I interviewed a couple of graduates recently for a job. One, a cousin of a friend of mine, went out before the interview and bought a new designer suit for £900. < ?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

His decision to buy the suit prompted another interviewee to do likewise, except he went one better and spent £1,000.

Quite apart from the fact that the pair of them looked like footballers at a fashion shoot — all five buttons and sharp shoulders — the point is that close to £2,000 was spent trying to distinguish one guy from the other.

The first guy thought that his smart suit would not so much enhance his chances but reduce the chances of others. So, naturally, the second guy felt that he had to spend more just to be at the races. This class of carry-on goes on all the time. One person’s spending habits have negative consequences on others.

Spending patterns are like viruses in modern society, not dissimilar to chicken-pox in children — one child with chicken-pox is a danger to the rest of the kids in the cre che. Similarly, one bloke buying a swanky suit negatively affects his peers when it comes to interviews, getting into nightclubs, chatting up women and the like.

Economics students may be taught that when the price goes up the demand goes down, but the modern consumer society works in the opposite way: when the price goes up, demand goes up!

Because people are trying to distinguish themselves from each other by what they wear, what they drive or how many bathrooms they have, the classic relationship between price and demand breaks down. This means that in a high-consumption society such as ours, when I buy a flash car or suit, I throw down the gauntlet to others to do likewise.

In the past, this type of competitive consumption was limited to royalty and gentry, as evidenced by Georgian follies around the country, but today, relatively easy access to credit allows everyone to shop to impress.

In the extreme, this means that people will work harder with the express intention of consuming more. This might make them extremely happy (who am I to judge?) but it does pose certain crucial questions for societies.

One of the important areas where the need to consume and to finance that consumption comes face to face with the constraints of modern economics is teaching, teachers’ pay and teachers’ status in society. Britain offers us some salient examples of what can happen when teachers’ pay falls relative to other professions over a protracted period of time.

Strangely, the effect can be seen most readily in property prices. In London, one of the major factors for the middle classes when selecting a place to live is the quality of the schools in the area and a common topic of conversation at thirtysomething dinner parties is schooling.

Ironically, in the 1980s the middle classes who voted for reductions in state spending on things like teachers’ salaries, now see the chickens coming home to roost. They are paying for access to good education not through higher taxes but through property prices; thus, the market for education reasserts itself in the glossy brochures of fancy estate agents. A good school can add 20 per cent to the cost of housing.

The British example has shown us that there are no free lunches: if you do not pay teachers well, graduates will not go into teaching. Gradually the profession will become hollowed out. Initially this will manifest itself in the state sector, as good teachers opt for the better money and conditions of the private sector. As the teachers leave, so too do the pupils.

Middle-class parents follow middle-class teachers. Over time, the middle classes opt out of the state school system, reinforcing the gap between the private and the public sphere. Residential areas that manage to retain a good basic primary school become much sought after, not because of transport links or elegant Edwardian terraces, but because little Miranda will learn how to read and write in the local school.

These schools can charge almost whatever they like, and it is not unusual for them to cost a couple of grand a term. So parents end up paying for lunch anyway. Unfortunately, in the process the class system is also reinforced at a very early stage, and, far from facilitating a melting-pot of races and classes, the London education system becomes an instrument of social segregation.

Another peculiar effect of the emasculation of the teaching profession in Britain is the rise in religious observance. Odd, but true.

Recent years have seen the mass conversion to religion of hitherto agnostic parents. This is because today the best primary schools in London are either Church of England or Catholic. You have to be in the club for little Miranda to get into the school. So many parents who haven’t been inside a church since their granny’s funeral are regularly hauling themselves out of bed on a Sunday to ‘get Mass’. Apparently, hypocritical investment bankers make great ministers of the Eucharist.

These are only two of the many significant changes that occur when teaching loses its position in a society, where status is bestowed by what you own, wear and drive. Obviously teachers want to play the competitive consumption game too, and so existing teachers feel economically vulnerable. More worryingly, few young graduates will entertain such a low-paid career today. In Britain, young teachers are regarded as laudable freaks who possess some sort of weird vocation.

There are other long-term ramifications of teachers slipping down the social pecking order. In the US, teachers are becoming more stupid. Since 1963, teachers’ salaries have fallen from 118 per cent of the average graduate salary to 92 per cent in 1997 and there has been a coincident decline in the average academic qualification of teachers.

Obviously, better teachers and more of them affect how children learn. A recent US study estimates that if teachers’ pay had remained on a par with other professions in the past three decades, current dropout rates would be 8 per cent lower and university enrolment four per cent higher than they are today. School sizes also matter. A different US study on schools sizes reveals that 61 per cent of kids in smaller classes score better than the national average.

At a more esoteric macroeconomic level, good teachers make smart students who make better workers, who are more productive, who allow the growth rate of the country to be higher than other countries with educational deficiencies. Thus, declining teaching standards today will be felt in our pockets tomorrow.

You don’t have to support the ASTI’s more colourful tactics to realise that good teachers are central to a functioning society in the way that good management consultants or good economists are not. Our world of instant material gratification allows little or no room for the traditional vocational values in teaching.

But why shouldn’t a teacher aspire to the latest designer clobber like everyone else? The ASTI’s tactics are probably doing teachers a disservice, but the overall strategy is about much more than budget deficits, caps on spending and the supervision allowances — it is about the future of our society.  

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