Club Troppo

White to play A H Wohl vs Gipslis 23. ? See game for solution.

Just solve this puzzle.  And here’s another really amazing game.

The rules and norms that allow markets to function effectively are public or collective goods. That’s something to which internet entrepreneurs turn their attention when setting up ‘two sided markets’ like Kaggle. At Kaggle we are always asking ‘what would make this an even better experience for the users (and the users are also the producers of the ultimate product – algorithms of use to those who host competitions).  In any event, one of my themes when introducing the economics of web 2.0 is mentioning the ways in which web 2.0 platforms conform to the technical definition of a public good which is to say that they’re non-rivalrous in consumption, and non-excludable.*

I also offer the further proposition which is that all productive economic structures are always and everywhere ecologies of public and private goods. As John Kay has observed, we do have live experiments of doing away with public goods – and they’re called failed states. You wouldn’t want to live there.

In any event, the purpose of this post is not a lot more than a note to self on being reminded of how much new startups put into creating great collectively consumed goods for their workplaces. Virtually all the most successful internet startups are famous for their food and for the hospitality they lay on for their workforce. The article which provoked this post was this one in which Steve Jobs boasts that in 1985 The Mac team spent $100,000 annually on juice! Facebook took great pride in pinching Google’s cook for their own caf. Us humangoes are turned on by belonging to collectives with which we identify.

One downside I noticed on a visit to both Microsoft and the Googleplex in February is that though both have a ‘campus’ feel with oodles of adjacent buildings (Microsoft has a whole food hall – with all the charm and charisma that shopping malls and Microsoft are famous for) they also require ID to get into these social spaces, because otherwise they’d be subsidising outsiders (and perhaps picking up the local homeless population). Anyway, this highlights the fact that, in terms of the Ostrom’s quadrant on which public goods appear, these internal public goods could also be regarded as ‘club goods’ rather than pure public goods. They are nevertheless experienced as collectively produced and consumed goods.**

* To be precise, though the definition has typically been put in terms of the non-excludability of a good, that’s because economists have thought about public goods as a problem rather than as an opportunity. Google, Twitter, Facebook and Wikipedia could be closed to all those who wouldn’t pay a price to access them, but those who run them can meet their (private) objectives more fully by leaving them open. They thus become public goods.

** At least to the extent of the subsidy which in many cases is 100%.

If Julia Gillard is known for one policy direction, it is her advocacy of making educational opportunities available to all. Her passion for this idea is clearly genuine, and has survived her move from Minister of Education to Prime Minister. It is also personal. She enjoyed her schooldays at a good government school (Unley High, across from my nana’s house on Kitchener Avenue) and believes everyone should have access to that sort of quality.

Providing opportunity is a wonderful goal. The ALP in particular has a rich history of concern about it. And innovations like the MySchool website, it seems to me, actually enrich the debate by giving people an idea about how we’re actually doing in spreading educational opportunity.

But when I have conversations with people about educating our kids, opportunity is not the issue that comes us the most. People talk instead about the importance of getting their kids to focus. This is a surprisingly consistent result. It comes up when I talk with the theatre director and musician with three brilliant kids, and when I run into the Indigenous woman in her 60s who take care of kids from troubled homes, and when I chat with Mark down at the footy club who has a middling-smart son at a solid public school.

Opportunity is not what they worry about. They are not rich people – some of them are genuinely struggling – but they can always scrape together the money for textbooks, new or secondhand. They have Internet connections and can see the enormous amount of great material available on the Web. The local public schools are good, though not perfect. They reckon the teachers are decent people.

Their concern and those of many others – myself included – is broadly the same: to extract the most from their education, kids need to be able to immerse themselves in what they are studying, and a lot of kids just aren’t doing that.

All these people see student focus as vital if kids are going to really benefit from their schooling. They also think it’s getting harder. If television made it trickier, the Internet makes it far tougher still: kids often need the ‘Net for homework, or at least claim to, but once connected they succumb to the delights of Facebook, Youtube, Twitter and that new blog about … whatever. Quite correctly, parents and guardians suspect “multitasking” means “doing several things half-arsed rather than one thing well”. And they worry that the broader cultural signals don’t tell kids that they need to focus on intellectual work in order to realise its rewards.

Good schools seem to understand this. At a recent high school parents’ night, I sat in a room of parents and teachers all concerned about and struggling with the same challenge. We discussed strategies ranging from having kids do their homework in public areas of the house to buying routers that block Facebook access. (The school involved was Northcote High School in Melbourne, which I have come to admire for the high quality of its interaction with parents. I know of at least one pricey private school which could learn a great deal from them.)

Yet I don’t see much research work looking at this question. ACER, for instance, doesn’t seem to be publishing on it.

So my first question is: Does anyone know of work being done on getting students focused and immersed?

My second question is: is the focus issue as widespread a concern in the community as I think it is?

One of the most famous passages in economics writing — at least if you’re an economist, as opposed to a policy maker — is the conclusion of Keynes’s General Theory, on the importance of economic ideas:

But apart from this contemporary mood, the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil.

But watching the current policy debate, I wonder if Keynes was too optimistic here.

I’ve noted before that these days policy orthodoxy seems, all too often, to be derived from highly heterodox models — or to put it more clearly, perhaps, the “radicals” are people like me who basically want to apply texbook macro, while Very Serious People are seizing on all sort of odd ideas about expansionary austerity and such to justify their views.

The new hysteria over the dollar is another example. The standard workhorse model of international is Mundell-Fleming, with maybe an update to reflect Obstfeld-Rogoff; this model does not at all justify huge fears about the consequences of currency depreciation. And in this case I don’t even think there’s an Alesina equivalent — that is, a study that claims to find evidence for the heterodox things VSPs believe.

This is just pure prejudice, unsupported by theory or evidence. And yet it’s quickly hardening into orthodoxy. What role, then for academic scribblers?

I’m preparing to do a bit of whithering on tertiary education next week at a strategy retreat or some such for a university – and wanted to ask Troppodillians for any sources they think I should consult. I want to bang my drum about the ways in which education at all levels (with an obvious focus on the tertiary sector) should be changing far more than they are. Some of the things I want to say include:

• The internet and particularly web 2.0 should be revolutionising education in so many ways. Indeed in principle, one might have expected web 2.0 to have had a more dramatic effect on education than it’s had on news and entertainment, and yet in these cases a revolution is clearly underway with huge economic and cultural implications whereas in education it’s amazing how much things remain the same as they ever were.
  • this is true at all levels of education though obviously the kinds of opportunities available at the various levels of education differ very markedly.
• I’ve commented before on Troppo on how amazingly static the curriculum in schools has been. We’ve had lots of rearrangement of the cultural deck chairs, and an amount of aboriginal studies that drives some kids completely nuts (though I expect the problem is in the quality of the teaching).  The web has been absorbed as a new, better, lower cost way to do simple research for assignments and so on, but the new possibilities have done virtually nothing to reshape the maths curriculum for instance. And when I was at high school in the early 1970s we actually did some computer programming.  I’ve not seen my kids do any. And yet they could be out there building mashups on Google maps, or apps on iPhones and doing all sorts of exciting things.
• Teaching methods are also changing at a surprisingly slow rate.  It seems so obvious that lectures should be both taped and lavished with some serious resources so that, for instance there might be a wealth of really good lectures that people can pull down at any university, with the university’s value add being in how they engage students with each other and with tutors. This is what’s happening in the Khan academy which is only at school level, so given that one of the problems cited with doing away with live lectures is the need to motivate students, if you can motivate them in high school with videos, you should be able to do it in universities. Ultimately this could be outsourced so that one would have a few providers of lectures which were given by people who were very good at it, with resources to generate multimedia of various kinds to illustrate what was being taught and so on.
• Then there’s the open science story and how slowly the tertiary sector seems to be making its way in that direction – helped on by mercantilist IP laws, the incentive system for academics and stuff like that. Michael Neilsen speaks about the way in which ‘open source’ means of doing science have sometimes worked miraculously – but that’s where they’re a clearly focused attempt to produce a publishable paper – so they tie into the incentive system. When it’s more open ended, it doesn’t work so well. (I suspect this isn’t only the incentive system at work – it’s also the case that crowdsourcing usually works better when a shared objective is clear to all).
• One of the ironies is that so much public money goes into education and yet it’s then used in ways that actively frustrate the natural way in which it could be build into public goods.

So verily oh Troppodillians I say unto you

1. What things do you think I should read to fill me in on these points and
2. What other points might be made
3. Do you agree or disagree with these points, and if so why?

In this week’s Missing Link Friday: fat, feminism, fair pay, philosophy and more.

The death of Obama? Catallaxy’s Samuel J spots an unfortunate typo at the Australian.

The dogs of war: "We sent 79 commandos to get Osama bin Laden — and one dog", writes Ezra Klein.

Cutting the fat: At Crooked Timber, John Holbo wonders why it’s virtuous to spend hours working out at the gym pursuing a better figure, but "regarded as just plain gross and freaky" to submit to cosmetic surgery.

Feminist call-out culture: Does the feminist blogosphere have an overactive immune system? At Feministe, Jill writes about the destructiveness of ‘call-out culture’ :

“calling out” has increasingly turned into cannibalism. It’s increasingly turned into a stand-in for actual activism. We have increasingly focused on shutting down voices rather than raising each other up.

Why Aren’t Porn Stars Paid More? At Dollars and Sex Marina Adshade wonders whether copyright laws can explain the pay gap between Hollywood stars and porn stars.

Should policy makers care about what people deserve? Julian Sanchez explains the difference between desert and entitlement arguing that:

political and policy discussions should concentrate on what people are entitled to, rather than on necessarily muddy attempts to determine (and embed in law) what people morally deserve.

Policy and philosophy: Many philosophers overestimate the importance of abstract principles, argues Fernando Teson:

… many philosophers think that if they can just make the right conceptual distinctions and identify the right political principles they can select the best institutions, laws, and policies. Not so. Abstract moral principles are insufficient to explain the differences between good and bad laws.

Herewith my column for Today’s Fin on the Government’s proposed new R&D Tax Credit. The paper on which it is based is on the Lateral Economics Website.

The politics of compromise can work to solve problems by taking everyone’s needs into account. But sometimes we just get caught up in pacifying those reluctant to part with existing entitlements. As Parliament debates the Government’s proposed changes to the tax concession for Business Expenditure on Research and Development (BERD), it should be wary of buying off those seeking to hang onto their BERD in the hand.

As I concluded in a recent study for the Australian Business Foundation, The BERD in the hand: Supporting Business Investment in Research and Development, if forced to choose, I’d abolish the current tax concession for R&D rather than maintain it. Why? When it was introduced in the mid 1980s it provided 24.5 cents assistance for every dollar of BERD. Today, with large reductions in company tax rate and the headline rate of assistance – from 150 to 125 per cent – it’s worth just 7.5 cents in the dollar.

So it has very little effect on business decision making – that the concession is simply a windfall on over nine tenths of R&D because it would have been done anyway. So the existing scheme probably generates more administrative, compliance and revenue costs than it does R&D benefits.

The scheme is also complex with multiple sub-schemes. And though the rate of assistance is low, some businesses have claimed a large share of their total production activities as R&D related. This sounds fair enough, but the only way it’s been affordable is via the atrophy of the rate of assistance. Both Canada and the UK can afford much more generous rates of R&D assistance, but only by ruling out production activities altogether.

And as the Cutler Report highlighted in 2008, one of the main beneficiaries of our laxity on production related R&D is mining. Some mines involving novel technical challenges have claimed the majority of their expenses as R&D related! (Continued)

The Candidates is on!  The Candidates is a tournament of the highest ranking chess players in the world (other than the world champion) and the prize is the right to challenge the champ in this case Vishy Anand.  The guy on the left right is Aronian who’s expected to win.  And the guy on the right left is Carlsen who has been rated most highly of all the players, and mysteriously withdrew from the process. [Sorry for saying left was right - ed.]

You can read about the way the Candidates matches are run on Wikipedia – it changes from time to time. There’s regular reporting on the matches at Chessbase including a report of round one which was last night our time – and yesterday Russian time where the tourney is on. And you can get a live feed of the games here.  Last night the one game that looked like going to a result had Aronian as white and he managed to make a fairly simple calculation mistake in an end game after 7 hours! Anyway, it’s fun to keep an eye on if you’re working away on your computer late at night. Quite distracting actually. Chessdom is particularly useful as it provides computer analysis of the position as you go and for these august games, grandmaster commentary as well. Amazing what you can get for free these days! I’m surprised players don’t make more of the copyright that I presume inheres in their games – though perhaps the tournament operators snaffle the copyright for themselves. Does anyone know what the story is here?

A long time ago in a galaxy far away (i.e. 2007), the University of Melbourne introduced ‘The Melbourne Model’ in which students were supposed to do many cross-disciplinary studies during their undergraduate degree (50 unit points, i.e. one year out of three) whilst being encouraged to further specialise in three post-graduate years. The explicit desire was to copy the broad liberal-arts type education of the American university. The economic incentive came from the higher fees that could be asked of post-graduate students, hence an increase in the post-graduate numbers due to students wanting to learn more about a discipline would boost the coffers. This model turned out to be a failure as many of the top students avoided Melbourne and the numbers going into the post-graduate degrees were disappointingly low. The Melbourne bureaucracy has recognised its mistake and the model is now being wound back, with students being asked to do only 25 unit points ‘outside of their discipline’. Face-saving requires that the misery is prolonged for a while but the first thing any smart new VC at Melbourne would do is to scrap the whole thing and revert to what it was before.

UWA in Perth has studied the Melbourne Model and is gearing up to introduce a system with some similarities, but with important bells and whistles designed to avoid the mistakes of Melbourne. Let’s dissect the main features of the Melbourne experiment and how UWA has learned from the experience:

1. By creating broad degrees, the Melbourne model lead to a mixing of students with different types of talents into the same courses. I predicted at the time that this mixing, together with the pervasive incentives not to fail anyone, would lead to a dumbing down of the disciplinary courses (a race to a bottom). This indeed happened, though not quite the way I envisaged it. What I envisaged was that the university bureaucracy would put pressure on the existing schools to dumb down their course offerings. Many schools anticipated this and tried to erect entry barriers into their courses. In turn, this lead the Melbourne university bureaucracy to create new ‘inter-disciplinary courses’ which I would say were at much lower levels than the more disciplinary courses they replaced in the student curriculum. Hence the dumbing-down was not so much due to pressure on existing courses but by a complete by-passing of existing courses, in many cases replacing them. This indirect dumbing down of the degrees did of course filter through to the higher years of the disciplines: if your 3rd year students have done a year of fluffy stuff in stead of any real learning then you will have to drop the entry-bar to honours, masters, and PhD courses, which is exactly what I understand has happened. UWA by contrast has opted not to create new courses but to reduce the number of disciplines into 4 broad disciplines (arts, science, commerce, and design) and to simply force students to follow a certain number of courses in the ‘other disciplines’. One part of the compulsory mixing is in the form of 4 compulsory ‘broadening units’, whilst another part comes from pick-and choose second majors in other discipline groups. This introduces the same forces I talked about 4 years ago: the mixing of students of different abilities, coupled with the strong incentives not to fail anyone, will lead to a significant dumbing-down of the courses in these 4 main disciplines, making them all ‘un-specialised’. Anything included in the ‘broadening units’ must be dumbed down, as well as anything that depends on it. This is not true if you let ‘broadening’ happen voluntarily (optional courses or people trying double degrees) because you then can have entry-barriers into courses and turn away students with insufficient aptitudes for particular courses. Hence the UWA model will lead to a more radical and probably more permanent change in the quality of the degree structure than the Melbourne model. Whereas Melbourne is now reversing its model and, because it has left the schools largely intact, can still draw on the expertise in those schools to unwind the clock, UWA will have no such easy turning-back option. UWA is burning its bridges and in that sense is embarking on a more ambitious program than Melbourne did.

(Continued)

I went to Harkaway State School in the foothills of the Dandenongs in Victoria.  It was settled by Germans and apparently in WWI they rang the bell of the local church when they heard of a German victory in WWI.  Probably not a good way to stay under the radar – though that was easy enough because it hadn’t been invented.

In any event, when I’m next in Sydney, I’ll be intrigued to go to “The Enemy at Home – The story of German internees in World War 1 Australia” which is on from 7 May – 11 Sep 2011 at the Museum of Sydney, Sydney. From the official blurb: (Continued)