* At the Chicago Fed's blog, Cindy Ivanac-Lillig discusses something very interesting, with regards to a Freakonomics podcast: economists really have no idea why college is valuable. No, really:

Most experts interviewed in the podcast seem to agree that the benefit of college is almost always greater than its cost (with the notable exception of students who might consider going into a trade); however, exactly why this is remains somewhat of a mystery…even to the experts.

One interviewee discusses how students don't remember much from their coursework and yet something about the process is transformative. It’s unclear if the benefit lies principally in knowledge acquisition, new perspectives, peer effects or simply being subject to higher expectations. Further, it is possible that the benefit is different for every individual.

It's evident that college graduates make more money, and are less susceptible to economic shocks; the issue is that economists haven't figured out what, if any, value there is to a general liberal-arts education, because the jump from non-vocational education to vocations is blurry. One thing seems to be missing from the above: it instills an ethics of work, as opposed to a work ethic. So much of college work is about fair dealing, not just as a thinker, but also as someone who creates a work product. Citation is ultimately ethical, which is why I'm always surprised when writers like Jonah Lehrer get pinched for plagiarism. Forget journalism; you're supposed to learn how to treat the work of others ethically with every college paper you write. It's supposed to instill an ethics of problem solving: being consciencious about obtaining enough information to come to a fair conclusion; explicitly considering the other side of the argument; not forcing unearned conclusions.

Employment is a matter of trust—oversight is time-consuming and expensive. On some level, a college degree just says trust me, that a graduate has not only shown an ability to work hard, but to do so with ethics and honesty. You don't have to go to college to be any of those things, but a degree is an efficient signal for all those things.

* In the New Republic, UIC economist Deirdre McCloskey takes on the science of happiness. She's a lucid and entertaining writer—not just for an economist—and it's a fascinating piece on what humans have come to believe about happiness, and how applying data and economic approaches changes that, beginning with the Chicago deli of choice for politicians:

Pleasure is to be achieved by things like dishes of ice cream. Psychologists have shown rigorously that people are most pleasured exactly as you might have thought if you are a human being: when eating, say, a heaped pastrami on rye at Manny’s Deli off Roosevelt Road in what was once the garment district of Chicago. Happiness, by contrast, is more complicated, though it can also be pursued at Manny’s. It is the pleasure of kosher comfort food, down to the diminishing marginal utility of that last bite—but it is also expressing one’s urban identity and Chicago-ism…. Pleasure is a brain wave right now. Happiness is a good story of your life.

[snip]

But nowadays there is a new science of happiness, and some of the psychologists and almost all the economists involved want you to think that happiness is just pleasure. Further, they propose to calculate your happiness, by asking you where you fall on a three-point scale, 1-2-3: “not too happy,” “pretty happy,” “very happy.” They then want to move to technical manipulations of the numbers, showing that you, too, can be “happy,” if you will but let the psychologists and the economists show you (and the government) how.

It pairs well with the prior dilemma:

A well-fed cat sitting in the sun is “happy” in the pot-of-pleasure sense of happiness studies. The pussy is a 3. But what the modern world offers to men and women and children as against cats and other machines for pleasure is not merely such “happiness,” but a uniquely enlarged scope to realize themselves. True, one can turn away from Bildung and read celebrity mags all day. Yet billions are enabled to do more. And they can also have, in proper moderation, more cat-like, materialistic, economist-pleasing “happiness” if they wish. Good for them. These are your sands of better life, though unmeasurable.

Photograph: brainware3000 (CC by 2.0)