When demand goes up, they act to gut supply. Thus huge amounts of society's resources are wasted & dissipated. From 2008: There has been some interest in this over on twitter and elsewhere. So time to highlight it once more. From 2008. I think it stands up very well:
Harvard has many interests--too many for the Yugoslav model to fit. Brad's essay assumes that Harvard is being run in the interests of its undergrads. I doubt it. As far as I can see, the relevant decisionmakers of Harvard seem to be: 1.) management of the hedge fund that hoovers up the charitable contributions; 2.) the contributors, who seem more interested in the welfare of the football team or their names on fancy buildings; 3.) the administration, exclusive of the hedge fund; and distantly 4.) senior faculty. All but #2 would seem to be interested in unlimited expansion.
Re: "While a competitive market capitalist firm responds to good news about its productivity and value to society by increasing employment."
Is this actually true? For example, steel companies in the US produce as much steel as ever, but have been cutting employment for decades. In fact, this is a lot of the story of the rust belt which, while increasing efficiency in the 1960s and 1970s, laid off thousands of workers and hollowed out much of the mid-west. It's similar for coal mines as they shifted from hard rock mining to surface mining and left much of Appalachia in terrible shape as the need for labor declined.
Think about the accounting. A profit maximizing firm would only add a worker if they had good reason to believe that they could sell the what that worker produced and that adding a worker was a more efficient way to do this than adding a piece of equipment or restructuring some element of productivity. Further, the market must be robust enough so that new worker's increased production will not lower the price of the product more than increased sales can compensate for.
P.S. Besides, Harvard is trying to be the gold medal at the Olympics picking what they consider the best of the best. There were 241 athletes in the first Olympics and 204 nations in the most recent. Should they have increased the number of gold medals in each event?
But isn't scarcity the summum bonum for Harvard? I would imagine they would be more inclined to go from 1600 undergraduates to 1200, rather than the other direction.
And given that, it's hardly surprising that the quality of undergraduate education may not match that of their peers, let alone other liberal arts colleges. Again: not the point.
I’ve always been willing to say a few good words about HLS in the early ‘80s, but I was a Midwestern small-town state-university product who was perhaps more open to being impressed by the place. Also, in those simpler days, the first time I even saw the place was the day I moved in. I also recall that many of my peers seemed to loathe the whole project. That said, I think exactly one person in my entering class dropped out before graduation.
Harvard has many interests--too many for the Yugoslav model to fit. Brad's essay assumes that Harvard is being run in the interests of its undergrads. I doubt it. As far as I can see, the relevant decisionmakers of Harvard seem to be: 1.) management of the hedge fund that hoovers up the charitable contributions; 2.) the contributors, who seem more interested in the welfare of the football team or their names on fancy buildings; 3.) the administration, exclusive of the hedge fund; and distantly 4.) senior faculty. All but #2 would seem to be interested in unlimited expansion.
Re: "While a competitive market capitalist firm responds to good news about its productivity and value to society by increasing employment."
Is this actually true? For example, steel companies in the US produce as much steel as ever, but have been cutting employment for decades. In fact, this is a lot of the story of the rust belt which, while increasing efficiency in the 1960s and 1970s, laid off thousands of workers and hollowed out much of the mid-west. It's similar for coal mines as they shifted from hard rock mining to surface mining and left much of Appalachia in terrible shape as the need for labor declined.
Think about the accounting. A profit maximizing firm would only add a worker if they had good reason to believe that they could sell the what that worker produced and that adding a worker was a more efficient way to do this than adding a piece of equipment or restructuring some element of productivity. Further, the market must be robust enough so that new worker's increased production will not lower the price of the product more than increased sales can compensate for.
P.S. Besides, Harvard is trying to be the gold medal at the Olympics picking what they consider the best of the best. There were 241 athletes in the first Olympics and 204 nations in the most recent. Should they have increased the number of gold medals in each event?
But isn't scarcity the summum bonum for Harvard? I would imagine they would be more inclined to go from 1600 undergraduates to 1200, rather than the other direction.
And given that, it's hardly surprising that the quality of undergraduate education may not match that of their peers, let alone other liberal arts colleges. Again: not the point.
I’ve always been willing to say a few good words about HLS in the early ‘80s, but I was a Midwestern small-town state-university product who was perhaps more open to being impressed by the place. Also, in those simpler days, the first time I even saw the place was the day I moved in. I also recall that many of my peers seemed to loathe the whole project. That said, I think exactly one person in my entering class dropped out before graduation.