Education

Institutions will try to preserve the problem to which they are the solution.” ~ Clay Shirky

You know the slavery Kool-Aid is working well when those who are oppressed petition their oppressors for more of that which helps keep them oppressed.

For instance, public education is a tool that was designed–specifically and directly–as a means of controlling the hoi polloi.  The educational system of compulsory public education championed by Horace Mann, chock-full of multiple-choice testing perfected by Frederick J. Kelly, feeding into statistical models based upon the work of (eugenicist) Sir Francis Galton, was (and is) designed to fulfill the need for employees who are primed and ready to inhabit factories where efficiency can be measured in ways developed by Frederick Winslow Taylor. (The fact that so few of such factories currently exist in America should also be telling, but that’s a different discussion.) Mann believed “universal public education was the best way to turn the nation’s unruly children into disciplined, judicious republican citizens.” The whole thing was designed to produce a seething throng of people ready to take orders, stand in line, ask few questions, and install bumpers all day–accepting the interminable boredom of such a life–while their over-lords made a ton of money.  Free and compulsory public education was never intended to create inquisitive, risk-taking, leaders. Or entrepreneurs and/or business owners.  Or frankly, owners of anything! Yet, people clamor that “education is a right” and “we need more funding for our schools” despite the inescapable fact that these same crap holes are doing their best at producing children incapable of independent thought and unable to read a book (or a blueprint), solve a simple mathematics problem, or devise a new strategy.  It’s damned sad, really.

[Keep reading…]

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You have heard of Pascal’s wager and the atheist wager.

Based on the comments from my last post and this Reddit thread, I have formulated two new wagers.

The first is the typical sky-is-falling-bernanke-will-eat-your-babies-carbs-kill-unicorns-i-hate-the-verizon-can-you-hear-me-now-guy-and-flouride-is-destroying-our-precious-bodily-fluids-!!!!111oneone.

If you believe a financial apocalypse will occur and/or there is a “revolution” that somehow magically “restarts” civilization, this is your wager:

Financial collapse happens Collapse does not happen
Belief You are a Pyrrhic King until the division of labor breaks down and you resort to cannibalism; you can’t buy anything with your gold because no one makes anything — and those that could, you just ate. You physically look like a disheveled beach bum and Google cache makes your crankery permanent  (-1 Reproduction sweepstakes)
Disbelief You dine and die with the lot of them, first eating the gizzards of sloth-like Pyrrhic Kings whose gold cache(s) are inedible and weigh them down. You are the life of the party, people enjoy being with you in part because you do not smell or look like a caveman (+1 Reproduction sweepstakes)

The second wager below is an illustrative rebuttal to the above self-delusional, self-defeating, borderline-anti-capitalistic, eschatological fantasy.  The hero of this story is the entrepreneur who tries either way.

Go get ‘em tiger:

Entrepreneurship creates wealth — rain or shine Entrepreneurship mysteriously fails to create wealth
Belief You retire comfortably after creating multiple streams of income and do not need to peddle affiliate newsletters, colloidal silver recipes and Truther conspiracies to stay alive. Your CV looks good and you know what not to do in the future.  Civilization collapses because economic calculation – coordinated by markets and entrepreneurs – is mysteriously impossible.
Disbelief Other entrepreneurs around you generate wealth, creating a wealthier, healthier and cleaner world. The positive spillover effect pulls you up from your living-in-the-basement-bootstraps. You have no job skills, no people skills and no assets.  No one wants to reproduce with you.  But it does not matter – entrepreneurs and markets are mysteriously unable to calculate – and thus civilization cannot grow from beyond a Hobbesian stone age.

The point of this carnal, non-supernatural exercise is clear, that no matter what happens,there is no net negative consequences for promoting entrepreneurship or partaking in it yourself.

To use a sport analogy, why be a fair weather capitalist?

If capitalism and markets can outproduce state consumption, why not promote libertarianism and entrepreneurship?  Why wait around until “just the perfect political atmosphere” is created?  Why wait until there is no more government debt?  Why wait until the stars are aligned just right?  Why wait until after a collapse or after a “revolution?” [Keep reading…]

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Quick quiz, name the country:

-  whose farms produce 20% of the world’s calories
-  who is the leading semiconductor manufacturer and exporter (and this country’s top export industry)
-  whose manufacturing base is the world’s largest
-  who is the largest recipient of FDI and the second largest exporter
-  whose entertainment and culture are pirated, siphoned, copied and continuously consumed globally (go to kat.ph/movies, how many of the top 100 are made in China?)
-  whose labor participation rate is at a 30 year low yet still produces the same amount of economic activity as ever before

Why are some misanthropic analysts throwing the baby out with the bath water when it is clear that the US has not collapsed or will collapse in the near future?

For example, not to single this reader out, but the comment from Mangix in yesterday’s blog post touches on a number of myth’s that are currently popular in some corners of the blogsphere:

so if china doesn’t present a particularly strong growth opportunity, what does?

According to Jim Rogers, capital has slowly been moving from the west to the east and since you can’t have capitalism without capital…

It boggles the mind that anything in the west would have any growth opportunity since most western governments are loaded with billions and trillions dollars of debt.

There are at least three problems with this:

1) Jim Rogers may have been correct with his investment strategies in commodities and agriculture, but his calls and timing regarding East Asia, especially China, have been wholly incorrect.  If someone is continually incorrect with their predictions, why continue listening to them and taking their advice in that domain?

No one listens to the Millerites or Harold Camping anymore, so why pay heed to Rogers & Co.?  Because it feels good?  Perhaps you are an apocaholic.

2) China has strict capital controls that prevent capital from flowing East to West.  If these were relaxed, domestic savers would now have alternatives to park their funds.  Currently Chinese savers have few choices: place the funds in state-owned banks whose repressed interest rates sit below CPI and/or purchase investment properties and hope to rent them out (though many of these properties remain dormant for years).  Also, look at China’s FDI.  As an investor why would you risk sending your capital to a country whose means of production is owned by the state?

3)  Presidents, the Supreme Court, drones, OWS, Tea Partiers, carbs, conspiracies, chupacabras and autotune are all easy scapegoats.  But it is also your responsibility as a potential entrepreneur to think of new growth opportunities in whichever country you live in (regardless of “East” or “West”).   Sure 56% of start-ups fail in their first 5 years, sure you might dislike the political environment in whatever domicile you live in, but there are probably still opportunities if you are creative.  Stop blaming the state, stop blaming political parties and “gridlock,” you alone can invent the future and become so rich that tax rates just make you blush.

Mark DeWeaver, who I interviewed here, has found opportunities in the most unlikeliest of places: Iraq.  Here is the official webpage of the Iraq Stock Exchange.  Here is a wiki entry about it.  Here is a story about it on Bloomberg (which is still blocked here in China).

One last note

Just because there have been riots in Greece and Spain in the past year, it does not follow that there will be a future, global societal collapse such as those continuously prophesied by doomsday radio-hosts and the hyperbolic (sic) blogosphere… who make a living off of preaching gloom.

Nor does it follow from such a collapse, that some wise libertarian-minded order will rise from the ashes.  This is a weird teenage eschatological fantasy.  Not once in history have “the masses” - hoi polloi – become instantly enlightened with agorism and libertarian thought following a “collapse.”   In fact, the last time a grand civilization collapsed we had 1000 years of Dark Ages.  Brutish and miserable.  Why would anyone want that to happen again?

And there is little evidence to suggest that gold/silver owners would be kings.  It is all a non sequitur.  More than likely, they would be the first ones <insert morbid death>.  Plus, if you dislike your USD so much, feel free to donate them to TLS.

See also: cryptography realists by XKCD.

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Economist Robert Gordon recently uploaded an NBER working paper regarding US economic growth that Mark DeWeaver recently passed to me.  Gordon makes the case that there are a number of headwinds (six by his count) that will prevent the US from growing more than one percent over the foreseeable future.

While I am bearish in some respects, I do not find any of the headwinds presented convincing.  In fact as I explain below, I find most of them simply non-issues and that other unmentioned policies to be much larger culprits in stymieing economic growth.

At the beginning, Gordon notes that this paper is an exercise in what-ifs.  Key to his point is, what-if the financial crisis did not occur after 2007 — what is the best-in-case growth trajectory for the US sans the financial correction?

[Keep reading…]

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For roughly three years I had the opportunity to live and work at two colleges out here in China.  I could describe any number of observations but one that sticks out at this time is the role the Communist Party plays in curriculum.

While the days of the Little Red Book (Mao zhuxi yulu) and cult of personality may officially be in the past, the Party still maintains control over what is and is not taught in classes.

For example, at both colleges I taught at, each department had both a nominal civilian leader as well as a de facto  Party leader.  While I had little daily interaction with Party leaders (I did meet them several times a semester at faculty dinners and they were actually very friendly to me — gan bei!), this form of governance  results in both direct overt censorship and self-censorship via “chilling effects.”

And because the faculty was limited to the Party approved curriculum, this hampered the instructors ability to inject new, different and simply foreign ideas into the classroom.  Thus you cannot foster creativity in a classroom without first dealing with the elephant in the room — the entity whose presence currently engenders the status quo.

The WSJ recently published a report noting how new Chinese graduates are having a difficult time finding jobs in part because of a skillset mismatch between what they learned in college and what hiring firms currently demand.

Before quoting the paper, I wanted to share one additional anecdote that involves this skillset mismatch.  While it may be hard to believe, but I never once in all of my teaching out here have espoused my personal opinions about libertarianism to the student body.  Not only do I think it is unprofessional to do so but I think it is short sighted (e.g., I would immediately lose my job and be deported) — and would accomplish nothing because there is no legal opposition group to rally around.  Thus martyrdom for laowai (which I do not encourage anyways) is self-defeating.

With that said, each semester there were always a number of students that would for better and for worse share their thoughts about the material they were studying in other classes.  And a handful of students, those with cajones, would even mention the material by name:  Marx and Mao.

You see, like many Western colleges, Chinese students are required to take specific courses each semester — with very few electives being offered (and none sometimes offered at all).  In addition to studying subjects like Chinese and English, all students (at the colleges I taught at and most others on the mainland) require that their students take several courses on the literature and philosophy of Marx and Mao.

And while they may have been sent on a fishing expedition to get their laowai instructor to divulge (my) personal opinions, several students each semester — those with cajones (because you could be publicly reprimanded for it) — would verbally complain about having to study the works of Marx and Mao.  Or in the words of one student I had two years ago, “if it doesn’t work in practice what good is learning an [anachronistic] theory semester after semester?  How will this help us get a job?” [He tried to say anachronistic but it didn't come out that way]

So while the North American blogosphere might complain about the futility and practicality of Underwater Basket Weaving or Virtual Reality Gender Studies, the fact that 6 million Chinese graduated this past year being indoctrinated with Marx and Mao should give First World bloggers a moment of solace and perspective.

Now back to the comment my student said two years ago, how will this help them find a job?  To quote the WSJ, it does not:

“High-end jobs that should have been produced by industrialization, including research, marketing and accounting etc., have been left in the West,” said Chen Yuyu, associate professor at Peking University’s Guanghua School of Management. Referencing the trade name of Hon Hai Precision Industry Co.,the Taiwan-based company that makes gadgets for Apple Inc. and others in Chinese factories, he said, “We only have assembly lines in Foxconns.”

Solving the problem is complex, involving a gradual overhaul of China’s education system as well as efforts to add more service-sector jobs. China’s Ministry of Education in 2010 unveiled new guidelines pressing universities to shift away from their traditional focus on increasing enrollment. It is also experimenting with giving faculty greater say over curriculum and school operations, though universities remain tightly controlled by the Communist Party.

Oops.  By directly and indirectly interfering with curriculum, the Party planners have unintentionally outsource — re-sourced — high skilled jobs to the developed world (see also tangentially labor arbitrage).  This is not to say that there are not opportunities for say software programmers (I personally have about 10 business Chinese students at this time who work for a very large American semiconductor company as chipset and driver programmers in Shanghai) — but this is the exception rather than the rule.

And as the same WSJ article notes those graduates that do find jobs are not making big yuan:

A survey of more than 6,000 new graduates conducted last year by Tsinghua University in Beijing said that entry-level salaries of 69% of college graduates are lower than those of the migrant workers who come from the countryside to man Chinese factories, a figure that government statistics currently put at about 2,200 yuan ($345) a month. Graduates from lower-level universities make an average of only 1,903 yuan a month, it said.

Thus the next time you hear someone from the the Professional Protesting class such as the Occupy Wall Street movement complain about making a mere $10 an hour at Walmart, kindly explain to them that college graduates in the worlds 2nd largest economy make less than $3 an hour despite increasingly higher costs of living — which is another anecdote I can vouch for (seeing as hundreds of my former students have now graduated and began their sobering careers).

One last note

Chinese students wishing to further their education via graduate school on the mainland are required to take another lengthy entrance examination (akin to the original gaokao) in which a students knowledge of Marx and Mao are again tested.  A foreign colleague of mine has a Chinese wife who bitterly complained about having to take those portions of the test simply to apply to a grad program in translation and interpretation.  Several of her other, talented friends opted out and instead used guanxi to get government jobs.

Which brings me to this slight twist of fortunes: do you know what the #1 desirable job is now in China?  According to a recent survey from ChinaHR: working for the government — for the old fashioned Iron Rice bowl (tie fan wan) once again.

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