Tuesday, August 17, 2010

How to Lose Wealth

Glenn Reynolds at Instapundit posted the following link today:
"IS THERE A HIGHER EDUCATION BUBBLE? Irate law school grads say they were misled about job prospects. 'As they enter the worst job market in decades, many young would-be lawyers are turning on their alma maters, blaming their quandary on high tuitions, lax accreditation standards and misleading job placement figures.'"
If you boil economics down to a tar-like fundamental substance, it amounts to this:  wealth is a function of knowledge.  Also, I suspect, vice versa.  If so, it follows that any economic policy or circumstance that decreases wealth also decreases the value of knowledge, which will eventually result in the loss of that knowledge.

In a thriving economy, there are lots of transactions.  Purchases.  Sales.  New businesses.  Mergers.  Acquisitions.  Plenty of opportunity for members of a fallen race to mix and mingle.  Therefore, plenty of opportunity for people to, well, screw each other over.  Hence, the law, and hence, lawyers.  The busier we depraved little capitalists get, the more we need lawyers to help us sort things out when the participants in a transaction quit singing, "Happy Days Are Here Again!" and start singing "Where Is the Love?"

And the converse:  the weaker the economy, the fewer the transactions, and hence the less demand there is for lawyers.

I understand why the law grads are irate.  But good luck suing the school.  They teach law, remember?

A year ago, in what I hope is one of my most tedious posts, I wrote the following:
"Economic woes tend to strike us at a primal level. The knowledge we have fought to acquire over the course of a lifetime has meant much to us in our struggle to distance ourselves from the desperate poverty that has dogged humankind throughout history. Within a few short months, a lousy job market can render such knowledge as worthless as a politician's promise. If the insurance companies go under, there will be no need for the actuary. If the software firms go out of business, there will be no role for the programmer -- or the DBA. We fear that we may need to acquire the knowledge of subsistence -- to learn how to grow vegetables and raise chickens in our backyards to feed ourselves -- and find ourselves at the bottom rather than the top of the knowledge ladder, worse off than the dirt farmers and food-gatherers who have been doing just that all along."
Thomas Sowell says the United States is headed for collapse.  When that happens, everything I know about administering databases will be worth very little, and so will the knowledge possessed even by the most seasoned lawyer about how to write a superb legal brief.  We'll both be studying how to keep the caterpillars off of our tomatoes and the neighbors out of our chicken hutch.

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