Tag Archives: STEM

Optionality and Education

This post introduces optionality, optionality in the context of foresight and then raises implications for education.

Discussing Optionality

A bit ago, both Tren Griffen and Nassim Taleb discussed “optionality” on their blogs.

“Optionality” refers to an investment decision where the reasonable upside is much larger than the reasonable downside.

Here are some of Tren’s thoughts on optionality:

Optionality is lost when you’re initial investments are so large, you cannot afford to abandon your initial plans:

“A rigid business plan gets one locked into a preset invariant policy, like a highway without exits —hence devoid of optionality.” I am at my self-imposed 999 word limit so what follows including this quotation must largely stand on its own without commentary…

“Optionality… explains why top-down centralized decisions tend to fail” …

“Like Britain in the Industrial Revolution, America’s asset is, simply, risk taking and the use of optionality, this remarkable ability to engage in rational forms of trial and error, with no comparative shame in failing again, starting again, and repeating failure.” Entrepreneurs harvest optionality when they tinker and experiment as they run their businesses and as a positive externality benefit their city/region/nation/the world in the aggregate by generating productivity and genuine growth in the economy even if legions of entrepreneurs may fail. Taleb: “Most of you will fail, disrespected, impoverished, but we are grateful for the risks you are taking and the sacrifices you are making for the sake of the economic growth of the planet and pulling others out of poverty. You are the source of our antifragility. Our nation thanks you.”

Optionality in the Context of Foresight

Unlike rigidly planned investment strategies, optionality emphasizes only maintaining flexibility and recognizing success when it happens:

“If you ‘have optionality,’ you don’t have much need for what is commonly called intelligence, knowledge, insight, skills, and these complicated things that take place in our brain cells. For you don’t have to be right that often. All you need is the wisdom to not do unintelligent things to hurt yourself (some acts of omission) and recognize favorable outcomes when they occur. (The key is that your assessment doesn’t need to be made beforehand, only after the outcome.)” Being able to make decisions which do not require correctly forecasting the future is a wonderful thing. Not one of the great value investors identified in the series of posts in this blog relies on macro forecasts of the future. Instead, value investors use the optionality of cash to buy after the outcome exists (i.e., a significant drop in intrinsic value). Regarding venture capital, Warren Buffett believes: “If significant risk exists in a single transaction, overall risk should be reduced by making that purchase one of many mutually- independent commitments. Thus, you may consciously purchase a risky investment – one that indeed has a significant possibility of causing loss or injury – if you believe that your gain, weighted for probabilities, considerably exceeds your loss, comparably weighted, and if you can commit to a number of similar, but unrelated opportunities. Most venture capitalists employ this strategy.”

“Optionality” is related to the career advise given by Jim Collins. Instead of simply cataloging your skills, and applying for high-paying jobs in which those skills are required, Collins recommended first looking at (a) what you love, (b) what you can be great at, and (c) what you can make money doing. The goal isn’t to aim for some perfect job sometime later in your life, but to set yourself up in an area where you enjoy practicing and you adaptable for those opportunities that appear.

3-circles-hedgehog-concept

Implications for Education

Optionality is an investment choice that has a small potential downside but large potential upside. You don’t need a strict plan, lots of foresight, or even great environmental awareness to look for investment choices that have optionality. You simply need to keep from making bad decisions, and need to tolerate “getting it wrong” (which means simply starting over).

So what does this mean for education?

Student loans are an anti-optionality catastrophe.

Student loans are impossible to get rid of in bankruptcy. They also require a lot of foresight and planning — and worst of all, require it of 18 year old idiots (that is, virtually all 18 year olds).

Being an idiot isn’t a bad thing — if you have optionality, you try, fail, and learn from experience. But being an idiot with debt is a horrible fate.

At the very least, non-bankruptable student loans should never be offered for non-Science/Technology/Engineering/Mathematics majors. To force someone with no work history to take ten thousand, twenty thousand, or more in non-forgivable debt for a worthless English literature degree is horrid. It is the closest thing to “usury” that exists in our world outside of organized crime.

Not only do non-bankruptable student loans kill optionality by making education have a big potential downside, they make that downside more likely. Student loans for non-STEM majors encourage failure by getting students to loan up to enter a ghetto of low wages and few jobs. This is the opposite of encouraging wise investments.

We need to close the on-ramp to the ghetto by discouraging youth from making choices that don’t have optionality. We need to end non-STEM student loans.

seattle_ghost_ramps_blocked

It’s better for an 18 year old to be a drug dealer or go-go-dancer than to take non-bankruptable loans to study sociology. Those options may have optionality. Sociology doesn’t.

Teachers and Intelligence

An individual’s performance is influenced, among other things, by his creativity, his motivation, his personality, and his intelligence. Intelligence can either be crystallized or fluid. Crystallized intelligence is in long term memory: it is what his knowledge, his expertise, his experience. Fluid intelligence is the central executive of working memory which controls what you think, what you pay attention to, and how you reason. Besides the episodic buffer that provides context, fluid intelligence is composed of a visuo-spatial sketchpad associated with scientific and mathematical reasoning, and also a phonological loop associated with rhetorical and verbal reasoning.

This is the context for some charts provided by the Educational Testing Service [PDF download], and already discussed by Education Realist, Razib Khan, and Steve Sailer.

Here is the chart for the verbal SAT score of teachers, which is a rough measure of their verbal and rhetorical:

Here is a chart for the mathematical SAT score of teachers, which is a rough measure of their scientific and mathematical reasoning ability:

Steve Sailer had the following thoughts:

Overall, public school teachers are pretty average for college graduates. It looks like they average about a quarter of a standard deviation lower on college admission tests than do average college graduates. But then college graduates are above average. With the exception of high school math teachers, teachers tend to score higher on the Verbal / Critical Reading section than on the Math section. That’s their job: to use words to explain stuff. But it also explains why they have trouble dealing with the flood of data that’s been incoming in recent years: thinking about statistics isn’t their strong suit.

My guess is that smarter teachers would probably be a good thing, so we ought to be thinking about ways to make the job of teaching more attractive to smart people. In general, smart people don’t like dealing with knuckleheads, so forcing teachers to carry most of the burden of discipline, a growing trend in recent decades, is a good way to keep smart people out of the business. You can instead use some of those gym teachers to run after school detentions instead of delegating most of the disciplining down to the teachers as happens in so many public schools desperate to avoid disparate impact lawsuits by not generating a paper trail of discipline actions carried out by the administration.

My take is if you want more lawyers and MBAs produced by our educational system, you should be happy with the status quo. If you think Science, Technology, Engineering, and Mathematics (STEM) are better at producing wealth, though, you should be unhappy for this.

On the other hand, if we don’t start treating teachers as professionals we’re going to end up with idiot-proof instructional technology anyway, so it might not even matter.

The Coburn Amendment on Political Science

Folks are pretty riled up that Senator Tom Coburn (R-OK) introduced a floor amendment to prohibit the National Science Foundation from funding research on political science.*

Now, before I go on, I should point out that I have a political scientist on my dissertation committee!

Now, that said, Senator Coburn’s argument makes sense for anyone who has been following this blog:

When Americans think of the National Science Foundation, they think of cross-cutting science, technology, engineering, and mathematics. Most would be surprised to hear that the agency spent $91.3 million over the last 10 years on political “science” and $325 million last year alone on social studies and economics….

STEM (Science, Technology, Engineering, and Mathematics) are the future of education in America. Coburn is trying to focus the National Science Foundation like a laser on STEM. Good for him.

That said, Coburn’s amendment is misplaced for four reasons.

1. As a matter of policy, I trust NSF bureaucrats** to set NSF priorities more than I do politicians
2. Generally, while STEM is the foundation of a modern education, political science is heavily scientific and mathematical. Coburn is thinking about STEM from a student’s perspective, not a practitioner’s perspective
3. There is only one natural world out there. Pretty much any breakthrough has consequences for political science and political behavior.
4. Senator Coburn is confusing punditry (which is a form of entertainment, on an intellectual par with docudramas about famous sluts) with political science.

While I understand Coburn’s concerns, he should withdraw his amendment.


Notes: The Obama administration has published new rules for bloggers, that are designed to allow easy prosecution of bloggers that the administration does not like. Specifically, the Administration has let it known that those who accept gifts and favors cannot blog about topics that concern the sources of those gifts and favors without full disclosure. Again, the obvious purpose of this is to use this as a “gotcha” way of throwing the book at someone who publishes something embarrassing to the President in the future. Nonetheless, this one time, I will comply out of a sense of my deep respect for Obama administration bureaucrats

* One of whom is on my dissertation committee
** One of whom drunk me under the table in Beijing.

STEM and History

In an excellent post, my friend Mark observes:

Aggravating matters, even if a prospective teacher did major in history in college, fewer of their professors were full-time history instructors than ever before, meaning that even the quality of the small minority of teachers who are history majors is going into decline! NCLB scorns history as a subject, so school districts across the nation will continue to starve it. Poorer districts will fire all the social studies teachers in coming years and parcel out the history sections to unwilling English teachers in order to save the jobs that will preserve reading scores (assuming those are making AYP in the first place).

Mark is right.

As someone who loves history, this is very sad.

As someone who is concerned with having a competitive educational system, this is fine.

Economic growth does not come from knowledge of history. If it did, Britain’s liberal arts and history-based curriculum would have allowed it to maintain hegemony in Europe through the 19th and 20th century. Insteda, science, technology, engineering, and mathematics are the “STEM” of economic success.

george_washington_mount_rushmore

History is a sentiment. Engineering is a reality.

George Bush did America a great favor by creating No Child Left Behind, and scorning history in favor of classes that are the root of STEM. However, like all great moves the consequences of No Child Left Behind are largely invisible to the public.

If America does not wish to become a second-rate power, America must avoid the path of Britain and take up the road of Germany. America must continue to prioritize fields of knowledge that are practical, and recognize that the rest are an enjoyable possibility for those looking for leisure.

Mark concludes the part I excerpted by writing:

After that, the science teachers will start to get the axe.

Ultimately, science can be taught in an intensive, adolescent setting if reading skills exist. Humans are natural learners, but not natural readers. It is more important to teach children how to read and comprehend information than to teach them the sort of vague facts that comprise a school science curriculum. Indeed, it is more important to learn to read than to know the “scientific method,” because the scientific method is itself idealized and not particularly useful to know until one is mid-to-late career.

American schools would be well-served by ceasing to teach history entirely, putting up some photos of Washington and Lincoln and the wall, and using tha hour a day to focus on mathematics and statistics. Indeed, No Child Left Behind implicitly encourages this. Only the backward-looking state standards boards, and the sentiments of our people, keep us from doing this.

Obama captiulates on foreigner-bashing!

Good news! Both Slashdot and Weekly Standard note the news, but both miss the story. Obama has always been a flake, a candidate of the establishment who can be trusted to do what he is told because he does not know any better. Today, we see more evidence of that. Given the choice between bashing China or following the Democratic Party elites, Obama flops. Good.

Versionista has the comparison. Obama’s old webpage pushed the view that H1Bs were in general not particularly qualified, and we could get away with less immigration if our schools were better. But that nonsense is now gone! The old page was full of language like this:

Most H-1B new arrivals, for example, have earned a bachelor’s degree or its equivalent abroad (42.5%). They are not all PhDs. We can and should produce more Americans with bachelor’s degrees that lead to jobs in technology. A report of the National Science Foundation (NSF) reveals that blacks, Hispanics, and Native Americans as a whole comprise more that 25% of the population but earn, as a whole, 16% of the bachelor degrees, 11% of the master’s degrees, and 5% of the doctorate degrees in science and engineering. We can do better than that and go a long way toward meeting industry’s need for skilled workers with Americans.

The implication of lines like this is that if we spend more money on “blacks, Hispanics, and Native Americans,” we would need less Asians. Thankfully, the establishment got to Obama, and this 19th century racial-politics/bundle-of-work nonsense is gone.

I previously criticized Obama for hinting that he would kick the forigners out of the country. I am glad he came around.

Here’s hoping Obama’s next move to betray his original supporters and befriend the establishment is changing his tune on Colombia.

Obama’s 19th century view of Science and Technology

Courtesy gnxp, this question-and-answer with Barack Obama on science. Particularly, Obama focuses on “STEM” – the Science, Technology, Engineering, and Mathematics fields that fuel so much of our growth. Those who actually follow news on STEM, a set which does not include Obama, are aware of the controversial STEM extension to post-degree ‘internship’ work, which allows foreigners who graduate from American universities to work for up to three years in the United States without even having an H1-B visa.

Unlike vague hand-waiving on issues such as global warming, STEM immigrant and non-immigrant labor actually affects the United States economy right away, and causes compounding benefits of damages (depending on your view) in the years to come.

Given this, it’s obvious that Obama does not say a single word how immigration impacts Science, Technology, Engineering, and Mathematics. I know that in college Obama hung-out with marxists and hippies, but if he would have actually visited the STEM programs he would have seen how they essentially run on indentured foreign labor. Such a state of affairs has real consequences. Should it be expanded? Should it be rolled-back?

Not a word from Obama. Instead, we get vague calls for pointless great power conferences. How 19th century:

Sciencedebate 2008
I will restore U.S. leadership in strategies for combating climate change and work closely with the international community. We will re-engage with the U.N. Framework Convention on Climate Change, the main international forum dedicated to addressing the climate change problem. In addition I will create a Global Energy Forum—based on the G8 5, which includes all G-8 members plus Brazil, China, India, Mexico and South Africa—comprising the largest energy consuming nations from both the developed and developing world. This forum would focus exclusively on global energy and environmental issues. I will also create a Technology Transfer Program dedicated to exporting climate-friendly technologies, including green buildings, clean coal and advanced automobiles, to developing countries to help them combat climate change.

Barack Obama is the candidate of the past. If you liked eight years of George Bush’s style and want more of the same, vote Obama. Otherwise, vote McCain.