The Tyranny of Meritocracy(theatlantic.com)
theatlantic.com
The Tyranny of Meritocracy
http://www.theatlantic.com/business/archive/2011/11/the-tyranny-of-meritocracy/248061/
18 comments
It feels like one's opinion on this is fundamental. The way people respond to it seems more like built-in bias rather than reasoning by logic. For example, I believe I disagree with you at a premise level rather than a reasoning level. The evidence that working hard helps you get ahead is legion. The evidence that having connections helps you get ahead is legion. Who is right?
I've always thought that you got ahead by hard work, even while I spent most of my life being lazy. I didn't turn in home work or pay attention in high school; I couldn't afford college because I wasn't a protected class (unlike my best friend) and my parents simultaneously made too much money and had too many kids to pay it; and I scraped by as an adult, always being able to declare exempt on my taxes. But I knew that if I had really wanted to, I could have done something. Even the college thing was just an excuse.
Finally, when I was 25 I decided to work really hard. Within a couple years I was able to get a programming job, and a couple years after that I was making 90k. You can say all day long that it's an anecdote, but seriously, the only luck involved is superficial. If it hadn't been those "lucky" events, it would have been some other ones.
I had no connections. I hardly had any friends! My parents didn't help. They wouldn't even let me stay with them while I tried to make something of myself! Hard to say that it's just an anecdote when you lived it.
Finally, whenever this issue of how we measure economic mobility comes up on HN, I object. What is the ideal mobility from the bottom quintile to the top quintile, anyway? Genes matter. Parenting matters. Those two things matter way more than anything government has been shown able to do. It is absolutely possible to imagine a society, one with a lot of interventionist and redistributionist policies, where economic mobility is higher because it is more arbitrary rather than merit-based. How far are we willing to take economic mobility? Parents matter more than schools. Should we redistribute children to different parents?
I've always thought that you got ahead by hard work, even while I spent most of my life being lazy. I didn't turn in home work or pay attention in high school; I couldn't afford college because I wasn't a protected class (unlike my best friend) and my parents simultaneously made too much money and had too many kids to pay it; and I scraped by as an adult, always being able to declare exempt on my taxes. But I knew that if I had really wanted to, I could have done something. Even the college thing was just an excuse.
Finally, when I was 25 I decided to work really hard. Within a couple years I was able to get a programming job, and a couple years after that I was making 90k. You can say all day long that it's an anecdote, but seriously, the only luck involved is superficial. If it hadn't been those "lucky" events, it would have been some other ones.
I had no connections. I hardly had any friends! My parents didn't help. They wouldn't even let me stay with them while I tried to make something of myself! Hard to say that it's just an anecdote when you lived it.
Finally, whenever this issue of how we measure economic mobility comes up on HN, I object. What is the ideal mobility from the bottom quintile to the top quintile, anyway? Genes matter. Parenting matters. Those two things matter way more than anything government has been shown able to do. It is absolutely possible to imagine a society, one with a lot of interventionist and redistributionist policies, where economic mobility is higher because it is more arbitrary rather than merit-based. How far are we willing to take economic mobility? Parents matter more than schools. Should we redistribute children to different parents?
The funny thing is that you seem to think you've achieved something significant with your work. Even if it was 3x, 270k, it's small potatoes. Value accrues most to those who can insert themselves at a nexus where a lot of money flows, where siphoning off a small percentage adds up to a large absolute gain. Typically, it's through getting other people to work for you, or owning a lot of capital, or selling large quantities of something that has low marginal costs.
TL;DR: the way you crack the 1% or 0.01% is not by working hard, but by getting other people to work hard. Which may or may not be hard work. Whatever the case may be, merit has little to do with it; it's all about scarce resources in high demand, which is a metric free of moral values.
TL;DR: the way you crack the 1% or 0.01% is not by working hard, but by getting other people to work hard. Which may or may not be hard work. Whatever the case may be, merit has little to do with it; it's all about scarce resources in high demand, which is a metric free of moral values.
I am a fan of the idea of working smarter, rather than harder. Sure, when you are starting out in an endeavor, shit work is pretty much where you cut your teeth. For example, as a programmer, cleaning up other peoples' messes. It's also good experience in that it lets you see other peoples' mistakes and gives you an opportunity to see how to avoid them.
But I've watched a lot of people do shit work, and even work hard doing shit work. Working hard may be necessary but it falls far short of sufficient. Those who have merit approach the shit work as a way of looking for problems to fix, as a way of finding what can be done to reduce the level of shit, and so forth. Those who do not just keep shovelling away.
I'd suggest that finding the right connections is often a matter of demonstrating to the right people that you fit in the former category.
But I've watched a lot of people do shit work, and even work hard doing shit work. Working hard may be necessary but it falls far short of sufficient. Those who have merit approach the shit work as a way of looking for problems to fix, as a way of finding what can be done to reduce the level of shit, and so forth. Those who do not just keep shovelling away.
I'd suggest that finding the right connections is often a matter of demonstrating to the right people that you fit in the former category.
IOW, something we all know as programmers:
There's something to be said for constructive laziness.
There's something to be said for constructive laziness.
>I've always thought that you got ahead by hard work,
One gets ahead by providing things of value that others are willing to pay for. You can work hard at digging a hole and filling it back in again, but since that has no value for others, you won't get ahead no matter how hard you work at that. You can also work very little and get ahead if you are very good at creating things others value.
I.e. hard work is neither necessary nor sufficient in order to get ahead. It's being able to provide something that others value that matters.
One gets ahead by providing things of value that others are willing to pay for. You can work hard at digging a hole and filling it back in again, but since that has no value for others, you won't get ahead no matter how hard you work at that. You can also work very little and get ahead if you are very good at creating things others value.
I.e. hard work is neither necessary nor sufficient in order to get ahead. It's being able to provide something that others value that matters.
>hard work is neither necessary nor sufficient in order to get ahead. It's being able to provide something that others value that matters.
While nominally true, this falls apart in the real world. Creating value is great, but if you aren't working hard at it then you will likely be outcompeted by someone who creates similar value per work unit, but works much harder than you. There are caveats and exceptions to this, but one cannot take the statement "hard work is not a necessary condition" to mean anything other than "hard work is a necessary condition" if one is to have any expectation of success.
While nominally true, this falls apart in the real world. Creating value is great, but if you aren't working hard at it then you will likely be outcompeted by someone who creates similar value per work unit, but works much harder than you. There are caveats and exceptions to this, but one cannot take the statement "hard work is not a necessary condition" to mean anything other than "hard work is a necessary condition" if one is to have any expectation of success.
I'm in a similar situation to you - dropped out of school, worked dead-end jobs for years, then suddenly "decided" to turn it around and have a career, and mostly just talked my way into a series of larger and larger successes. And I've met a few other people who've followed this path.
But I have friends my age who just can't pull this off. There doesn't seem to be any particular reason, but they just keep failing to find anything but the most soul-crushing low-paying jobs. I can't find anything that they're doing that's different than what I was doing - and some of them have nice college and graduate degrees, even.
And, somehow, there's a correlation with the income level of each of our parents. It's as if it's just easier for some of us to navigate the economy, if we've had good examples of how to do it.
So I guess I agree with you, even though I could have sworn I was trying to write a rebuttal.
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"""The evidence that working hard helps you get ahead is legion. The evidence that having connections helps you get ahead is legion. Who is right?"""
Actually, the evidence that "working hard helps you get ahead" is not that much. Mostly correlation based on some people that got ahead in other ways (parents, environment, education, connections, chances, etc) but also work hard.
The counter-evidence though is enormous. Hundreds of millions of hard working people never get anywhere.
We just keep in our mind that CEO X that works 16 hours a day doing CEO work is a "hard working man", while we forget the millions pour sods doing real hard labor for the same amount of days...
Actually, the evidence that "working hard helps you get ahead" is not that much. Mostly correlation based on some people that got ahead in other ways (parents, environment, education, connections, chances, etc) but also work hard.
The counter-evidence though is enormous. Hundreds of millions of hard working people never get anywhere.
We just keep in our mind that CEO X that works 16 hours a day doing CEO work is a "hard working man", while we forget the millions pour sods doing real hard labor for the same amount of days...
How is a CEO being paid $10M per year and running the company into the ground different from an employee being paid $6/hour and alienating 10 customers?
In both cases the shareholders were harmed. In both cases, the company made a bad hiring decision.
If a CEO has the market power to demand a golden parachute and happens to be paid after she's fired, that's a byproduct of her initial market power, not corruption.
Unless you idealize a world in which all employees have equal market power then some employees are going to be able to extract better perks, severance, etc.
In both cases the shareholders were harmed. In both cases, the company made a bad hiring decision.
If a CEO has the market power to demand a golden parachute and happens to be paid after she's fired, that's a byproduct of her initial market power, not corruption.
Unless you idealize a world in which all employees have equal market power then some employees are going to be able to extract better perks, severance, etc.
To expand on this, hiring the CEO and giving them a golden parachute might still be a good thing.
Suppose Nokia's chances of survival were 10% without Stephen Elop and 20% with him. That means he is worth 0.1 x value of Nokia if Nokia survives.
If you pay Elop based directly on the performance of Nokia (i.e., he only gets paid if Nokia does well), he'll stay at Microsoft. Why leave MS for an 80% chance of getting paid nothing? Obviously Elop demands some cash up front, a golden parachute, or something of that nature, and a rational board of directors will give it to him.
In 80% of situations like this, the CEO gets paid well for running the company into the ground. But that's a better situation than the alternative, i.e. 90% of similarly situated companies crashing and burning.
Suppose Nokia's chances of survival were 10% without Stephen Elop and 20% with him. That means he is worth 0.1 x value of Nokia if Nokia survives.
If you pay Elop based directly on the performance of Nokia (i.e., he only gets paid if Nokia does well), he'll stay at Microsoft. Why leave MS for an 80% chance of getting paid nothing? Obviously Elop demands some cash up front, a golden parachute, or something of that nature, and a rational board of directors will give it to him.
In 80% of situations like this, the CEO gets paid well for running the company into the ground. But that's a better situation than the alternative, i.e. 90% of similarly situated companies crashing and burning.
> Suppose Nokia's chances of survival were 10% without Stephen Elop and 20% with him. That means he is worth 0.1 x value of Nokia if Nokia survives.
With respect, this is complete nonsense. It would only be true if there were no replacement for Elop who could not produce similar returns for a lower cost.
Supply and demand, not intrinsic value.
With respect, this is complete nonsense. It would only be true if there were no replacement for Elop who could not produce similar returns for a lower cost.
Supply and demand, not intrinsic value.
With respect, this is complete nonsense. It would only be true if there were no replacement for Elop who could not produce similar returns for a lower cost.
I realize Elop's pay is set by supply and demand, and if Nokia could find a cheaper person with the same qualities, they would and should hire him.
I'm just pointing out that it is in Nokia's best interest to pay significant amounts of cash comp to a good executive even if that executive "runs the company into the ground".
I realize Elop's pay is set by supply and demand, and if Nokia could find a cheaper person with the same qualities, they would and should hire him.
I'm just pointing out that it is in Nokia's best interest to pay significant amounts of cash comp to a good executive even if that executive "runs the company into the ground".
Who is a replacement? Care to list 30 such replacements along with the types of contracts you expect Nokia would have been able to negotiate?
With many millions of dollars of shareholder wealth at stake, only people with a strong track record should be seriously considered.
With many millions of dollars of shareholder wealth at stake, only people with a strong track record should be seriously considered.
In other words, you're agreeing with me; Elop is benefiting from a windfall of lack of information. This lack of information forces companies to make inefficient choices of leaders and waste lots of money on leadership.
So Nokia has a lack of information but you don't ? What decision should have been made? And whose responsibility is it to make that decision?
Sure there are problems with corporate governance but ultimately we're talking about the risk of misallocating capital belonging to investors, whose job it is to oversee the allocation.
Sure there are problems with corporate governance but ultimately we're talking about the risk of misallocating capital belonging to investors, whose job it is to oversee the allocation.
Not to nitpick, but since we're on the topic of corporate governance... Hopefully this will make it a bit more clear on why the governance issues are so murky: At least in Canada, and I'm fairly sure the United States as well it's actually not investors' job to oversee the allocation. The board of directors manages the company. Investors merely get to vote for who gets to be on the board of directors.
Sooo, it's the job of the board of directors to select who the CEO (an officer in Corporate Law-speak) is.
Sooo, it's the job of the board of directors to select who the CEO (an officer in Corporate Law-speak) is.
Well, it's indirect, but they're still ultimately responsible for it. If there weren't any control, why would anyone invest?
That's a good question (not sarcasm, it might come off that way). I actually do have a small investment yet I never planned on exercising any control and only control a trivial number of shares. There's a fair bit of academic debate on these theories of control and how shareholders relate to companies.
Personally I think there's a lot of freeloading off the small group of big players that do exercise control. I have a certain amount of faith that they won't vote in a way that's seriously adverse to my interests as a little fish.
Personally I think there's a lot of freeloading off the small group of big players that do exercise control. I have a certain amount of faith that they won't vote in a way that's seriously adverse to my interests as a little fish.
Then shouldn't part of their job also be researching and coming up with a larger pool of candidates for a position of that importance? Not saying Nokia didn't necessarily do that, but I suspect in a lot of cases, there tends to be a short list that people choose from initially. Expanding out from that short list and spending more time gathering more info might take more time, but would ultimately be in the shareholders' interest.
How exactly do you establish the %likelihood that a particular CEO will save your company to the degree of precision that you could actually meaningfully incorporate it into a business model?
Seeing as Elop's $6M pay is orders of magnitude smaller than Nokia's $25B market cap, you don't need to be very accurate. Say my 10% was wrong, even wildly so. As long as Elop gives Nokia more than 0.024% improved odds over his next best alternative, he is still worth $6M.
(Yes, I'm ignoring the time value of money, risk, etc, to simplify.)
(Yes, I'm ignoring the time value of money, risk, etc, to simplify.)
You're just pretending you can calculate inherently incalculable probabilities. How do you determine the probability a company will fail under a variety of potential CEOs so that you could even get a mathematically-justifiable rank order? You can't run trials, you can't really extrapolate from past performance, you're subject to all kinds of confounding variables, you can't actually treat 'failure' as '$0 market cap', etc, etc, etc.
The best you could ever hope to do is "CEO candidates with this kind of background tend to have this kind of record when taking over this kind of company", which I'm sure is quite an illuminating sample.
The best you could ever hope to do is "CEO candidates with this kind of background tend to have this kind of record when taking over this kind of company", which I'm sure is quite an illuminating sample.
You are correct - the board's estimate is merely the best approximation they can come up with based on incomplete information and a subjective set of priors (yes, "subjective prior" is redundant). So what?
I really don't get the point you are making. Are you telling me that a struggling company shouldn't try to get what they believe is the best possible CEO, provided his pay package is vastly smaller than the variance in possible outcomes for the company?
I really don't get the point you are making. Are you telling me that a struggling company shouldn't try to get what they believe is the best possible CEO, provided his pay package is vastly smaller than the variance in possible outcomes for the company?
My point is that it's ridiculous to try to justify golden parachutes for bad CEOs using fake math, and the fact that the market bears these kinds of contracts isn't evidence on its own that they are good.
So business decisions that use uncertain numbers are "fake math"?
You realize that with the narrow exception of a few quant traders, you've pretty much described all business decisions.
You realize that with the narrow exception of a few quant traders, you've pretty much described all business decisions.
The fact that most business decisions are made by gut feeling implies that post-hoc pseudo-mathematical rationalization shouldn't be called out as bullshit?
The problem with this is that the CEO gets the same payout if he does a good job and things don't work out or if he fantastically mismanages the company.
Or you can give him a variable payout - $6M if he fails, $20M if he succeeds. This is a far more common situation.
Sure, but there's failure with best effort and then there's the fiasco. Not enough is done to punish the latter, IMO.
I think a lot of the problem with CEO failure come from risk adverse boards being unwilling to try someone new as opposed to the accepted stable of CEO candidates. Small pool equals big compensation even for failure.
There's more to it than that. Board members of large corporations tend to be CEOs of other large corporations. Not only do they see each other at charity events and such, they have a vested interest in not being too hard-nosed about compensation.
The question is why the shareholders put up with it, and I don't have an answer to that question.
The question is why the shareholders put up with it, and I don't have an answer to that question.
Because it sounds like the safe, experienced play. It does work for a lot of companies (says something about the companies more than the CEO), and I would suppose it is easier to make deals to keep the company going when you have all the "club" contacts. When it fails, it fails in amazing spectacular ways.
I guess many should be sorta happy since it allows untried upstarts to disrupt the market and truly well run companies to expand. I feel sorry for all the people caught up in the fail.
I guess many should be sorta happy since it allows untried upstarts to disrupt the market and truly well run companies to expand. I feel sorry for all the people caught up in the fail.
The board of directors decides if a CEO gets hired, and for how much money. Often this board consists of presidents and CEOs of other companies. Is it very far-fetched to suspect that there may be non-market forces at work when this compensation is determined? Quid pro quo? I don't have a chart handy, but I think the pay of a CEO in relation to the average employee of a company has been rising dramatically over the past decades. Are CEOs orders of magnitude more important today than they were 30 years ago? I don't think so.
I think you have to define market forces. The market force is simple:
"You want me. If you don't pay me enough, I will go somewhere else that will!"
In other words, as Adam Smith correctly noted, it is a question of who has power in coercive negotiations. Consequently CEO's get paid so much because they are so much more powerful than workers in that negotiation process, not because they are worth that much more.
But a lot of market forces boil down to this sort of power difference analysis. We think of a free market where the consumer has the power and the company does not, but I wonder how often that is really true.
But a lot of this boils down to the reason I think folks should try to be able to be self-employed-- it means you negotiate with companies from a position of greater power. I suspect if 60% of the population was self-employed doing everything from janitorial services through database engineering, we'd have no need of minimum wage laws because anyone anywhere could turn down a job offer.
"You want me. If you don't pay me enough, I will go somewhere else that will!"
In other words, as Adam Smith correctly noted, it is a question of who has power in coercive negotiations. Consequently CEO's get paid so much because they are so much more powerful than workers in that negotiation process, not because they are worth that much more.
But a lot of market forces boil down to this sort of power difference analysis. We think of a free market where the consumer has the power and the company does not, but I wonder how often that is really true.
But a lot of this boils down to the reason I think folks should try to be able to be self-employed-- it means you negotiate with companies from a position of greater power. I suspect if 60% of the population was self-employed doing everything from janitorial services through database engineering, we'd have no need of minimum wage laws because anyone anywhere could turn down a job offer.
By market forces I mean supply and demand. And you have correctly noted that these have a secondary role in CEO pay negotiations. Instead, it's a question of power and indifference. Where does this power come from? It stems from the fact that the board with which the future CEO is negotiating consists of inside and outside officers. This means that he is negotiating with future subordinates (inside officers) and executives who might want to become the CEO of a company where this future CEO has a seat on the board. Who would openly try to lower the salary of their future boss, the same person they will have to talk to about their own pay raises? So, the board does not really have an incentive to push for the true market rate of the CEO, unless they are major shareholders, but usually lots of incentives not to do so.
> We'd have no need of minimum wage laws because anyone anywhere could turn down a job offer.
And right now janitors can't turn down job offers? I don't understand. How does a self-employed janitor have more power? I think you greatly overestimate the advantages of being self-employed, and underestimate the downsides.
> We'd have no need of minimum wage laws because anyone anywhere could turn down a job offer.
And right now janitors can't turn down job offers? I don't understand. How does a self-employed janitor have more power? I think you greatly overestimate the advantages of being self-employed, and underestimate the downsides.
Right now, only 20% of the US workforce are self-employed, and a quarter of them are professionals (lawyers and doctors mostly). That means 16% of the population are running a business which is not expected to be a medical or legal business.
Most people esp. in the current economy, are not in a position to turn down a job offer. This means they want work more than the company wants to hire them. This is a major source of a power differential. If, on the other hand, the boundary between employment and self-employment is porous, this means that companies not only have to compete with eachother to hire said janitor, but they also have to compete with the fact that they could hire said janitor's ability to be self-employed.
The point is it is a clear shift.
Right now minimum wage laws are too low. We should at least set them high enough that people have no need of welfare when having a minimum wage job. As it is they are a nice way to tell us we are protecting the worker when in fact we are doing no such thing. When you combine it with welfare, you have solid incentives for low-paid workers not to become self-employed and thus the welfare and minimum wage scheme we have right now are actual tools in the class war by the wealthy against everyone else.
Most people esp. in the current economy, are not in a position to turn down a job offer. This means they want work more than the company wants to hire them. This is a major source of a power differential. If, on the other hand, the boundary between employment and self-employment is porous, this means that companies not only have to compete with eachother to hire said janitor, but they also have to compete with the fact that they could hire said janitor's ability to be self-employed.
The point is it is a clear shift.
Right now minimum wage laws are too low. We should at least set them high enough that people have no need of welfare when having a minimum wage job. As it is they are a nice way to tell us we are protecting the worker when in fact we are doing no such thing. When you combine it with welfare, you have solid incentives for low-paid workers not to become self-employed and thus the welfare and minimum wage scheme we have right now are actual tools in the class war by the wealthy against everyone else.
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"If a CEO has the market power to demand a golden parachute and happens to be paid after she's fired, that's a byproduct of her initial market power, not corruption."
Adam Smith made the same point. Wages are a result of power differential in negotiations, not value to the organization. This is why being able to be self-employed is so important. If you do decide to take a job, you can negotiate from a much greater position of power than if you can't be self-employed.
Adam Smith made the same point. Wages are a result of power differential in negotiations, not value to the organization. This is why being able to be self-employed is so important. If you do decide to take a job, you can negotiate from a much greater position of power than if you can't be self-employed.
"If a CEO has the market power ..."
Isn't it possible for the market itself to be screwed up? There is no such thing as The Market, there are many different markets with different rules and contexts. We can alter these rules and contexts, and they change on their own over time through technology and other things.
The question is whether the market we have right now is serving us well, or if we could alter it to serve us better.
Isn't it possible for the market itself to be screwed up? There is no such thing as The Market, there are many different markets with different rules and contexts. We can alter these rules and contexts, and they change on their own over time through technology and other things.
The question is whether the market we have right now is serving us well, or if we could alter it to serve us better.
Market prices just reflect supply and demand. If there are insufficient numbers of people qualified to act as CEO of a struggling fortune 500 company, and such people are paid very well, then there's a strong incentive for anyone remotely qualified to do whatever possible to appear qualified, so that he/she might receive that high level of compensation.
"Market prices just reflect supply and demand"
This isn't true. One example off the top of my head, good looking people get paid more. They aren't more qualified, yet they get paid more. Even at the executive level.
This isn't true. One example off the top of my head, good looking people get paid more. They aren't more qualified, yet they get paid more. Even at the executive level.
> How is a CEO being paid $10M per year and running the company into the ground different from an employee being paid $6/hour and alienating 10 customers?
Clearly the former is orders of magnitude worse (in every respect) than the latter, no?
> If a CEO has the market power to demand a golden parachute and happens to be paid after she's fired, that's a byproduct of her initial market power, not corruption.
The system need not be corrupt, just broken. In the sense that (I think) we're discussing the merits of modern american capitalism, your comment begs the question.
Clearly the former is orders of magnitude worse (in every respect) than the latter, no?
> If a CEO has the market power to demand a golden parachute and happens to be paid after she's fired, that's a byproduct of her initial market power, not corruption.
The system need not be corrupt, just broken. In the sense that (I think) we're discussing the merits of modern american capitalism, your comment begs the question.
Orders of magnitude worse each time, but likely to happen far less often. Arguably hiring a bad low wage employee, if repeated a lot of times, is way worse.
Wage inequality is not necessarily a sign of corruption.
Wage inequality is not necessarily a sign of corruption.
Think of how it must look to a third-worlder who has trouble scoring a dollar a day to see that lavishly paid slackard mistreating customers despite being paid so very much.
think of how it must be to be on the edge of starving in the US to realize that you can eat out at a restaurant and get a good meal for a dollar in many parts of the world.
Wages are relative to expenses.
Wages are relative to expenses.
>If you're creating value, the wealth society has given you is probably a bargain for society
If you're creating value, you're creating it, it isn't being given to you (nor is it being taken from someone else). For example, if I (as a great painter!) take $5 worth of art supplies and create a painting worth $1,000,000, I have gained a million dollars in wealth without taking it from society.
In a free market, people can and do create great wealth without deleting someone else's wealth.
If you're creating value, you're creating it, it isn't being given to you (nor is it being taken from someone else). For example, if I (as a great painter!) take $5 worth of art supplies and create a painting worth $1,000,000, I have gained a million dollars in wealth without taking it from society.
In a free market, people can and do create great wealth without deleting someone else's wealth.
Well said. I found the sentence you quoted fundamentally broken to the point of offensiveness. As though society has graciously allowed people to create value. Nobody asked for your permission; don't claim to grant permission for something everyone has the fundamental right to do anyway.
Do you believe that everyone who becomes wealthy by definition must have created value? And that everyone who creates value by definition becomes wealthy?
If so, then yes, we hopelessly disagree.
If not, then you're agreeing that wealth can accumulate to some people who don't create value and/or can fail to accumulate to some people who do. I'd hope you would also agree that that's a problem, and that we'd be better off if we figured out how to fix it?
If so, then yes, we hopelessly disagree.
If not, then you're agreeing that wealth can accumulate to some people who don't create value and/or can fail to accumulate to some people who do. I'd hope you would also agree that that's a problem, and that we'd be better off if we figured out how to fix it?
> Do you believe that everyone who becomes wealthy by definition must have created value? And that everyone who creates value by definition becomes wealthy?
The latter, sadly, does not inherently hold true; many times people create value but do not manage to get any value for themselves. That situation has improved drastically, but I'd certainly love to see it improved even further.
For the former: ignoring theft and fraud, by definition they created value for someone, or they wouldn't have gotten paid. We can argue over whether we would prefer them to have created value in another way, but we don't get to choose that; that remains between them and whoever chose to give them money.
If you want to improve that situation to create value in ways you'd prefer, then I'd suggest working to ensure that good mechanisms exist to help people get value from activities you'd prefer to see rewarded, and try to get people to take advantage of them. For example, crowdfunding programs like Kickstarter enabled many creative people to benefit directly from the value they create. We could use a hundred more ideas as novel and useful as crowdfunding; that would help greatly.
Or, to put it another way, coming up with such an idea and implementing it would greatly amplify your own ability to create value, and in doing so it would allow you to create the kind of value you'd prefer.
The latter, sadly, does not inherently hold true; many times people create value but do not manage to get any value for themselves. That situation has improved drastically, but I'd certainly love to see it improved even further.
For the former: ignoring theft and fraud, by definition they created value for someone, or they wouldn't have gotten paid. We can argue over whether we would prefer them to have created value in another way, but we don't get to choose that; that remains between them and whoever chose to give them money.
If you want to improve that situation to create value in ways you'd prefer, then I'd suggest working to ensure that good mechanisms exist to help people get value from activities you'd prefer to see rewarded, and try to get people to take advantage of them. For example, crowdfunding programs like Kickstarter enabled many creative people to benefit directly from the value they create. We could use a hundred more ideas as novel and useful as crowdfunding; that would help greatly.
Or, to put it another way, coming up with such an idea and implementing it would greatly amplify your own ability to create value, and in doing so it would allow you to create the kind of value you'd prefer.
Yeah, that last paragraph didn't make sense to me either. I think her point is that for all the systemization and professionalization of knowledge over the last several decades, the boom(s) leading up to the financial crisis were just as irrational and ultimately ephemeral as the false wealth of the roaring 20s, when the financial sector was a comparative free-for-all.
We're basically on the same page, but I'm curious what you think of concentration of wealth and its effect on political processes? Say you've got a person who truly earned his wealth, who is worth billions, and who is using that wealth to corrupt politicians in his favor. You can say 'we need stronger institutions' but it might be the money that's weakening them in the first place. I don't have a good answer for how to reconcile this.
The root of the problem (or at least the fixable part of the problem) is probably schools. Rich people arrange for their kids to go to good schools, and poor kids end up stuck in bad schools. So maybe the best way to narrow the gap is to make the worst schools better. That would be a good thing to do regardless.
Startups may be able to help: http://imaginek12.com
Startups may be able to help: http://imaginek12.com
Most of the achievement gap actually comes from parenting, not schools. And of the portion of the gap that comes from schools, most of it comes from the differences within individual schools, rather than the differences between schools. (In other words, a kid taking high-level classes in a low-income school is probably getting a better education than a kid on the bottom track of a high-SES school.)
While I'd like to believe that startups could help, I find it fairly unlikely. Most entrepreneurs I see in the education space don't seem to be experts in education theory/research, so most of the time their products seem to be only making things worse. And if the general public were well-educated enough to tell the difference, there wouldn't be nearly as much of a problem to begin with.
While I'd like to believe that startups could help, I find it fairly unlikely. Most entrepreneurs I see in the education space don't seem to be experts in education theory/research, so most of the time their products seem to be only making things worse. And if the general public were well-educated enough to tell the difference, there wouldn't be nearly as much of a problem to begin with.
Most of the achievement gap actually comes from parenting, not schools.
John Hattie in his book Visible Learning: A Synthesis of Over 800 Meta-Analyses Relating to Achievement
http://www.amazon.com/Visible-Learning-Synthesis-Meta-Analys...
reviews a lot of research studies from a lot of countries and suggests that that view, although it is conventional wisdom, grossly underestimates the importance of schools. I agree with you, because the data agree with you, that the most stark differences in school performance are among different teachers in the same school rather than between one school and another, but throughout the Western world, students with tough home conditions tend to get the lousiest teachers and the most underperforming curricula.
Other writers who have important points to make about how to help learners with the worst home environments by improving schools include the collaborators from Teach for America who have put together the book and website Teaching as Leadership
http://www.teachingasleadership.org/
and Eric Hanushek at Stanford with his research on the effects of variance in teacher quality.
http://edpro.stanford.edu/hanushek/content.asp?contentId=60
There is a lot yet to be done that is very feasible (well, except for politically feasible in most states of the United States) to improve the education of the most disadvantaged learners and to help them reach significantly higher levels of academic achievement.
John Hattie in his book Visible Learning: A Synthesis of Over 800 Meta-Analyses Relating to Achievement
http://www.amazon.com/Visible-Learning-Synthesis-Meta-Analys...
reviews a lot of research studies from a lot of countries and suggests that that view, although it is conventional wisdom, grossly underestimates the importance of schools. I agree with you, because the data agree with you, that the most stark differences in school performance are among different teachers in the same school rather than between one school and another, but throughout the Western world, students with tough home conditions tend to get the lousiest teachers and the most underperforming curricula.
Other writers who have important points to make about how to help learners with the worst home environments by improving schools include the collaborators from Teach for America who have put together the book and website Teaching as Leadership
http://www.teachingasleadership.org/
and Eric Hanushek at Stanford with his research on the effects of variance in teacher quality.
http://edpro.stanford.edu/hanushek/content.asp?contentId=60
There is a lot yet to be done that is very feasible (well, except for politically feasible in most states of the United States) to improve the education of the most disadvantaged learners and to help them reach significantly higher levels of academic achievement.
Good points, all of which I agree with, and I'll check out those sources. The book I snapped the pic from was Equality and Achievement, which is similar to the book you're linking to.
"reviews a lot of research studies from a lot of countries and suggests that that view, although it is conventional wisdom, grossly underestimates the importance of schools. "
I do think it's important to note though that you can believe that the achievement gap is mostly coming from home factors, while also not underestimating the importance of school. That is, you can believe that all kids are basically receiving an equally crappy education. You're certainly right though about the kids from the worst home conditions getting stuck with the worst teachers within schools.
"reviews a lot of research studies from a lot of countries and suggests that that view, although it is conventional wisdom, grossly underestimates the importance of schools. "
I do think it's important to note though that you can believe that the achievement gap is mostly coming from home factors, while also not underestimating the importance of school. That is, you can believe that all kids are basically receiving an equally crappy education. You're certainly right though about the kids from the worst home conditions getting stuck with the worst teachers within schools.
And just as importantly, stuck in classes with each other. There's an amplifier effect as a result.
It may be that parenting is more important (though I'd want to see some data there -- there's was a recent study showing that for poor children attending preschool was a very good predictor of life success; this would seem to argue counter to your assertion), but I don't see how that refutes the point. "Parenting" is not something subject to public policy, in the general case. School is. We can pass laws to make schools better. If it works (even partially), then we should. No?
"though I'd want to see some data there -- there's was a recent study showing that for poor children attending preschool was a very good predictor of life success; this would seem to argue counter to your assertion"
In terms of data, here is the graph showing how SES effects achievement for school kids:
http://dl.dropbox.com/u/1655696/SES_and_school.jpg
It's a little difficult to read, but basically what you can see is that poor kids and rich kids learn roughly the same amount in school. The reason there is such a big gap is because A) there is a large gap that already exists when they get to Kindergarten and B) while rich kids are learn over the summer and get smarter, the poor kids are actually forgetting what they've learned the previous year.
If you want to learn about why there is already a 2 year gap before the kids get to kindergarten, you should read the book Meaningful Differences In The Everyday Experience of Young American Children.
The finding about within school differences vs. between school differences comes from the Coleman report, which is one of the largest social surveys ever conducted, and still one of the most important to date. I also have a blog post here explaining a bit about why within school differences are important:
http://alexkrupp.typepad.com/sensemaking/2009/02/the-most-im...
If I remember correctly efficacy of preschool is mixed, and it depends a lot on the type of preschool. However, even the best preschools can never be as effective as good parenting at imparting language schools, for reasons that the Meaningful Difference book explains. (However, preschools may be good for other reasons.)
In terms of data, here is the graph showing how SES effects achievement for school kids:
http://dl.dropbox.com/u/1655696/SES_and_school.jpg
It's a little difficult to read, but basically what you can see is that poor kids and rich kids learn roughly the same amount in school. The reason there is such a big gap is because A) there is a large gap that already exists when they get to Kindergarten and B) while rich kids are learn over the summer and get smarter, the poor kids are actually forgetting what they've learned the previous year.
If you want to learn about why there is already a 2 year gap before the kids get to kindergarten, you should read the book Meaningful Differences In The Everyday Experience of Young American Children.
The finding about within school differences vs. between school differences comes from the Coleman report, which is one of the largest social surveys ever conducted, and still one of the most important to date. I also have a blog post here explaining a bit about why within school differences are important:
http://alexkrupp.typepad.com/sensemaking/2009/02/the-most-im...
If I remember correctly efficacy of preschool is mixed, and it depends a lot on the type of preschool. However, even the best preschools can never be as effective as good parenting at imparting language schools, for reasons that the Meaningful Difference book explains. (However, preschools may be good for other reasons.)
Can I beg we avoid the term "good parenting" as it is
semantically very poor in this context. For example a kid from a loving and conscientious poor and illiterate parent may receive better parenting than a more perfunctory well-off parent - and yet the latter will undoubtedly be ahead by the time they reach kindergarten. The issue is not so much, I believe, in the "goodness" of the parenting, rather, it is in the richness of the environment.
You're right about good parenting being a bad term. However, it is the qualities (value neutral) of the parenting that determines outcome rather than the richness of the environment. To quote Paul Tough, who gives a good summary of the research:
"The disadvantages that poverty imposes on children aren't primarily about material goods. True, every poor child would benefit from having more books in his home and more nutritious food to eat (and money certainly makes it easier to carry out a program of concerted cultivation). But the real advantages that middle-class children gain come from more elusive processes: the language that their parents use, the attitudes toward life that they convey. However you measure child-rearing, middle-class parents tend to do it differently than poor parents; and the path they follow in turn tends to give their children an array of advantages. As Lareau points out, kids from poor families might be nicer, they might be happier, they might be more polite; but in countless ways, the manner in which they are raised puts them at a disadvantage in the measures that count in contemporary American society."
"The disadvantages that poverty imposes on children aren't primarily about material goods. True, every poor child would benefit from having more books in his home and more nutritious food to eat (and money certainly makes it easier to carry out a program of concerted cultivation). But the real advantages that middle-class children gain come from more elusive processes: the language that their parents use, the attitudes toward life that they convey. However you measure child-rearing, middle-class parents tend to do it differently than poor parents; and the path they follow in turn tends to give their children an array of advantages. As Lareau points out, kids from poor families might be nicer, they might be happier, they might be more polite; but in countless ways, the manner in which they are raised puts them at a disadvantage in the measures that count in contemporary American society."
> For example a kid from a loving and conscientious poor and illiterate parent may receive better parenting than a more perfunctory well-off parent - and yet the latter will undoubtedly be ahead by the time they reach kindergarten.
Undoubtedly?
> The issue is not so much, I believe, in the "goodness" of the parenting, rather, it is in the richness of the environment.
In the US at least, there are free yet rich environments. If you're poor, you do have to get out of the house and seek them out.
So, what definition of "better parenting" are you using?
Undoubtedly?
> The issue is not so much, I believe, in the "goodness" of the parenting, rather, it is in the richness of the environment.
In the US at least, there are free yet rich environments. If you're poor, you do have to get out of the house and seek them out.
So, what definition of "better parenting" are you using?
Poor children attending preschool doesn't necessarily mean that schooling is the answer. It could be that the parents who would send their kids to preschool (regardless of socioeconomic background) are the kind of parents who give their kids the skills needed to succeed later in life. There are tons of confounding variables when it comes to stuff like this, so the jump from "preschool is a good predictor of life success" to "we should invest more in preschools" isn't necessarily a logical one. Correlation does not imply causation, and all that.
It's hard to study this sort, of thing, sure, but that doesn't mean that it hasn't been studied. Probably the most famous is the Perry Preschool Project in the 60s, which randomly assigned students to a control versus preschool group and followed the students until they were 40, finding significant differences in life outcomes (earnings, arrests, teen pregnancies, etc) between the two groups.
A lot of this is based on assumptions, but unless the study was somehow able to seperate "parenting" from pre-school attendence as an intervening variable, I don't necessarily think it's counter to his assertion.
I would argue that pre-school attendance could be a very strong indicator of parenting quality, if we can even try to quantify such a thing.
On the other hand, lack of pre-school could indicate a parent taking the pre-schooling responsibility upon themselves and providing a rather spectacular "home pre-school" environment.
I would argue that pre-school attendance could be a very strong indicator of parenting quality, if we can even try to quantify such a thing.
On the other hand, lack of pre-school could indicate a parent taking the pre-schooling responsibility upon themselves and providing a rather spectacular "home pre-school" environment.
Education and schooling are not synonymous. I don't think that entrepreneurs can help schooling but they can certainly help education. To be honest, most 'education' startups are really about 'schooling'. The problem that for the most part schooling is designed to educate people for manufacturing jobs in the industrial revolution and service in the military. That kind of education (aka. schooling) is completely inappropriate in the information age where ingenuity and critical thinking are far more important than blind rule following. We're not building nations anymore, we're building individuals. To paraphrase Wilde we're producing "people who know the answer to everything, but the meaning of nothing"
I think Khan Academy is honestly about education more so than schooling.
The general public can tell the difference which is why choice in education is a no-go, and the compulsory system remains in place.
I think Khan Academy is honestly about education more so than schooling.
The general public can tell the difference which is why choice in education is a no-go, and the compulsory system remains in place.
I agree with your point on education vs. schooling. If you want to focus on building individuals then you really have to think about education in terms of being a part of the larger psychospiritual development process, rather than just an ongoing series academic content. Although people in the west like to make fun of gurus, and often rightly, I think there is good reason to reconceptualize education in a way that's more connected to the various life stages a person goes through, a la the four life stages of hinduism.
That's the problem I have with Khan academy. That is, the lessons are factually correct, but they have no soul, and at the end of the day I think that's bad pedagogy.
That's the problem I have with Khan academy. That is, the lessons are factually correct, but they have no soul, and at the end of the day I think that's bad pedagogy.
I think Feynman captures the essence of what I meant by "the answer to everything but the meaning of nothing". In his teachings in Brazil IIRC Feynman talks about Physics students who knew the refactory index of water but couldn't tell you why the ocean sparkled in the sun.
Could you explain how to measure the various concepts you are describing in your post? It would help the rest of us understand what you are talking about.
I.e., if we "reconceptualize education" to connect it to hinduism's 4 life stages [1], what outcomes will change? How can we measure the "soul" of a lesson, and what happens when a lesson lacks "soul"?
[1] As far as I know this is only a meaningful concept for Brahmin and Kshatriya men. But I guess since they are the highest castes, they are the ones who's mysticism we should adopt.
I.e., if we "reconceptualize education" to connect it to hinduism's 4 life stages [1], what outcomes will change? How can we measure the "soul" of a lesson, and what happens when a lesson lacks "soul"?
[1] As far as I know this is only a meaningful concept for Brahmin and Kshatriya men. But I guess since they are the highest castes, they are the ones who's mysticism we should adopt.
"How can we measure the 'soul' of a lesson, and what happens when a lesson lacks 'soul'?"
A good proxy would be just looking at whether something was made by an artist, or a committee. E.g. Feynman's lectures were those of an artist, whereas most textbooks are created by a committee. (And then they get someone with a PhD to add their name as the author after the fact.) It's clear to me that Kahn's lessons are more in the style of the typical textbook, rather than in the style of someone like Feynman. You can't measure it, that's the point. If you could measure it then that's the first sign that something is wrong.
"But I guess since they are the highest castes, they are the ones who's mysticism we should adopt."
I'm not advocating the hindu model per se, only using them as an example of a society where schooling is framed in terms of a larger model... In their case one that includes work, marriage, wisdom seeking, preparation for death, etc. It's not clear to me that this is the right approach for western society, but I do think it's worth looking at for inspiration.
A good proxy would be just looking at whether something was made by an artist, or a committee. E.g. Feynman's lectures were those of an artist, whereas most textbooks are created by a committee. (And then they get someone with a PhD to add their name as the author after the fact.) It's clear to me that Kahn's lessons are more in the style of the typical textbook, rather than in the style of someone like Feynman. You can't measure it, that's the point. If you could measure it then that's the first sign that something is wrong.
"But I guess since they are the highest castes, they are the ones who's mysticism we should adopt."
I'm not advocating the hindu model per se, only using them as an example of a society where schooling is framed in terms of a larger model... In their case one that includes work, marriage, wisdom seeking, preparation for death, etc. It's not clear to me that this is the right approach for western society, but I do think it's worth looking at for inspiration.
If you could measure it then that's the first sign that something is wrong.
In that case, I can tell you that you are very wrong. Khan's lessons have lots of soul. Not only soul, but also invisible dragons that breath the fire of knowledge!
http://www.godlessgeeks.com/LINKS/Dragon.htm
In that case, I can tell you that you are very wrong. Khan's lessons have lots of soul. Not only soul, but also invisible dragons that breath the fire of knowledge!
http://www.godlessgeeks.com/LINKS/Dragon.htm
I think Sagan's rant is cute, but ultimately wrong. And besides, when I talk about soul in this context, I'm obviously not talking about anything metaphysical. I'm just saying that his lessons are rather prosaic.
Most of the credentialed "experts" in education theory or research that I've encountered have been the last people I'd want designing or administering an educational program.
I'm sure this isn't universally true, but just like many other fields, expertise in technology should let new people disrupt the field. Education, being highly regulated, lacking real feedback mechanisms, government funded, etc., is perfect to disrupt.
I'm sure this isn't universally true, but just like many other fields, expertise in technology should let new people disrupt the field. Education, being highly regulated, lacking real feedback mechanisms, government funded, etc., is perfect to disrupt.
David Brooks wrote once "the rich don’t exploit the poor, they just out-compete them" And if out-competing people means tying their ankles together and loading them down with extra weight while hiring yourself the most expensive coaches and the best practice facilities, he’s right. The entire U.S. school system, from pre-K up, is structured from the very start to enable the rich to out-compete the poor, which is to say, the race is fixed. And the kinds of solutions that might actually make a difference: financing every school district equally, abolishing private schools, making high-quality child care available to every family are treated as if they were positively un-American.
And the kinds of solutions that might actually make a difference: financing every school district equally
My state has had a state law that finances districts equally by enrollment since the 1970s.
http://www.house.leg.state.mn.us/hrd/pubs/mnschfin.pdf
Actually, the districts with the highest concentration of low-income families have long received extra funding per pupil compared to the majority of school districts in the state. For more than twenty years now, all public schools anywhere in the state offer open enrollment to all students anywhere in the state, up to the limits of the capacity of each school district to receive students.
http://education.state.mn.us/MDE/Academic_Excellence/School_...
So if students don't like what is on offer in their local school district, they can shop around, and take their state funding with them, by trying out another school district's offerings of courses and teachers (and classmates). More students enrolled means more state funding, so school districts make efforts to provide attractive programs that will bring students across district lines. This competition among school districts has promoted innovation in programs and resulted in a fair amount of interchange among students who live in different neighborhoods. School districts compete with one another by offeringprograms for fine-arts-inclined students, or students who desire language immersion programs (Spanish immersion and Chinese immersion programs are both hot programs in Minnesota), and students with many other characteristics. Some school districts gain almost half of their enrollment from open enrollment, and correspondingly some of the historically worst school districts in Minnesota have lost large percentages of enrollment to families crossing district boundaries to look for better schools. (Minnesota also has a huge number of charter schools, which is a distinct form of competition for publicly subsidized students, but they cannot offer some of the programs that public school districts can.) This competition keeps all districts accountable for providing a good learning environment, and helps change the psychology of teachers and principals dealing with families from one of treating learners as a burden to one of treating learners as an opportunity to be grateful for.
Any other state in the United States could do the same, and a few already have.
http://educateiowa.gov/index.php?option=com_content&task...
http://www.ecs.org/html/offsite.asp?document=http%3A%2F%2Fww...
abolishing private schools
Abolishing private schools is a distinctly bad idea (as shown by the example of the Netherlands, where multiple kinds of schools receive public funding on a per-capita basis) and anyway is unconstitutional in the United States. The last major effort to abolish private schools in a whole state was sponsored by the Ku Klux Klan (which didn't like Catholic schools) and was overturned by the United States Supreme Court.
http://scholar.google.com/scholar_case?case=6094501649208458...
My state has had a state law that finances districts equally by enrollment since the 1970s.
http://www.house.leg.state.mn.us/hrd/pubs/mnschfin.pdf
Actually, the districts with the highest concentration of low-income families have long received extra funding per pupil compared to the majority of school districts in the state. For more than twenty years now, all public schools anywhere in the state offer open enrollment to all students anywhere in the state, up to the limits of the capacity of each school district to receive students.
http://education.state.mn.us/MDE/Academic_Excellence/School_...
So if students don't like what is on offer in their local school district, they can shop around, and take their state funding with them, by trying out another school district's offerings of courses and teachers (and classmates). More students enrolled means more state funding, so school districts make efforts to provide attractive programs that will bring students across district lines. This competition among school districts has promoted innovation in programs and resulted in a fair amount of interchange among students who live in different neighborhoods. School districts compete with one another by offeringprograms for fine-arts-inclined students, or students who desire language immersion programs (Spanish immersion and Chinese immersion programs are both hot programs in Minnesota), and students with many other characteristics. Some school districts gain almost half of their enrollment from open enrollment, and correspondingly some of the historically worst school districts in Minnesota have lost large percentages of enrollment to families crossing district boundaries to look for better schools. (Minnesota also has a huge number of charter schools, which is a distinct form of competition for publicly subsidized students, but they cannot offer some of the programs that public school districts can.) This competition keeps all districts accountable for providing a good learning environment, and helps change the psychology of teachers and principals dealing with families from one of treating learners as a burden to one of treating learners as an opportunity to be grateful for.
Any other state in the United States could do the same, and a few already have.
http://educateiowa.gov/index.php?option=com_content&task...
http://www.ecs.org/html/offsite.asp?document=http%3A%2F%2Fww...
abolishing private schools
Abolishing private schools is a distinctly bad idea (as shown by the example of the Netherlands, where multiple kinds of schools receive public funding on a per-capita basis) and anyway is unconstitutional in the United States. The last major effort to abolish private schools in a whole state was sponsored by the Ku Klux Klan (which didn't like Catholic schools) and was overturned by the United States Supreme Court.
http://scholar.google.com/scholar_case?case=6094501649208458...
Education isn't a race. If rich children perform better that doesn't worsen the plight of poor children. Rather, a better educated populace increases the wealth of society enabling us to spend more on programs for the poor.
Furthermore, the game may be rigged against poor students, but it isn't rigged by the rich. It's rigged by the teachers unions. Some schools that serve poor children have the highest per-student budgets in the nation (see: DC). But they still perform abysmally. Rich parents have the free time to browbeat administrators of low-performing schools until things change. Poor parents are too busy trying to make ends meet. Their children are stuck with whatever the bureaucracy gives them.
This is why school choice programs have displayed promising performance in many low-income areas. They allow students to escape quagmires of union-driven mediocrity. It's interesting that you would want to get rid of the best chance for poor children to get a good education! The DC opportunity scholarship fund increased high school graduation rates by 20% by sending poor kids to private schools. That's a big deal - having a high school diploma substantially increases lifetime earnings.
True to form, the unions killed the DC Opportunity Scholarship fund after only a few years of operation. It's hard to make change for the benefit of the poor! But fortunately, the house Republicans brought the program back with their electoral sweep in 2010, so we will get to continue to monitor its results.
Furthermore, the game may be rigged against poor students, but it isn't rigged by the rich. It's rigged by the teachers unions. Some schools that serve poor children have the highest per-student budgets in the nation (see: DC). But they still perform abysmally. Rich parents have the free time to browbeat administrators of low-performing schools until things change. Poor parents are too busy trying to make ends meet. Their children are stuck with whatever the bureaucracy gives them.
This is why school choice programs have displayed promising performance in many low-income areas. They allow students to escape quagmires of union-driven mediocrity. It's interesting that you would want to get rid of the best chance for poor children to get a good education! The DC opportunity scholarship fund increased high school graduation rates by 20% by sending poor kids to private schools. That's a big deal - having a high school diploma substantially increases lifetime earnings.
True to form, the unions killed the DC Opportunity Scholarship fund after only a few years of operation. It's hard to make change for the benefit of the poor! But fortunately, the house Republicans brought the program back with their electoral sweep in 2010, so we will get to continue to monitor its results.
> Education isn't a race.
I was explicitly told in school that it was. Sure, getting an education is important; but the race aspect - specifically, against repeating a year - was hammered home.
I was explicitly told in school that it was. Sure, getting an education is important; but the race aspect - specifically, against repeating a year - was hammered home.
There are also outliers, about which it interesting to ask "why?" This [1] example of poor kids in a good school was recently reported in Australian media. The Albert Street School [2] in Johannesburg is run by Zimbabwean refugees for Zimbabwean refugees. Recently, it's been achieving results comparable to the best African private schools.
[1] http://www.abc.net.au/news/2011-11-06/disadvantaged-students...
[2] http://www.eliasfund.org/partners/albert-street-school
[1] http://www.abc.net.au/news/2011-11-06/disadvantaged-students...
[2] http://www.eliasfund.org/partners/albert-street-school
It's far more than that though, your democracy is becoming beholden to it, the rich can lobby while the middle and lower classes can't. Or at least can't as effectively.
The rich can run for office much easier than the middle and lower classes.
The rich can monopolize new markets by simply undercutting new entrants.
I'm sure there's many more examples than this of how by concentrating vast wealth to a few people you cut out opportunities for everyone else.
The rich can run for office much easier than the middle and lower classes.
The rich can monopolize new markets by simply undercutting new entrants.
I'm sure there's many more examples than this of how by concentrating vast wealth to a few people you cut out opportunities for everyone else.
It's far more than that though, your democracy is becoming beholden to it, the rich can lobby while the middle and lower classes can't.
Indeed, much of this is predicted by public choice theory,
http://www.econlib.org/library/Enc/PublicChoice.html
http://perspicuity.net/sd/pub-choice.html
http://www.sjsu.edu/faculty/watkins/publicchoice.htm
which predicts that interest groups who have money to gain from a particular policy will fight harder to get their way on that policy than will voters in general who might gain more from a different policy.
In education policy, there is HUGE access to the legislative process (especially at the state level, where most education policy is made) for the schoolteacher labor unions. The general public doesn't get the same kind of place at the table, by far. But politicians are not embarrassed by that. They call special access for special interest groups "taking care to consider the point of view of stakeholders," and don't think about policy in terms of what's right in the abstract, but rather in terms of what's expedient for staying out of political trouble. A quiet majority of inadequately educated Americans struggling to find time for political participation while making ends meet has less voice in the process than a vocal minority of wealthy people whining about "class warfare," and also less voice than a minority of people employed by publicly funded schools who are not held accountable for results.
Indeed, much of this is predicted by public choice theory,
http://www.econlib.org/library/Enc/PublicChoice.html
http://perspicuity.net/sd/pub-choice.html
http://www.sjsu.edu/faculty/watkins/publicchoice.htm
which predicts that interest groups who have money to gain from a particular policy will fight harder to get their way on that policy than will voters in general who might gain more from a different policy.
In education policy, there is HUGE access to the legislative process (especially at the state level, where most education policy is made) for the schoolteacher labor unions. The general public doesn't get the same kind of place at the table, by far. But politicians are not embarrassed by that. They call special access for special interest groups "taking care to consider the point of view of stakeholders," and don't think about policy in terms of what's right in the abstract, but rather in terms of what's expedient for staying out of political trouble. A quiet majority of inadequately educated Americans struggling to find time for political participation while making ends meet has less voice in the process than a vocal minority of wealthy people whining about "class warfare," and also less voice than a minority of people employed by publicly funded schools who are not held accountable for results.
Don't discount the value of family connections, whether to family-run businesses or through friends. I turned down three jobs (two family firms and one using friends in the oil industry) because I did not feel I wanted a life beholden to that system.
Most of our productivity comes from what we learn at our jobs, especially when our jobs (as you say) include a good portion of "school". Helping your children land good jobs is a very good way of passing on skills.
Most of our productivity comes from what we learn at our jobs, especially when our jobs (as you say) include a good portion of "school". Helping your children land good jobs is a very good way of passing on skills.
What if it is the students who make the schools a "worst school". Nobody seems to ever put any blame on the students. From 6th to 12th grade, I attended one of these very bad schools and largely the students were the problem.
Yeah opportunity comes to the educated and the rich. While this is the advantage of the first world this is the deep problem with third world.
Alternatively, make better schools cheaper.
The KIPP program seems to work very well. I believe it's because it creates a cult-like environment, and I mean this in the best and most impressed way. It keeps poor opportunity kids (chosen by lottery) in school from very early to very late as many days as it can, loads them with homework, promotes group cohesiveness, and generally drills in the schools messages. Since the home neighborhood environment is often toxic, a complete environmental change seems to do the trick.
"Since the home neighborhood environment is often toxic, a complete environmental change seems to do the trick."
...As measured by standardized testing, on a good day, and when you analyze the data the right way. And who knows what sorts of longterm problems KIPP could be causing in these kids and within their communities.
The fact that the 'best' idea in educational reform is basically just taking kids away from their parents for virtually all of their waking hours shows that America is on its last legs. We no longer have the cognitive infrastructure necessary to transmit learning from parents to children, so I think KIPP is really just a hail mary attempt to try to buy some time before the whole system collapses.
...As measured by standardized testing, on a good day, and when you analyze the data the right way. And who knows what sorts of longterm problems KIPP could be causing in these kids and within their communities.
The fact that the 'best' idea in educational reform is basically just taking kids away from their parents for virtually all of their waking hours shows that America is on its last legs. We no longer have the cognitive infrastructure necessary to transmit learning from parents to children, so I think KIPP is really just a hail mary attempt to try to buy some time before the whole system collapses.
The fact that the 'best' idea in educational reform is basically just taking kids away from their parents for virtually all of their waking hours shows that America is on its last legs. We no longer have the cognitive infrastructure necessary to transmit learning from parents to children...
This is an exaggeration. At most, programs like KIPP show that our lowest performing households no longer have the cognitive infrastructure necessary to transmit learning from parents to children.
This is an exaggeration. At most, programs like KIPP show that our lowest performing households no longer have the cognitive infrastructure necessary to transmit learning from parents to children.
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Thank you for this reply. I am very interested in seeing data against the KIPP model - what sources would you recommend?
EDIT: just read http://en.wikipedia.org/wiki/Knowledge_Is_Power_Program#Crit..., which is certainly interesting.
EDIT: just read http://en.wikipedia.org/wiki/Knowledge_Is_Power_Program#Crit..., which is certainly interesting.
"I am very interested in seeing data against the KIPP model - what sources would you recommend?"
There's very little data, which is the main problem. In terms of books about KIPP, the one I've read is Whatever It Takes, which is about Geoffrey Canada, who founded the Harlem Children's Zone. I'm not sure if this school is technically affiliated with KIPP proper, but it used the KIPP model.
It's very difficult to explain the problems with KIPP. Basically you need to take a really good look at how the kids are actually spending their days, and then compare it with what we know about child development, educational research, best practices in various fields, research data on student achievement, etc. I don't think there is any way to understand it without having a solid background in education theory, education research, cognitive development, psychology, early childhood education, history, and even things like organization behavior and management theory, etc. The problem of what makes a good school and a good classroom is insanely complicated, which is why we've been using basically the same model since WWI.
There's very little data, which is the main problem. In terms of books about KIPP, the one I've read is Whatever It Takes, which is about Geoffrey Canada, who founded the Harlem Children's Zone. I'm not sure if this school is technically affiliated with KIPP proper, but it used the KIPP model.
It's very difficult to explain the problems with KIPP. Basically you need to take a really good look at how the kids are actually spending their days, and then compare it with what we know about child development, educational research, best practices in various fields, research data on student achievement, etc. I don't think there is any way to understand it without having a solid background in education theory, education research, cognitive development, psychology, early childhood education, history, and even things like organization behavior and management theory, etc. The problem of what makes a good school and a good classroom is insanely complicated, which is why we've been using basically the same model since WWI.
Is there any non-theoretical reason to believe KIPP doesn't work? I.e., do KIPP students underperform in some way?
Forget the theory. The theory might tell me why some measurable effect occurs and generate a complicated model of how it occurs. But without delving into theory, you can certainly tell me what the measurable effect will be. E.g., "KIPP students will have 10% lower math scores in year 2-4 of college," or something like that.
Forget the theory. The theory might tell me why some measurable effect occurs and generate a complicated model of how it occurs. But without delving into theory, you can certainly tell me what the measurable effect will be. E.g., "KIPP students will have 10% lower math scores in year 2-4 of college," or something like that.
"Is there any non-theoretical reason to believe KIPP doesn't work? I.e., do KIPP students underperform in some way?"
There isn't enough data to say.
"But without delving into theory, you can certainly tell me what the measurable effect will be."
Cognitively, I'd be most concerned about whether the program would be harming their executive function and their intrinsic motivation. I don't see any value of trying to predict specific metrics though, beyond identifying specific metrics to look at once more data exists.
There isn't enough data to say.
"But without delving into theory, you can certainly tell me what the measurable effect will be."
Cognitively, I'd be most concerned about whether the program would be harming their executive function and their intrinsic motivation. I don't see any value of trying to predict specific metrics though, beyond identifying specific metrics to look at once more data exists.
I'd also worry that such a program might reduce the ability of kids to function independently and instead reinforce the ideas that large government institutions should displace the family as a means of childrearing.
Doesn't exactly sound like a "lottery" to me:
http://en.wikipedia.org/wiki/Knowledge_Is_Power_Program#Crit...
Basically: they have prerequisites for parental involvement (i.e. your parents have to be willing to work at your schooling too), and a high attrition rate (i.e. they throw out the underperformers). That's not a random sample, it's self-selected for people who do well in it.
This doesn't mean that it's a bad idea, or that it doesn't work. But it means you have to be very careful about pronouncing it "working well."
http://en.wikipedia.org/wiki/Knowledge_Is_Power_Program#Crit...
Basically: they have prerequisites for parental involvement (i.e. your parents have to be willing to work at your schooling too), and a high attrition rate (i.e. they throw out the underperformers). That's not a random sample, it's self-selected for people who do well in it.
This doesn't mean that it's a bad idea, or that it doesn't work. But it means you have to be very careful about pronouncing it "working well."
Perhaps what really matters for accumulating wealth is not being transmitted in colleges?
Call me crazy, but if your assumption is that opening the doors to the unwashed masses and funding lots of education for poor people raises them up, and it doesn't? Perhaps you should verify your assumptions. Perhaps what really matters for accumulating wealth is the modeling of attitudes and virtues from an existing wealthy set of parents. Much the same way that watching a movie of a famous piano player won't help you play the piano, but working day-to-day with one might, perhaps all this structural, fact-based education actually misses the point of how wealth really accumulates? Perhaps wealth generation is actually more of a learned art, not an applied science. EDIT: I see pg says this could also be the quality of the schools, and I think this dovetails in with what I'm saying. It's better to be around folks who model and demonstrate the best wealth-generating lifestyles in order to generate wealth yourself. When we look at the word "education," we are measuring the wrong thing.
Don't know. Just putting it out there. I found this essay thought-provoking. Much better than the usual fare on this topic.
Call me crazy, but if your assumption is that opening the doors to the unwashed masses and funding lots of education for poor people raises them up, and it doesn't? Perhaps you should verify your assumptions. Perhaps what really matters for accumulating wealth is the modeling of attitudes and virtues from an existing wealthy set of parents. Much the same way that watching a movie of a famous piano player won't help you play the piano, but working day-to-day with one might, perhaps all this structural, fact-based education actually misses the point of how wealth really accumulates? Perhaps wealth generation is actually more of a learned art, not an applied science. EDIT: I see pg says this could also be the quality of the schools, and I think this dovetails in with what I'm saying. It's better to be around folks who model and demonstrate the best wealth-generating lifestyles in order to generate wealth yourself. When we look at the word "education," we are measuring the wrong thing.
Don't know. Just putting it out there. I found this essay thought-provoking. Much better than the usual fare on this topic.
I think this is a bit of a misnomer. The problem is not meritocracy. The problem is concentration of control within a fake meritocracy. This is the same problem that doomed the Soviet Union, and it exists to a lesser, but still serious extent, here in the United States.
As Hilaire Belloc wrote, control over the production of wealth is the control of life itself. When we give the rich control over the production of wealth because they are rich and can afford to fund capital, we disempower the majority. The answer is not socialism or communism, which try to solve the problems associated with such concentration through further concentrating that control. The answer is to back off and recognize that the division between capital and labor which has developed is an unhealthy one, that laborers should own their own means of production not collectively but individually and that the role for big capital should be as restrained as possible. As Chesterton said, "Too much capitalism does not mean too many capitalists, but too few."
And as I say "In these economic woes, jobs are the problem, not the solution."
One reason Open Source rocks is that it gives economic ownership to the means of production to every willing programmer and user. This is a value that cannot be measured economically. And open source works often according to a real meritocracy, where those who contribute the most and the best rise to the top, absent corporate control and marketing.
So it is my hope that we recognize it is not meritocracy that is the problem but rather the level of concentration of resources and control that has been achieved that is the problem. These are good reasons to support small businesses, bank with credit unions, become self-employed, and encourage others to do the same.
As Hilaire Belloc wrote, control over the production of wealth is the control of life itself. When we give the rich control over the production of wealth because they are rich and can afford to fund capital, we disempower the majority. The answer is not socialism or communism, which try to solve the problems associated with such concentration through further concentrating that control. The answer is to back off and recognize that the division between capital and labor which has developed is an unhealthy one, that laborers should own their own means of production not collectively but individually and that the role for big capital should be as restrained as possible. As Chesterton said, "Too much capitalism does not mean too many capitalists, but too few."
And as I say "In these economic woes, jobs are the problem, not the solution."
One reason Open Source rocks is that it gives economic ownership to the means of production to every willing programmer and user. This is a value that cannot be measured economically. And open source works often according to a real meritocracy, where those who contribute the most and the best rise to the top, absent corporate control and marketing.
So it is my hope that we recognize it is not meritocracy that is the problem but rather the level of concentration of resources and control that has been achieved that is the problem. These are good reasons to support small businesses, bank with credit unions, become self-employed, and encourage others to do the same.
"In fact, if the last generation is any guide, your child growing up in the top two-fifths today will have a 60 percent chance of being in the top two fifths as an adult. That's the impact of picking the right parents -- increasing the chances of ending up middle- to upper-middle class by a factor of three or four."
Let me get this straight. A kid starting in a bracket that includes 40% of the population has a 60% chance of remaining in that bracket as opposed to the 40% if it was totally random. I would actually have expected a higher %.
Let me get this straight. A kid starting in a bracket that includes 40% of the population has a 60% chance of remaining in that bracket as opposed to the 40% if it was totally random. I would actually have expected a higher %.
The article has other flaws as well, but the one I disagree most strongly with is:
"But in the new aristocracy, it is rarely enough to just get born to the right parents; you also have to work very hard. (Higher earning men are now more likely to work more than 50 hours a week than are men in lower earnings quintiles.) Whatever the systemic injustices, it's also quite clear to everyone ... even parasitic leeches of investment bankers ... that their salaries only come as the result of frantic effort."
Here's what I think is missing from that paragraph. I've tried to label each logical fallacy, but I could be fallacious (hah!) in my labelling. Argue to the point, I'm not interested in getting the fallacy names just perfect. (Here's a source if you want one: http://en.wikipedia.org/wiki/Fallacy )
1. How can she attack hard work and intelligence? She doesn't state what metric she is using, but I assume it's what she starts the next paragraph with: "one's parents to confer such enduring advantages is obviously unfair." If hard-working well-educated parents teach their children to be hard-working and well-educated, that does not prove hard-working poorly-educated parents cannot. "Hasty generalization" fallacy?
2. What justification does she have to write off "systemic injustices" with a summary "whatever"? Should that not have been the focus of the article? "Straw man" fallacy?
3. Why are investment bankers singled out? "Ad hominem" fallacy?
"But in the new aristocracy, it is rarely enough to just get born to the right parents; you also have to work very hard. (Higher earning men are now more likely to work more than 50 hours a week than are men in lower earnings quintiles.) Whatever the systemic injustices, it's also quite clear to everyone ... even parasitic leeches of investment bankers ... that their salaries only come as the result of frantic effort."
Here's what I think is missing from that paragraph. I've tried to label each logical fallacy, but I could be fallacious (hah!) in my labelling. Argue to the point, I'm not interested in getting the fallacy names just perfect. (Here's a source if you want one: http://en.wikipedia.org/wiki/Fallacy )
1. How can she attack hard work and intelligence? She doesn't state what metric she is using, but I assume it's what she starts the next paragraph with: "one's parents to confer such enduring advantages is obviously unfair." If hard-working well-educated parents teach their children to be hard-working and well-educated, that does not prove hard-working poorly-educated parents cannot. "Hasty generalization" fallacy?
2. What justification does she have to write off "systemic injustices" with a summary "whatever"? Should that not have been the focus of the article? "Straw man" fallacy?
3. Why are investment bankers singled out? "Ad hominem" fallacy?
Perhaps I can summarize what I think are her real points:
The old system was an aristocracy, where people were born into positions at the top of society, and this was obvious unfair. However, this system was not stable.
The new system is (supposedly) a meritocracy, where people have to work towards high positions in society. This system is not obviously unfair. But it is stable, because parents tend to instill the qualities required to succeed in their children.
Her point was that what these two systems have in common is that who your parents were is a good predictor of where you will end up.
The old system was an aristocracy, where people were born into positions at the top of society, and this was obvious unfair. However, this system was not stable.
The new system is (supposedly) a meritocracy, where people have to work towards high positions in society. This system is not obviously unfair. But it is stable, because parents tend to instill the qualities required to succeed in their children.
Her point was that what these two systems have in common is that who your parents were is a good predictor of where you will end up.
Yeah, I'm with you on point 1, particulary since I know a lot of parents that got a grade school education, but taught their children to value education. It is kind of the standard immigrant story.
Her arguments seem really lazy and not well justified.
Her arguments seem really lazy and not well justified.
Not everyone is cut out for a high-paying white collar job. Some people are passionate about doing construction work, driving a truck across the country, or even waiting tables. Or maybe one of these profession is most in line with their physical and intellectual abilities.
These people believe (and rightly so I think) that if you put in your 40-50 hours of hard work per week in a blue-collar job, you should earn enough to afford a decent place to live, food, health care, child care, to send your kids to college and to retire once you're 65.
The problem is today that this is less and less the case. This is what people are complaining about. They're not envious of the "Top 1%" making a lot more money than they do, instead, they are noticing that the "ruling class" is actively pushing blue collar wages down, either directly or indirectly by outsourcing, dismantling entitlement programs, slashing union rights and so on, with the help of politicians they bought. Of course, the money saved goes back into the pockets of the upper class, for example in the form of tax cuts, bonuses, or dividends, and at the same time they claim that these are hard times and everyone has to tighten their belts.
It's not a tyranny of the meritocracy, it's a tyranny of the power elite.
Your argument is a nostalgic argument... one might as well argue that an honest and hard working blacksmith deserves to be able to earn a living wage to support a family... This ignores the changing economy -- these days people use bicycles, public transit, and cars for transport rather than horses.
Other areas of the economy are changing too. Most technological innovations exist b/c they do something cheaper or faster than the human labor alternative.
No matter how much a person may enjoy menial labor, someone else is working hard to make that work unnecessary. To fight against this trend is a doomed effort and frankly longs for the dark ages.
Other areas of the economy are changing too. Most technological innovations exist b/c they do something cheaper or faster than the human labor alternative.
No matter how much a person may enjoy menial labor, someone else is working hard to make that work unnecessary. To fight against this trend is a doomed effort and frankly longs for the dark ages.
Believe it or not, there are still working blacksmiths and horse carriage drivers. But that's beside my point. My point was that the author of the article assumes that with enough work and educational opportunity, anyone can join the meritocracy. But I believe that getting a college degree requires a certain set of talents, which I believe a sizable chunk of the population simply does not possess (I admit that I may be wrong here, and that some people might see this as offensive elitism). It's unfair that those who don't win the talent lottery should be doomed to a life in poverty. Therefore, there should be a bottom in labor compensation, and that this bottom should guarantee a certain standard of living, and that this standard of living should depend on the wealth of a society as a whole. The US has a minimum wage, but that is way to low to guarantee any sort of comfort in many parts of the country.
I think the amount of variation in innate human talent is vastly overstated. But every year that goes by in which a human fails to thrive (intellectually, etc.) he/she falls further and further behind. In America, many people are already significantly damaged by the 2nd or 3rd grade. By the time Junior High rolls around, it would take a drastic intervention to correct someone's course.
So I think it comes back to our educational system... both those who run it and those who consume it (the people). As a daycare/assimilation system it works great, which is not surprising since this is its primary purpose.
Your comment advocates a welfare state where I'd estimate the bottom 40% of earners would be on welfare. I'm not sure that such a system is good for peoples' sense of self-worth.
Instead, people should realize that the secret to success is personal empowerment, learning, etc. It's never too late to learn new skills, etc.
Many who share your view think that it's unreasonable to ask Joe Sixpack to learn anything new... that his pride at doing unneeded, outdated work is so precious that we should simply give him welfare.
As long as society's notion of a "normal" life includes working 9 to 5, watching sports and drinking beer on weekends, etc., then few will ever have the time to improve their lot in life.
Every successful person I know works like a dog and has earned what they have, at great sacrifice (skipping parties and fun activities, working weekends, late nights, etc.). The fact to be remembered is that motivation is not evenly distributed in society and that many of the people struggling are simply not all that motivated. In fact, many teach their kids to disdain learning and education, etc.
Why should anyone in the US be guaranteed comfort when there are children begging in the street in Mexico or India?
So I think it comes back to our educational system... both those who run it and those who consume it (the people). As a daycare/assimilation system it works great, which is not surprising since this is its primary purpose.
Your comment advocates a welfare state where I'd estimate the bottom 40% of earners would be on welfare. I'm not sure that such a system is good for peoples' sense of self-worth.
Instead, people should realize that the secret to success is personal empowerment, learning, etc. It's never too late to learn new skills, etc.
Many who share your view think that it's unreasonable to ask Joe Sixpack to learn anything new... that his pride at doing unneeded, outdated work is so precious that we should simply give him welfare.
As long as society's notion of a "normal" life includes working 9 to 5, watching sports and drinking beer on weekends, etc., then few will ever have the time to improve their lot in life.
Every successful person I know works like a dog and has earned what they have, at great sacrifice (skipping parties and fun activities, working weekends, late nights, etc.). The fact to be remembered is that motivation is not evenly distributed in society and that many of the people struggling are simply not all that motivated. In fact, many teach their kids to disdain learning and education, etc.
Why should anyone in the US be guaranteed comfort when there are children begging in the street in Mexico or India?
Regarding human talent, we both can't prove either standpoint, so we'll just leave it at that.
Welfare is not the only solution to this problem. If minimum wage is not enough to allow a single mother to pay for child care, then we should just offer free child care, financed by taxes. Mom still has an incentive to work for a living, but is much better off. Scandinavian countries demonstrate that this works very well.
>Why should anyone in the US be guaranteed comfort when there are children begging in the street in Mexico or India?
Because as I said, the US as a society is incredibly wealthy. It's possible with a few political tweaks to fix this, and not a single person will be noticeably worse off. There's no real reason not to fix it, except for the extraordinary greed of a few.
Welfare is not the only solution to this problem. If minimum wage is not enough to allow a single mother to pay for child care, then we should just offer free child care, financed by taxes. Mom still has an incentive to work for a living, but is much better off. Scandinavian countries demonstrate that this works very well.
>Why should anyone in the US be guaranteed comfort when there are children begging in the street in Mexico or India?
Because as I said, the US as a society is incredibly wealthy. It's possible with a few political tweaks to fix this, and not a single person will be noticeably worse off. There's no real reason not to fix it, except for the extraordinary greed of a few.
I don't disagree with anything you have said here, only unless you also advocate a drastic overhaul of our educational system your proposals would seem to be nothing other than the most cynical form of wealth redistribution.
I think the social status quo would fall within a generation or two if the structural barriers to education were removed.
Humans have a strong desire to thrive intellectually and to understand the world. The US K-12 system has done much to stifle that and train people to be obedient workers.
I think the social status quo would fall within a generation or two if the structural barriers to education were removed.
Humans have a strong desire to thrive intellectually and to understand the world. The US K-12 system has done much to stifle that and train people to be obedient workers.
As far as wealth redistribution, we've had two great successes with this in the US. The first was the Homestead Act which helped many Americans escape poverty in order to become smallholding farmers.
The second was WWII and the GI bill which constituted the greatest downward transfer of wealth in US history, and created the huge, stable, Middle Class that has survived well up until recently. The New Deal was at most just icing on the cake (and I think actually destructive to the overall trends). The wages of war, the draft, and the on-going benefits were where the real successes were.
The second was WWII and the GI bill which constituted the greatest downward transfer of wealth in US history, and created the huge, stable, Middle Class that has survived well up until recently. The New Deal was at most just icing on the cake (and I think actually destructive to the overall trends). The wages of war, the draft, and the on-going benefits were where the real successes were.
The homestead act I can agree with, but not WWII. At least, I don't think WWII really created structural improvements that wouldn't have happened on their own if we'd stayed at peace.
I didn't say structural improvements. It just took a lot of money from the wealthy and paid it to people in exchange for military service. In other words, it set back the concentration of wealth, which is now continuing apace again.
Although I agree with this:
"Why should anyone in the US be guaranteed comfort when there are children begging in the street in Mexico or India?"
I also think the course of the argument goes the wrong direction when talking about the changing economy. I think technological progress is usually over-emphasized as a driving force and class warfare underestimated (Belloc's discussion of the factors involved in the creation of the industrial revolution in England is very good and explains various puzzles such as the relationship to Protestantism that had previously baffled me).
I also agree with this:
'As long as society's notion of a "normal" life includes working 9 to 5, watching sports and drinking beer on weekends, etc., then few will ever have the time to improve their lot in life.'
The problem here is in part how poorly integrated these activities are, and how this is used to control and keep down the masses.
'Every successful person I know works like a dog and has earned what they have, at great sacrifice (skipping parties and fun activities, working weekends, late nights, etc.). The fact to be remembered is that motivation is not evenly distributed in society and that many of the people struggling are simply not all that motivated. In fact, many teach their kids to disdain learning and education, etc.'
Agreed here too. However, the most successful people I know are ones who have this integrated with family time and so family, personal, and work time are not separate buckets but rather extremes, and most of life is spent doing all three to some extent. The doctor who reads stories to his kids while being on call in case of emergency is one example. So is "I am going to work on fixing bugs in this software while you do your homework, and if you have questions, I am right here, and can answer them" is another.
I don't know any small business owner who works less than 60 hrs per week. However, I don't know many small business owners who work more than 40 hrs a week away from family.
To live is to work. And we all work better when we are in charge of our work and work as free agents, not serfs of corporations.
BTW, there's a very dark side to welfare that is rarely discussed, and that is the use of welfare as a method of class warfare against the lower and middle classes. If Walmart can pay workers less and have them get Medicaid and Section 8 housing that means we are taxing mom-and-pop businesses to essentially subsidize a large corporation's operations. This thus acts to transfer wealth not from more fortunate families to less, but from middle income families to the very wealthy.
The answer is, in my view, to:
1) Tax lease income, encouraging sale over rent 2) Encourage self-employement as a means out of poverty. This means ensuring that what welfare benefits we offer don't go away just because someone starts a business, but rather get gradually phased out. 3) Corporate income tax should have a high marginal rate, and increases in corporate equity due to off-shore holdings should be taxed at full income tax rates.
"Why should anyone in the US be guaranteed comfort when there are children begging in the street in Mexico or India?"
I also think the course of the argument goes the wrong direction when talking about the changing economy. I think technological progress is usually over-emphasized as a driving force and class warfare underestimated (Belloc's discussion of the factors involved in the creation of the industrial revolution in England is very good and explains various puzzles such as the relationship to Protestantism that had previously baffled me).
I also agree with this:
'As long as society's notion of a "normal" life includes working 9 to 5, watching sports and drinking beer on weekends, etc., then few will ever have the time to improve their lot in life.'
The problem here is in part how poorly integrated these activities are, and how this is used to control and keep down the masses.
'Every successful person I know works like a dog and has earned what they have, at great sacrifice (skipping parties and fun activities, working weekends, late nights, etc.). The fact to be remembered is that motivation is not evenly distributed in society and that many of the people struggling are simply not all that motivated. In fact, many teach their kids to disdain learning and education, etc.'
Agreed here too. However, the most successful people I know are ones who have this integrated with family time and so family, personal, and work time are not separate buckets but rather extremes, and most of life is spent doing all three to some extent. The doctor who reads stories to his kids while being on call in case of emergency is one example. So is "I am going to work on fixing bugs in this software while you do your homework, and if you have questions, I am right here, and can answer them" is another.
I don't know any small business owner who works less than 60 hrs per week. However, I don't know many small business owners who work more than 40 hrs a week away from family.
To live is to work. And we all work better when we are in charge of our work and work as free agents, not serfs of corporations.
BTW, there's a very dark side to welfare that is rarely discussed, and that is the use of welfare as a method of class warfare against the lower and middle classes. If Walmart can pay workers less and have them get Medicaid and Section 8 housing that means we are taxing mom-and-pop businesses to essentially subsidize a large corporation's operations. This thus acts to transfer wealth not from more fortunate families to less, but from middle income families to the very wealthy.
The answer is, in my view, to:
1) Tax lease income, encouraging sale over rent 2) Encourage self-employement as a means out of poverty. This means ensuring that what welfare benefits we offer don't go away just because someone starts a business, but rather get gradually phased out. 3) Corporate income tax should have a high marginal rate, and increases in corporate equity due to off-shore holdings should be taxed at full income tax rates.
I find the issue of technological change and class warfare interesting.
I think overall technological change can lead to widespread social empowerment, but the most politically entrenched workers with the loudest voices are those who are least likely to benefit from it.
On the other hand, the kid in India using a $35 tablet to learn calculus or the people starting businesses using Kickstarter are hugely empowered by it.
The main reason I mentioned technological change is just to reinforce that productive work is a moving target, for all factors of production (including labor). It's sentimental to look back fondly on the blacksmith or the wheelwright or the person who made nails by hand... just as it is to look fondly upon the economic fluke that has allowed many Americans to live well above the poverty line with virtually no skills, in spite of living amid an economy that has transferred mostly to knowledge work.
I will look into Belloc's stuff too, links?
I think overall technological change can lead to widespread social empowerment, but the most politically entrenched workers with the loudest voices are those who are least likely to benefit from it.
On the other hand, the kid in India using a $35 tablet to learn calculus or the people starting businesses using Kickstarter are hugely empowered by it.
The main reason I mentioned technological change is just to reinforce that productive work is a moving target, for all factors of production (including labor). It's sentimental to look back fondly on the blacksmith or the wheelwright or the person who made nails by hand... just as it is to look fondly upon the economic fluke that has allowed many Americans to live well above the poverty line with virtually no skills, in spite of living amid an economy that has transferred mostly to knowledge work.
I will look into Belloc's stuff too, links?
Belloc's "The Servile State" can be found at:
http://www.archive.org/details/servilestate00belluoft
Belloc's view was that usually in class warfare the wealthy will win. I don't agree with all the religious nuance, but I have to say the look at ancient and medieval history is surprisingly good from an economic perspective.
"I think overall technological change can lead to widespread social empowerment, but the most politically entrenched workers with the loudest voices are those who are least likely to benefit from it."
Maybe. I think everyone tries to use it. However, I think we are at a point now where the real power in the newer high tech approaches is the power to decentralize both decision making and production. As you say, the kid in India, or the guy in rural America who starts a small business, not the factory worker.
But this is another reason why I say that in these economic times, jobs are the problem, not the solution.
Belloc's view was that usually in class warfare the wealthy will win. I don't agree with all the religious nuance, but I have to say the look at ancient and medieval history is surprisingly good from an economic perspective.
"I think overall technological change can lead to widespread social empowerment, but the most politically entrenched workers with the loudest voices are those who are least likely to benefit from it."
Maybe. I think everyone tries to use it. However, I think we are at a point now where the real power in the newer high tech approaches is the power to decentralize both decision making and production. As you say, the kid in India, or the guy in rural America who starts a small business, not the factory worker.
But this is another reason why I say that in these economic times, jobs are the problem, not the solution.
Interesting. I downloaded the book to my books folder on dropbox for perusal in my next reading leisure session.
I think the subgroup I was trying to mention was the class who has managed to pull itself up through social organization (unions, guilds, etc.) and in the process has increased the incentive to disrupt the status quo (by making doing so more profitable). This will tend to attract disruptive technology (ubercab, khan academy, etc.)
I think the subgroup I was trying to mention was the class who has managed to pull itself up through social organization (unions, guilds, etc.) and in the process has increased the incentive to disrupt the status quo (by making doing so more profitable). This will tend to attract disruptive technology (ubercab, khan academy, etc.)
Long ago, I think I actually read the study on Sweden vs. U.S. mobility. Alas, only the first page is available now without the requisite JSTOR tolls:
http://www.jstor.org/pss/2951338
My recollection is that the authors looked at the predictive power of a father's earnings on his son's earnings, but rather than measure changes in absolute (or inflation-adjusted) earnings, they measured earnings relative to the society (Sweden or the U.S.) as a whole. In other words, if my father was in the 50th percentile for earnings, I could use their "mobility" estimate to determine my odds of making it to the 75th percentile (or down to the 25th percentile).
That doesn't seem like a useful statistic on which to make qualitative comparisons when you're talking about societies with two very differently shaped income distributions (as the authors acknowledge is very much the case with Sweden and the U.S. on the freebie first page).
Suppose the middle 60% of Swedish males earn between $25,000 and $35,000 annually. A jump from the 20th to the 80th percentile (or vice versa) in absolute terms isn't that impressive. If the income curve gets narrow enough, any impact your parents have will get lost in the noise and you'll have a "perfectly mobile" society in which everyone makes almost exactly the same amount of money. But how is that mobility?
In contrast, if the earnings difference between the 20th percentile and the 80th percentile is, as in the U.S., a factor of four+, then moving from the 20th to the 80th percentile represents dramatically more "mobility" than in the Swedish case. AFAIR, the 1997 study would treat those movements equivalently.
http://www.jstor.org/pss/2951338
My recollection is that the authors looked at the predictive power of a father's earnings on his son's earnings, but rather than measure changes in absolute (or inflation-adjusted) earnings, they measured earnings relative to the society (Sweden or the U.S.) as a whole. In other words, if my father was in the 50th percentile for earnings, I could use their "mobility" estimate to determine my odds of making it to the 75th percentile (or down to the 25th percentile).
That doesn't seem like a useful statistic on which to make qualitative comparisons when you're talking about societies with two very differently shaped income distributions (as the authors acknowledge is very much the case with Sweden and the U.S. on the freebie first page).
Suppose the middle 60% of Swedish males earn between $25,000 and $35,000 annually. A jump from the 20th to the 80th percentile (or vice versa) in absolute terms isn't that impressive. If the income curve gets narrow enough, any impact your parents have will get lost in the noise and you'll have a "perfectly mobile" society in which everyone makes almost exactly the same amount of money. But how is that mobility?
In contrast, if the earnings difference between the 20th percentile and the 80th percentile is, as in the U.S., a factor of four+, then moving from the 20th to the 80th percentile represents dramatically more "mobility" than in the Swedish case. AFAIR, the 1997 study would treat those movements equivalently.
"In fact, if the last generation is any guide, your child growing up in the top two-fifths today will have a 60 percent chance of being in the top two fifths as an adult."
Great that means that 40% of the top two-fifths will be from people who earned their way up, instead of being born into it. Tyranny of meritocracy indeed, I mean what kind of uppity lower class kids are we raising who think they can earn wealth instead of inheriting it!
Great that means that 40% of the top two-fifths will be from people who earned their way up, instead of being born into it. Tyranny of meritocracy indeed, I mean what kind of uppity lower class kids are we raising who think they can earn wealth instead of inheriting it!
While I agree that improving access to education and opportunities for all is a big part of the remedy, I do have to take a disagreement with the author's initial statement that wealth ratios aren't worth considering.
Expensive education may be one part of the gap that appears to be widening, but as wealth disparity grows, so does power disparity. Money can't buy you happiness, or even 'true' friends perhaps, but it can buy you influence and it can keep people following you. This can let the wealthy 'open' job and experience opportunities where others might not be so fortunate.
Expensive education may be one part of the gap that appears to be widening, but as wealth disparity grows, so does power disparity. Money can't buy you happiness, or even 'true' friends perhaps, but it can buy you influence and it can keep people following you. This can let the wealthy 'open' job and experience opportunities where others might not be so fortunate.
Right. Wealth has both absolute and relative terms. The poor in American today have it better in many ways than even nobility in millennia past. But there is also a relative component to wealth too. If Bill Gates and his class can pay for their children to receive personal instruction from the best tutors and at the best schools, that does price/crowd out the less wealthy. But that's because the tutors and schools will naturally seek to get more money rather than less money. I think most people would. So it's hard to know how to solve this problem short of forcing these tutors to do what others want at the point of a gun, or cloning them, etc. None of these seem very satisfying.
I pump this from time to time, but MIT's OpenCourseWare does a great job of making a fantastic education widely available. Perhaps this is a model others could adopt more widely.
I pump this from time to time, but MIT's OpenCourseWare does a great job of making a fantastic education widely available. Perhaps this is a model others could adopt more widely.
This is one of the most chilling short audio essays I've ever listened to on NPR. de Botton blasts a huge hole in the idea of pure meritrocracy.
Commentator Alain de Botton explores the darker side of a western ideal: meritocracy. http://www.npr.org/templates/story/story.php?storyId=3200029
I wish there was a transcript of this. I think he covers the basic topic in some of his books.
Commentator Alain de Botton explores the darker side of a western ideal: meritocracy. http://www.npr.org/templates/story/story.php?storyId=3200029
I wish there was a transcript of this. I think he covers the basic topic in some of his books.
Interesting listen.
The topic is pretty challenging, especially so for the left leaning where quite often the political policy related by affluent lefties is "to give people the same opportunity as me" to compete in a meritocracy.
The topic is pretty challenging, especially so for the left leaning where quite often the political policy related by affluent lefties is "to give people the same opportunity as me" to compete in a meritocracy.
"tell me why all those professors we paid millions of dollars to study economics couldn't provide a convincing rebuttal to that ideology in advance of the crash."
Because many business and economics professors, esp. the prominent ones, make the majority of their income from consulting fees and by serving on boards of large corporations.
For example Frederic Mishkin a professor at Columbia Business School and a former member of the Federal Reserve Board of Governors authored a paper titled "Financial Stability In Iceland" shortly before the countries economy imploded from a credit bubble. As it turns out he was paid $124,000 to write it by the Icelandic chamber of commerce. http://en.wikipedia.org/wiki/Frederic_Mishkin
This and many similar examples are detailed in the documentary "Inside Job", though, it isn't something you hear about in the news much if at all.
In other words the study of business and economics has been corrupted by corporate money.
Because many business and economics professors, esp. the prominent ones, make the majority of their income from consulting fees and by serving on boards of large corporations.
For example Frederic Mishkin a professor at Columbia Business School and a former member of the Federal Reserve Board of Governors authored a paper titled "Financial Stability In Iceland" shortly before the countries economy imploded from a credit bubble. As it turns out he was paid $124,000 to write it by the Icelandic chamber of commerce. http://en.wikipedia.org/wiki/Frederic_Mishkin
This and many similar examples are detailed in the documentary "Inside Job", though, it isn't something you hear about in the news much if at all.
In other words the study of business and economics has been corrupted by corporate money.
I don't think you're actually disagreeing, because I think the entire point of the piece was to highlight the discrepancy between the putatively educated meritocracy and the fact that they have in fact not produced all that much merit. I think the "Meritocracy" in the title is intended to be subtly ironic. I think you're supposed to read this and then kvetch about how the meritocracy isn't.
I could copy and paste this as a reply to a number of other people complaining about how misinformed this piece is, then going on to argue in the comment about how the meritocracy isn't. This piece is a fine bit of judo, getting a whole bunch of people who probably would otherwise be defending the dominant educational culture to condemn it, by its own standards.
I could copy and paste this as a reply to a number of other people complaining about how misinformed this piece is, then going on to argue in the comment about how the meritocracy isn't. This piece is a fine bit of judo, getting a whole bunch of people who probably would otherwise be defending the dominant educational culture to condemn it, by its own standards.
"I don't care about income inequality. I care about the absolute condition of the poor--whether they are hungry, cold, and sick. But I do not care about the gap between their incomes, and those of Warren Buffet and Bill Gates."
The entire article seems to be about income inequality.
The entire article seems to be about income inequality.
I'm unclear on just how bad meritocracy is; the author blames meritocracy for the recent economic mess, sure. And our meritocracy isn't "perfect"; it doesn't guarantee that "good" workers end up well-off, and that "bad" workers end up destitute. Everyone has a leg up (or not) from their starting circumstances, which unbalances their supposed merit.
But it's really hard to see what the comparison is. Was there more upward-mobility in the old aristocratic system? Were the leaders too stupid to make gargantuan mistakes? The article certainly doesn't have any good comparison to make, and there were certainly problems in the Good Old Days (like, say, the Great Depression), too.
The whole article looks like it's trying to pin blame somewhere, and it has enough facts to get a decent start, but it has too many holes to be convincing.
But it's really hard to see what the comparison is. Was there more upward-mobility in the old aristocratic system? Were the leaders too stupid to make gargantuan mistakes? The article certainly doesn't have any good comparison to make, and there were certainly problems in the Good Old Days (like, say, the Great Depression), too.
The whole article looks like it's trying to pin blame somewhere, and it has enough facts to get a decent start, but it has too many holes to be convincing.
"But I think that rather misses the point: shouldn't the educational meritocracy, which really is very different from the combination of WASP elites and up-from-nowhere untutored operators, have done better?"
It's unclear what definition of "meritocracy" Mz. McArdle is using.
"Don't tell me that regulators were stupid or bankers got greedy until you first explain to me why tens of thousands of very well educated people, most of them graduates of colleges and professional schools that had aggressively winnowed them based on intelligence, barely outperformed a bunch of upstart micks, third-generation coupon-clipping WASP dimwits, and central bankers who still worshipped the barbarous relic of the gold standard?"
As I suspected, she's confusing credentialed with educated and thinks that schools winnow only on intelligence.
It's unclear what definition of "meritocracy" Mz. McArdle is using.
"Don't tell me that regulators were stupid or bankers got greedy until you first explain to me why tens of thousands of very well educated people, most of them graduates of colleges and professional schools that had aggressively winnowed them based on intelligence, barely outperformed a bunch of upstart micks, third-generation coupon-clipping WASP dimwits, and central bankers who still worshipped the barbarous relic of the gold standard?"
As I suspected, she's confusing credentialed with educated and thinks that schools winnow only on intelligence.
I wonder if free education would help?
At any rate I am still more concerned with inequality than with relative mobility within quintiles. There is always going to be a larger number who stay than those who move, and the numbers here are not as bad as the author makes them seem
At any rate I am still more concerned with inequality than with relative mobility within quintiles. There is always going to be a larger number who stay than those who move, and the numbers here are not as bad as the author makes them seem
Free education generally means that there are fewer placements. In countries where university used to be free you had to excel to be accepted, so many students left school with only the opportunity to enter the trades or an apprenticeship. Once universities charged fees, they could open up to a broader range of students. This may leave us where we are now - with people with degrees and heavy loan payments but maybe it's just a transition period we have to go through, where students start to become directed more into areas that actually suit them rather than the default bachelor degree. I'm not convinced on either method and would like to see a balance in between, and better funding for apprenticeships.
Apprenticeships rock.
Actually as I am looking at expanding my business, I am actually looking to an apprenticeship/guild model for scalability rather than a traditional corporate model.
Actually as I am looking at expanding my business, I am actually looking to an apprenticeship/guild model for scalability rather than a traditional corporate model.
"Other than pure envy, it's hard to see how I could somehow be made worse off if Bill Gates' income suddenly doubled, but everything else remained the same."
This statement is enormously naive. Bill's money has to come from somewhere so the "everything else remained the same" is just not possible...
Unfortunately if people are getting much richer than other people it is necessarily at other people's expense - a reasonable approximation is to think of money like energy, which can never be created or destroyed (its not quite true) - Bill doesn't make his pile of money out of nothing leaving everything unchanged, the money he makes comes from other people's piles of money - these need not be poorer people, in fact I bet most of them are big businesses, but then they don't get their money from nothing either, and their budget decisions on how much to spend on MS software will be balanced alongside salaries etc... at any rate, that money moves around and naively, if you made too much you would quite literally be making everyone else poor. I don't have access to huge amounts of data needed to workout how this scales in reality and if Bill is anywhere near the point where he is almost certainly making everyone poorer, but it is a trivial consequence of the nature of money.
This is the nature of capitalism - if every one does what is in their best interest, some talented/lucky/greedy people will end up much better off with zero incentive to improve the situation for anyone else. Thankfully capitalism is merely an ideal and nobody follows it that blindly - Bill at least tries to give some of his money away to good causes lately...
This statement is enormously naive. Bill's money has to come from somewhere so the "everything else remained the same" is just not possible...
Unfortunately if people are getting much richer than other people it is necessarily at other people's expense - a reasonable approximation is to think of money like energy, which can never be created or destroyed (its not quite true) - Bill doesn't make his pile of money out of nothing leaving everything unchanged, the money he makes comes from other people's piles of money - these need not be poorer people, in fact I bet most of them are big businesses, but then they don't get their money from nothing either, and their budget decisions on how much to spend on MS software will be balanced alongside salaries etc... at any rate, that money moves around and naively, if you made too much you would quite literally be making everyone else poor. I don't have access to huge amounts of data needed to workout how this scales in reality and if Bill is anywhere near the point where he is almost certainly making everyone poorer, but it is a trivial consequence of the nature of money.
This is the nature of capitalism - if every one does what is in their best interest, some talented/lucky/greedy people will end up much better off with zero incentive to improve the situation for anyone else. Thankfully capitalism is merely an ideal and nobody follows it that blindly - Bill at least tries to give some of his money away to good causes lately...
This statement is enormously naive. Bill's money has to come from somewhere so the "everything else remained the same" is just not possible...
Only if you see money as a fixed quantity of dollars. We're really talking about purchasing power here.
Bill Gates invented a way to make anyone who used his products more efficient. (You can do a lot more with Windows than older OSes.)
Since everyone is more efficient, your $1 can buy more. Of course, you will probably choose to give some of your money to Bill Gates, but since the rest is worth more it's a fair trade. (Also, no one can force you to give money to Bill. If you think it's not a fair trade, don't buy Windows; ignoring monopoly power here.)
In formal terms, the economy is not a zero-sum game. Your assertion that "money is like energy, which can never be created or destroyed" is incorrect, if we're talking about the purchasing power of money and not its numerical face value.
Only if you see money as a fixed quantity of dollars. We're really talking about purchasing power here.
Bill Gates invented a way to make anyone who used his products more efficient. (You can do a lot more with Windows than older OSes.)
Since everyone is more efficient, your $1 can buy more. Of course, you will probably choose to give some of your money to Bill Gates, but since the rest is worth more it's a fair trade. (Also, no one can force you to give money to Bill. If you think it's not a fair trade, don't buy Windows; ignoring monopoly power here.)
In formal terms, the economy is not a zero-sum game. Your assertion that "money is like energy, which can never be created or destroyed" is incorrect, if we're talking about the purchasing power of money and not its numerical face value.
You are completely right that what I was trying to talk about was the purchasing power of money - I did try to imply that there are reasons why money can be created and destroyed (this is true for the numerical case as well). It is a valid point that things can depreciate in value with improvement in e.g. manufacturing process, but I think that is quite independent of people making money - Bill Gates is an interesting example because Microsoft have changed the world in that way. A lot of the very rich do not make such contributions so I do not see how their amassing wealth can do anything other than to take away from others.
It seems very fundamental - maybe I miss something, but if you get money (spending power, whatever) it comes from other people. Therefore people can't get richer without making other people poorer.
It seems very fundamental - maybe I miss something, but if you get money (spending power, whatever) it comes from other people. Therefore people can't get richer without making other people poorer.
Is there historical evidence of the deflationary power of operating systems?
Windows has been on the market since 1985. If we're so much more efficient using Windows than not, one would expect a dollar to be worth more today than back in the old, inefficent days of... whatever we had before.
However... in 1985 US$1.00 had the same buying power as US$2.08 does in 2011.
Average annual inflation over this period was 2.86%.
Windows has been on the market since 1985. If we're so much more efficient using Windows than not, one would expect a dollar to be worth more today than back in the old, inefficent days of... whatever we had before.
However... in 1985 US$1.00 had the same buying power as US$2.08 does in 2011.
Average annual inflation over this period was 2.86%.
Sure, the measure you're looking for is GDP per capita:
http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&#...
Inflation is a separate phenomenon that occurs through time and can be influenced by the money supply. The government encourages inflation to encourage investment (i.e. prevent people from hoarding cash) and for various other reasons.
I'm only looking at a snapshot: imagine you work for a year in 1985 and spend all your money the same year. Can you buy more or less than if you work for the same amount of time (with the same skills etc) in 2011, and spend all your money the same year? Turns out you can buy much more in 2011.
If you really want to look at the "through time" case, calculate what your $1.00 in 1985 would be worth if you invested it and what it could buy in each case.
http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&#...
Inflation is a separate phenomenon that occurs through time and can be influenced by the money supply. The government encourages inflation to encourage investment (i.e. prevent people from hoarding cash) and for various other reasons.
I'm only looking at a snapshot: imagine you work for a year in 1985 and spend all your money the same year. Can you buy more or less than if you work for the same amount of time (with the same skills etc) in 2011, and spend all your money the same year? Turns out you can buy much more in 2011.
If you really want to look at the "through time" case, calculate what your $1.00 in 1985 would be worth if you invested it and what it could buy in each case.
There is more to this discussion (for and against) than this, but I think you may have missed the point.
Money is not really a resource in and of itself. It's kind of a 'point system' we use to allocate finite resources.
I do think that this is a very important concept that is very difficult for many people to grasp.
If you took 50% of each person's money on the planet and burned it in a fire prices would (eventually) drop by 50% on most products.
If everyone has less money, they buy less things, and so there is a surplus of things. This causes the price of things to drop so that an equilibrium is reached. It will also (ideally) cause a drop in wages, etc so that things are still distributed.
The purchasing power of your money depends on the amount of resources to be allocated and the amount of money the people that want the resource are willing to spend.
So if banks hoard money, it really does not effect your purchasing power negatively until someone tries to spend that money on resources you want.
This is the basic concept, it doesn't mean that there are no consequences to these actions. If you hoard everyone's money (same as burning, but it can come back) you basically get deflation.
Deflation is bad because things like salaries don't scale down easily. People get upset when you dock their pay and most companies would rather just cut hours and lay-off employees rather than upset the entire company.
This is bad because the company is now over-paying (and over-working) workers for their services and there are lots of unemployed that can't find jobs.
So these changes don't happen as easy as the simplified example above, but they are real and very significant effects that need to be taken into account.
Money is not really a resource in and of itself. It's kind of a 'point system' we use to allocate finite resources.
I do think that this is a very important concept that is very difficult for many people to grasp.
If you took 50% of each person's money on the planet and burned it in a fire prices would (eventually) drop by 50% on most products.
If everyone has less money, they buy less things, and so there is a surplus of things. This causes the price of things to drop so that an equilibrium is reached. It will also (ideally) cause a drop in wages, etc so that things are still distributed.
The purchasing power of your money depends on the amount of resources to be allocated and the amount of money the people that want the resource are willing to spend.
So if banks hoard money, it really does not effect your purchasing power negatively until someone tries to spend that money on resources you want.
This is the basic concept, it doesn't mean that there are no consequences to these actions. If you hoard everyone's money (same as burning, but it can come back) you basically get deflation.
Deflation is bad because things like salaries don't scale down easily. People get upset when you dock their pay and most companies would rather just cut hours and lay-off employees rather than upset the entire company.
This is bad because the company is now over-paying (and over-working) workers for their services and there are lots of unemployed that can't find jobs.
So these changes don't happen as easy as the simplified example above, but they are real and very significant effects that need to be taken into account.
This is a good point, supply and demand affects prices, but I /think/ you have made the assumption that the goods bought by the wealthy do not overlap the good bought by the poor.
Housing is the classic example, where the rich have pushed the pricing up so high that even moderately wealthy people can't afford to buy houses outright without multiple years worth of salary. The result is a shift towards renting rather than mortgaging, which mostly gives even more money to those people who drove the prices up to begin with...
Housing is the classic example, where the rich have pushed the pricing up so high that even moderately wealthy people can't afford to buy houses outright without multiple years worth of salary. The result is a shift towards renting rather than mortgaging, which mostly gives even more money to those people who drove the prices up to begin with...
He's creating value of course, and if this hadn't been downvoted to the bottom of the page you'd have gotten a lot more 'economics isn't zero-sum' type replies. Politics, that is influence in politics, is zero-sum however, and wealth is a huge factor, perhaps the biggest factor, in determining that influence. So while economics isn't zero-sum, it gives you a somewhat proportional stake in a game that is, which is where the problem with wealth disparity lies.
Another very good essay, quite cognate. "Lost in the Meritocracy," http://www.theatlantic.com/magazine/archive/2005/01/lost-in-..., by Walter Kirn a few years back.
Any discussion of so-called "meritocracy" requires that we specify a timeframe.
Short-frame meritocracy means that resources are allocated to people who will do the most with them now. Long-frame means that resources are given to people who will produce the most with them in the future (i.e. we invest in people whose short-term performance may be mediocre). Short-frame meritocracy is pragmatic and efficient in the context of a static time-frame, but doesn't produce growth or social justice in the long run. Resources (VC funding, jobs, educational opportunities) are allocated to those who don't need them. Long-frame meritocracy is fairer and more productive in the long run but much harder to implement because it requires a certain foresight.
Most business decisions are made in the context of short-frame meritocracy. People aren't hired based on what they might become in 5 years, but based on what they're likely to be doing in 3 months. Schools are supposed to take more of a long-term outlook, but they have no real incentive to do so, and plenty of incentives (alumni and parental contributions) to kowtow to society at large and rubber-stamp the preselected winners.
The truth is that iterated short-frame meritocracy is not much better than oligarchy. It's oligarchy with a tiny Brownian motion term thrown in, and the annealing rate is always calibrated so as not to threaten the overall shape of society.
For a historic analogue, one might consider that it was very easy for the peasants of medieval Europe to believe that the nobility were of superior "merit". Merit at the time was physical might (and this wasn't unreasonable, since it also conferred the ability to protect others). First, the nobles were better nourished and much larger. Second, they knew how to use weapons, because they were trained. Third, they could ride horses. Feudal Europe was, fundamentally, a meritocracy (of the short-frame variety) for some definition of "merit".
Short-frame meritocracy means that resources are allocated to people who will do the most with them now. Long-frame means that resources are given to people who will produce the most with them in the future (i.e. we invest in people whose short-term performance may be mediocre). Short-frame meritocracy is pragmatic and efficient in the context of a static time-frame, but doesn't produce growth or social justice in the long run. Resources (VC funding, jobs, educational opportunities) are allocated to those who don't need them. Long-frame meritocracy is fairer and more productive in the long run but much harder to implement because it requires a certain foresight.
Most business decisions are made in the context of short-frame meritocracy. People aren't hired based on what they might become in 5 years, but based on what they're likely to be doing in 3 months. Schools are supposed to take more of a long-term outlook, but they have no real incentive to do so, and plenty of incentives (alumni and parental contributions) to kowtow to society at large and rubber-stamp the preselected winners.
The truth is that iterated short-frame meritocracy is not much better than oligarchy. It's oligarchy with a tiny Brownian motion term thrown in, and the annealing rate is always calibrated so as not to threaten the overall shape of society.
For a historic analogue, one might consider that it was very easy for the peasants of medieval Europe to believe that the nobility were of superior "merit". Merit at the time was physical might (and this wasn't unreasonable, since it also conferred the ability to protect others). First, the nobles were better nourished and much larger. Second, they knew how to use weapons, because they were trained. Third, they could ride horses. Feudal Europe was, fundamentally, a meritocracy (of the short-frame variety) for some definition of "merit".
Other than pure envy, it's hard to see how I could somehow be made worse off if Bill Gates' income suddenly doubled, but everything else remained the same.
Nobody reasonable begrudges anyone who is wealthy for creating commensurate value. The issue is with wealth that accumulates to those who don't, like CEOs who run their companies into the ground or bankers who crash the entire economy.
If you're creating value, the wealth society has given you is probably a bargain for society; if you're not, it's an inefficient allocation of resources, a symptom of a systemic fault that hurts everyone else.
It's actually rather more worrying if what they're giving their children is a strong education and an absolutely ferocious work ethic. An aristocracy that simply bequeaths money and social position to its children will eventually fall. And aristocracy that bequeaths the actual skills required to earn more money than everyone else is self perpetuating.
Strong education + ferocious work ethic + skills to earn money seems like a weird definition of meritocracy to me, especially given that later in the article we acknowledge that this combo doesn't actually seem to be getting good results. A strong education does not necessarily imply you know how to apply it, and there's certainly a long history of people without that advantage succeeding. The dirty secret of working long hours is that much of it is either for show or spent doing shit work. And the 'actual skills' in question are still very frequently having the right connections.
Don't tell me it got hostage to the wrong ideology--tell me why all those professors we paid millions of dollars to study economics couldn't provide a convincing rebuttal to that ideology in advance of the crash. Don't tell me that regulators were stupid or bankers got greedy until you first explain to me why tens of thousands of very well educated people, most of them graduates of colleges and professional schools that had aggressively winnowed them based on intelligence, barely outperformed a bunch of upstart micks, third-generation coupon-clipping WASP dimwits, and central bankers who still worshipped the barbarous relic of the gold standard?
I... what?