My fellow Americans, we canâ€™t continue in this mode of â€œDumb as we wanna be.â€ Weâ€™ve indulged ourselves for too long with tax cuts that we canâ€™t afford, bailouts of auto companies that have become giant wealth-destruction machines, energy prices that do not encourage investment in 21st-century renewable power systems or efficient cars, public schools with no national standards to prevent illiterates from graduating and immigration policies that have our colleges educating the worldâ€™s best scientists and engineers and then, when these foreigners graduate, instead of stapling green cards to their diplomas, we order them to go home and start companies to compete against ours.
To top it off, weâ€™ve fallen into a trend of diverting and rewarding the best of our collective I.Q. to people doing financial engineering rather than real engineering. These rocket scientists and engineers were designing complex financial instruments to make money out of money â€” rather than designing cars, phones, computers, teaching tools, Internet programs and medical equipment that could improve the lives and productivity of millions.
1) obsessing over PhD stats is useless, because “even if China spends a fortune to train more scientists, it cannot prevent America from capitalizing on their inventions with better business models.”
2) the commercialization, diffusion and use of inventions is more valuable to companies and economies than the original act of invention (hmm, I believe we call that the “Microsoft effect”), so more MBAs than PhDs
I prefer T.F. to T.B. here, though as I am a PhD student married to an engineer, I may be biased!
Razib’s take was written before the Toms’, but I think it a good coda here:
First, scientifically trained people are very common in quantitative finance. Second, history would probably have helped us see what was going to go down; the idea that property values were always going to go up was the latest tulip mania, though the idea was buttressed by “rigorous models.”
The way scientists can help the economy is simple: keep doing science & engineering and increase economic productivity through the generation of new techniques and technologies. That’s the real engine of growth & wealth. I think we’ve really hit the era of diminishing marginal returns when it comes to increasing efficiency through more intelligent capital allocation. Perhaps the lost luster of hedge funds and the financial sector more generally will mean that those trained in the mathematical sciences will remain in those fields. The argument in Knowledge and Wealth of Nations the modern affluence is the product of spillover effects from technological innovation should make it clear what the most optimal allocation of cognitive power is, at least when it comes to aggregate social utility.
So should our education system concentrate on a ‘next generation’ of scientists and engineers, lawyers and MBAs, critical theorists and community activists, or something else?