It’s odd how many people take my skepticism about college and try to twist it into an opposition to learning. But like the quote often attributed to Mark Twain, “I never let schooling interfere with my education.”
Here’s a radical idea worth contemplating: that school is not the best way to learn. Let me count the ways:
School fragments knowledge in the name of specialization. The problem that I run into most when advising businesses and investors is the problem of fragmentation. Economics is separate from finance; finance is separate from management; management is separate from sociology; sociology is separate from psychology. And the whole mess of the social sciences is separate from the whole mess of the humanities.
I’ve written till my face is blue and my fingertips are purple about the ways in which modern portfolio theory severs finance from economics, and the ways that Keynesian economics severs economics from productivity, but it never seems to stick. Why? Because we’re all overschooled and undereducated. Economists have to go through a long and arduous path to academic certification during which every last vestige of common sense is eradicated from their minds through a process of alternating cookies and electric shocks as they recapitulate and/or repudiate the Keynesian formulae.
Financial people go through this too, not mainly in a purely academic environment, but with the series of professional exams stuffed with material which originated in an academic environment. A friend of mine who has accumulated about as many letters after his name as any normal business card would fit, told me that when he studied for his CFA he felt like he was being forced to eat garbage. What did he mean? He meant the academic secretion known as modern portfolio theory and its universe of non-causal randomness.
It doesn’t have to be like that. I know that it doesn’t have to be like that, because it didn’t use to be like that. Read the great classical and Austrian economists, and you’ll see that they slide easily over the artificial borders of what are usually segregated into economics, finance, sociology, religion, philosophy, political science and psychology. Doing that kind of stuff gets you killed when it comes to publishing in academic journals, but who cares about academic journals? Do you want pack membership with the prerequisite butt-sniffing? Or do you prefer to shape the world?
It’s the same among the financiers: Read Bagehot and you get finance and economics and political science and history and literature and theology. You get real life. John Burr Williams is like that too. He’s the last of the integrated financial theorists, I think. After him, it’s the rise and dominance of Keynes in the economics departments and the rise and dominance of Modern Portfolio Theory in the department of finance. The integrated thinkers were set on the ice float. The new order emerges, periodically festooned with fool’s gold from Oslo just to make sure that everyone knows that it is marching from triumph to triumph.
And out of this factory comes a lobotomized economic and financial ruling class. Theanthropoi, godmen, who walk the earth having been apotheosized in the best schools, with power over trillions of dollars and hundreds of millions of people, but who don’t have a clue about matters slightly outside their area of specialization.
During the financial crisis of 2008, in at least a dozen conference call consultations with Ed Lazear, Chairman of the President’s Council of Economic Advisors, I repeatedly tried to help him and his staff understand the enormous negative effect of the mark-to-market accounting regulations. But Lazear was an economist: He didn’t understand accounting. He didn’t need to in order to get a PhD in economics from a prestigious school. He didn’t need to in order to become the Chairman of the President’s Council of Economic Advisors. But unfortunately, he needed to in order to deal with the problem before him.
The administration ignored the accounting issue: pushed a huge bailout plan. The plan failed economically and politically, and it wasn’t until the following spring on May 20th that Congress pressed to have the rule suspended. Interestingly enough, that was the turning point in the market. Does that mean mark-to-market accounting was the only issue? Of course not, but it was a major issue, and one to which academic specialists were blind. Steve Forbes, who is largely an economic autodidact saw it. Official Washington did not.
School is out of order. Here’s the way many people, especially natural leaders, learn best: they run into a problem. If they are motivated to solve the problem, they look for solutions. An unsolved problem is distressing to people, so they tend to remember the experience (amygdala and memory and all that). The process of searching for a solution is usually costly and painful so they remember that too. At the end of this experience, they have an emotionally bonded memory of the problem, a sense of elation at having found the solution, an answer to their question, and in addition to having learned the answer to their initial question, have also learned a little more about how to learn. What I’ve just described is real life. It’s how one gets wisdom.
Yes, there are a few foundational skills which one must have before this starts, most notably strong reading skills, but there is a no reason to delay this struggle for real-world learning until age 23 at the youngest. The old model (or at least the ‘modern’ model of the 20th Century) which front-loads spoon-feeding into the first 16 years of ‘schooling’, lies by implying that what comes after that 16 years is even remotely like what comes after.
What we do around here (in Bowyerville) is to inject reality a lot sooner. We work on solving problems, real problems, together in the early teens. Need to learn something? Look it up. A data problem to solve? Learn some software. Where should you learn it? Look for a free on-line tutorial. If there’s nothing free, we’ll go sign up for one, or buy a book on Amazon, preferably something we can download cheap on Kindle. One of the biggest differences between school and real world is the importance of software. Want to be productive? Learn the tools. Practice them. Master them. Learn the tricks and tips. Spreadsheets, scheduling, word processing, presentation, data analysis, specialty programs: learn them all.
If you have a problem to solve which involves math which is beyond your current level of knowledge, let’s go over to Khan’s Academy and see if he has a video on that topic. If he doesn’t, somebody else will. Not sure you’ve got the concept mastered? Review it, and review it again, and work some of the exercises.
Traditional school is obsolete. It is a dead man walking. The knowledge which is available for free, or nearly free on the web is so large and abundant that for all practical purposes it might as well be infinite. For thousands of years knowledge was scarce, expensive and hoarded in a few geographically specified locations. In our lifetime, knowledge has gone from overly scarce to overly abundant. It has gone from expensive to nearly free. My friend Rich Karlgaard‘s cheap revolution is about to destroy the reigning higher education model. The new skill set is finding needles in haystacks using Boolean algebra; the old skill set was eating haystacks. The old emotional state was compliant credulity with students in the role of baby birds gulping predigested chunks of knowledge. The new emotional state must be critical thinking, filtering, and discernment. No longer “What do I have to learn to get a diploma?”, but now “How do I know what you are saying is true?” And “Can I get this same thing someplace else for free?”
Mr. Bowyer is the author of "The Free Market Capitalists Survival Guide," published by HarperCollins, and a columnist for Forbes.com.
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for July 22nd, 2014 | John Ransom
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for July 21st, 2014 | John Ransom