Academic journal article Policy Review

Delta Force: Conservatism's Best Young Economists

Academic journal article Policy Review

Delta Force: Conservatism's Best Young Economists

Article excerpt

The creeping rot of multiculturalism, feminism, deconstructionism, and other fashionably radical intellectual trends has spread to nearly every branch of study in American universities. But economics appears to have developed an immunity to such diseases. It is one of the few disciplines in which radical Left ideology has failed to take root. Market capitalism--anathema to the bulk of the professoriate--flourishes in economics departments, where Keynesians have been unable to prevent the growth of various offshoots of classical free-market thought. This lack of political correctness is one of the reasons why U.S. economics programs are considered to be among the best in the world, while humanities and most other social sciences attract fewer foreign students.

The University of Chicago--which once commanded the heights of free-market economic thought--no longer stands alone at the summit. Ideas that originated at Chicago have disseminated throughout the nation's economics departments, and many of the country's top young economists are now emerging from schools like the University of California at Los Angeles (UCLA), the University of Minnesota, and George Mason University in Virginia.

What follows is a brief description of some of the best work of the rising generation of free-market oriented economists. They are tackling controversial issues, such as the legacy of Reaganomics, the privatization of the economies of the former East Bloc, and the prospects for Third World economic development.

GAP KIDS

What caused the rising income inequality of the 1980s? Many economists argue the wage gap was caused by the switch from high-paying manufacturing jobs to lower-paying service sector jobs, among the working class. But Kevin Murphy, of the University of Chicago, provides another explanation. He and UCLA's Finis Welch show that those with college degrees have always earned more than non-degree holders, but the gap widened precipitously during the 1980s. Their article, "The Structure of Wages," originally published in the Quarterly Journal of Economics, demonstrates that, in the 1980s, possession of a college degree became more crucial than ever to financial success.

Murphy gives two reasons for this. During the 1980s, degree holders became more valuable due to a dwindling supply of graduates. Simultaneously, there was an increased demand for advanced education and skills in the workplace.

During the 1970s, college graduates earned about 40 percent more than high school graduatcs. By 1980, the difference had declined to about 25 percent. But by 1985, the gap had widened to 55 percent. According to Murphy, this is because colleges were flooded with Baby-Boomer students during the 1970s, and the flood subsided during the 1980s. Murphy says that, even within the same profession, degree holders pulled away from less-educated peers. For instance, during the 1980s, college-educated secretaries outearned non-degree holding secretaries by a considerable margin. Murphy claims that those with advanced degrees continue to earn more throughout their lifetime. Recent college graduates entering the job market can expect to earn hundreds of thousands of dollars more, over the course of their lifetimes, than those with only a high school diploma.

Employers are seeking well-educated employees more than ever. By the mid-1980's, nearly three times as many employees held college degrees as during the late 1960s. The danger is that those who do not earn college degrees will drop further and further behind. In a separate article, published in the American Enterprise, Murphy relates this study to the economic plight of black Americans: "The key point is that the failure of our nation's educational system to provide blacks with the quantity and quality of schooling required to compete in today's labor market may be a reason for the lack of economic progress for blacks in recent years. …

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