An Audio Narration of "The Coming Transformation of Education: Degrees Don’t Matter Anymore, Skills Do"

I was surprised to stumble across (via a tweet)  an audio narration of my Quartz column “Degrees don’t matter anymore, skills do.” I think this narration is quite well done. (It isn’t me talking, but Larry Rice, who definitely sounds like a professional narrator.) The column sounded better and smarter to me in this narration than it sounded in my head as I was writing it and proofreading it. Of course, however good or bad the article is, it is definitely no smarter or less smart in the narration than in the reading–so that is an illusion! Anyway, you might like it. 

By the way, I am unclear on the copyright issues here, and interested in what you think about that. As far as I know, Umano did this without any permission, and let me say that I am not giving them permission, despite the fact that I am linking to this. At this point, I don’t think this hurts either me or Quartz, but I reserve the right to protest at any later time if I come to the view that circumstances have changed so that the posting of this narration does hurt my interests.  

Update April 15, 2015: My editor now tells me this is with the permission of Quartz.

Quartz #58—>How Big is the Sexism Problem in Economics?

Link to the Column on Quartz

Here is the full text of my 58th Quartz column, “How big is the sexism problem in economics? This article’s co-author is anonymous because of it,” now brought home to supplysideliberal.com. It is coauthored with an anonymous female economist, with whom I have had many interesting discussions since the column was published as well as in the process of writing it.  It was first published on January 6, 2015. Links to all my other columns can be found here.

I regret that my coauthor still feels she needs to remain anonymous. But I understand that a bit better now, after seeing the heat of some of the discussion surrounding this column.

At this writing, this is my 6th most popular Quartz column ever. You can see a list of my most popular columns here.

We want these ideas to get out there. So if you want to mirror the content of this post on another site or make printouts, that is possible for a limited time if you read the legal notice at this link and include both a link to the original Quartz column and the following copyright notice:

© January 6, 2015: Miles Kimball and Anonymous, as first published on Quartz. Used by permission according to a temporary nonexclusive license expiring June 30, 2017. All rights reserved.

The Economist’s recent list of the 25 most influential economists did not include a single woman. Many male former central bankers and regional Federal Reserve Bank governors were included on the list, but the Economist gave itself a special rule to exclude active central bankers, which meant that Janet Yellen—arguably the world’s most influential economist—didn’t make the list.

University of Michigan Professor and New York Times columnist Justin Wolfers responded with a tweeted list of influential women economists. You can read his whole tweetstorm on Twitter. 

Why are top-notch female economists not being taken seriously? Why are they having trouble being recognized for their contributions to the profession? Why do women still have a hard time in the economics profession in general? There is no shortage of potential explanations.

In their recent academic paper “Women in Academic Science: A Changing Landscape,” Stephen J. Ceci, Donna K. Ginther, Shulamit Kahn, and Wendy M. Williams document the gender gap in economics and discuss many possible hurdles at each stage of a female economist’s career. And in a recent Bloomberg View article, University of Michigan Economics PhD Noah Smith adds to this list of potential hurdles the climate created by many male economists who defend their sexist views as hard-nosed truth telling.

One indication of the career challenges women face in economics is the fact that one of us felt the need to remain anonymous. The co-author of this piece is a still-untenured female economist who has withheld her name because there unfortunately could be real professional risks in publicly discussing many of these issues.

Many male economists underestimate the headwinds women face in economics, but they exist at every stage of a woman’s career. Just as an annual economic growth rate of about .33% per year in the 18th century and 1% in the 19th century transformed the world in the First and Second Industrial Revolutions, women in economics face many forces both large and small that add up to a huge overall damper on the number of women who make it to the higher ranks of our profession.

And even when women do reach these higher levels—despite the difficulty of getting their work published in male-dominated journals and in getting promoted even when they do get their work published—their wages remain lower.

In a Jan. 3 New York Times article, “Racial Bias, Even When We Have Good Intentions,” Harvard economist Sendhil Mullainathan argues that discrimination often operates at an unconscious level:

Even if, in our slow thinking, we work to avoid discrimination, it can easily creep into our fast thinking. Our snap judgments rely on all the associations we have—from fictional television shows to news reports. They use stereotypes, both the accurate and the inaccurate, both those we would want to use and ones we find repulsive.

The same sort of unconscious biases operate against women at every stage.

Here are a few of the issues women in economics face that their male colleagues might not be aware of:

  • New female economics PhD’s have to worry about what to wear during the job market: skirt too short vs. too long, vs. just right.
  • Female economists endure the nasty misogyny of many threads on econjobrumors.com.
  • Students don’t give female professors the same respect as they do male professors. Compare ratings given to online teachers who represent themselves as female to one set of students and male to another, as in the experiment these instructors recently conducted.
  • Female assistant professors have to worry about whether they dare take advantage of tenure clock extensions to have a child, while male assistant professors have no worries about taking advantage of the tenure clock extensions they get when their wives have a child. For the men, it is a simple strategic choice; for the women, it is reminder to their colleagues that (with rare exceptions) they bear the heaviest burden of taking care of a young child—a burden that might take time away from their research.
  • Female professors are often inundated by students needing more “emotional” mentoring (a type of help many students assume they can’t get from male professors).
  • Women in economics often get mistaken at social events for an economist’s spouse instead of being recognized as economists themselves.
  • Female economists have to figure out how to deal with disrespectful comments or “jokes” made by their senior colleagues.

Fostering awareness of issues like these, and a hundred others of the same ilk, is one of the biggest things that can be done to improve women’s lot in economics.

Greater gender equality in economics could also be fostered by a better power balance among colleagues. What we mean is that female economists should be encouraged to assert their power, but male economists should find it hard or impossible to exert illegitimate, sexist power over their female colleagues. If this sounds obvious, it’s much harder than it seems.

Today, women in economics face a Catch-22, where speaking up can easily make them look like a shrew, while not speaking up robs them of legitimate power. There may be some loopholes in this Catch-22, but women starting out in economics need to be shown the ropes. And with so few senior female professors in economics, who can show a female graduate student how to promote herself gracefully, and break into predominantly male conversations without raising hackles? Somehow, that question needs to be answered. As more women push these boundaries, things will become easier. It may become possible to open up new ways of communicating and asserting power that allow women to be themselves and still have others listen to them carefully and respectfully.

If men are allowed to be jerks without suffering serious consequences, while women aren’t, then even well-behaved men have a threat-point that women are denied. One of the most primal reasons to treat someone nicely is the fear of a mistreated person’s anger or revenge. That doesn’t work well for women, because getting angry either makes them look like a harridan, or look overly emotional—both of which carry a big penalty in lost status.

It is easy to confirm that men are allowed to be jerks in ways that women aren’t—by flipping genders when someone does something out of line:

  • What would you think of a particular man’s bad behavior if a woman you know did it?
  • What would you think of a particular woman’s bad behavior if a man you know did it?

We don’t think the answer here is to change the culture so that women can be jerks, too, but to move toward holding everyone, both men and women, to account for bad behavior.  For many men, it will be a revelation to be called out on the ways in which they demean others. Some may not even realize all the ways they routinely put others down—especially those in vulnerable positions who dare not strike back. But if you talk to a few women who spend time in economics departments, you will hear the stories.

Equal pay for equal work

Besides the threat point of men behaving badly, there is another threat point that gives men an advantage over women—one that gets men more than equal pay for equal work. It is typical in academia that a tenured professor who receives a competing job offer and can credibly threaten to leave gets a big raise. By comparison, professors who seem unlikely to jump ship end up underpaid. But given gender inequality on the home front (and the male-female wage differential for spouses), it is a lot more credible that a male professor can convince his wife to move to another city than that a female professor can convince her husband to move. This difference in ability to threaten to leave because of a spouse’s willingness to move is just one of the many ways that different levels of career support from spouses affects women in academia. The only thoroughgoing remedy for this inequity will come from greater gender equality throughout society.

(The situation is different when both wife and husband are academics, especially when they are both in the same discipline. Joint hiring decisions come up so often and go down so many different ways that no one should read any particular case into what we say. In general, because the couple forms a bargaining unit, some of the advantages men have in academia accrue to the wife in the husband-wife power couple. Women hired only because of their spouses—when they should have been hired in their own right—make academic departments look less sexist on paper than they really are. And when a woman who shouldn’t have been hired in her own right is hired in order to attract her spouse, it can be demoralizing to other women trying to make their way in academia on their own. Unfortunately, we don’t see any easy solution for the issues created by joint hiring decisions. But at a minimum they shouldn’t be allowed to distract economists from deeper issues of gender inequality.)

One final step that would make economics less forbidding for women is for each economist to become open to a wider range of scientific approaches and topics. Statistically, men and women are not drawn to the same fields within economics. And even within a field, women are drawn to a different balance between immediate real-world relevance and theoretical elegance. It is natural for each economist (and for each academic in general) to construct a narrative for why his or her approach to economics is the best. But since men in senior ranks in economics are more numerous than women, the narratives that men construct for why their individual approaches to economics are better usually win out in hiring and promotion decisions over the narratives that women construct for why their individual approaches are better.

This imbalance disadvantages junior women, whose individual approaches will on average have fewer champions. Here, the solution, difficult as it is, is for economists to appreciate the boost to scientific progress from having many different approaches and topics well represented—and for the subjective opinions of those who don’t appreciate the value of a wide range of approaches to be discounted. In particular, putting a premium on balancing theory with real-world understanding and policy action will not only make economics a stronger force for good in the world, it will help women take their rightful place in economics.

The Coming Transformation of Education: Degrees Don't Matter Anymore, Skills Do

Here is a link to my 60th column on Quartz, “Degrees don’t matter anymore, skills do.” The first part of the title of this post is my original working title. 

I want to thank Steven Bogden for this crystallized idea about elite universities selling social status: 

There will still be a few expensive elite colleges and universities; these schools are not just providing an education, they are selling social status, and the opportunity to rub shoulders with celebrity professors.

John Erdevig and Kenji Yano: A Personal East/West Convergence and “The Nature God”

John Erdevig and Kenji Yano are two friends that I know from the First Unitarian Universalist Congregation of Ann Arbor. The “I” in this guest post is John, but Kenji contributed just as someone who is interviewed contributes to an interview. Here is what they have to say. 

John’s Note: This post continues some themes explored in my guest post “Head and Heart in ‘Saving’ the Earth.” How do those who cleave to science andreject the supernatural maintain a vital connection to the biosphere, and confront the moral and existential challenge of climate change?

My friend Kenji wasborn in Delaware, mostly raised in Japan, and has lived in the U.S. Midwest most of his adultlife. We had a long talk over lunch last week about our religious beliefs. Kenjiis a biology PhD, but earned instant skeptical blowback from another friend, achemist with a lower tolerance for “god talk,” when Kenji said that “nature ismy god.” It’s become clear to me that he says this, however, in the sense that his vital relationship with the biosphere is very close to what the average listener might understand as an individual-to-god relationship. I say, it was clear to me, because there wasn’t a hint of any of the Yahweh-like personality in this nature god. You know, like there was no big old bearded guy in the clouds calling the shots, choosing nations to covenant with, and listening to and granting prayers. God the Father, Almighty God, the Creator… no, no, none of that. Nor any homegrown Japanese supernaturalism, as would be entailed in a literal interpretation of expressions that Kenji grew up with: “The Sun watches you by day, and the Moon watches you by night.”

That is a phrase Kenji’s mother used to awaken Kenji’s conscience. But these globes only “watch us” in the sense that our awareness of the omnipresent sun and moon awakens our preexisting moral awareness. Our moral awareness is partly rooted in awareness of our concentric spheres of concern (more co-equal and overlapping, in Kenji’s worldview), extending all the way throughout our households/ecosystems. As sun and moon regulate everything from moods to growth to tides, they “watch us” and “watch over us” in several ways. So please, ye who must pooh-pooh tendencies toward a belief in the supernatural among our discussion circle, Kenji’s belief is not that. Indeed, that would be a fatal contradiction for Kenji. There is nothing outside of and above nature. Therefore there is nothing supernatural to believe in. I hope to bypass the debate that gets framed in terms of “Does God exist?” For me, the questions are, “What and perhaps who, in existence, do you find more or less divine? Describe your relationship with it/these.”

So what is the next level of the sacred that is not God, what we’ll call for the sake of discussion “our vital relationship with the biosphere” which I share with Kenji. I approach our convergence from a different way, say, from a West-to-East direction. The vitality on the human side of the relationship might include deep reverence, awe and wonder, at newfound scientific knowledge, enduring mysteries, and piercing sensations. Moreover, in our daily thoughts, if not through concerted efforts in art and ritual, we feel, if not consistently and thoughtfully express, appreciation and reciprocity. The biosphere being what it is – it giveth and taketh away, or better put, everything gets recycled – then a certain humility, even submission, is in order. This should sound like some human inter-relationships, but on a different scale, with a kind of ultimacy, pervasiveness, and unmatched emotion. E.g. “Islam” means “submission.” That’s why I assert that Kenji’s and my relationship with the life-giving biosphere is logically atheistic, but often acts “as if” nature is our god. We could use the corresponding adjective, “divine,” to describe the religious-biospheric process, our story/history… mostly, our correspondence with the biosphere. In Unitarian-Universalism’s 7th Principle, we say, perhaps more tepidly, that we have “respect for the interdependent web of life of which we are a part.”

That we our grounded in our individual bodies and in our smaller spheres (family, community) leads us to reaffirm compassion and reciprocity on the species scale. However, casting one’s gaze toward the dirt and heavens, perhaps with an inner eye during indoor meditation, or perhaps with a hike among the druidic hemlock forest giants, we can expand compassion and reciprocity beyond the species in a way that is practically useful to humans as well as intellectually and emotionally congruent with our modern experience – resolving tensions between science and religion, science and artistic expression, science and love. To me, both study and an almost ecstatic contemplation of the biosphere together lead to a sensible and healthy concern for not only my and my children’s generation, but “The Seventh Generation,” to borrow the Native American phrase. Gaia and my parents launched me and left a legacy. Am I The Prodigal Son, or worse, not only using my fortune but spoiling my children’s chances? In gratitude and reciprocity, can I do better than that?

Not all of nature seems accessible in the worldview and religious practice I just described. True, our biosphere coats a “Goldilocks Planet,” a dynamic and fertile rock favored by a remarkable astronomical and natural history. In nearer space, the orbital and geologic circumstances are discernable and heartwarming. Further off in space and time, we understand that we are elemental dust born in starbursts. Much of the cosmos, however, feels alien… is undeniably cold and radioactive. Beyond biosphere, ozone layer, ionosphere, and the sun’s happy medium of warmth, there are forces ready to not just snuff out our already mortal individual existence, but also quite ready to annihilate all trace of humankind. My mythopoetic relationship over this distance is tenuous. Awe and submission probably are my dominant sacred thoughts. I do not linger as long as the spiritually-minded cosmologists. Not much in the line of enduring grace or “warm fuzzy,” gazing at ancient light (not the stars as they now burn), millions of light years away, or watching science shows about the end of the biosphere, or the end of the entire solar system by various scientifically projected means. Apocalypse has a place in my horizon, but if “religion” is “re-tying” or “connecting,” then the band here is loose or frayed. So, to return to the bosom of Gaia, who/which invites a more generous interpretation of existence…

My first week back from sunny Spain, I skied in County Farm Park three consecutive mornings. High altitude snowflakes or windblown frost from the silvery tree branches swirled and sparkled like fairy dust in the slanting sunshine. “Dawn stretched her rosy fingers across the sky.” – Homer’s Odyssey. The shadows shown blue with reddish highlights, just as the Impressionists taught us. At first, just crows overhead, and rabbit tracks below. Then a tawny-coated, healthy-looking urban coyote crossed warily on a prairie rise ahead of me. And then four minutes later a young buck pranced through the woodlot understory. Too cold for people and dogs, thanks be. To cap it, the sensation of gliding over terra firma begets a giddiness and warmth so effacing of the winter blues that set in for the first couple months of the season.

Another morning, I walked in soggy snow – the welcome January thaw – with the sky a protective envelope of water vapor enclosing warmer temperatures and filtering an ever stronger and longer sunshine. The Carolina Wren whistled exuberantly and sparrows chirped. Of all things, a tiny spider was crawling over the snowy path this time. I am clothed in thick leather, wool and cotton, making my own heat from nuts, grains, fruits, ham, and a quickened pace, and from recollection of last night’s meeting of friends, beer and nachos afterward, and Saturday night’s karaoke and dance party. I start to sing “Lean on Me” until I reach a verse with memory holes in it. So I recite “On Stopping by a Woods on a Snowy Evening,” and it occurs to me that if you whisper almost anything in any language, but certainly these lines by Robert Frost, “the only other sound’s the sweep / of easy wind, and downy flake.”

And May It Be So With You. – John 

Provocative Epigram of the Day: “The most beautiful thing we can experience is the mysterious. It is the source of all true art and science.” – Albert Einstein

Virginia Postrel: Glamour and Yearning

“This then is what glamour does as rhetoric. It focuses preexisting, largely unarticulated desires on a specific object, intensifying longing. It thus allows us to imaginatively inhabit the ideal and, as a result, to believe–at least for a moment–that we can achieve it in real life. … Glamour is defined not by the specific desires it promotes but by the process of projection and sense of yearning it creates and … by the recurring elements that generate that projection and yearning: the promise of escape and transformation; grace; and mystery.”

– Virginia Postrel, The Power of Glamour, p. 41

Public School Indoctrination: A Facebook Convo →

When I posted this quotation 

Why, indeed, do we have public schools at all? There are advantages to having an educated public, and there are at least arguments to the effect that the private sector will undersupply education. But that’s an argument for government subsidies or vouchers; it’s not an argument for the government to actually run the schools. The reason the government wants to run schools is so that it can control what is taught. I hope that makes people uncomfortable.

– Steven E. Landsburg, Fair Play, p. 31

I hoped to spark an interesting debate. I did! The link at the top is to what I think is a very interesting Facebook discussion about this.

Finding Out the Truth about Infrastructure Projects

Along with Noah Smith, I write in favor of infrastructure investment in “One of the Biggest Threats to America’s Future Has the Easiest Fix” and followed that up with “Capital Budgeting: The Powerpoint File.” But I am frustrated by my inability to tell from the news how which particular infrastructure investments are a good deal from the standpoint of solid cost-benefit analysis, and which are just meant to be salient shiny baubles for voters–or perhaps worse, meant to be ways to get money into the pockets of campaign contributors or into the pockets of workers being paid more than a free-market wage. It is very, very easy for the government to pay more than it should for an infrastructure project, given that every dollar it spends is someone’s income. And it is very easy to be drawn to a shiny new light rail system, for example, when a better bus system would be a much more cost-effective solution–or to be drawn to building a new road, when fixing the potholes on existing roads is a better investment. 

I was reminded of this frustration by reading Holman Jenkin’s Wall Street Journal op-ed “The Infrastructure Medicine Show and tweeted the following, which is the question I want answered:

Is there any way to establish an independent think tank to make trustworthy analyses of infrastructure projects? http://t.co/irk8xkVpmF

— Miles Kimball (@mileskimball) February 4, 2015

David Warsh's Take on New Classical Economics, Circa 1985

For many years, David Warsh has been writing about economists in a weekly column that moved in 2002 from the Boston Globe to his own website economicprinciples.com. On February 24, 1985, in the middle of my time in graduate school, he wrote a piece in the Boston Globe pondering the significance of Robert Barro’s intermediate textbook, which had been out for about a year. Given the heavy-duty discussions of economic methodology in the economic blogosphere in recent years, I thought you might be interested in this excerpt to get a sense of how things looked back then. To begin with, let me say that David Warsh gives a book recommendation:

“Barro certainly has a very optimistic way of thinking about how markets work,” says Wellesley College’s Arjo Klamer, whose book, Conversations with Economists, expertly details the scope and history of the controversy between the New Classicals and everybody else.

David himself gives this description of New Classical Economics: 

The late 1960’s were a time of great ferment in technical economics. Out of the period grew a movement called the “New Classical” economics, designed to depose the Keynesian orthodoxy. At a time when Keynesians were moving to tackle what were viewed as imperfections in markets–sticky wages in particular–the New Classicals chose to see things differently. 

Just suppose, the new view went, that markets, especially labor markets, are working the way they are supposed to. Suppose that those who aren’t working aren’t really involuntarily unemployed, that they simply prefer leisure to the prevailing wage. Suppose also that because people correctly anticipate attempts by government to manage the economy, of the sort designed by Keynes and his followers, these managing effots have little or no effect–or worse, actually contribute to instability. 

If so, then the thing for government to do would be to recognize that all was almost always for the best, and to retreat into following a few simple rules, such as keep money growth steady and government spending down. 

Sound like Reagonomics? Well at a deep and satisfying level, maybe so. It was far more sweeping than monetarism, though in its defiant rejection of the conventional medicine, and in its emphasis on mind over apparent illness, it seemed a little like Christian Science to its detractors. 

Let me make two comments. First, perhaps because I was a student of Greg Mankiw, I have always thought that sticky prices were the issue rather than sticky wages. You can see a discussion of that in “Sticky Prices vs. Sticky Wages: A Debate Between Miles Kimball and Matthew Rognlie.”

Second, David Warsh’s emphasis on involuntarily unemployment makes me wonder how Saltwater and Freshwater economists view the now popular labor market search theory in relation to their perennial debates with one another. I don’t really have a good sense of this, except that the folks in the labor search literature seem to be afraid to talk about labor market demand shocks coming from aggregate demand shocks; the literature routinely moves around labor demand through ritual technology shocks, perhaps to avoid the Saltwater/Freshwater controversy. Since labor demand shocks do the same kinds of things to the labor market regardless of where they come from, this is OK except insofar as unwary listeners are lead to think that aggregate demand shocks don’t exist, or that they don’t matter for the labor market!

“[My daughter Cayley] knows a lot about right and wrong already. She is an active trader in the schoolyard markets for decals, trading cards, and milk bottle caps. Sometimes Cayley wants to trade with her classmate Melissa but Melissa prefers to deal with Jennifer, from the other fourth-grade classroom. Cayley knows how disappointing that can be, but she also knows she can’t force Melissa to trade with her. More important, she knows it would be wrong to try.

Cayley is too morally advanced even to imagine asking her teacher to intervene and prohibit Melissa from trading with ‘foreigners.’ Only a very unpalatable child would attempt such a tactic.

[Pat] Buchanan sees the U.S. Congress as the great national teacher, maintaining order on the schoolyard, making sure that all the children play the way the teachers’ special pets – or special industries – want them to play. My daughter thinks that stinks. She’s right.

Protectionism is wrong because it robs individuals of a basic human right: the freedom to choose one’s trading partners.”

– Steven E. Landsburg, Fair Play, p. 14

John Stuart Mill on the Rich and the Elite

Larry Ellison, 5th richest on the Forbes list, on one of his smaller yachts

Larry Ellison, 5th richest on the Forbes list, on one of his smaller yachts

Not long after I began blogging, in my post “Rich, Poor and Middle-Class,” I wrote:

I am deeply concerned about the poor, because they are truly suffering, even with what safety net exists. Helping them is one of our highest ethical obligations. I am deeply concerned about the honest rich—not so much for themselves, though their welfare counts too—but because they provide goods and services that make our lives better, because they provide jobs, because they help ensure that we can get good returns for our retirement saving, and because we already depend on them so much for tax revenue. But for the middle-class, who count heavily because they make up the bulk of our society, I have a stern message. We are paying too high a price when we tax the middle class in order to give benefits to the middle-class—and taxing the rich to give benefits to the middle-class would only make things worse. The primary job of the government in relation to the middle-class has to be to help them help themselves, through education, through loans, through libertarian paternalism, and by stopping the dishonest rich from preying on the middle-class through deceit and chicanery.

I still feel the same way. I hate bashing of the honest rich. Of course, the dishonest or unworthy rich are a very different matter, as I wrote of in my column “Odious Wealth: The Outrage is Not So Much Over Inequality but All the Dubious Ways the Rich Got Richer.” Whatever arguments one may have for taxing the rich, it is not OK to verbally attack the honest rich. As a society, if we fail to give honor to those who became rich by helping to provide goods and services that we value, then we will have to let them keep more money in order to provide appropriate incentives. On the other hand, the more we honor and tend to the souls of the rich, the more we can tax them and still have adequate incentives. This is the key idea behind these posts and columns:

Envy raises complex philosophical issues for utilitarian social welfare maximization, related to issues about respect for the boundaries between people that I discussed in 

One problem with interfering with conspicuous consumption out of one’s envy is that it has the potential to interfere with the efficient provision of incentives. But envy not only leads to attempts to limit conspicuous consumption, but also often leads to attempts to limit conspicuous excellence. Here is what John Stuart Mill has to say on that, in On Liberty, Chapter IV, “Of the Limits to the Authority of Society over the Individual” paragraph 17:

To imagine another contingency, perhaps more likely to be realized than the one last mentioned. There is confessedly a strong tendency in the modern world towards a democratic constitution of society, accompanied or not by popular political institutions. It is affirmed that in the country where this tendency is most completely realized—where both society and the government are most democratic—the United States—the feeling of the majority, to whom any appearance of a more showy or costly style of living than they can hope to rival is disagreeable, operates as a tolerably effectual sumptuary law, and that in many parts of the Union it is really difficult for a person possessing a very large income, to find any mode of spending it, which will not incur popular disapprobation. Though such statements as these are doubtless much exaggerated as a representation of existing facts, the state of things they describe is not only a conceivable and possible, but a probable result of democratic feeling, combined with the notion that the public has a right to a veto on the manner in which individuals shall spend their incomes. We have only further to suppose a considerable diffusion of Socialist opinions, and it may become infamous in the eyes of the majority to possess more property than some very small amount, or any income not earned by manual labour. Opinions similar in principle to these, already prevail widely among the artizan class, and weigh oppressively on those who are amenable to the opinion chiefly of that class, namely, its own members. It is known that the bad workmen who form the majority of the operatives in many branches of industry, are decidedly of opinion that bad workmen ought to receive the same wages as good, and that no one ought to be allowed, through piecework or otherwise, to earn by superior skill or industry more than others can without it. And they employ a moral police, which occasionally becomes a physical one, to deter skilful workmen from receiving, and employers from giving, a larger remuneration for a more useful service. If the public have any jurisdiction over private concerns, I cannot see that these people are in fault, or that any individual’s particular public can be blamed for asserting the same authority over his individual conduct, which the general public asserts over people in general.

Virginia Postrel: Jet Age Glamour

“Jet Age glamour expressed the longing to experience a world of variety and excitement, a fast-moving, dynamic, and diverse alternative to the familiar and routine. We now inhabit the real version of that world, a world glamour advertised and helped bring about. We can never bring the old illusion back. We can only invent new ones, reflecting new circumstances, new possibilities, new desires, and new versions of yearnings that never go away.”

– Virginia Postrel, The Power of Glamour, p, 199

Quartz #57-->In Defense of Clay Christensen: Even the 'Nicest Man Ever to Lecture' at Harvard Can't Innovate Without Upsetting a Few People

Here is the full text of my 57th Quartz column, “Defending Clay Christensen: Even the ‘nicest man ever to lecture’ at Harvard can’t innovate without upsetting a few people,“ now brought home to supplysideliberal.com. It was first published on December 23, 2014. Links to all my other columns can be found here.

I wrote a version of this first as a blog post. I am delighted that my new editor at Quartz, Paul Smalera, liked it enough to publish it in Quartz. (My previous editor, Mitra Kalita, is now overseeing key aspects of Quartz’s global expansion.)

By the way, since I am blogging through Clay’s books (as I have been blogging through John Stuart Mill’s On Liberty) I have a virtual sub-blog on Clay Christensen:

http://blog.supplysideliberal.com/tagged/clay

In the column, I give my take on Clay’s theory as well as defending him personally. 

If you want to mirror the content of this post on another site, that is possible for a limited time if you read the legal notice at this link and include both a link to the original Quartz column and the following copyright notice:

© December 23, 2014: Miles Kimball, as first published on Quartz. Used by permission according to a temporary nonexclusive license expiring June 30, 2017. All rights reserved.

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Clay Christensen is not only the most famous management guru in the world, he is one of the few public figures—other than full time humanitarians or religious leaders—whom people go out of their way to describe as a good person. For example, in the Financial Times in November 2013, Andrew Hill described Clay Christensen, who had just won an award for most influential management thinker for the second time in a row, as “perhaps the nicest man ever to lecture at Harvard Business School.”

So I was surprised to see key Apple executive-turned-tech-entrepreneur Jean-Louis Gassée criticize not only Clay’s theories but also Clay’s character in his Nov. 25, 2014 Quartz article Clayton Christensen should really disrupt his own innovation theories. I want to defend Clay and his theories.

To be clear about where I am coming from, let me say that I can personally vouch for both Clay’s brilliance as a business thinker and his positive personal qualities. On the personal side, I carpooled across the country from Utah to Boston with Clay back in 1977 when I was beginning my freshman year at Harvard College and Clay was beginning to work toward his MBA from Harvard Business School. I have had relatively little contact with Clay since then, but still remember that trip as a bright moment in my life, and consider Clay a friend to this day. My daughter Diana’s experience as a Harvard MBA student in Clay’s class only reinforced my impression that Clay is one of the best human beings I have met.

My views on Clay as a thinker come from reading six of Clay’s books this year:

As an economist, I found them fascinating. One of the hottest areas of economics in the last twenty years has been the border between economics and psychology. One basic idea at that intersection is that people have limitations in their ability to process information and make decisions. This idea that cognition is finite is a key issue in macroeconomics, as Noah Smith and I wrote about in “The Shakeup at the Minneapolis Fed and the Battle for the Soul of Macroeconomics—Again.” But the idea of finite cognition also matters a lot for businesses. Some decisions are hard even for people who spend their careers making those kinds of decisions, and the support of teams of experts.

Clay, in the management theory he has developed with various coauthors, identifies one key factor in how hard a decision is for a generally well-run business: whether it involves taking care of what are already the business’s core customers, or trying to sell to either peripheral customers or people who have never bought from the business before. No business is successful for any significant length of time if it doesn’t do a reasonably good job of taking care of its core customers. But being good at understanding and serving its core customers may make it bad as an organization at understanding and serving peripheral or potential customers.

Clay’s famous warnings about “disruptive innovation” boil down to saying that any set of peripheral or potential customers a business doesn’t serve well—even if those non-core customers look relatively unprofitable—might provide a ladder for a competitor to climb up and eventually overtake that business. And since the main part of a business is designed to serve its core customers, it may need to set up a separate unit to act like a start-up and focus on other potential customers.

When Clay turns to public policy issues in education and health care, the idea of innovative upstarts overtaking an established business by starting with underserved customers or non-customers morphs into the idea of reforming education and health care by finding chinks in the armor of the status quo. The key public policy recommendation I draw from Clay’s logic is that policy should be supportive of organizations doing things in new ways that help people on the margins who find the current systems difficult to navigate, even if those new approaches don’t improve quality for those who are currently well served by the status quo.

Here is Gassée’s own summary of Clay’s theory:

The incumbency of your established company is forever threatened by lower-cost versions of the products and services you provide. To avoid impending doom, you must enrich your offering and engorge your price tag. As you abandon the low end, the interloper gains business, muscles up, and chases you farther up the price ladder. Some day—and it’s simply a matter of time—the disruptor will displace you.

The first charge Gassée makes against Clay is that Clay is a very persuasive, high-priced consultant who advises rival companies:

… in the mid-to-late 1980s, parlayed his position into a consulting money pump. He advised—terrorized, actually—big company CEOs with vivid descriptions of their impending failure, and then offered them salvation if they followed his advice. His fee was about $200,000 per year, per company; he saw no ethical problem in consulting for competing organizations.

In Clay’s case, I get the sense that he is giving almost every company a variant of the same advice, which is more concerned with potential competitors who might not even be in the picture yet, rather than existing competitors. So I can see why two rival companies might both feel comfortable hiring Clay. As to the price, I also find Clay’s insights valuable, so I am willing to go with the default view of economists that if someone is willing to pay a lot of money for something, it is an indication that they find it quite valuable.

Gassée’s next charge is that Clay is arrogant:

The guru and I got into a heated argument while walking around the pool at one of Apple’s regular off-sites. When I disagreed with one of his wild fantasies, his retort never varied: I’m never wrong.

Had I been back in France, I would have told him, in unambiguous and colorful words, what I really thought, but I had acclimated myself to the polite, passive-aggressive California culture and used therapy-speak to “share my feelings of discomfort and puzzlement” at his Never Wrong posture. “I’ve always been proved right…sometimes it simply takes longer than expected,” was his comeback.

Hyperbole—”exaggerated statements or claims not meant to be taken literally”—has its place in conversation (for example, there is every indication that the historical Jesus frequently used hyperbole). So the exact tone of voice and context matter a lot. The management consulting context is one in which hyperbole might be appropriate in order to help counteract an attachment by someone one is advising to the status quo. In that context, saying “I’m never wrong” might mean simply “You should really, really, listen to my advice.” Given the magnitude of Clay’s claims, if Clay sincerely believes in the advice he is giving, as I suspect he does, the sentiment “You should really, really, listen to my advice” is understandable.

Gassée’s last charge is that Clay became defensive and lashed out when his work was challenged by Jill Lepore. Here is what Gassée has to say about that:

Christensen is admired for his towering intellect and also for his courage facing health challenges—one of my children has witnessed both and can vouch for the scholar’s inspiring presence. Unfortunately, his reaction to Lepore’s criticism was less admirable. In a Businessweek interview Christensen sounds miffed and entitled:

“I hope you can understand why I am mad that a woman of her stature could perform such a criminal act of dishonesty”

In this case, fortunately, the context is known. You can see Drake Bennett’s Businessweek interview “Clayton Christensen Responds to New Yorker Takedown of ‘Disruptive Innovation‘” here. Clay told Drake

… she starts instead to try to discredit Clay Christensen, in a really mean way. And mean is fine, but in order to discredit me, Jill had to break all of the rules of scholarship that she accused me of breaking—in just egregious ways, truly egregious ways. In fact, every one—every one—of those points that she attempted to make [about The Innovator’s Dilemma] has been addressed in a subsequent book or article. Every one! And if she was truly a scholar as she pretends, she would have read [those]. I hope you can understand why I am mad that a woman of her stature could perform such a criminal act of dishonesty …

So Clay’s intemperate phrase “criminal act of dishonesty” is about Jill Lepore writing as if Clay hadn’t ever given any answer to the kinds of questions she raises. A specific case later in the interview clarifies what is angering Clay. Here is Drake Bennett’s question:

Another point Lepore makes is that you leave out relevant factors that would challenge your thesis. In the case of the steel industry, you don’t talk about unionization, which was a major difference between U.S. Steel and upstart minimills.

Clay replied:

Yes and no. The world is actually very complicated and big huge books are written about unionization and the impact that it has, and so … other people have addressed that.

If she’s interested, there’s a case that I use in my course about U.S. Steel that occurred in 1989. There the union contract in Mon Valley Works [one of U.S. Steel’s plants] was a huge factor. So, again, if she were thorough on this issue and she Googled it and put in my name and U.S. Steel, that would have come up. But because her purpose was to discredit me rather than look for the truth, she didn’t even look. Are you feeling a little bit about how she’s caused me to feel?

That is, Clay thinks Jill Lepore did not do even the most basic homework to see if Clay had any subtlety to his views. Here, actually, Lepore’s point is about how differential unionization might weaken the evidence for Clay’s theory of disruptive innovation, which Clay’s Harvard Business School case might not have done anything to address, so Lepore’s fundamental point might stand, but she should have made that argument. And while it may be unreasonable to expect someone writing a magazine article to know one’s whole body of work before vigorously criticizing a piece of it, it is reasonable to expect her to try to talk to Clay to get his side before publishing a traditional-style long-read article attacking Clay’s work. This is a point Clay himself makes:

… if she’s interested and wants to help me—she’s just an extraordinary writer—and if she’s interested in the theory or its impact, I mean, come over! I would love to have you openly invite her to come do this, if she’s interested.

(Like Clay, Jill Lepore is at Harvard.)

I think Drake Bennett is right that Clay was quite angry at Jill Lepore’s article:

Consistently described by those who know him as a generous and thoughtful and upbeat person, he is also capable of fury. “Keep asking me questions,” [Clay] said, “it’s helping me.”

But, I am not going to change my view of Clay as one of the best human beings I have met for controlled anger in a situation like that.

No one is perfect. But in order for us to have a hope of becoming better human beings, we need to at least know which direction is up. Despite his flaws, I don’t know anyone who wouldn’t do well to become a little more like Clay in at least some respect.

Matthew Yglesias on the Need to Eliminate the Zero Lower Bound to Avoid Secular Stagnation →

A tweet from Ellie Kesselman pointed me to this piece by Matthew Yglesias. The key passage is

As I’ve been saying for a while, humanity could rid itself of the pesky zero bound problem by eliminating physical currency and creating a situation where nominal interest rates can go negative. Demographic shifts and population aging may someday (like “next few decades” not “later this summer”) soon force us to choose between this option and the world economy falling into a basically permanent recession.

That is, Matthew Yglesias is very worried that the natural interest rate might be below zero on a long term interest rate, and an inability to have negative interest rates would therefore be disastrous. I am less convinced that the natural interest rate will be negative on a long run basis (because I am optimistic about future technological progress), but it is definitely worth being prepared. 

You can see links to what I have written on negative interest rates in my bibliographic post “How and Why to Eliminate the Zero Lower Bound: A Reader’s Guide,” and my discussion of issues surrounding the natural interest rate and secular stagnation in “The Medium-Run Natural Interest Rate and the Short-Run Natural Interest Rate” and “On the Great Recession.”

Greg Shill: So What Are the Federal Reserve’s Legal Constraints, Anyway?

Link to the post on Greg’s blog

Greg Shill is the expert I turn to for a better understanding of legal issues surrounding monetary policy. He is a fellow at New York University Law School and is on Twitter here. This is the first of what I hope are many guest posts by Greg. This one appeared first on his own blog on December 4, 2014. Thanks to Greg for allowing me to reproduce it here. Greg’s words follow: 

Many in the Federal Reserve – both the Board of Governors in DC and the reserve banks around the country – have come to view low inflation as the main threat to the economic recovery. Fed Chair Janet Yellen has repeatedly voiced this concern, which was detailed today by Chicago Fed chief Charles Evans in an interview with the New York Times. The Bank of Japan and the European Central Bank have recently warned of the same problem. Those institutions, and Japanese Prime Minister Shinzo Abe, have staked their reputation on the power of monetary policy to stimulate economic growth, and there are growing calls in and outside the Fed for the US central bank to do more.

The basic problem these institutions are trying to address is that with inflation expectations low – and they have been very low since 2008 – firms and individuals have little incentive to invest or take other economic risks, which means the virtuous cycle of spending and hiring leading to more spending and hiring hasn’t had an opportunity to get rolling yet.

I’m interested in the scope of the Fed’s legal authority to address this collective action problem through so-called unconventional monetary policy, which has come to be defined as the use of unusual monetary measures to stimulate demand. I will soon be writing more about these legal questions here and at Miles Kimball’s blog, Confessions of a Supply-Side Liberal. Miles, an economist at the University of Michigan, has written extensively on how to combat the so-called Zero Lower Bound problem, which is when the economy is stuck in a rut for the long term and the Fed can’t do more to stimulate lending (or inflation) through its conventional policy channels because it can’t take interest rates below zero.

The question I’ll be looking at is, how far can the Fed in unconventional policy go beyond what it’s already done. The Fed’s most prominent use of unconventional policy post-crisis took the form of the three consecutive rounds of “quantitative easing,” during which the bank bought US government bonds and government-backed asset-backed securities (Fannie and Freddie mortgage-backed securities (“agency MBS”)). Many economists believe quantitative easing served as a major stimulus to the economy and was particularly helpful given the inadequacy of the 2008 and 2009 fiscal stimulus measures. However, many “dovish” economists and Fed policy makers, like Evans, would like to see the bank do more.

When I began to look at the legal dimension of monetary policy – after all, that policy is conducted pursuant to a legal mandate – I was surprised to find very little in the way of scholarship or (publicly-available) policy guidance. Until recently, Fed officials and outside observers have strongly suggested that the Fed lacked the authority to expand the bank’s QE program beyond US government bonds and agency MBS. While Fed officials haven’t revised that view publicly, one might reasonably begin to question whether they doth protest too much. In testimony at the ongoing trial of former AIG CEO Hank Greenberg’s lawsuit over the Fed’s bailout of AIG, Fed officials have recently, for the first time, acknowledged the existence of something the NY Fed actually refers to as the “Doomsday Book,” which is a multi-hundred-page book kept in the basement of the NY Fed that outlines the legal parameters of what the bank can do in the event of a crisis (!). The Fed has thus far avoided having to turn this over, so we can only speculate about what it contains.*

As I will discuss in upcoming posts, my initial review of the sources of law governing the Fed (about which very little has been written) suggests that the bank has significantly more monetary policy discretion than is commonly assumed. I personally believe this expansive power is a good thing: the Fed is charged by statute with a dual mission of promoting full employment and “price stability,” and given the importance of that mandate – as illustrated by the continuing weakness of the economy and the extraordinary human suffering it’s caused – it’s important that those terms have real meaning and not be aspirational only. (“Price stability” has normally been taken to require monetary tightening to keep the economy from overheating, but if the Fed’s inflation target is not being met there’s no reason the same term couldn’t permit loosening in order to stimulate the economy.) Further, Congress gave the Fed a broad mandate in the Federal Reserve Act of 1913; for good reasons, it chose not to set monetary policy legislatively. Given how broadly that statute is written, it’s hard not to see the delegation as a deliberate choice, and one that favors a functional interpretation of the statute (literal interpretations of the Federal Reserve Act are often not fruitful exercises).

So those are my (dovish) priors. If one is an inflation hawk, however, there’s even more reason to want a clearer sense of the legal scope of the Fed’s authority. Presumably a hawk would want to restrict the Fed’s authority to stimulate the economy and would want to know where the lines are that circumscribe the bank. Burnishing his hawk credentials, Texas Governor Rick Perry once famously branded then-Fed Chairman Ben Bernanke’s monetary policy “treasonous” and rhapsodized about Texas-style dangers to Bernanke’s safety if he set foot in the state. So it seems it’s safe to say that this subject appeals to cowboys, economists, and policymakers alike, as well as legal academics.

*Interestingly, officials have conceded that the Fed broke the law a few times during the crisis, to facilitate bank rescues (essentially without legal consequences). So there’s even some question about the enforceability of the constraints on the Fed that do exist.

Note: Mike Sankowski told me on Facebook: “Over at monetary realism Carlos R Mucha Cullen Roche and JKH talk about these legal constraints frequently.”

The Race Card Project →

“Look past race to underlying humanity” was my entry for the Race Card Project, which asks for short-form thoughts about race. Here is the link to see other race cards, and here is the link if you want to make a race card yourself. 

Michele Norris, who started the Race Card Project, introduces it this way:

My idea was to use these little black postcards to get the conversation started. But I quickly realized once I hit the road on my book tour that I didn’t really need that kind of incentive. All over the country people who came to hear about my story wound up sharing their own. …

I asked people to think about their experiences, questions, hopes, dreams, laments or observations about race and identity. Then, I asked that they take those thoughts and distill them to just one sentence that had only six words.

Jethra Spector: Using Miles and Noah's Math Column in the Classroom

This is a picture of Jethra Spector at the elementary school where she used to teach. She is now in her 5th year of teaching GED math for Minneapolis Public Schools adult education and her 1st year of teaching developmental math at Minneapolis Community and Technical College. Before that she was an elementary school teacher for 23 years.

I was delighted to get the following email from Jethra Spector to Noah Smith and me about our Quartz column “There’s One Key Difference Between Kids Who Excel at Math and Those Who Don’t,” which was later syndicated to the Atlantic as “The Myth of I’m Bad at Math.” She graciously gave me permission to share it with you. 

I want to thank you again for permission to share your article “The Myth of ‘I’m Bad at Math’” with the students in my remedial math classes at Minneapolis Community and Technical College. Classes started last week, and I assigned the article for homework on the first night of class. 

Here is a link to the student response sheet I made for my students to complete when they were done reading the article. And here is a link to the PowerPoint I made to facilitate a follow-up discussion the next time the class met. 

I thought you might be interested in what I learned from my students’ response sheets and class discussion.

  • Nearly every single one of my students has at some point said that he/she was bad at math, one as early as first grade when other kids laughed at her answers in class. The only students who didn’t say something like that were students who were worse at other subjects like reading, so that made them think math was their strong suit.
  • Almost none of my students had parents who drilled them on math. The few who did were all from other countries.
  • Every single student agreed most with an incremental orientation to intelligence. This was perfect for me because it set them up to realize that they could be successful in my class if they were willing to make the effort and work hard.
  • Most of my students identified with the statement, “I’m not a math person.” But one student wrote that the article changed his perception and he’s not going to say that about himself anymore because now he realizes that with hard work and determination he can master the material. Another student wrote that math is part of our lives, and knowing it could help improve our futures. Many students said that they like math when they get it but feel frustrated when they don’t get it. That just reinforced my belief that as their math teacher one of my goals must be to present the concepts in such as way that they get it. However, I now feel empowered to remind my students that not everyone will get it at the same time, and for some it will take more practice.
  • Everyone agreed that many things can be accomplished through personal perseverance and effort.
  • Only a few wrote about a famous person as a hero or role model (Oprah, Barack Obama, and Nelson Mandela). The rest wrote mostly about family members.
  • I enjoyed reading their responses regarding how much effort they are willing to make to ensure their success in my class. One student wrote 110%. Many wrote, “whatever it takes.” It was a great opportunity for me to remind them that they don’t have to do it alone; the school has many tutors available to help them succeed.
  • Other thoughts about the article included:
  • “It really puts motivation in students to say practice makes perfect. With effort and persistence you can get through anything.”
  • “I think that this was a great article…it has opened up my mind and helped me understand some things that I did not know about being good or bad at math.”
  • “I’m intrigued by the study habits and how many days they go to school in Japan. Even though it seems a lot, one can never have too much education and knowledge.”
  • “It is an eye-opening article. It made me change the way I think about math.”
  • “I knew it! I used to think I was unintelligent, but that was only because I never really tried. Deep down inside I knew I wasn’t putting forth any effort. When I did, I got great results back.”
  • “I learned that I’m not dumb at math. I just have to make the extra effort to succeed at it.”

When I asked my current students if I should have my classes in the future read this article, the overwhelming response was “yes!”

As I collected the student response sheets, some students asked what they should do with the article. I told them to give it to someone else they know who thinks they’re bad at math!

Update–A Note from Jethra: I saw the guest post up last night and already sent the link to a few people. My dad already wrote back and said it brought tears to his eyes. He’s got a PhD in math and taught math at UW-Milwaukee once upon a time.

I hope other people will feel free to use the student response sheet and powerpoint for discussion if they like. As for me, I couldn’t be happier with the results. It was a great learning experience for me because it helped me get to know my students better. It also established the common understanding that students may have to work hard in my class, but that they can and will be successful if they do. One student made a connection to the bible: “As ye sow, so shall ye reap.”

Best to you and Noah, Jethra