Hayek, the Stones, Beckham . . . and Kotter?

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Nobel Prize winning economist Friedrich Hayek died in 1992 at the hoary age of 92. He lived long enough to have heard the Beatles and Rolling Stones, perhaps seen an episode or two of Welcome Back, Kotter, the 1970s situation comedy centered on the travails of a high school teacher and his “at-risk” students; but not long enough to experience the rise of European soccer’s invasion of the US, personified by the move of England’s David Beckham’s to the Los Angeles Galaxy team in 2007 — for a slightly exaggerated $250 million price.

Hayek recently came to mind during a spirited debate with a retired teacher friend over educational policy. She brought up that old canard about our market society having misplaced economic values because teachers are not compensated as well as rock or sports stars. Her assumption — a common one — was that monetary compensation ought to be commensurate with intrinsic worth; and if rock and sports stars are paid more than teachers, our society must value entertainment much more than education — prima facie evidence of market failure that ought to be rectified.

Whew! I didn’t know where to begin. But since the toughest part of a good discussion is clarifying terms and premises, I backpedaled to them.

First of all, the term “society,” though a useful abstraction, has been inappropriately reified and pumped up with steroids. Ayn Rand questioned its notion of “society” as a tangible entity by prosaically listing its components — the butcher, the baker, etc. That allowed her, quite fairly, to dismiss concrete conclusions from its meta-usage, much as we now dismiss the merely statistical reality of a .3 child in the typical American family of 2.3 children.

Second, “economic values” is another high-sounding but meaningless term. Hayek dismissed this inflated premise as prosaically and brilliantly as Rand. He insisted, indeed, that “there is no such thing as ‘economic values’ ”:people have values; economic markets are the most efficient means to realize them. “Economic values” makes as much sense as “biological, physical, or chemical values.”

Conservatives and libertarians often stumble over the same concepts and fall into the same trap. But instead of trying to correct the terms of debate, they go with the flow and say that it’s just fine if folks value entertainment more than education — that’s their choice in a free society. Moreover, who’s to draw the distinction between one and the other?

Cutting through the Gordian knot of highfalutin conclusions, Hayek explained that the price disparity between rock or sport stars and teachers was simply due to old-fashioned supply-and-demand: there are few of the former and lots of the latter. No overwrought conclusions about social values — no concerns about “society” respecting good teachers less than it does Beckham — are warranted.

Since Hayek’s death not much has changed on this front, except for one crucial distribution, which proves Hayek’s insight. Teachers are still a dime a dozen, and public schools lack any mechanism for recognizing or rewarding superstars, while a degree in education remains about the easiest such degree to acquire. (I know, having received a complimentary MA for neither fee nor work.) Sports stars are — mostly — still members of protected cartels that keep supply low and prices high. But the music industry has undergone some radical upheavals.

Back in the 1970’s — the heyday of the Beatles, the Rolling Stones, and the Who — rock stars were, well . . . Rock Stars. Today, the high-end popular music market has broadened to include country music, hip-hop, world music, opera, cross-over collaborations, and a variety of independent “others,” with a concomitant dilution of the take. Additionally, in this technologically sophisticated post-Napster era, recorded music is cheaper. A DJ I know, lately from WNYU, guesses that the Beatles or the Stones made more than $30 million in 1970. Accounting for inflation, that’s about $300 million in today’s dollars (see “Cash Poor” in last year’s Liberty).

Dr. Dre, a hip-hop superstar and Forbes magazine’s highest paid musician in 2012, earned a measly $110 million — followed by Roger Waters of Pink Floyd at $88 million, Elton John at $80 million, U2 at $78 million, and Take That (a British boy band) at $69 million. Justin Bieber, only 18 years old, was the tenth highest paid pop star in 2012 at $55 million. The take at the top has tanked.

But what about musicians in the trenches; how do they compare with teachers, and the general population?

The average personal gross income in 2012 for musicians was $55,561, with only $34,455 coming from their music endeavors, according to Artist Revenue Streams. The average US teacher salary (grades 1-12) was about $52,000 — according to many sources. Per capita personal income for the entire country in 2010 was $39,945, according to the Bureau of Labor Statistics.

Today, the Rolling Stones keep rolling on; David Beckham is on the cusp of retirement; the quality of US public education keeps deteriorating . . . and Frederick Hayek is probably rolling over in his grave.




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Comments

Jon Harrison

Excellent point made by Mr. Miller. Hayek is probably my favorite libertarian. So many libertarian "giants" -- Ayn Rand, von Mises, Murray Rothbard -- were repellent personalities. Hayek on the other hand was a gentleman. So was Milton Friedman. Hayek's ideas have stood the test of time better than Friedman's, though.

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