Paul Krugman says inequality in education leads to lower economic growth.

Kevin D. Williamson of the National Review argues instead that bad education leads to both inequality and lower economic growth.

Inequality in Education

Paul Krugman and other like-minded gentlemen keep trying to make a case for more aggressive redistribution of income, but they keep making the case for education reform.

In his most recent New York Times polemic, Professor Krugman argues that inequality creates a drag on our economic growth rate and that the policy necessary for overcoming this is — here you will not be surprised — raising taxes on the rich. He cites, with some caution, a recent survey of academic research on the question from Standard & Poor’s, along with research from the International Monetary Fund. John Cochrane of the University of Chicago, in the course of an obviously irritated dismembering of the S&P report, asks what seems to me the most important question: What is the mechanism by which inequality hinders economic growth? He argues that if you buy the conventional Keynesian diagnosis, that insufficient income at the bottom end of the income spectrum reduces aggregate demand, then you are intellectually obliged to take up the standard Keynesian solution, which is spending rather than tax increases. “If the reason that inequality is bad is that it is bad for growth,” he writes, “and if the reason it is bad for growth is that it leads to insufficient consumption and lack of demand, then that can easily be addressed in the same Keynesian framework with lots of stimulus spending. If you play the Keynesian game, it seems to me you have to play by the Keynesian rules.”

Fair enough. But Professor Krugman, who is double-timing his intellectual retreat into cheap moralizing, offers a slightly different explanation: “Do talented children in low-income American families have the same chance to make use of their talent — to get the right education, to pursue the right career path — as those born higher up the ladder? Of course not.”

But that is not an argument for higher taxes on the wealthy — it is an argument for education reform. Conservatives have long argued that our current educational arrangements, organized around the interests of local political cartels that are in the main dominated by public-sector unions, reliably fail to serve the interests of the poor, even when they spend a great deal of money. As with public services ranging from police protection to trash removal, well-off people and well-off communities have the political clout to demand and secure reasonably good services from government, and poor people do not. Professor Krugman cites the food-stamp program as an example of how providing poor people with resources can lead to better long-run outcomes: The children of poor families who need food assistance and get it tend to do better in the long run than the children of poor families who need food assistance and are denied it, which seems plausible enough. What he ignores is that the basic mechanism of the food-stamp model is precisely what conservatives want to apply to the case of poor children in bad schools: What is a food stamp if not a voucher?