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The Human Wealth of Nations

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31 pointscarlosgg52 comments

I have listened to a great deal of hand wringing since the PISA reports dropped and I think it is easy to concentrate on the negative and overlook the positive news from these results.

Three points I think we should keep in mind.

One, the results were VERY uneven among the states. More importantly, if you look at the Northeast, (Massachusetts, NY, NJ etc), and the western Midwest, (Minnesota, Wisconsin), the scores were pretty competitive relative the top performing nations actually. For instance, in Massachusetts, even if you only counted the scores of black students, the Math and Science average was higher than Finland, which is continuously touted as a model of educational efficiency!

Two, teens in Mississippi, Texas, California and Washington are pretty much the same as teens in Minnesota, New Jersey and Massachusetts. This is good news, as it indicates that there are models out there that can be employed to better the performance of students in other areas of the country.

Lastly, something about the US creates an openness in its citizens that drives a good deal of activity beneficial to society. The article references, for instance, "... America's entrepreneurial energies, its openness to innovation and creative destruction ...". This "Creativity" has some value, which I would admittedly be challenged to quantify. It is the sort of thing tests will overlook. Which is curious, because in the future I think it will be one of the most important skills, (or, 'traits' perhaps), of the high value worker.

My last point had only a tangential relevance to the PISA, I just thought it was an important point to make. That aside, I think the first two points are clearly cause for a cautious optimism here.

Thanks for the context. These statistics favor monocultural societies and collectivist societies over individualist ones. Your point on innovation is but one overlooked factor that these stats don't account for.

I'd love to get some global statistics on educational knowledge of 18 year olds in all of these countries, and also get statistics on the per capita numbers on new businesses opening up by this age group in these countries as well. Just a thought that IMO may not skew these stats so much towards monocultural/collectivist societies so much.

The U.S. actually ranks pretty low among OECD countries in terms of rate of entrepreneurship. There is a strong correlation between a strong safety net and entrepreneurship.

And I'm sure innovation in general is even harder to monitor.

Well I still stand by my observation that the top rated countries are on average more monocultural and collectivistic (which would lead to better safety nets I'd hope).

bilb0s, where did you find the report by state?

"even if you only counted the scores of black students"

This is the sort of thing I can never really swallow when reading stuff about education rankings in the states. There's a lot of what seems to be really casual\accidental racism along the lines of the quoted text above as well as things like "controlling for race" and excuses pinning the US's low scores on being "more multicultural". Perhaps this is not the intent but it's sort of painful to read.

It's not "casual racism." It's simply a recognition of the fact that blacks in the U.S. face unique challenges that are not just economic, but social. Those challenges, while important, have effects that can obscure whatever it is that you're actually trying to study.

If you're trying to evaluate school quality, it makes no sense not to control for race and socioeconomics. It wasn't the schools that enslaved blacks, segregated them into ghettos, then subjected them to disparate treatment in a violent drug war. And schools won't be the solution to those things either. This isn't an "excuse" it's a recognition of reality. Education by itself cannot be America's salvation for its past sins.

Failing to control for race and sociology-economics leads you to the wrong conclusions. If you look at the test scores of students in Chicago, ignoring race, you might be tempted to conclude that Chicago has a problem with its schools. Maybe they need more funding or better teachers. That's the wrong conclusion. The reality is that 90% of kids in Chicago public schools are black or hispanic, and almost 90% are low-income. The schools are in areas of strong gang presence, and gang activity has infiltrated every one of the schools. The gangs have replaced parents and teachers as authority figures and the bedrock of social order has crumbled. Schools, no matter how well funded, and teachers, no matter how qualified, aren't going to fix those root causes.

My wife taught in a school on Indian land in eastern Washington. She had an awful experience, because she realized that these kids didn't need teachers with degrees from good schools, but fathers who weren't alcoholics, or indeed fathers in the first place. Schools and education cannot replace these things.

So then why not control for low income or poor social conditions? Why make the connection from black\hispanic to "bad"?

First, because there is more to it than just income. My wife grew up in a town of about 3,000 people in Iowa. The town had poor people and rich people, but was ethnically homogenous (98% white), and everyone went to the same schools, same churches, their kids played together, etc. I've been to a similar-sized town in Illinois that is ethnically mixed (about half hispanic, half white). The hispanics in that town are poorer than the whites, as a group, go to their own church, don't speak English at home, their kids play with other hispanic kids and not so much with the white kids, though they all go to school together. Then you have places like Chicago, where a neighborhood might be 95% low income hispanic, where kids only play with other low income hispanics and go to a school that is 90%+ low income hispanic.

A child with the same family income is going to nonetheless have a dramatically different experience in the three cases. They will have dramatically different experiences not because "hispanic = bad" but because the segregation is bad, and race is a powerful driver of segregation in American communities even today.

I agree that it would be better to break things down into the relevant elements, instead of using race as a crude proxy. Adjust for whether parents speak English at home, adjust for educational status of parents, adjust for level of gang activity in the community, adjust for whether father figures are present, adjust for level of social integration between economic classes within the community, etc. Considering all of those things, together, would be better than using race as a proxy. But we don't keep the data in a way that would allow us to measure things that way. We keep track of racial demographics, but not things like the degree to which kids of different economic backgrounds play in mixed instead of segregated groups.

Well for a start, there's a very common [far]-right wing argument that Finns and Chinese are probably innately smarter due to not having many native black or hispanic citizens. You can either ignore it, or you can demolish it pointing out that black kids in certain states actually do better than the very, very white Finnish population....

There's also a lot of what seems to be really casual/accidental accusations of racism in contexts where it clearly doesn't exist (i.e. recognizing and accounting for racial differences isn't racist). That different racial groups score differently on IQ tests, for example, is a fact that can be stated without any judgement of value, or, indeed, without any attempt to explain its causes (which are numerous, I'm sure.)

A true fact stated in a certain way can lead to false impressions e.g. Group A is poorer than Group B, or Group A have less years of education than Group B. If however, Group A is on average younger than Group B, then the differences may disappear. Is is still "true" to state those "facts" without the extra context?

You'd obviously want to control for age in exactly the same way as the comment that started this thread mentioned controlling for race. That's exactly what we're talking about. I'd hope nobody would call you ageist for doing so.

I don't really have any issue with the original comment, but it was someone rushing to provide context for the apparently misleading fact that "Finland does better than the US" so the thread itself shows that facts do not stand alone, and that people care about that context when it's the US as a cultural whole that is low-ranked, in fact it's basically a cliche in these discussions.

Another article that misleadingly cites PISA scores without adjusting for demographics: http://voices.washingtonpost.com/answer-sheet/research/how-p..., http://super-economy.blogspot.com/2010/12/amazing-truth-abou....

The U.S. has problems, but the problems are not schools, teachers, or funding. The problem is Chicago, Philly, L.A., Detroit, etc. Places that have levels of crime and social dysfunction that simply do not exist at that scale in other OECD countries.

I live in Wilmington, DE. A city of 71,000 people. Last year, it had 26 murders. London, a city of 8 million people, had 99. That's a 30x higher murder rate (and 2x higher than Bogota, Colombia!).[1] These are mostly 20-somethings killed in gang wars. There's a pipeline from the schools here straight into these gangs. I'm not surprised that test scores aren't the first thing on the minds of kids here.

Also, I'll note that the U.S. has one of the highest fertility rates in the OECD, just behind Mexico and Turkey. I don't think its unreasonable to assume that this has an impact on the demographic distribution of children in schools. That is to say, I'm willing to bet that children in schools in other OECD countries were more likely to be planned and born to parents who intended to take care and properly educate them than children in American schools.

[1] Four major U.S. cities (five if you count Puerto Rico as part of the U.S.) make the list of the 50 most murderous cities in the world: http://en.wikipedia.org/wiki/List_of_cities_by_murder_rate. The only countries with cities on that list that aren't in Latin America are Jamaica, South Africa, and Iraq.

Probably close to 90% of the murders on that chart are related to the drug trade. Notice how they are mostly in Central/South America.

Sure, and Wilmington is on I-95, a major drug trafficking corridor. Kids get caught up in gangs, and the gangs are minor or major players in that drug trade, and the gangs are a major presence in the schools.

I'd bet that ending the drug war and destroying the drug trade would have a much larger impact on test scores in the U.S. than even drastic improvements in school funding or teacher quality.

"""Some 7% of U.S. students reached the top two scientific performance levels, compared with 17% in Finland and an amazing 27% in Shanghai."""

I'm not normally a stickler for this kind of statistical bullshit, but this is particularly bad. They compared a country of 300mil with a country of 5mil with a city of 14mil. I think the percentages are interesting, but this is ACTUALLY comparing apples and oranges. I'd be interested to see how Boston (or whatever US city with the highest "scientific performance level") does in that mix though.

It would be interesting to discuss the target percentage. Yes I'm sure 100% would be nice in an abstract sense, but there are a lot of things that would be nice.

I can assure you that my favorite waitress having a bachelors degree in early childhood education doesn't make my food arrive at the table any quicker, or her recitation of scripts sound any better. Or my favorite coffee barista who has some liberal arts degree or another doesn't make coffee any better than the illegal who can't read or write. Perhaps if all lunchroom ladies were competent FPGA programmers then they would shovel canned peaches onto trays better, or something.

So I'm not seeing how the hotel desk clerk in Shanghai having memorized the periodic table is going to improve anything in any way.

You're rather nastily assuming that people who currently hold low-level jobs should hold those jobs, for their entire careers, and that therefore, any education unnecessary for their menial jobs is unnecessary for them as human beings.

That's one small step for illogic, one giant leap for inhumanity to other people.

One fundamental problem is massive underemployment. Another is a failing educational system in bubble mode means no one on the planet pays more while getting less. Another problem (related to #2) is the monetary costs of the failing educational system are financially crippling our youth and the guaranteed loans that will never be paid back will financially cripple everyone else.

So your solution is individuals who are headed for a cliff, should step on the gas and to fling over it faster. After all, if it doesn't work, keep trying it over and over until it does. And I'm the inhumane one LOL.

I will say if a system is inevitably crashing, then its best to accelerate the process so as to reach the recovery quicker. The sooner we have a big crash, the sooner we can pick up the pieces and start living again. So in that way you are correct, the best thing kids can do "for everyone" is financially immolate themselves, because in the long run that'll bring on the crash (and hopefully, recovery) quicker. If that is your analysis then by its conditions, I admit you are correct, under those specific conditions, although I'd hate to be one of the individuals being crushed for the betterment of everyone else.

As far as I know, PISA tries to test for understanding, not things like memorizing the periodic table. The reading test is specially aimed at this--do these children actually understand the meaning of what they just read. These kinds of skills have huge impact on democratic (or would be democratic) societies. You know, do people actually understand what the press is writing, what the politicians are saying, etc.

That is a well written paragraph explaining the test goals; I was just using four words for brevity. Also to some extent for comic effect, although unfortunately most management theory as applied seems oriented around workers, especially low level workers, not understanding and thinking about meanings, but basically being human shaped programmed repetitive robots, and any robot getting out of line is a threat to be removed.

"You know, do people actually understand what the press is writing, what the politicians are saying, etc."

So.. in a consumer based economy there would be a strong financial incentive in promoting failure, so advertising is more effective. Or, in a democracy or psuedo-democracy or more likely in a republic, all professional politicians would find ignorant unthinking citizens to be in their best interest at all times. So... what group could be put in charge who wouldn't want citizens to be ignorant? This is a political problem that hasn't been solved yet.

Absolutely, I agree. No group, every ruling structure benefits from the ignorance of the masses. I was replying under the impression you are arguing against the need for everyone to be properly educated (in the sense of high level of literacy, critical thinking, reasoning etc. all the things PISA is supposedly designed to measure). I apologise if that impression was wrong. It's true that I was a little confused by your post and the one you were replying to, mostly because of no fault of yours or the parent's but because I'm not entirely sure what the percentages of "highest scientific performance" that the article is referring to mean.

"Economies grow by exploiting scarce resources, people most of all."

No, they don't. Economies grow because of cheap inputs. Every economic revolution is the result of something becoming ridiculously cheap; the last one was oil, the current one is computation.

You can't reduce economic growth to single factor. Oil itself wouldn't be worth much without technologies to exploit. And without the right human capital, those technologies wouldn't exist in the first place. And without the right socioeconomic institutions in place (stable government, judicial system, etc.), we wouldn't be able to do much with either the technology or the resource.

Are there any "cheap inputs" in Singapore any more? I remember going to Singapore when it was transitioning from low-cost to high-value manufacturing. Now finance is bigger than all manufacturing put together in Singapore, and electronics manufacturing in Singapore in heavily into high-value items like chip foundries that don't depend on cheap inputs.

In the case of the US you could throw in centuries of free slave labor.

That would imply that immediately before the civil war the south was a boomtown and the slaveless north was a rustbelt.

Not necessarily. Slavery might have indirectly assisted the north's industrialization in at least a couple ways. (1) Accumulation of financial capital in the hands of an investment class (2) Cheap cotton gave northern factories a competitive advantage.

That is a good point although there should also be a way to compare and contrast with other countries that didn't have slavery as an "advantage". Then you could try to back-apply the model to other countries, like if the English outright owned the Irish then economic growth would have increased ... or would it have?

Good question. It would take some serious time studying history to have even a decent guess.

The results (png): http://i.imgur.com/mZ8Tj0kh.png

Report (pdf): http://www.oecd.org/pisa/keyfindings/pisa-2012-results-overv...

"Since 1998, the Program for International Student Assessment, or Pisa, has ranked 15-year-old kids around the world"

Every American 15 year old kid? Probably darn close. Every Vietnamese 15 year old kid? LOL.

For a heavily class based country, the USA has quite a blind spot to how other countries organize more heavily by class starting at a rather young age.

I love the smell of a Rupert Murdoch propaganda piece in the morning.

Weird that India did not participate.

Here's a terrifying thought (which I believe to be correct).

I don't think US schools are that bad on fundamentals. They're probably quite good on average. Of course, a large percentage of what makes a school good or bad is the other students, not the teachers or material. I'll get to that...

These indifferent, underachieving students (disproportionately, but not entirely, in poor areas) aren't stupid or bad people. I think they're just rational. They see what society has to offer them even if they do succeed and conclude that it's not worth the effort for them. If middle-class, college-educated people are applying for jobs in fast food, then what should a low-income student, who might be able to scrape together enough scholarships to get through undergrad with merely moderately crippling debt, expect? They see people far ahead of them in the socioeconomic queue ending up miserable and disappointed, and conclude that there's no chance of success for them. Most of them are probably right.

This country has a deep-seated morale problem, expressed at the top through corruption and dishonesty and nepotism, and at the bottom through indifference and underperformance-- which is most measurable and upsetting in the schools because that's before society has formally given up on people. It stems from fundamentals that will take a long time to fix.

I strongly disagree.

US schools are pretty bad on fundamentals. Period. Talking to parents who are here from Asia (for business, grad school), they are shocked how behind the grades are compared to their home countries.

And about the underachieving students supposedly not trying harder because they see college educated people applying for fast food jobs, I think that's just not true. And if they really do think that way, I'm sorry but they deserve the poverty they are stuck with.

I have history of an entire nation to to prove that people don't stop (and should not stop) studying in school because they see other college grads stuck with low paying or no jobs.

S Korea at end of the Korean War (1950-53) was a complete disaster. There were college educated kids in 50's, 60's and 70's but no jobs for them. The country was still largely surviving on foreign aid.

The job market was bad enough that when S Korean govt recruited people to go to West Germany to work as 'miners' (mainly to earn foreign currency) in 1963, 2894 men applied. Out of 2894 men, 375 got the job. Basically 1 was selected out of 7. The competition was so fierce that names of who got in were published on national newspaper. Over 60% had completed high school or tertiary education.

http://en.wikipedia.org/wiki/Koreans_in_Germany http://www.zum.de/whkmla/sp/0708/giyoon/giyoon1.html

So did the south Korean kids in school stop studying because they saw how college grads were so desperate for jobs that they were willing to go abroad to work as coal miners? Of course not.

If the American kids really are afraid of ending up like the other college grads being stuck without jobs, they should study harder, be it in college or vocational training etc.

"If the American kids really are afraid of ending up like the other college grads being stuck without jobs, they should study harder, "

This is hilarious and can be compared to: There are thirty NBA teams and twenty million teenagers so the obvious national educational and employment strategy should be to tell all twenty million teens to just practice harder if they don't want to end up unemployed.

If as per the pigeonhole principle, if the numbers don't match up, just handwave away the unlucky ones, let them eat cake.

Using example of NBA doesn't really work imo because of the skewed statistics. No one is saying high school students shouldn’t study because only a very small percentage will ultimately earn PhDs. That's not what the OP and my comment is about.

What handwaving? An entire generation S Koreans in 1950 - 80 basically 'studied' their way out of extreme poverty. They have no oil or any other useful natural resource to speak of.

Obviously studying hard in school wasn't the only reason as they got a few other lucky breaks, but ultimately it was the education that got them out of poverty.

"but ultimately it was the education that got them out of poverty"

How? What is your economic system wide reaction mechanism? I think the problem is confusing macro and micro. On a micro level yes one individual can rise above others in that way. However, on a macro level diverting capital out of productive enterprises into merely increasing existing underemployment stats makes the overall situation worse for everyone, not better.

I'm not saying education is worthless, or underemployment should be 0% (or maybe it should?).

Think about this analogy. Maximum productivity resulting in maximum wealth for everyone involved happens when a factory produces 1000 cars. I know, lets produce 1500 cars, and also increase prices 10% per year, then having those unsold cars sit on the lot will make society as a whole wealthier because ... err, I guess it makes society as a whole substantially poorer. Don't get me wrong, I'm not saying producing 1500 is a disaster therefore producing 500 would be genius, that would also be pretty bad. I'm also not making any moral or ethical or environmental value judgement about manufacturing cars.

Its basically the economic broken window fallacy.

Another way to look at it, is if you know about control system theory, taking an unstable system and pushing it hard in an even more unstable direction is not going to work well.

WRT the Korean example, as a cheap hobby or time filling past time, there's nothing inherently wrong with education, it didn't hold them back as far as I know. Nobody was spending money on liberal arts professors instead of spending the same money on welding robots and conveyor belts. Not that there's anything wrong with the liberal arts and making life worth living, just that it is orthogonal to economic productivity.

"I think that's just not true."

LOL next time you're at a restaurant ask your waitress what her bachelors degree was in. My favorite one did her student teaching portion of her ed degree at my son's school. We massively overproduce early childhood grads.

I don't think there's any reason to (potentially) embarrass the wait staff. Always be polite, and tip big.

True. I never complain to wait staff. No matter what comes out, I just eat quietly and leave after paying for food and tips. Now if only my wife would just do the same...

That's not what I said at all???

Why do they deserve it? How is unrewarded work a virtue? Why should people who have very little when it comes to most resources (including emotional and intellectual energy) be shamed for choosing not to invest it in something that appears fruitless to them? Because society might right itself in 20 years and have appropriate roles for them?

I'm not saying "education is worthless". Far from it. For privileged people like most of us, it delivers a lot of value (objective and subjective). However, most people who are deep in poverty see no way out in it, and I don't think they're wrong (for them).

Hm, ok maybe I was being a little harsh. Yes no one deserves to be stuck in poverty. But if there is a will, there is a way.

> expressed at the top through corruption and dishonesty and nepotism

So how do you explain Obama becoming President or the large number of immigrants who are wildly successful?

I take it you're not from Illinois.

Maybe you could some arguments that Obama became President through dishonesty, but corruption and nepotism, nonsense.

http://www.census.gov/popclock/

Anecdotes in a macro level discussion?

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