Is the sum total of all the wealth in the world a fixed number that just gets moved around from person to person, group to group, or is wealth dynamic (created)?
This is a question I asked a group of college freshmen and sophomores in an entry level business school course. A slim majority of the students raised their hands when I asked “how many of you think wealth is a zero sum game?” One of my stronger students sitting on the first row very confidently stated that wealth is definitely a fixed number and for one person to get it another person must lose it.
At that time, Apple was in the news for hitting $1 trillion in market capitalization, so I asked the class, Apple became a publicly traded company in 1980. It is now worth $1 trillion. Who did they take that wealth from? The rise of Apple and computers in general surely made an impact on makers of typewriters and calculators over time, but those weren’t multi-billion dollar industries. I then took a few minutes at the whiteboard to walk them through how wealth is created using a simple banking example. Capitalism 101.
What does binary mean?
This is a question I asked another entry level business school class at a different university. The context was how to build decision trees and arrive at satisficing solutions. The first student who raised his hand stated that binary referred to gender and that some people don’t identify clearly as male or female. I replied that he had captured one way the word binary is used in a sentence, but that definition wasn’t relevant to the context of our conversation. I explained the core definition of binary is, something having two parts. Binary choices, a or b. Binary code, zeros and ones, etc. Gender dysphoria was not part of the curriculum for that course. But the students are much more informed about gender dysphoria than they are binary equations.
These are two anecdotal examples of issues that lie at the heart of education in the 21st century. It really boils down to what students are learning and what they aren’t.
What They Aren’t Learning
Civics – according to a 2016 survey by the Annenberg Public Policy Center, only 1 in 4 Americans can name the three branches of government and 1 in 3 can’t name any. That survey is seven years’ old. I can’t imagine the results would be any better in 2023. Having a basic understanding of our constitution, how laws get created and challenged through the court system, and how a representative government works at the federal, state and local level should be an essential part of our primary education. It’s shocking that so many citizens know so little about it.
Financial Literacy – even college students don’t understand what money is, where it comes from, how it compounds, and how wealth is created, sustained and becomes generational. Michael Goldenberg of National Debt Relief links part of the mass financial illiteracy plaguing our country to the emphasis on standardized testing. Schools put a lot of emphasis on teaching Math and English skills in order to help their students score better on the tests. But one might ask, “would we rather have a high school graduate who has temporarily mastered advanced algebra or one who understands how to open a checking account, how the banking system works, how debt works (credit cards and mortgages), and how equity instruments and compound interest works (stocks, bonds), etc.?” It’s a lot easier for a social studies teacher to bash capitalism and link it to “the patriarchy” and “white supremacy” when neither the teacher nor the students understand what capitalism actually is.
Important Life Skills – things like how to write a resume and find a job, how to have a civil conversation with someone you disagree with, manners and etiquette, and time management have been de-emphasized for reasons I don’t understand.
What They Are Learning
Success requires Oppression – in my experience what history college students do remember has been framed by who were the oppressors and who were the oppressed. One person’s achievement was accomplished at the expense of someone else’s freedom and opportunity. While there is truth in this, it is overwhelmingly the preferred method for studying human history in modern America. Henry Ford didn’t just make the automobile affordable for the masses, he did it at the expense of people in horse-related businesses like saddle makers and buggy whip manufacturers.
Victimhood is rewarded – because there are rewards associated with successfully casting oneself as a victim, more and more people are choosing to pursue that path. Rewards can be as simple as getting extra time on exams at school because you suffer from some hard-to-define emotional malady, to expecting to be hired or promoted based solely on your identity (real or perceived).
Equity over Merit – the American dream was based on the idea that if you worked hard and made good decisions, you could live a better life than your parents did. Today’s schools de-emphasize or even eliminate the concept of merit altogether. Unequal outcomes are always based in some type of bigotry and discrimination. If women are underrepresented on corporate boards, the glass ceiling and sexism are the only explanation. If a small college can’t recruit enough girls to field a soccer team, then the boys soccer team must be eliminated. If we don’t have the proper distribution of student ethnicities in an advanced placement class, the class must be eliminated.
What is the Solution?
The core solution is simple. School choice! The U.S. system of higher education is the envy of the world. The variety of elite private colleges and universities, affordable state universities, community colleges, trade schools, and the newer on-line university models gives people options to identify and attend schools that meet their financial and professional needs. The annual competition for students puts pressure on these institutions to constantly improve.
At the same time, our K-12 schools are among the worst in the industrialized world. This is not an indictment of teachers! There are over 4 million teachers in the U.S. The vast majority of them entered the teaching field because they have a passion for helping children learn. The realities of working in a bureaucracy that doesn’t reflect their values and having to spend more time dealing with behavior issues than actually educating burns many of them out. If you’re a plumber and don’t like your employer, you can likely find another one. If you’re a teacher, your only real choice of employers is/are the public school district(s) within driving distance of your home.
Yes, kids from wealthy families have choices. They can attend their assigned public school or apply to a private school. Poor and middle class kids are not so lucky. Most have no choice but to attend the school that the school district says they must attend. Or perhaps be home-schooled. In some cases they have access to a charter school. The lack of competition for the local school system results in those schools not improving and inevitably becoming bloated with unnecessary administration and bureaucracy.
The St. Louis Public School District, for example, has a budget of around $470 million and has close to 20,000 students. That’s a spend of $23,500 per student. If the public schools were forced to compete with private schools for that $23,500, they’d get better very quickly. And the number of private entrants into the school industry would skyrocket. I also project that private schools in lower economic areas would flourish. Elite private schools for the wealthy already exist. The market for improved schools is in middle and lower income communities.
One of the anti-school choice arguments is that school choice would drain money from school districts that already need more. But it’s not the lack of money that makes public schools so bad, it’s the lack of competition. Here’s some data on student performance from 2017. I intentionally looked for pre-COVID data. It’s abysmal. Throwing more money at public schools is like paying the guy who wrecked your car to repair it.
Another argument is that parents might want to send their kids to a religious based school. I would counter that public schools are already in the process of becoming centers for the teaching of modern religions. The fallacy of the argument is that by providing vouchers or credits to a Catholic school, for example, is tantamount to the government sponsoring Catholicism. But that’s hogwash. It’s really just a taxpayer asking the government to send their tax money to this Catholic school because it aligns with their values.
Finally, there is the argument that people shouldn’t profit off of education. My expectation is that most private schools will affiliate with non-profit organizations, but I’m not opposed to smart educators making a profit. Harvard has accumulated an endowment of $53 billion. A true for-profit school modeled after the University of Phoenix or Strayer University would be required to pay taxes on its income.
In short, the biggest threat to education is government oversight. The Dept of Education should publish research and suggest best practices, but let creative entrepreneurs design schools that meet the needs of children and parents. And if they make a profit – good for them.