Free Market Produces Too Little Education

Very interesting text I just read by Michael Parkin that says that "The free market produces too little education." And it goes on to say that education produces benefits that go beyond what the market would see. I infer that means the market does not gain much by teaching or imparting skills. And since there is no exchange of equals perhaps government incentives or something need to be given in order for education to take place.

Well, there are 2 interesting things I have been thinking about that kinda ties in to this concept. 2 very controversial thoughts that most people might just disagree with me about.

Firstly, we talk about management of corporations. There are 2 schools of thought here. Peter Drucker's school of thought is that the economy thrives with many large corporations, with well trained managers who rise through the ranks with good training (MBA's and the like). The other school of thought is that the economy will thrive only with entrepreneurs, many small business and start ups. Obviously, from Parkin's point of view the first school of thought is preferable. Once a start up grows beyond a certain size, an "entrepreneur" would need much more skills to run it, and he needs much more technical knowledge such as financial accounting etc. And he will not learn this in the free market which he so embodies, cos the free market does not have any incentive to teach him. Entrepreneurs are selfish face it. They will not organize a course in accounting to "share the knowledge", although investment banks like Goldman Sachs would. And they even welcome "alumni" who have gone through the training and left the company. Well, my entrepreneur friends say that you can always hire somebody to do the math for you, accounting, forex arbitrage etc. But then again, if u look carefully, for a start up investment house to reach the level of Goldman Sachs today would be quite impossible. The people you hire do not have the loyalty or the "system" in place, and if they come and go, you're in trouble.

Now the second thought. All this learning on the job rather than learning from courses is bullshit! Learning on the job presupposes that if you are dumped into doing the work, and trying to survive out there in the "market", you will learn how to survive. Unfortunately, without proper training more often that not I see that most new staff just learn the wrong things and "think" they have got it right. Nobody out there is gonna teach u the right thing unless there is something in it for them (or they are old grandfathers who are dying to impart knowledge). Chances are they'll teach u a bit and that's it. After all, what's in it for middle management to teach you all their skills? Hell, if you're brilliant you might actually be able to take over them after one year of training! Yes, I've seen people who have been around for 20 odd years who I can replace easily. And highly paid people too. Of course you need work experience that could only be gained from OTJ training. But thats probably half the solution.

Take for example designing a building and making it stand up. Really you could actually learn how to do it just by shadowing some PE and reading the building code top to bottom. After all, all the rules you need to follow are in there. As long as you follow the rules and some PE agrees to stamp it for you, you pass the building permit check am I right? Well, that's "assuming" you already have a degree, but lets say you don't but you pretend you do, you could probably get by and the building will stand up. Now, if you really didn't take any classes in building design or never went to college and never had a professor lecture to you and you did just that. I don't know what jack shit your building will look like. It'll probably stand up but nobody would wanna hire you or trust your judgement. And if something special had to be altered in the design I wouldn't even seek this guys opinion. Learning solely on the job is like desiging a skyscraper by hanging around with a PE for a month and memorizing the building code with no knowledge of what goes into structural analysis and design. No offence to Poly kids, but I hear people with diploma and no degree but 20 yrs on the job claim that they can design building just as well as any PE, after all they already memorize the code head to toe. No guesses why nobody would dare offer them a PE to design.....

Booksmarts vs streetsmarts? Hell there's no clear cut to the answer to this question. But if you watched Apprentice 3 (i think), its quite clear that the streetsmarts start to breakdown after reaching the highest level of corporate management. Hell that lady finalist, she wouldnt even want to thank her team after the last task, she just walked off! See at least with some degree of manners, culture, and not just BS "be yourself, do your own thing" perhaps she could have scored much better. I'd have preferred to work with the streetsmart lady than the other one. But at the highest level, she clearly felt out of place and didn't make the cut.....

So there.