POWIP Piece of Work In Progress

Come over to the Dark Side…

Let us consider what happens to those who achieve academically -- they go to school for years, being taught by people who often have never had a job outside of teaching. Then they end up in college, being taught by people who think there's nothing better in the world than to be a professor in the academy. But what do they know? Have they actually tried working outside the academy?

This continues a few thoughts from my previous post, but it's mainly inspired by this post, from Cato@Liberty, about the snotty attitude regarding Rhodes Scholars being involved in business.

Apparently Gerson believes that our best and brightest can accomplish more good for the world in such fields as writing, law, and bureaucracy than they can by creating, innovating, and improving lives in the world of business — the arena that not only provides all of us with more comfortable, more interesting lives, and has lifted billions of people out of the back-breaking labor and short lives that were the human condition for millennia, but also makes possible the luxuries of the Aspen Institute, which was founded by Walter Paepcke (1896-1960), chairman of the Container Corporation of America, and is supported by successful businesspeople and their heirs today.

Of course, it’s not clear that business needs Rhodes Scholars. Think of the businesspeople who have revolutionized our world in recent decades: Bill Gates and Paul Allen, Steve Jobs and Steve Wozniak, Larry Ellison, David Geffen, Ted Turner, and Malcom McLean, among others, either never attended or never finished college. Sam Walton, Bill McGowan, and Fred Smith did finish college but weren’t Rhodes Scholars. In the Washington Post Jay Mathews notes that the chief executives of the top 10 U.S.-based Fortune 500 companies attended Pittsburg (Kan.) State, Texas at Austin, University College Dublin, Texas Tech, Texas at Austin, Dartmouth, Kansas, Gannon, Georgia State and Central Oklahoma, not the usual sources of Rhodes Scholars.

But the elite hostility to business — a holdover from Europe, perhaps, where aristocrats looked down on “trade,” or an unconscious echo of Marxism — is unseemly and harmful to both general prosperity and the individuals who are influenced by it to avoid productive enterprise. It crops up in President Obama’s commencement addresses sneering at students who want to “take your diploma, walk off this stage, and chase only after the big house and the nice suits and all the other things that our money culture says you should buy” and in Michelle Obama’s urging hard-pressed women in Ohio, “Don’t go into corporate America.” It’s nice that some people, like senators’ wives, can make $300,000 a year in “the helping industry,” but it’s business that produces the wealth that allows such nonprofit generosity.

The contempt is mutual.

When I applied for a temp job, during a summer while I was in college, the woman running the agency made fun of the fact that I had never had a "real job" [I had taught, and worked in the math department's computer labs]. After my typing test, she shut up [No, 60 wpm isn't speedy, but it's decent and I made no errors. It probably was better than most of the people who took the typing test.] I had a good time doing data entry for a company that did inspections on foreclosed properties [and it was interesting when one of the field agents sent in newspaper clippings showing the person being foreclosed on was in jail pending his trial for murder.]

When I dropped out of grad school and tried to enter the world of finance in NYC [my timing being fabulous, as my job search began in 2002], in the few interviews I got, there was often a sneering that I wouldn't have any useful skills to bring, and what's worse, an assumption that I'd have a bad attitude as the work as a spreadsheet monkey would be beneath me intellectually. As I said then, I have an math background probably deeper and wider than most of the people there, but I had no business experience, and I wasn't about to assume that I knew anything about business. I ended up getting an entry-level job at TIAA-CREF in the actuarial department, and I got quite the experience not only in business, but also academia.

TIAA-CREF has universities as its main customers, and their main product is retirement plans for these institutions. Well, retired [and tenured] professors love writing letters telling people how they're doing it all wrong, and one of the most fun jobs I've done is composing letters in reply to the guys who wanted to tell the actuaries how they were screwing it up. You see, according to one guy's calculations, using a life insurance male mortality table from the 1960s [was that before we broke out non-smokers vs. smokers? Can't remember when that occurred], and calculating the annuity value using life expectancy and an interest rate much higher than one can get on the investment-grade corporate bond market.... we were totally screwing this guy over on his annuity payments.

From a business standpoint, I suppose writing a 6-page letter in response to this guy [complete with footnotes!] wasn't the best use of our time, but it sure was fun. Heck, I was a low-paid [relatively] actuarial assistant, and reading these customer letters [they only filtered quantitative-related letters to the actuarial department, but we'd get things where we had to explain exactly what compound interest is. To a stats prof. It was so embarrassing] gave me a taste of limited rationality even on the part of people who really were very smart. At least in their fields.

I also learned about how irrational business can be from the inside as well. People have the same cognitive blind spots, whether in business or academia.

But here's a major difference between business and academia: an outside measuring stick. If I screw up enough in business, then the business will fail. [Yes, the politically well-connected companies might be able to avoid disaster for awhile, but you do need to make money at some point to buy off those politicians. It will be interesting to see how Government Motors fares in the years ahead.... ]

Academia is very insular. You might think the outside check on some fields, such as the hard sciences, would be reality itself, but once people get involved, there's an awful lot of politics. And once you reach tenure? What is the outside check? At that point, it's a matter of pecking status, whether you get grants and grad students, what your reputation is in your field. You can get locked into a small circle of researchers and it becomes status games within this circle. [Hmmm, for some reason, I'm reminded of blogging here. Except I'm not getting paid for this. Do they award grants to bloggers to continue doing what they were going to do for free anyway?]

Yes, status games within a small circle do happen within business, too. That's just human nature. But there's the possibility of escape, into starting your own business, where the market is going to determine whether you succeed or fail.

I like reading Paul Graham on issues such as these [he specializes in tech startups, and has some sort of venture fund thing himself. But one thing he notes is that to do really well in business, you've got to take risks -- and that's really anathema in the academy. Consider schooling - you do as you're told, you get good grades, you "succeed". You're following the rules. Funny how that doesn't work when you get outside the academy. Consider tenure - where's the risk in that? You follow the rules in grad school, you write your dissertation which must be approved by already tenured profs, you do research for a number of years and get published [which involves doing work just a little bit different from what's out there, but not too different]. Now you're a tenured prof! Huzzah! Now you have the freedom to buck the system.... but will you? You've been in a system where all this time conformity is what is rewarded.

I could pull in the whole Climatequiddick crap into this as well, but that's gilding the lily at this point. Stuff like that happens all the time in academia, just usually not that blatantly documented and usually not involving impacting the world economy to the tunes of billions of dollars per year. The stakes usually are much more rinky-dink, and that much more hotly contested when there's little more at stake than personal reputation and status. Think of blog wars. Yeah, that level of importance. And now I'm going to gratuitously link to Stacy McCain, because he likes that sort of thing, and it just seems fitting to do at this point.

Meep

Meep is a member of the Irish Catholic mafia, having a suspiciously high number of green-eyed, red-haired friends. While she doesn’t have red hair herself [except when she goes into the sun (rare for any vampire)], she does have green eyes. She’s a raving Papist and is a life actuary on the side [i.e., she counts dead people]. An amateur pain-in-the-ass [willing to go pro!], she likes covering retirement, mortality, math, and education issues.