Home > arms race, modeling > What Monsanto and college funds have in common

What Monsanto and college funds have in common

April 2, 2014

College

I recently read this letter to the editor written by Catharine Hill, the President of Vassar College, explaining why reducing family contributions in college tuition and fees isn’t a good idea. It was in response to this Op-Ed by Steve Cohen about the onerous “E.F.C.” system.

Let me dumb down the debate a bit for the sake of simplicity. Steve is on one side basically saying, “college costs too damn much, it didn’t used to cost this much!” and Catharine is on the other side saying, “colleges need to compete! If you’re not willing to pay then someone else will!”

Here’s the thing, there’s an arms race of colleges driving up costs. In some perverse combination of US News & World Reports model gaming and in responding to the Federal loan support incentive system, not to mention political decisions methodically removing funding from state colleges, college costs have been wildly rising.

And when you have an arms race, as I’ve learned from Tom Slee, the only solution is an armistice. In this case an armistice would translate into something like an agreement among colleges to set a maximum and reasonable tuition and fee structure. Sounds good, right? But an armistice won’t happen if the players in question are benefitting from the arms race. In this case parents are suffering but colleges are largely benefitting.

Monsanto

This recent Salon article detailing the big data approach that Monsanto is taking to their massive agricultural empire is in the same boat.

The idea is that Monsanto has bought up a bunch of big data firms and satellite firms to perform predictive analytics on a massive scale for farming. And they are offering farmers who are already internal to the Monsanto empire the chance to benefit from their models.

Farmers are skeptical of using the models, because they are worried about how much data Monsanto will be able to collect about them if they do.

But here’s the thing, farmers: Monsanto already has all your data, and will have it forever, due to their surveillance. They will know exactly what you plant, where, and how densely.

And what they are offering you is probably actually a benefit to you, but of course the more important thing for them is that they are explicitly creating an arms race between Monsanto farmers and non-Monsanto farmers.

In other words, if they give Monsanto farmers a extra boost, it will lead other farmers into the conclusion that, without such a boost, they won’t be able to keep up, and they will be forced into the Monsanto system by economic necessity.

Again an arms race, and again no armistice in sight, since Monsanto is doing this deliberately towards their profit bottom line. Assuming their models are good, the only way to avoid this for non-Monsanto farmers is to build their own predictive models, but clearly that would require enormous investment.

Categories: arms race, modeling
  1. April 2, 2014 at 7:21 am

    And who SHOULD be brokering the armistice? The government! And why can’t the government broker such a deal? Because we all know that “government is the problem” and “government regulation is bad” so we are starving the government of resources and introducing deregulation in every corner of the market— including the public sector. And who benefits from the government’s inability to intervene? Why the oligarchs, like Monsanto, who CAN afford to do the massive surveillance and data collection Monsanto is undertaking. But here’s a paradox: do we really want the government collecting the kind of data Monsanto is collecting?

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  2. cat
    April 2, 2014 at 8:12 am

    The government should be doing exactly what Monsanto it’s doing.They probably already have this data from most of their weather and climate data.They just need to get the farmland crop yields and a few other pieces of data to help start making the models. Food it’s probably one of the most important resources humans need and it really feels like Netflix is going to be able to predict what movies I want to watch before we’ll be able to predict how to maximize farm production.

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  3. mb
    April 2, 2014 at 8:22 am

    You leave out another very important factor driving costs – licensing and occupational requirements (most required government). My first job out of college was one that was typically done by high school graduates – there were still a few around – but a college degree is required now, those few were grandfathered in. there are many other issues as well and yes most are caused by the government.

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  4. Larry Headlund
    April 2, 2014 at 8:45 am

    Armistices end, or at least pause, wars. Once you get to the point of fighting the prior arms race is not the main problem. Treaties end (or moderate) arms races without wars. Examples include the Washington Naval Treaty (1922) and the SALT agreement.

    Now that we have the pedantic pettifogging out of the way, what would such Higher Education Tuition and Fees Agreement (HETFA) look like? At first glance it looks like price fixing. I assume aid will have to be included. Rankings and membership in each tier will be frozen. The higher education functions of networking and credentialing can continue uneffected. Would not universites come to resemble their 19th century counterparts, light on the research? Or would research be excluded from the limitations (the aircraft carriers versus the battleships)? Would aid, particularly aid to graduate students, the proletariate of research (as a former graduate fellow, I’ve seen feudalism from inside and from the bottom), be covered by the agreement?

    My point is that when you can end an arms race by agreement, the race is usually over.

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  5. Guest2
    April 2, 2014 at 9:01 am

    The arms race is better understood as a status competition that includes recruiting mega-star faculty, high-wealth students, research grants, and alumni contributions. All these activities cost money (especially at Vassar), and the mark of a higher-status institution is the ability to pull down more resources than the next school. In fact, this is generally recognized as success and prestige.

    The arms race itself involves layers of congressional lobbying (one congressman was even a provost), powerful associations that have defended “academic freedom” for more than 100 years.

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  6. April 2, 2014 at 7:08 pm

    There seem to be a couple of differences.

    One is that the colleges risk pricing their customers out of the market if they keep going indefinitely, although if they are overly interested in deriving status by attracting ultra wealthy students they might not notice.

    Monsanto appear to risk nothing in particular. In that sense, and given they’re apparent head start, I’m not sure they’re even in an arms race, at least no more than the US is an arms race with Zimbabwe.

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    • DJ
      April 9, 2014 at 9:05 pm

      As long as student loans exist, colleges will never price their customers out of the market. Federal loan limits don’t matter. Private loans are available, to anyone, in any amount. Private loans are completely risk-free for the lender. In the event of default, the lender can garnish wages, tax refunds, disability. and social security payments, and they can do so as an administrative action, without a court order. There is no statute of limitations on student loan debt, and no time limit to how long a lender can pursue the debt. Bankruptcy by itself does not wipe out student loan debt; the only way to escape it is to pay it off, die, or prove “undue hardship” which is a more stringent standard than mere bankrupcty. Even dying isn’t guaranteed to help, if you have cosigners, and they aren’t dead: everything mentioned above applies equally well to cosigners.

      As long as student loans continue to enjoy their privileged legal status compared to other loans, colleges can raise tuition with abandon with zero financial consequences to themselves. The students suffer severe financial consequences, but that is not the colleges’ concern.

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  7. DJ
    April 2, 2014 at 8:37 pm

    Unfortunately, colleges can’t talk to each other to set prices, regardless of whether they’re raising or lowering prices. It would be a major violation of antitrust law.

    The Atlantic coincidentally had a recent piece on rising college costs (http://www.theatlantic.com/education/archive/2014/04/the-myth-of-working-your-way-through-college/359735/). Unfortunately the article gets cause and effect wrong. Rising college costs aren’t causing students to borrow more in loans. Far from it! In fact the reverse is true: obscenely lax lending practices, supported by government guarantees, enable students to borrow more than what they would otherwise be able to borrow at market rates, which causes tuitions to rise.

    US News is certainly making things worse, but I can’t imagine any way to solve that problem without infringing on US News’s First Amendment rights. The correct solution is to get the government out of the student loan market. If students were forced to borrow at market rates, then pure market economics would force tuitions to come down, no matter what the colleges or US News might otherwise want.

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  8. SamChevre
    April 3, 2014 at 3:07 pm

    The government doesn’t even have to broker an armistice; it could just impose a cap.

    I’ve semi-seriously proposed that there ought to be a Civil-Service rule that you aren’t eligible for a policy-making job unless your undergraduate college was outside the “highly-selective colleges” classification.

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  9. Alan Fekete
    April 3, 2014 at 5:05 pm

    For the agriculture half of this story, one should also consider the many many farmers who are not in the arms race, because they are not aiming at massive profit; instead they farm for love of the land (often they farm organically). They won’t be affected by Monsanto’s actions either way. Agribusiness may occupy a lot of land and produce a lot of food, but it employs very few people as farmers; in contrast, the “lifestyle” farm sector is very labor intensive, but not data intensive.

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  10. RS
    April 4, 2014 at 4:28 am

    If the competions is only about recruiting the most brilliant students the prices for tuition should go down, not up. Is the education quality actually better at a very expensive college?

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