Miscellaneous – fun list of music & art links.

Thanks for reading.

I was recently quoted in the Huffington Post in a story about Thiel’s claim that higher education is a bubble. I was quoted as one of the skeptics. Later that day, Thomas Gorkey, who teaches at Syracuse, read the article and wrote, I said that higher education wasn’t a bubble in the normal sense of the word because education is not a commodity that you can trade:

This doesn’t seem right to me, but I’d love for you to convince me that I’m wrong! To me it seems that students (and mainly parents) do in fact treat college as a tradable commodity. They trade thousands of dollars (that they don’t have) for an education that is supposed to land them a job that pays even more than what their education cost.

I think this deserves a response. In my response, I relied on a distinction made by the economist Gary Becker: physical capital vs. human capital. Physical capital is some physical object that allows you to produce more goods and services for sale on the market. Human capital is the skill that someone has that allows them to gain income from the market. Becker’s argument was that education resulted in higher income because schools trained people in various skills and thus create human capital.

Now let’s get back to the higher education bubble. When people say “bubble,” they usually mean “an unsustainable rise in prices,” which is often, but not always, due to speculation. The reason that prices have to eventually go down is that the underlying value hasn’t risen. The gap, as I mentioned, is often attributed to speculation. People consistently buy something hoping to quickly sell it off.

Notice that in this description of a bubble, some commodity is circulated and there’s a consistent error that pushes the price up and up each time the commodity changes hands. This describes the housing bubble well. People (including banks) started believing that housing prices would just go up and up, which then justified all kinds of crazy loans. However, college education is a form of human capital. The stuff you learned can’t be transferred to another person, no matter how much they pay. So it can’t be a bubble, at least they way most people talk about bubbles.

Thus, something else is happening in higher education. For a certain segment of the market, there is a huge over investment in human capital. As in some bubbles, people are making some sort of gross over estimation of how much some economic resource is worth. But the difference is that there’s no Ponzi scheme since you can’t sell or transfer your college degree to someone else for an even higher price. Human capital simply can’t be transferred. I agree with Thiel that something is very much wrong in higher education, but it’s not quite analogous to the housing or dot-com bubbles.

Let me end with a few hypotheses about why some people – mainly middle class people sending their kids to private colleges – are paying way to much for college. (a) Can’t say no. (b) They simply don’t understand that their kids won’t make the income to cover the loan. (c) Emulation of the wealthy. (d) Consumption good – they simply value the four years a lot. (e) Myopic preferences – people seriously underestimate long term costs.

Today, we start with the story of Tanya McDowell, a homeless woman charged with larceny and conspiracy in defrauding the Norwalk, Connecticut, public schools.  Ms. McDowell, facing conspiracy for possessing marijuana and crack cocaine in another case, allegedly used a false address to enroll her 5 year old in school.   Presently, McDowell faces the possibility of up to 20(!?)! years in prison, as well as being forced to pay $16,000 in restitution for the schooling her child wasn’t entitled to.

Parents trying to defraud public schools, particularly better public schools, isn’t all that unusual; criminal prosecution is.  McDowell is the only one of 27 parents accused of cheating to get their kids in school facing court charges.  Her case has become a cause for education activists.  Change.org has launched a petition campaign against prosecution that, at this moment, has more than 17,000 on-line signatures.

Would a judge actually send a parent trying to look out for her kid to jail?  Yes.  Earlier this year, an Ohio judge sent teacher’s aid Kelley Williams-Bolar to jail for ten days after finding that she had falsified residency records to that her children could attend better schools.  The judge suspended the rest of the five year sentence.

Ms. Bolar-Williams, studying to be a teacher (a prospect that is now up in the air), was well aware of the vast inequality that characterize public schools in Ohio (and the rest of the United States), and wanted the best for her children–better than she could pay for.  She thought the Copley-Fairlawn district provided better and safer schools than those where she lived.

Her case has also become a cause.  Moms Rising organized a campaign for her pardon, and Governor John Kasich asked the Ohio parole board to consider expunging her record.

Could these dramatic cases become the spark that starts a national movement for real school reform?  Sometimes a visible injustice does exactly that.  Think of what the civil rights movement did with Rosa Parks.  But Williams-Bolar and McDowell weren’t looking to change the world, just the prospects for their children.  And the middle-class education-oriented people who often support social justice campaigns are worried about their own children.

These dramatic and disturbing cases underscore the obstacles education reformers face in America.  Parents looking out for their kids try to move into communities which offer the best public schools they can afford.  (This usually means higher local property taxes and higher real estate costs.  In California, it means extensive private fundraising.)  My parents did, siting off reputation; these days, we have test scores as well.

Parents want to get what they pay for, which generally includes better facilities, more diverse offerings and activities, and smaller class size.  Students from outside the district aren’t paying their share, and their presence, school administrators explain, strains the schools.  Does an additional child or two in a class really make that much of a difference?  How about nine?  How about when class size rockets from 20-31 residents (a result of school budget crises)?

These numbers are from my daughters’ first grade classes in Irvine, California–which has a reputation for very good schools.)  Every year, Irvine families must demonstrate residency for each child; it feels more frequent than that.

As Americans, we have an interest in providing a good education to all children.  Actually, it’s probably even more important for children whose parents are less competent (homelessness and crack cocaine are hardly educational advantages).

As parents, and as residents of local communities, we want to preserve what we can for our children and our neighbors, fighting against a tide of decline sweeping the state or country.

In Beverly Hills, local parents started an emergency fundraiser to prevent 11 layoffs in the district.  They raised more than a half-million dollars in a week, and the effort continues.  In Irvine, as in other affluent communities, a (private) public school foundation raises money to provide programs that the state no longer does.  They don’t criticize, or even mention, local legislators who vote against plans to fund the schools.  After all, opponents of fair taxation might make generous contributions.  And parents who can hire tutors and pay fees for special programs, so that their children don’t face the full consequence of our collective choices.

In effect, a drive to protect the local school works against adequately educating all our children.

MathSciNet now has a simple tool to compute your Erdös number.  You go here, put an author’s name and first initial followed by an asterisk and then click on the “Collaboration Distance” link and click on the “use Erdös” button. In Sociology, one of the few open paths to Erdös is via Stan Wasserman (E=6; you can check for yourself here).  Thus, all co-authors of Stan have a finite Erdös number.  One of them is Joe Galaskiewicz (E=7).  Since Jeff Larson is a co-author of Joe G’s, and I’m a co-author of Jeff’s, then that puts my Erdös number in the finite camp (E=9).

For the courageous young people who willingly disclosed their undocumented status last year, Congress’s failure to pass the DREAM Act was a devastating blow.   They had an overly optimistic view, as activists often do, that the justice of their cause, the intensity of their commitments, and the drama and risk of their efforts, would carry the day.  They were wrong, but that doesn’t mean they didn’t matter.

In the lame duck session following the 2010 elections, the Democratically- controlled House of Representatives passed the DREAM Act, but Democrats in the Senate were unable to generate the supermajority necessary to break a filibuster and vote on the bill.  Those who came out were politically disappointed–and personally at risk; they knew they were now visible and vulnerable to deportation.

The prospects for passing a new DREAM ACT, when the Republicans added to their numbers in the Senate and took control of the House of Representatives, are much worse than before.  The grassroots wing of the Tea Party movement has identified stopping any kind of immigration reform, aside from increased border security, as a key priority.  They’ve effectively held their legislators hostage to this position.

But President Obama is now pressing Congress to bring the DREAM back.  When Obama was interested in building a bipartisan coalition for comprehensive reform, he invested heavily in putting money and people on the border with Mexico, and dramatically increased the number of deportations.  He now knows–and even more importantly, says that nothing the administration does will buy Republican support for comprehensive reform.  The Administration’s key enforcement and deportation priorities, he has announced, involve removing convicted criminals without documentation from the United States.  This doesn’t mean that the students are now safe, just that they won’t be explicitly targeted.

Quite obviously, electoral politics are all over this move.  President Obama means to mobilize Latino enthusiasm and voters.  He also means to have the Republicans take full responsibility for catering to the anti-immigrant forces within their ranks.  And he must surely know that his efforts will provoke and mobilize nativist activists in opposition.

The DREAMers, denied a legislative victory, need to realize that none of this would have happened without their efforts.  Their demonstrations, press conferences, civil disobedience actions, and everything else, dramatized their cause and its political support.  President Obama thinks there are electoral advantages to be gained here because the DREAMers showed him their power and support.  And the DREAMers activated a vigorous opposition that has pushed Republican politicians away from a key mainstream Republican constituency: big business.

Businesses always want access to labor, and cheaper labor is better.  In response to President Obama’s recent immigration speech, the normally stalwart Republican US Chamber of Commerce announced enthusiasm and support for the president’s approach to comprehensive reform.  Ambreen Ali (Roll Call) reports:

The U.S. Chamber of Commerce, which has long supported immigration reform as a way to help American businesses remain competitive, gave the speech an “A” grade.

“We were quite pleased with the ideas he put forth,” said Randy Johnson, the chamber’s senior vice president of labor, immigration and employment benefits. “Now’s the time to get prepared for an economic recovery. This bill isn’t going to rush through Congress, so let’s get off the dime.”

Johnson said the president’s outline for immigration reform largely reflects the business group’s position.

A renewed campaign for comprehensive immigration reform could mobilize the Democratic base–and fracture the Republican electoral coalition.

The DREAMers made this move smart politics for the president.