New School Economic Review

Advice to young economists… zzzz

by Benjamin on October 23, 2011

A new video on the INET webpage promises ‘advice to young economists‘ but it’s not exactly awe-inspiring stuff (despite the star cast of the video). Best of the lot is probable INET director Rob Johnson who (paraphrasing Richard Hamming or Johnny Bunko) says to focus on important problems, because you only have so much time on earth and you should look at the big questions.

Beyond that John Kaye says to look at how people act, not how we think they should act – despite, as he says, the things he has been teaching over the last many years. Joe Stiglitz says to look at solving the problems of the developing world, Ian Goldin wants a toolbox and Anatole Kaletsky says these are exciting times to study economics. So yeah, despite the amount of interesting things these people usually have to say about economics, there’s not a lot to take away here. The cruel twist is perhaps Rob Johnson’s comment that he would give this advice to a ‘rising star in economics today’ … Of course, said rising star would probably not be coming with your radical or different ideas.

I think Deirdre McCloskey’s letter to a graduate student is a better time to spend five minutes, so let me leave you with her closing sentiment:

Please, please, my dear, be brave, and remake our splendid subject, the intelligent student of prudence, by bringing it back to science. I’ll hire you, if I can. And you’ll have a worthwhile life in science.

Adam Smith on universities

by Benjamin on November 1, 2010

I just read this and had to share it. It seems that universities haven’t changed radically for a good couple of centuries if Adam Smith’s writings in the Wealth of Nations are anything to go by:

The discipline of colleges and universities is in general contrived, not for the benefit of the students, but for the interest, or more properly speaking, for the ease of the masters. (Smith, 1776: V.i.f.15)

If nothing else, any suggestion of university curriculum change can now be prefaced by an Adam Smith quote.

Stop your children going to school & Free Trade

by Benjamin on May 10, 2010

This is the analogy Ha-Joon Chang presents in his relatively new book, Bad Samaritans, to promote free trade and open competition for developing nations. I think it’s a nice one, so thought I would share it:

“I have a six-year-old son. His name is Jin-Gyu. He lives off me, yet he is quite capable of making a living. I pay for his lodging, food, education and health care. But millions of children of his age already have jobs…

…Working might do Jin-Gyu’s character a world of good. Right now he lives in an economic bubble with no sense of the value of money. He has zero appreciation of the efforts his mother and I make on his behalf, subsidizing his idle existence and cocooning him from harsh reality. He is over-protected and needs to be exposed to competition, so that he can become a more productive person. Thinking about it, the more competition he is exposed to and the sooner this is done, the better it will be for his future development. It will whip him into a mentality that is ready for hard work. I should make him quit school and get a job. Perhaps I could move to a country where child labour is still tolerated, if not legal, to give him more choice in employment.”

I can hear you say I must be mad. Myopic. Cruel. You tell me that I need to protect and nurture the child. If I drive Jin-Gyu into the labour market at the age of six, he may become a savvy shoeshine boy or even a prosperous street hawker, but he will never become a brain surgeon or a nuclear physicist – that would require at least another dozen years of my protection and investment. You argue that, even from a purely materialistic viewpoint, I would be wiser to invest in my son’s education than gloat over the money I save by not sending him to school. After all, if I were right, Oliver Twist would have been better of pick-pocketing for Fagin, rather than being rescued by the misguided Good Samaritan Mr. Brownlow.” (Chang 2008: 65-6)

Therefore the Bad Samaritan in Chang’s title. He argues that free-trade policy-makers may mean well, through an incorrect understanding of their own history, but end up hurting developing countries through the policies they so assiduously pursue. Updating, and perhaps going further than his last book on the topic, Kicking away the Ladder (or “the purple one?” as a friend of mine put it yesterday), this books makes the argument in more detail that there is no reason for economists to recommend trade-liberalisation on the ground that it has always worked. In fact it looks as if most economic growth has coincided with periods of protectionism and infant industry protection. Everyone wants to be a brain surgeon it seems.

Don’t get a Bachelors if you discount by 6-7%

by Benjamin on August 8, 2009

I have today discovered that my discount factor of future income is less than 6-7%, because I would tell my kids to do their homework and stay in school… If I was to discount future income by more than 6.56% I would not send my daughter to do a B.A., but rather would put her into the maximum allowable full-time work under New York State labour laws from the day she starts school, and let her fail after 9th grade. Her discounted income from the two activities equal out at the 6.56% discount rate. Similarly, due to gender differences in U.S. median wages, my son shouldn’t try to get an undergrad degree if my discount rate is more than 7.95%. While a Masters degree increases the discount rates, a Ph.D. is not at all desirable for the boys out there (anything above 7.2% rate equalises the return with dropping out at 9th grade), while a masters degree or Ph.D. is almost the same for girls (7.1% and 7.08% respectively).

If my child is lazy – the genetics factor works against me here – and therefore wont work full-time during their school years, my discount of the future would have to be considerably higher for allowing them to fail school. In fact they will be encouraged to get some form of education, as the BA requires a whopping 14.86% discount of the future for boys, and 13.61% for girls to give the same return as dropping out. If my discount rate was a bit lower, say 10.66% (boys) or 11.1% (girls), I’d discourage the Ph.D., but still go for the Masters…

This is either a fun example of why discounting isn’t such a great idea for long term projects; or it’s an example of the governments belief in the rational behaviour when they instituted 12 years of compulsory schooling – although the NY legislative forgot about it when they set up the child labor laws of the State.  Below is the full table of discount rates which would equal out a degree holders gross 2004 median income and years in school.

I could play with the data to get net rates of pay, change my assumption of retiring at 64, get regional specifics etc, but I just wanted to make this point, and happily share my excel calculations, sources and data-set here, so you can play with it. Beware the Long-term discounter…

Educating educators

by Benjamin on May 11, 2009

A topic close to my heart is the quality of teaching in universities, or sometimes the lack of it. A good lecturer inspires us while a bad lecturer can truly kill the wish to study any subject. In this sense it baffles me that we do not teach ‘presentations & teaching’ to graduate students, or at least to Ph.D. Students. Even the undergraduates could benefit from such a subject.

Creating interesting and good presentations is a skill which people retain for life. The ability to pitch a project to investors, present a technical subject or convince 100 undergrads of a theoretical idea all fall under the same heading of ‘presentation’. So why don’t we focus on doing more about it in higher education?

I suspect part of the answer lies with the fact that the academics who actually put on a really good lecture, don’t know how to teach that skill to others. When I say “Really Good” I am talking about the stuff that Al Gore does in his environmental talks, I am talking about Steve Jobs MacWorld Keynote Speeches, I am thinking of documentaries like Planet Earth and adverts which resonate and stay with us, like this 2006 Argentinian election ad. They are all memorable, interesting and informs the audience, much like the “Lost Generation” clip below, inspired by the Election Advert:

As lecturers and Teachers we should be inspirational. So I think that we in academia can learn a lot from people who give good presentations, and we can use it to our benefit in lectures. I am not suggesting that technical subjects should become cartoonish or silly entertainment, what I am suggesting is that lectures can be delivered (regardless of the topic) in interesting ways which motivates students, and not as repetitions of the text-book, (which students will read without you anyway). Not every talk needs slides, and not every talk needs problem solving, the issue is to know when each tool is appropriate as an interested audience is always key.

Some of my best lectures were on Gerrard Debreu’s Theory of Value (free here), a book I would recommend to no-one, but which was taught in a manner that made the topic and its author come alive. For those in the know, Debreu’s book is anything but fun, so if there is hope for that, imagine what can be done with exciting subjects like the development of whole nations or the political intrigue of growth policies? 

So what can be done? Can we teach people to do good presentations, not meaning 1 slide, 7 bullet points, 7 words, but something you could get on a stage with (a lecture hall is a stage) and interest your students – or friends? – with for two hours. (I invited a friend of mine to a lecture I gave after having harped on about teaching at home, and must admit I was a lot more nervous about her [educated] reaction to my presentation than my undergrads’ – I recommend it, it’s a good experiment in self-improvement / flagelation). I think teaching ‘presentation skills’ can be done, but I do not think that we are properly equipped to address the issue as academics yet. Simply because we haven’t been taught anything about doing good presentations or good lectures ourselves. For us it was assumed that we would catch on to good practice (or more likely, avoid the worst practice) as we sat through conferences, lectures and seminar talks. Osmosis, however, can only do so much, and there’s a lot to do learn before we can teach the next generation how to take to the stage in the world around us. Personally I am reading much more, and have been contributing to the British Economics Networks series on their ‘New Lecturers Workshop’ where I’ve just finished a quick 2k article on undergrad teaching [yup, shameless self-promotion, you spotted it], with some videos and references to things which I feel have impacted my own teaching in the last six months, It’s a long road ahead, but hey, it’s been a lot of fun so far.

Graduate education is rubbish

by Benjamin on April 28, 2009

At least that’s what Dr. Mark Taylor is arguing in this New York Times op-ed. He provocatively opens with the statement that,

Graduate education is the Detroit of higher learning. Most graduate programs in American universities produce a product for which there is no market (candidates for teaching positions that do not exist) and develop skills for which there is diminishing demand (research in subfields within subfields and publication in journals read by no one other than a few like-minded colleagues), all at a rapidly rising cost (sometimes well over $100,000 in student loans).

And yes, he raises a lot of very good points, some of which I agree with, others which I do not. I would echo his sentiment that often graduate (and undergraduate students) are not taught the tools they need to participate in the job market – we are not even taught how to lecture, and neither were our lecturers for that matter. We are underpaid and cheaper than hiring staff for which there is always a poor demand, and as specialisation is the order of the day “research and publication become more and more about less and less”, but Taylor has a list of solutions:

1. Re-think departments and organise both the undergrad and graduate curriculum around cross-disciplinary issues. 2. abolish departments for problem solving oriented programs focussing on an overarching topic; Water, oil, faith, unemployment, the middle east. 3. More cross institutional collaboration, and interactive teaching which will cut back staff requirement.  4. Drop the undergrad and graduate dissertation for interactive projects and problem solving. 5.  Expand range of professional options taught. 6.  Impose mandatory retirement and abolish tenure. 

I quite like some of Taylor’s points, but I am not convinced about all the cross discipline talk, alot of which sounds like fluff. I don’t see how specialising universities and cutting departments in non-specialised institutions would improve either teaching or the graduate job market – regardless of comparative advantage Mr. Ricardo. I also disagree with Taylor’s approach to the dissertation. I think that learning to write a proper report / paper on a problem, with good referencing and structure is vital for anyone graduating from university – of course that means we have to teach how to write and solve problems analytically – which we hardly do today. Ending the procedure of tenure and imposing mandatory retirement age might be good for the new people coming in, but it might equally limit original or radical scholarship, so I am not really sure about that plan – but does the current system of peer-review not already restrict academic output? I have to agree that the teaching of students needs to be re-oriented towards transferrable skills (presenting, report writing, problem solving). This would avoid the current system where the whole education system, from kindergarten to post-docs,  seems geared towards creating new academic professors (as Sir Ken Robinson quipped beautifully in this talk - worth watching, it’s 18 mins of brilliance!).  But then again, we all want to be professors, right?

Why else? [from PhD Comics - check out the two preceding strips for the whole conundrum of a Ph.D. students inevitable destiny...]