SOPHISTICATED FINANCE

Passion and Discipline

It has been stated many times that passion is a key to success, whether in business, research or art. Passion can be defined as an intense, enduring motivational feeling or conviction, which extends beyond romance and sexual activity. Passion is one of several emotions we all feel. 

Schopenhauer said that art is the physical expression of emotions. This insight is both profound and useful. It is profound perhaps because of the simplicity it brings to understanding art. It is useful in that it focuses the creator of art inwardly on their own knowledge. Maurice Sendak, not surprisingly, said it better--"knowledge is the driving force that puts creative passion to work".

However, why are so few of us able to use knowledge to produce art? Part of the answer is found in this quote from Isabel Allende, "Writing is always giving some sort of order to the chaos of life." Writing and art comes from the processing of emotions and knowledge in order to reach an understanding. Therefore, art comes from a commitment to reach understanding and the commitment is grounded in discipline. Ursula Nordstrom stated this point beautifully, "emotion combined with the artist's discipline is the rarest thing in the world".

While this post focuses on art, the "trilogy" of passion, knowledge and discipline is a recurring pattern in most creative people regardless of their area of interest. The theme of "order from chaos" also recurs not only in art but also in science and math and perhaps other fields.

This post was inspired by a post on Brain Pickings, "Conjuring Cohesion and Purpose: How Ursula Nordstrom Cultivated Maurice Sendak’s Genius". 

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The Answer is Easy

The Good blog has a video posted (below) of Peter Norvig talking about online learning at this year's Google I/O conference. Norvig is well known for his online course in computer science that attracted 160,000 students. He is also an AI expert who heads Google's search quality unit and a professor at Stanford.

About 13 minutes into the video, Norvig makes the comment that "the answer is easy" (...search on Google), "the interesting part is what was the question". My own variation on this is "the answer is easy, understanding the problem is the hard part". Many people define science as the determination of what we do not know. The pursuit of science is to answer the unanswered questions.

With the continuing increase in information and access to it, answers become less important. As I try to teach my students, what is interesting is what is currently outside the scope of human knowledge. Unfortunately most of us have been trained to focus on what is already known.

Norvig also has interesting comments on how to make online courses more effective and how to improve learning in general (minute 18). Norvig also comments on Nobel Prize winner Herb Simon and his thoughts on learning.  

 

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My Speech at Honors College Colloquium at FIU

Recently I was invited to speak at FIU where I teach. The forum was the Honors College Colloquium. I spoke about the relationship between entrepreneurship and design, ways to think about "impossible" problems and a little on OLPC. The hour long video is below.

 

The Wisdom of Hayek

I really like this quote from Cafe Hayek. 

"The ultimate ends of the activities of reasonable beings are never economic.  Strictly speaking, there is no “economic motive” but only economic factors conditioning our striving for other ends.  What in ordinary language is misleadingly called the “economic motive” means merely the desire for general opportunity, the desire for power to achieve unspecified ends."  The Road to Serfdom F.A. Hayek

The beauty of this quote from Hayek is that it focuses on the social objective and makes the economic benefits secondary or more precisely a means to an end. This, of course, has been shown to be the pattern frequently in successful entrepreneurship at scale.

Like I always say, start with the theory!!

A Refresher on the Fundamentals of Capitalism

I am very fond of asking my students to define the words they use. For example, I have yet to find a student that has a good definition of marketing, despite the popularity of marketing courses in business schools. Suppose I asked you to define capitalism, the intellectual and practical foundation for business. What would you say? Drum roll....

Capitalism is "the free allocation of capital by individuals in the service of their individual ends (within the framework of a fully competitive market)". (paraphrase of Milton Friedman) 

This definition comes from a new working paper at HBS by Rebecca Henderson and Karthik Ramanna titled "Managers and Market Capitalism". The paper argues that businesses have a moral responsibility beyond Milton Friedman's dictum to maximize shareholder returns. The authors argue that businesses have a moral obligation to serve society by preserving free markets and capitalism, which is in their self-interest, and not just satisfy the self-interest of shareholders. Essentially without capitalsim and free markets the shareholders would most likely be harmed. Therefore, egregious behavior, such as the 2008 financial crisis, undermines the integrity of free markets and is therefore immoral.

The authors provide a moral framework around the writings of Milton Friedman through a very insightful discussion of the history of the economic principles that underpin his thinking. Friedman's thinking was in large part based on the original liberal thinking of Hobbes and Locke and further advanced by Friedrich Hayek. The economic history lesson alone makes the article worthwhile for anyone who needs a refresher in the fundamentals of capitalism.

I also think the article is the best development of a moral framework for capitalism that I have read. The power of the argument is that the authors derive the requirement for moral behavior from classic economics writings alone with no reliance on another discipline. Putting Friedman in a compelling moral framework is long overdue. 

The article is here  Download SSRN-id2231526. Simply a brilliant article.

Another perspective on capitalism from another group of HBS professors is here. "Capitalism at Risk", despite the title, presents views consistent with Henderson and Ramanna albeit derived from a totally different approach . Not as rigorous an approach but equally insightful.

 

 

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Philosophy and Physics

George Polya, the famous Stanford math professor, once quipped " I am too good for philosophy and not good enough for physics. Mathematics is in between". Amongst the many implications of this quote, Polya implies that there is a relationship between philosophy and physics.

The intersection of philosophy and physics is an admittedly escoteric subject but a great example of interdisciplinary thought. However, as physics advances and becomes increasingly complex, the challenge is for the philosophers to understand the physics and identify the philosophical questions that must be considered. The discipline that addresses such issues is the philosophy of science.

The philosophy of science deals with "what science is, how it works, and the logic through which we build scientific knowledge". Building scientific knowledge requires a theory of epistemology, albeit a somewhat specialized epistemology or theory of knowledge. Philosophers were doing a good job of keeping up with the physicists until recently.

The Guardian newspaper has a great article on the three possible roles for the philosophy of science, as physics and perhaps all science gets increasingly complex. The three possible roles, as defined by Peter Godfrey-Smith, are:

1. an integrative role, whereby philosophy can assess and connect various fields with an emphasis on generic categories and perspectives; 
2. an incubator role, where philosophy develops new ideas in a broad and speculative form, which are then pursued in a more focussed and specific way within an individual science; 
3. an educative role, where philosophy teaches various general skills, including critical and abstract thinking

I will leave it to to your own deliberate thinking to decide which role you believe is the right course for the philosophy of science to pursue, although the Guardian writer argues for one particular role.

Now you may be wondering why I wrote this post on a subject for which the term "esoteric" might be an understatement. My three reasons are:

1. To demonstrate that philosophy is still relevant in the modern world
2. To show that the complexity of science has many implications, to which I think we are paying insufficient attention
3. To highlight a great example of interdisciplinary thought--the philosophy of science

I also think the Guardian should be commended for writing on such a learned subject. Other posts on public intellectualism are here, here and here.

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Speech at Barry University

I will be speaking at Barry University on February 27 at noon in room 308 of the library. The speech is on Israel Kirzner, Austrian School economist, NYU professor emeritus and rabbinical scholar. I will not be covering his religious works, which I have not read.

The speech will cover his theory of entrepreneurship and how it relates to poverty eradication. I will throw in a bit from Frederich Hayek to provide some ideas on individual empowerment and the role of government, which is relevant to understanding Kirzner better.

These themes are also the first part of a speech at FIU on Tuesday, February 26.

Another Event on Thinking, Design and Individual Empowerment

On February 26 I will be speaking at the FIU Honors College Colloquim. The Honors College has been very supportive of my teaching and the event is mandatory attendance for 800 students. I am going to talk on OLPC and entrepreneurship and cover three topics.

1. Thinking
2. Design
3. Individual empowerment

The MIT Media Lab theme "do the impossible" has prompted a lot of my reading on thinking and more precisely on how great ideas come about. In other words why do some researchers make trivial contributions and others expand human knowledge. Interesting that a lot of geniuses have written on thinking, such as Plato, Cezanne and Einstein.

I am more and more convinced that design theory and processes provide many great tools and techniques for entrepreneurship. Debbie Millman's "How to Think Like a Great Designer" has some useful ideas. Design Mind is an excellent blog by Frog Design on the subject.

Individual empowerment should be the objective of every social venture. To achieve individual empowerment one needs education, social inclusion and information. Please write to President Obama and tell him that we need to focus on education and social inclusion and the people will foster entrepreneurship (and new job growth). We do not need government programs for job creation. Remember individual empowerment.

Previous posts on design are here. A post on thinking and learning, the ultimate objective of the talk, is here. An article on entrepreneurship and individual empowerment is here.

Two quotes from the speech:

"Designers have the ability and the training to harness the tacit knowledge of the unconscious mind, rather than being limited to working with explicit knowledge.” 

Bill Moggridge Co-founder IDEO

[Creativity and genius] "depends on an unfiltered view of the world, one that is unconstrained by preconceptions and more open to novelty." 

Ingrid Wickelgren Scientific American

 

 

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Thoughts on Creativity

For a variety of reasons lately I have been thinking about the concept of creativity. Quite a wide range of great thinkers all describe creativity as a process based on discovery. In other words, creativity is not creating but rather discovering something new. We all have perceptions and experiences which when put through an appropriate process foster the discoveries that produce the new ideas--creativity. Such luminaries as Plato, Cezanne, Van Gogh and Einstein, to name a few, all share this view of creativity as a process of discovery.

The question that you should now be asking yourself is "What prompts the discovery process?". The simple answer is curiosity--the most natural instinct of all and shared by all of us from a very young age. So if your schooling did not kill off your curiosity you are well on the road to being creative. (I will avoid the temptation to turn this post into another article on education.)

The other key ingredient for creativity is the process one uses to analyze their perceptions and experiences. Here again many genius level thinkers (Einstein, Hamming, Minsky to name a few) provide the answer. One can learn the process, especially by studying the great thinkers. Alternatively, or perhaps in parallel, one could develop the ability to think critically. Critical thinking is the foundation for creativity. Critical thinking is defined here in this article on training young entrepreneurs. (If you have read this far then the critical thinking process is probably/hopefully engaged.)

 In a post on Brain Pickings today there is an interesting article on creativity--Chuck Close on Creativity, Work Ethic, and Problem-Solving vs. Problem-Creating. The best quote from the renown photorealist is:

 “Inspiration is for amateurs — the rest of us just show up and get to work.”

The other good quote from Close is:

"And the belief that process, in a sense, is liberating and that you don’t have to reinvent the wheel every day. Today, you know what you’ll do, you could be doing what you were doing yesterday, and tomorrow you are gonna do what you did today, and at least for a certain period of time you can just work. If you hang in there, you will get somewhere."

Suffice it to say that Close recognizes the critical role that processing plays in creativity.  And....no more excuses about waiting for inspiration.

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What Forbes Missed in the List of the Most Powerful

Forbes released today their list of the most powerful people in the world today--71 people out of a total world population of 7.1 billion or 1 in 100 million. Generally the list highlights politicians (Obama #1, Angela Merkel, Chancellor of Germany, #2) and business people (Bill Gates #4, Carlos Slim #11). One segment of the population notably omitted is academics and intellectuals. Thought leaders apparently are a group that Forbes does not deem sufficiently powerful. 

Perhaps the President of Harvard, Drew Gilpin Faust, warrants a position given the number of people on the list who have strong ties to the university. Perhaps the historic and future contribution of the Harvard student body is a better reason. Using this logic, L. Rafael Reif, President of MIT, would deserve to be on the list. He might also deserve to be on the list given the 60 Nobel Prize winners that are either faculty or in some other way affiliated with MIT. Thoughts on public intellectualism are here and here.

Other groups noticeably missing are:

1. Large hedge fund operators, e.g. George Soros
2. Scientists, e.g. Stephen Hawkings
3. Writers, e.g. certain Pulitzer Prize winners
4. Religious leaders, e.g. Billy Graham (although Pope Benedict XVI ranked #5)
5. Nobel Prize winners excluding politicians (835 individuals since 1901)

Add other notable groups missing in the comments. The complete list from Forbes is here.

 

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Blog Reading

I saw on Google Reader today a previously overlooked feature--Trends. When I clicked on it I got analytics on my blog reading. The first statistic surprised me (and prompted this post), which is below:

"Since July 15, 2007 you have read a total of70,466 items."

Based on another statistic on Trends, I have seen 3.5 million blog posts since 2007. I read about 2% of the articles I see. What blogs provide the most information of interest to me are shown below:

 

3Quarks is the most eclectic. Hacker News is a must read. NYT Technology just a habit.

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Thinking and Learning

A colleague at MIT of Marvin Minsky once described Minsky to me as "the smartest person in any room". Every time that I read something by Minsky I better understand the comment. Today's Minsky quote is on learning from this article, which also includes comments from Alan Kay. 

"The most important thing in learning is copying how other people think. I don't think learning by doing really gets one to emulate how other people think. The way to learn something hard is by getting new ideas. How do you do something in your head? ... We need a cultural situation where every child has an adult friend who they can emulate. And communicate their ways of thinking to the child. Do something that gets each child to spend a few hours a month with someone worth copying. What we do now is to take a six year old and send him in a room full of six year olds. The result is that every person grows up with the cognitive capability of a five year old."

Minsky's point on learning is a recurring theme for him. A quote from the SF post on the 25th anniversary of the MIT Media Lab is below.

He [Minsky] said that when you see a great idea do not bore down to better understand the idea. It is much more important to ask the person how they came up with the idea. Understanding how original thinkers think about problems is the especially valuable part because a similar approach could be used to solve other big problems. Minsky also mentioned the concept that great ideas frequently come where several disciplines intersect. (I always find it fascinating when a great thinker is interested in how other great thinkers come up with their ideas. Obviously a lesson for all entrepreneurs.)

The Minsky article is courtesy of @OLPC_Mexico and my friend Mariana.

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Scaling Social Entrepreneurship

Yesterday I was preparing to teach my January class at MIT Sloan (ignore they got my name wrong) and came across an interesting article--Identifying the Drivers of Social Entrepreneurial Impact--by Paul Bloom and Brett Smith (1). I like models, heuristics and other systematic theoretical approaches to business problems. Such theory generally provides a comprehensive starting point to understand an issue.

The article identifies seven capabilities an organization needs to achive scale on social ventures:

1. Staffing--"the effectiveness of the organization at filling its labor needs, including its managerial posts, with people who have the requisite skills for the needed positions, whether they be paid staff or volunteers"
2. Communicating--"the effectiveness with which the organization is able to persuade key stakeholders that its change strategy is worth adopting and/or supporting"
3. Alliance building--" the effectiveness with which the organization has forged partnerships, coalitions, joint ventures, and other linkages to bring about desired social changes
4. Lobbying--"the effectiveness with which the organization is able to advocate for government actions that may work in its favor"
5. Earnings generation--"the effectiveness with which the organization generates a stream of revenue that exceeds its expenses"
6. Replicating--"the effectiveness with which the organization can reproduce the programs and initiatives that it has originated" 
7. Stimulating market force--"the effectiveness with which the organization can create incentives that encourage people or institutions to pursue private interests while also serving the public good"

1 and 5 are not unique to social entrepreneurship and required for every for-profit business model. 2 is a critical insight and the key to establishing "value creation" and "brand" in a "change" strategy. 3 is particularly challenging given the large number of low quality partners available. 4 I tend to ignore in favor of individual empowerment but it may have value. 6 is the real key to scaling and particularly challenging in the developed world when one considers replicating selling, distribution and perhaps manufacturing. 7 is sort of a key performance indicator. When the private sector starts to compete with you then scaling really starts, but the question arises about whether you can still compete. A serious approach to 1-6 will surely help.

For anyone perhaps silly enough to approach social change through a non-profit (except for museums, performing arts centers and a limited number of other projects that cannot attract capital from financial markets), I think the seven capabilities also apply.

(1) Journal of Social Entrepreneurship Vol. 1, No. 1, 126–145, March 2010

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Foreign University Students

As is the case in many U.S. universities, especially at the graduate level, a significant number of the students are from foreign countries. The amount paid by these students or their governments is a very significant amount, as discussed in this article in Forbes "Stop Wasting Foreign Aid: Let's Import Millions Of New College Students Instead", by my friend Iqbal Quadir--founder and director of the Legatum Center for Development and Entrepreneurship at MIT. 

Some eye opening facts about higher education:

1. Higher education in the U.S. has annual revenues of $400 billion
2. 700,000 foreign students attend U.S. universities
3. Foreign students pay $21 billion annually in tuition and living expenses
4. If foreign students increased from the current 3.5% to 15% of total students, the economic benefit would reach $100 billion annually and foreign students would total 3 million

Expanding the number of foreign students, Iqbal argues, would have three benefits beyond increased revenue:

1. "Expertise and resource development in educational institutions; 
2. Enrichment of the knowledge ecology from foreign graduates who remain in the US; and
3. Connections between this augmented American knowledge base and foreign graduates who return to their countries"

I like the idea of expanding the number of foreign students in U.S. universities. It might facilitate greater understanding between countries and would be a significant economic benefit.

Inside MIT

I have been visiting MIT regularly for the last three years, given some lectures there and taught a course in social entrepreneurship in January 2011 and 2012. People ask me about MIT and all I can say is it is a special place. Debbie Liu, a graduate student at Harvard, wrote a guest column for The Tech which captures the essence of MIT and why it is a special place. The article is below.

"A love letter to MIT

I received my bachelor’s from Wellesley College (‘06), master’s from Boston University (‘08), master’s from Harvard University (‘08), and will be receiving my doctorate from Harvard; but it’s you, MIT, that has made the biggest impact on my life — academically, socially, and personally. And for that, I love you. You have succeeded in making a positive impact not just on your immediate family members, but you have touched the lives of people who are only a mere part of your extended network.

You made yourself an open playground. Literally, your buildings are always open. You can easily find an open classroom for students and friends to gather to brainstorm startup ideas. This is quite different from Harvard where even if you are a student, you are often met with locked doors. You allowed me to conduct my senior thesis research through UROPs (the Undergraduate Research Opportunities Program) at what is now the Koch Institute for Integrative Cancer Research, and take courses at MIT without any hassle. By being a cross-registered student of even just one course, you gave me access to everything at MIT. I could ride on the SafeRide, print for free, and access all your buildings and libraries.

By you making it possible for me to be an efficient learner (not having to worry about gaining access to buildings and classrooms, paying for printing, getting around), you made me a more successful person academically. I was able to spend my time thinking about more meaningful things than logistical hurdles to overcome. At Boston University, only one computer lab allowed free printing, and you would have to stand in line to pick up your printouts. At Harvard, I couldn’t ride the shuttle because only select schools within Harvard could use them. Yes, I don’t get it either. And that’s why I love you. You get us. You get your students. You get people.

Even now, being at Harvard, I am still benefiting from MIT. Your professors open their arms to all students regardless of whether they are getting a degree from MIT. My doctoral research at Harvard entailed interviewing scientists at the forefront of 21st century science, and your most notable professors were there for me. Robert Langer replies to emails on his Blackberry with an average response time of one minute. And yes, I mean Bob Langer, the PI of the largest biomedical engineering lab in the world and winner of the Noble Prize-equivalent for engineers (Charles Stark Draper Prize). Philip Sharp agreed to a sit-down conversation without any hesitation, a Noble Prize winner. I am always so amazed at how the people at MIT are so humble given their brilliance, a rare trait among the elite schools; I know this from being at a school where people wear double pop collars and white pants with pearls. I even have MIT professors sitting on my Harvard dissertation committee. None of them have any obligation to me as I am not an official student at MIT, but they do it because they care about their contributions beyond the walls of the institution. This is the energy you foster at MIT. Thank you.

Besides enriching my academic and research life, you enriched my social life during college. By allowing Wellesley shuttles to drop off students at various MIT locations, you’ve enriched the love lives of many Wellesley and MIT students. From MIT, I’ve dated the right and wrong guys, and ended up with my current husband (MIT ‘06; the right guy). Trust me, there are a lot of happily married Wellesley-MIT husbands and wives, thanks to you. I got to experience the fraternity life, being a “rush” girl, throwing rush week events, and taking childish jabs at other fraternities. I even lived at an MIT fraternity over a summer, as they become co-ed over the summer, and lived unofficially as a resident girlfriend during other times. You gave me the best times of my life at MIT. I got to party with people that were uncannily witty, jovially sarcastic, and all the while had substance and big goals for their lives. It was through seeing your students working together from two o’clock a.m. to sunrise on problem sets that were almost always impossible to solve that I learned the bigger purpose in life. It’s not all about getting A’s, which is surprisingly a more random process than you might want to believe, but being able to unselfishly collaborate, share information, and come out of the experience with a memorable story to tell and a band of friends that will be secretly thinking about all the people you’ve dated while you’re saying your wedding vows.

I love you MIT for making your constituents’ lives easier and more efficient, which consequently enable us to lead a more meaningful life. I love you for hosting numerous contests to support your students in becoming innovators and entrepreneurs; this is what makes your students so attractive and why I fell in love with one of them. I love you for being an open university, literally and figuratively, providing free access to knowledge like OpenCourseWare and now edX. I love you for being out-of-the-box fun by turning a blind eye to the ingenious hacks by MIT students. Yes, I was there when a group of MIT students moved the 1.7 ton Fleming Cannon from Caltech across the country to MIT and adorned it with a MIT Brass Rat ring over the cannon as if a finger; it was only after MIT notified Caltech did they realize the cannon was missing and it took them weeks to figure out how to move it back. I love you, MIT, for valuing creativity over titles or degrees. For example, hiring Joi Ito to be the director of Media Lab, who has never graduated from college, but is a recognized cyber-elite. Now, that’s bold!

These are but a sampling of the myriad of reasons for my deep-seated love for you. If you only remember one thing, just know that you have touched more lives than you recognize. I love you with all my heart."

My friend Mariana (@Yaquesita) posted this story on FB.

Economics as Moral Science

Having taught entrepreneurship now for eight years, I find that many students use words that they cannot actually define. Such a word is "economics". Every business student takes macro and micro-economics, but how many students can give a concise definition. Fortunately Ben Bernanke, Fed Chairman, provides an elegant definition.

In a speech reported in Businessweek, Bernanke defined economics as " the allocation of scarce resources". Bernanke then went on to ask why we do economics, which lead to a discussion of the close relationship between economics and government policy. Bernanke believes that all the focus on economic indicators masks the real objective of economic policy and government. Quoting Adam Smith, Bernanke stated that government should provide "secure tranquility", what some would call happiness. Bernanke then went on to describe the Bhutan government index of happiness as possibly a better way to measure economic performance because it moves away from materialistic measurements in favor of more personal benefits. This concept moves us closer to Robert Schiller's (Yale economist) view of economics as a "moral science" where economics is “driven by the broad moral purpose of improving human welfare.” I like this concept because I find it hard to believe that the great (economic) thinkers have consistently ignored morality. I believe that even Milton Friedman, the "bad boy" of 20th century economics, recognized the need for morality in economic systems.

If we accept this concept of economics, the distinction, for example, between social entrepreneurship and traditional entrepreneurship may become trivial. The implied normative judgment in social entrepreneurship is not necessary if economics is a "moral science". Need to read more Schiller.

This is the link to the full Businessweek story. The story has many other interesting points on the history of economic thought and the changes in economics in periods of crisis.

Student Use of Time

I really like the blog Concurring Opinions. It is a combination of good academic and practical thinking on legal issues and related themes. The latest story is entitled What Could Law Students Do With 2 Million More Hours a Year? Setting aside advocacy for all academic and law journal articles to be published on SSNR, which is a no brainer in my opinion, the article poses the question of what law students could do with their time if they were not working on law review. There must be a better use of this time, especially when it totals an estimated two million hours per year.

Makes one ponder what other student activities could be re-directed to more productive or socially useful activities.

Competence and Comprehension

One of the debates that I have been following is framed as follows:

Do we need to teach aritmetic if computers can perform the same task?

Until today I thought we should teach arithmetic.

Another related question is why we cannot develop computer software that does more than traditional teaching methods.

This article from Atlantic, "A Perfect and Beautiful Machine': What Darwin's Theory of Evolution Reveals About Artificial Intelligence" provides insight on both questions. This quote provides a possible answer:

"What Darwin and Turing had both discovered, in their different ways, was the existence of competence without comprehension. This inverted the deeply plausible assumption that comprehension is in fact the source of all advanced competence. Why, after all, do we insist on sending our children to school, and why do we frown on the old-fashioned methods of rote learning? We expect our children's growing competence to flow from their growing comprehension. The motto of modern education might be: "Comprehend in order to be competent." For us members of H. sapiens, this is almost always the right way to look at, and strive for, competence. I suspect that this much-loved principle of education is one of the primary motivators of skepticism about both evolution and its cousin in Turing's world, artificial intelligence. The very idea that mindless mechanicity can generate human-level -- or divine level! -- competence strikes many as philistine, repugnant, an insult to our minds, and the mind of God."

The distinction between competence and comprehension provides a possible answer to both questions. Competence does not lead to comprehension. We do not need to teach to achieve competence in arithmetic because computers can do it for everybody (with a computer and electricity). Comprehension in math, the higher level objective, is a totally different objective which is not necessarily derived from competence.

This distinction also explains the weakness in current educational software and most online offerings. Rather than using software/content to teach competence, we should focus on developing software to facilitate reasoning and comprehension. Perhaps harder said than done, but if we stop focusing on competence we will be on the right path.

Question: How many numbers between 0 and 10 can be divided by 2

Competence answer: 2,4,6,8,10

Comprehension answer: all the numbers

I found the Atlantic article on Arts & Letters Daily.

 

Integrating Science, Engineering and Ethics

I have been re-reading Richard Hamming"s "The Art of Doing Science and Engineering". It always amazes me the range of subjects that great thinkers can integrate. This quote demonstrates my point:

"What is possible?

What is likely to happen?

What is desirable to have happen?

In a sense the first is Science—what is possible. The second is Engineering—what are the human factors which choose the one future that happens from the ensemble of all possible futures. The third is ethics or morals or whatever other word you wish to apply to value judgments. It is important to examine all three questions, and in so far as the second differs from the third, you will probably have an idea of how to alter things to make the more desireable future occur, rather than let the inevitable occur and suffer the consequences."

The Evolution of Elites

Interesting article in The Nation today on elitism, its evolution and eventual decline. The summary is that eventually all elites become corrupted oligarchies. This is a very similar conclusion to Friedrich Hayek's conclusions about capitalism and, of course, The Nation, draws the comparison to the current situation in the U.S.

The article draws heavily on the writing of German social theorist Robert Michels, who was a contemporary of Hayek. Michel's “The Iron Law of Oligarchy” states: “It is organization which gives birth to the dominion of the elected over the electors, of the mandataries over the mandators, of the delegates over the delegators. Who says organization says oligarchy.” Organizations naturally evolve toward oligarchies.

Michels second idea is the Principle of Mobility. "Over time, there must be some continuous, competitive selection process that ensures performance is rewarded and failure punished. That is, the delegation of duties cannot simply be made once and then fixed in place over a career or between generations. People must be able to rise and fall along with their accomplishments and failures."

However, rather than drawing a positive conclusion about mobility and meritocracy, he concludes:

"Over time, a society will become more unequal and less mobile as those who ascend its heights create means of preserving and defending their privilege and find ways to pass it on across generations."

The increasing concentration of wealth in the U.S. could be the evidence for Michels views. The increasing inability of Congress and the Executive branch to effectively address issues could be evidence that "preserving and defending their privilege" is the inevitable corruption both Michels and Hayek predicted. 

One alternative to spiraling down into corruption is a charismatic leader with a new view who can rise above the monied interests. Unfortunately, the best example of such a leader is Hitler. Another alternative is a revolution, but I doubt we have the heart for it. Maybe we should advocate for an enlightened oligarchy. Not many examples exist in history of such behavior. Looks like a tough problem to solve.

Remember it is not the concentration of wealth that is the problem. The problem is that the wealthy oligarchy corrupts the process of government and eventually free markets. The inability of Washington to address global warming might be the perfect example to demonstrate this issue.

 This article from Ribbon Farm, "Hall’s Law: The Nineteenth Century Prequel to Moore’s Law", might argue for a contrary view. We may be in the third stage of a new technology (Moore's Law) which will inevitably be followed by a period of disruption (today) until the next new technology cycle begins.

Regardless of whether you care about the subject of this post, the Ribbon Farm article is a good read. It outlines the technology cycle that preceded Moore's Law and how it is almost identical to what happened with Moore's Law. Some very good insights into how to identify business opportunities.

Another view on the subject of government is from Rationalist Conspiracy, where the writer asks why government does not do anything. That writer might enjoy the above post.