Signals v Causes: Poverty

From the Introduction of the William Easterly’s book, The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor:
:

The technical problems of the poor (and the absence of technical solutions for those problems) are a symptom of poverty, not a cause of poverty. This book argues that the cause of poverty is the absence of political and economic rights, the absence of a free political and economic system that would find the technical solutions to the poor’s problems. The dictator whom the experts expect will accomplish the technical fixes to the technical problems is not the solution; he is the problem.

Think of technical problems as problems like not having medicine, food or the internet and technical solutions as providing medicine, food and the internet.

I’m looking forward to reading the rest of the book. I heard about it from this EconTalk episode with William Easterly and that discussion is worth a listen.

Feedback Matters in Customer Service

This EconTalk podcast features a panel discussion on the future of work, featuring Andrew McAfee, Megan McArdle and Lee Ohanian.

Host, Russ Roberts, makes a good point about 29 minutes into the podcast. They are discussing how people differ from artificial intelligence. McArdle points out that there is value in charm. McAfee isn’t so sure. He says:

But think of your last 10 service interactions with another human being. How many of them left you with that warm, chamomile tea feeling?

McArdle say most of them. McAfee responds:

Oh, come on, did you walk through a sea of pleasant experiences in the airports on your way here? If so, I want to travel with you. [Or] When you call up Comcast, when you go–

Roberts points out that these are outliers:

You’ve picked the example of the places in America where there is very little competition due to regulation and government monopoly.

Good point. Not all customer service experiences are great, but certainly the ones from the companies that compete for your business are better than those that don’t. Everybody dreads going to the DMV. Most people are okay with heading to McDonald’s.

Failing sucks, get over it

The Wall Street Journal published an adaptation of Admiral William McRaven’s commencement address to the University of Texas about life lessons learned at Navy SEAL Training that is worth a read.

Here are a couple prescient lessons.

Get over failing:

Several times a week, the instructors would line up the class and do a uniform inspection. It was exceptionally thorough. Your hat had to be perfectly starched, your uniform immaculately pressed and your belt buckle shiny and void of any smudges.

But it seemed that no matter how much effort you put into starching your hat, or pressing your uniform or polishing your belt buckle, it just wasn’t good enough. The instructors would find “something” wrong.

For failing the uniform inspection, the student had to run, fully clothed, into the surfzone and then, wet from head to toe, roll around on the beach until every part of your body was covered with sand. The effect was known as a “sugar cookie.” You stayed in that uniform the rest of the day—cold, wet and sandy.

There were many students who just couldn’t accept the fact that all their effort was in vain. That no matter how hard they tried to get the uniform right, it was unappreciated.

Those students didn’t make it through training. Those students didn’t understand the purpose of the drill. You were never going to succeed. You were never going to have a perfect uniform.

Sometimes, no matter how well you prepare or how well you perform, you still end up as a sugar cookie. It’s just the way life is sometimes.

If you want to change the world, get over being a sugar cookie and keep moving forward.

More on failing, don’t afraid of “the circus”, in fact it’s how you respond to failure that may build your success in the future:

Every day during training you were challenged with multiple physical events. Long runs, long swims, obstacle courses, hours of calisthenics—something designed to test your mettle.

Every event had standards, times that you had to meet. If you failed to meet those standards, your name was posted on a list and at the end of the day those on the list were invited to a “circus.”

A circus was two hours of additional calisthenics designed to wear you down, to break your spirit, to force you to quit. No one wanted a circus. A circus meant that for that day you didn’t measure up. A circus meant more fatigue, and more fatigue meant that the following day would be more difficult—and more circuses were likely.

But at some time during SEAL training, everyone—everyone—made the circus list. Yet an interesting thing happened to those who were constantly on the list. Over time those students, who did two hours of extra calisthenics, got stronger and stronger. The pain of the circuses built inner strength—built physical resiliency.

Life is filled with circuses. You will fail. You will likely fail often. It will be painful. It will be discouraging. At times it will test you to your very core.

But if you want to change the world, don’t be afraid of the circuses.

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Don’t get caught in the justice trap

I enjoyed this post from David Henderson on EconLog about why businesses hire employees and that it is worthwhile to avoid the justice trap.

Henderson quotes good advice from Jeffrey Tucker:

Sincere apologies and genuine admissions of error and wrongdoing are the rarest things in this world. There is no point at all in demanding apologies or in becoming resentful when they fail to appear. Just move on. Neither should you expect to always be rewarded for being right. On the contrary, people will often resent you and try to take you down.

How do you deal with this problem? Don’t get frustrated. Don’t seek justice. Accept the reality for what it is. If a job isn’t working out, move on. If you get fired, don’t seek vengeance. Anger and resentment accomplish absolutely nothing. Keep your eye on the goal of personal and professional advancement, and think of anything that interrupts your path as a diversion and a distraction.

And perhaps a bit more powerful from Walter Oi regarding Japanese internment camps in World War II:

…the Japanese-Americans were treated unjustly, but that the best thing to do for them was to move on and not create a new government program.

I agree. It is very easy to get caught in the justice trap and dwell on how you have been wronged, but that isn’t the least bit productive. Get over it.

Megan McArdle on Failure

I agree with most of what Megan McArdle has to say about failure in this EconTalk podcast.

Why is failure valuable?

…because that’s how we get information.

What about the typical success story?

…when you see the cover of a business magazine, it’s always this genius with his folded arms staring at you and the piece goes through all these brilliant ideas. But in fact when you talk to entrepreneurs, that isn’t how they experienced it. Usually how they experienced it was: We had this great idea and then it turned out that didn’t work, so we did something else. Or it turned out: It didn’t work and we went out of business.

Where do we learn to start avoiding failure?

…having failed is an important skill that kids need to learn. And the right time for them to learn it is when they are kids. And when the consequences for that are actually pretty low.

One of the book talks that I gave, a 10th grade girl came up to me afterwards and she said, You know, I would really love to try to fail, but I’m in an AP (Advanced Placement) program; only 5% of the people who are in the program are going to get a 4.0; and I just can’t afford to take a class that I wouldn’t get an A in.

And I just thought: America, you are doing it wrong. It’s not that kids shouldn’t work hard in school. That’s not what I’m saying. But the idea that at the age of 15 you have to be so self-protective that you can’t take any risks at all is insane. Because when is going to be a better time? When she is looking for an assisted living facility?

I might rephrase that first part, though. Having failed isn’t the important skill. Learning to deal with failure is and learning to overcome the fear of failure is another important skill.

It seems like soon after we get past the trials and errors of learning to walk, run, talk and ride bikes, we forget that trial and error is how we learn and we tighten our tolerance for error.

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Who deserves some help?

I’m looking forward to reading Bryan Caplan’s follow-up to his post, Poverty: The Stages of Blame. In the follow-up, he plans to explore what that implies about government and personal behavior.

This topic baffles me. When kept in the abstract, people seem to default to an attitude that ‘something must be done to help’ because people are poor ‘through no fault of their own.’

But, when you start talking about specific people, Caplan’s logic tends to override that abstract reasoning.

But, few people backtrack and wonder how many people really fall into that abstract “through no fault of their own.”

Update: Here’s Bryan’s follow-up post, Poverty: The Stages of Blame Applied. He makes good points.

The spider and the starfish

starfish

starfish = bottoms-up (Photo credit: kevinzim)

I enjoyed listening to this EconTalk podcast with guest Lant Pritchett about education, specifically in poorer countries. I recommend it.

He begins with a nice discussion about bottom-up and top-down systems using metaphors (emphasis added):

…the basic distinction is between a top down organization where the metaphor of a spider is, all of the resources of the spider web, however spread out they are, merely serve to transmit information to one spider, who synthesizes that information and responds with the resources of the system. So, if there is a bug, the spider crawls out and gets it. But kind of all the web is kind of an ancillary to the brains of the top. The starfish is a creature that actually has no brain. It’s neurally connected, but a starfish moves because the individual units of the starfish sense something and if they sense more food they try and pull that way. And if the other side isn’t pulling as hard, the starfish moves. So it’s really a metaphor of a decentralized system, where individual units responding to local conditions create the properties of the system. And the beauty of a starfish is if you cut a starfish up into 5 bits, you get 5 starfish. The danger of a spider is that when the spider dies, it’s dead. The whole system therefore falls into dysfunction [single point of failure].

Later, he proposes why bad school systems may persist:

…one of the conjectures I put in the book is that it persists partly by camouflage. It pretends to be something it’s not and then can project enough of the camouflage that it maintains its legitimacy. So, sociologists of organization have a term called ‘isomorphic mimicry’, which is adapted from evolution where some species of snakes look poisonous but aren’t, but get the survival value of looking poisonous. So, one of the things that’s happened is by this pressure to expand schooling and by the governments’ desire to control that socialization process, they have created all the appearances of schools that provide education but without actually doing it. But have at the same time not produced the information that would make it clear that they weren’t doing it. So they produce enrollment statistics, numbers of buildings, numbers of toilets, numbers of textbooks, numbers of everything. But have, you know, all of which can project the image that there’s a functional system and providing real learning there. But they don’tprovide metrics of learning or incentives for learning or feedback on learning or accountability for learning at all.

There’s much more good discussion throughout, but I’m fond of something Pritchett said near the end:

You know, the United States has always been much more of a starfish system. And the starfish system has enormous strengths, and I think those enormous strengths have led America to be a leader in education in many ways. And one of the examples I use in my book is, if there’s a scaled example of a starfish education system, it’s American universities. And it’s just unbelievable from the data the extent to which America dominates quality universities. It’s just unbelievable compared to Europe, which always took the same approach to universities that other countries want to take to their basic education. And you see the consequences of it. America’s universities–in the book I have numbers of the top 200 universities in the world, what fraction of them are in Anglo countries, and it’s just way disproportional to the population size. And even wealth. Because Europe, which is equally sized and equally wealthy, continental Europe, just has nowhere near. And it’s the result of a starfish system, in my view.

I’ve made the same point several times on this blog. Here and here are a couple of examples.

I do appreciate the spider and starfish metaphors. Those roll-off the tongue better than top-down and bottom-up.