Higher cost, lower esteem

Revisiting something I noted a few years ago, an incredible story of a university suing its former student for graduating too rapidly:

A German university is suing a student for lost income because he finished his bachelors and masters degrees in only 20 months.

The School of Economics and Management in Essen is asking the court to make former student Marcel Pohl, 22, pay an extra $3,772 after he obtained his degrees in only three semesters instead of the usual 11, The Local.de reported Tuesday.

“When I got the lawsuit, I thought it couldn’t be true,” Pohl told the Bild newspaper. “Performance is supposed to be worth something.”

Could there be a better example of how ugly it is when colleges forget that their role is developing a human person, rather than producing (or benefitting from) just the economic dimension of a person?

Does a college exist to extract value from its students before producing graduates for a marketplace, or does it exist more broadly to elevate its students beyond their marketplace value?

This question prefaces almost every conversation about college life today.

Commitment, not passion

I think one of the most misunderstood ideas today is that happiness in life comes after you decide to “follow your passion.” Steve Jobs famously encouraged young people to follow their passion in his Stanford commencement address. It’s a beautiful way to think about creating an intentional and rewarding life, but those three words paper over the stark reality that “passion” doesn’t lead to “happiness.” Steve Jobs himself elbaorated on this idea in a separate talk:

“People say you have to have a lot of passion for what you’re doing, and it’s totally true. The reason is because it’s so hard that if you don’t, any rational person would give up. It’s really hard. And you have to do it over a sustained period of time. So if you don’t love it—if you’re not having fun doing it, and you don’t really love it—you’re going to give up.”

In other words, people who are committed to their vision, or who have a strong sense of vocation or purpose in life, are the ones likeliest at least not to be discouraged by the sheer difficulty of realizing their vision. Jobs suggests needing to be irrational in pursuit of the passion, but I think it’s simpler to think in terms first acting out of a place of happiness, and second, living with commitment. Warren Buffett spoke to this many years ago:

If you think you’re going to be a lot happier if you’ve got 2x instead of x, you’re probably making a mistake. You outta find something that you like that works with that and you’ll get in trouble if you think that making 10x or 20x is the answer to everything in life, because then you’ll do things like borrow money when you shouldn’t, or maybe cut corners on things your employer wants you to cut corners on. It just doesn’t make any sense, and you won’t like it when you look back on it.

Far better to encourage young people to have a fixed ethical/moral sense, and unshakeable commitment to something concrete.

Castes v. mobility

I want to share some excerpts from R.W. Grant’s The Incredible Bread Machine, a “study of Capitalism, Freedom, and the State” published in the 1970s:

Every enterprise imaginable — dry cleaning, trucking, beauty parlor, grocery store, and on and on — is today under the thumb of the politician. ….

For those who already have capital, experience and education, the numberless “barriers to entry” erected by the state [ie – licensing, regulatory requirements] can be overcome, but to the under-capitalized poor, often with little experience and scant education, these barriers are virtually insurmountable. The illegal immigrant selling oranges at the off-ramp of the Los Angeles freeway is a truer capitalist than those businessmen who are constantly running to government for this-or-that favor or restriction.

Regulation is a necessary evil, but onerous or punitive regulation is a genuine evil in that it distorts natural relations and market activity, typically to the greatest detriment of the “under-capitalized poor.”

[T]he barriers are more complex today than they were then. For example, suppose a person in a poor area saw the need for a low-cost barber shop. One might suppose that with a few hours practice, a $15 set of clippers, a chair and a willing customer, he could go into business. Then, if her were industrious, and were truly able to provide a service of value to his neighbors, he would prosper. Perhaps one day he could open a bigger shop and hire two of his relatives. That is the way things are supposed to be in a “land of opportunity.” But that is not the way things are. In California, this is what the law says he must do.

The first step for an aspiring barber is a barber’s license granted by the state Board of Barber Examiners. But this requires either two years as an apprentice working for someone else or 1500 hours (!) at a state-licensed barber school at a cost upwards of $3,500. … Then, it costs $50 to register for the state test. And then, if the test is passed, there’s another $50 for the two-year state license. But there’s still more, for the new shop must now be inspected and approved by the Board — for another $50. Then, a city business license ($106.43 in Los Angeles). …

Now, assuming he were still in business, suppose the new proprietor hires an assistant. Deductions, contributions and fees must be accurately computed and paid. Just for starters there’s Worker’s Compensation and unemployment insurance (around 1.3% of the first $7,000 in wages) paid for by the employer. Then, in California there’s something called the Employee Training Tax, 0.1% of the first $7,000. Then there is a Federal Unemployment Tax, $56 per year per employee.

Now come the payroll deductions. State Disability Insurance (SDI) is 15% of the first $31,767 in wages. Then there’s State Withholding Tax (variable). Then come the federal calculations which include Withholding plus Social Security/Medicare (7.65% matched by the employer).

The paperwork for all this represents a severe burden even to people with a fair degree of schooling; to the person with only a meager education and perhaps only a scant familiarity with the mysteries of bookkeeping, these artificial barriers to business survival are simply overwhelming. But there is still more: most states enforce — or try to enforce — minimum price schedules. But a poverty area shop forced to charge these inflated rates would go out of business in a week!

The decision a few years ago to give the FDA power to regulate tobacco demonstrates the way in which regulation can be used to insulate existing interests from competition. Who came out on top in that case? Marlboro. Flush with cash, and with an army of lobbyists, they successfully convinced the FDA to ban flavored tobacco cigarettes on the grounds that they appealed to children. Okay…

A big maker of flavored cigarettes (a competitor) was Djarum, an Indonesian company that was effectively eliminated from the U.S. market by that protectionist regulation.

And most interestingly, Marlboro’s menthol flavored cigarettes were exempted from the flavored tobacco ban. Critics have dubbed this change in law the “Marlboro Monopoly Act of 2009.” (Black Americans are a large percent of menthol sales, and a ban including menthols would have dealt a heavy blow to Marlboro’s market share.)

It seems as if bureaucracy and regulators function well when promoting a principle, but often stumble when enforcing specific policies.

It’s better to try

Seth Godin writes:

…if the cost of finding out [whatever you need to find out] is a phone call, make the call. No need to spend a lot of time planning how to call or when to call or which phone to use when execution is fast and cheap.

The digital revolution has, as in so many other areas, flipped the equation here. The cost of building digital items is plummeting, but our habit is to plan anyway (because failure bothers us, and we focus on the feeling of failure, not the cost).

The goal should be to have the minimum number of meetings and scenarios and documentation necessary to maximize the value of execution.

The key idea is that “when execution gets cheaper, so should planning.”

Now, this doesn’t (or shouldn’t) mean “don’t do things intentionally” or “just act for the sake of acting”. What it means is that it’s easier to try things, and the financial/reputation cost for trying new things tends to be incredibly low.

A small example is a company embracing videoconferencing when consensus dictates the need for a conversation versus 10 business days of communication to schedule meetings to talk about issues that might already be moot.

The purpose of meetings is to talk through how to do things. Since we often won’t really know until we try, it’s often better to try than to plan.

‘You can’t love something you don’t know’

David McCullough, Pennsylvanian and historian, wrote a few years ago:

“People who come out of college with a degree in education and not a degree in a subject are severely handicapped in their capacity to teach effectively,” Mr. McCullough argues. “Because they’re often assigned to teach subjects about which they know little or nothing.” The great teachers love what they’re teaching, he says, and “you can’t love something you don’t know anymore than you can love someone you don’t know.”

Where are we now? Teachers majoring in “education” (theory), then graduating and becoming the head of a fifth grade classroom—all with no particular depth in any of the subjects to be taught. That’s a problem, isn’t it?

I don’t think passion can be taught. I think it flows out of us naturally; it’s like energy. A teacher either has zeal, or a teacher doesn’t have zeal. She either knows her stuff, or she doesn’t. And a third grader will know. It’s instinctively obvious to any child when an adult is in her element, in charge, not to be messed with, to be paid attention to, to hang on every word, to respect.

But that’s where we are today. We’re all being taught to be generalists in a world that’s rewarding specialists. Anyone can know a little about a lot. Few can really walk you through much with depth, and with ease.

Teacher 1: “The Battle of Stalingrad was the bloodiest on the eastern front. X happened, then Y happened. Some say this about it, others say that.”

But what was life like for the German soldier, huddling at night amidst mortar and chaos and an anonymous death?

Teacher 2: “Let me tell you how this soldier’s death in Russia broke his family in Munich, and about the life of his son growing up fatherless in the fringes of the Iron Curtain after being raised to believe Hitler was a savior.”

We don’t get “Teacher 2” when we let our schools be dictated to by Middle States and other accrediting agencies.They require schools to hire only certified teachers. And a certification program isn’t typically something a real historian, or a real businessman, or a real science lover either gains real knowledge from or has time for.

So we get Teacher 1, and a world where many teachers deserve provide as much information (or less) than what’s found on Wikipedia, etc. In the society we’ve built, too many teaching positions should be automated.

But the conversation really shouldn’t be about online learning or automation. It should be about asking whether our teachers are in love with what they’re teaching.


When I was in Washington late last month for Michael Novak’s funeral, I stayed at the Marriott in Foggy Bottom. It’s functionally a part of George Washington University’s campus.

After arriving on Friday night, I looked at what was nearby for dinner and ended up grabbing a sandwich from Carvings, a small deli around the block. It was a beautiful night, still in the mid-60s after a day that cracked the 70s in late February. The twilight was hanging in the air, and students were enlivening the streets and windows. On the way out I picked up a copy of The Hatchet, GW’s student newspaper.

The cover story was an uninteresting feature on their outgoing president’s global fundraising tour. Inside, an opinion piece by Sky Singer was more interesting. Headlined, “GW should let underclassmen take classes pass/fail,” Sky writes: “When I was a freshman … I felt hesitate to take classes I knew nothing about but thought might be interesting. The worry that I would fall behind on completing my requirements and the stress of maintaining a strong GPA during my first term dissuaded me from trying things outside of my comfort zone. But looking back on my first couple of years at GW, I wish I had taken the time to explore more classes and subjects I was not exposed to…”

I think this is absolutely right, and something I’m adding to my wishlist for Penn State. Our colleges have become far more administrative and credentialistic in their nature, and I’m sure what Sky describes at GW is a reality among most young people. When young people stay in their comfort zones and avoid interesting but intimidating subjects, the humane and liberal arts aspects of their education suffer.

Penn State was once at the forefront of radically rethinking what it meant to be a college-educated citizen, blending the liberal and “mechanical” arts to encourage the development a more comprehensively-educated sort of person. If students are taking simple courses to maintain a stellar GPA, their degree diminishes in its value.

Why not something as radical as a “first semester pass/fail” policy to encourage curiosity, boldness, and discovery?

Catholic social teachings

In the latest Legatus magazine Andreas Widmer writes:

What makes business leadership Catholic?

…knowing and implementing the Church’s social teaching. Many business leaders are surprised to learn that the Church’s rich social teaching didn’t start with Pope Leo XIII’s encyclical Rerum Novarum (1891); it goes back to Sts. Thomas and Augustine, the Church Fathers and the apostles. It goes back to the radical charity that Jesus himself described in John 13:35: “This is how all will know that you are my disciples; if you have love for one another.”

As scholars have studied, meditated upon and lived Christ’s social teachings through the centuries, they’ve synthesized them into nine basic classic principles:

  1. Human dignity: Men and women are made in God’s image and destined for eternal life.
  2. Justice: This cardinal moral virtue consists in the constant and firm will to give their due to God and to neighbor.
  3. Social justice: Groups and individuals must receive what is rightly owed them.
  4. Common good: All the conditions in society must allow individuals and groups to reach their fullest human potential, both in this life and the next.
  5. Solidarity: This is a firm and persevering determination to commit oneself to the common good.
  6. Subsidiarity: Social functions should occur at the lowest possible level so that individuals and groups have a true sense of purpose.
  7. Universal destination of goods: God gave the good things of the earth to the entire human race, not just a select few.
  8. Charity: Charity disposes us to love God above all creatures for Himself, and to love ourselves and our neighbors for the sake of God.
  9. Preferential option for the poor: Charity requires us to place the needs of the poor before our own.

Worth referencing from time to time…