The "Bubble:" How a High-School Dropout Taught Me Capital Theory
By David Henderson
There have been a lot of good comments on Arnold Kling’s post on Charles Murray’s “bubble” and a few on mine. On Arnold’s post, Tom West makes a good point about not taking any particular question of the 20 too seriously.
Still, I do find something missing and it’s a point I made in “Tea and Empathy,” my response to what I saw as a little (just a little) elitism toward the Tea Party on Arnold’s part. I think that it would be absurd not to let your education influence your thinking about lots of things. If you didn’t, then education would be almost totally just a screen. That said, it would be equally absurd not to think that you can learn from people with way less formal education than your own. I won’t repeat what I said in “Tea and Empathy,” but I do recommend reading it and the comments, especially the one about the bottle of soda on the supermarket checkout belt.
Rereading my original post, I noticed that I had promised to tell how a high-school dropout had taught my UCLA apartment mate and me (when he and I were entering the Ph.D. program at UCLA in September 1972) capital theory. I never told it. Here it is:
Harry Watson, my roommate, and I were looking for an apartment in West Los Angeles or Santa Monica. We found one that was within our budget, was just over the West L.A. border into Santa Monica (on Berkeley St.), and was just a little nicer–slightly bigger bedrooms and a nice high ceiling–than the others we looked at. Moreover, it was about $20 a month cheaper–$145 a month, if I recall correctly, rather than the $165 for the others.
There was just one problem: it had no stove and no refrigerator. The woman showing it to us was a resident of the apartment block next door and had been hired by the owner to show it. Her name was Darlene. She was in her late 30s and had moved there from rural Oklahoma. We said that although we liked it a lot, it didn’t have a fridge or stove. We regretted it, but we just didn’t think it would work.
Darlene shook her head. “I can’t believe you two. You’re going to UCLA graduate school? Think about it. You’re going to save $20 a month. You can go down to a used appliance store and buy a good used fridge and stove for less than $100 each. You’re signing a one-year lease and so in the first year, it will pay for itself.”
We grinned at her, looked sheepish, and asked her to give us an hour to check the prices on fridges and stoves. We did, she was right, and we signed the lease.
Darlene, by the way, was the first person to introduce me to U.S. Thanksgiving. She found out that I was home alone that day and felt bad for me. (I didn’t. It was a great day to catch up on the daily curve balls Armen Alchian was throwing our way.) So she brought over a plate piled high with turkey, mashed potatoes, vegetables, and stuffing. Sweet!