:) welcome to the great divide between spoken British-English & spoken American-English
306 karma · joined November 26, 2012
I wonder what size teams this product works best for? Presumably seeing 45 faces on the sidebar would get a bit much...
I had a few emails recently asking if my site had an RSS feed. I have never used RSS and had no idea. Went into Squarespace settings, messed around for 2 mins, it gave me a button and set it all up for me. Honestly I thought it was already dead until I had those emails come in...
You can apply the same analysis to the study of how "entire societies / nations generate Wealth" and get an interesting picture of the international econo-political metagame throughout history...
I'm not focused enough right now to put a book together -- although I agree that there is more to be said on and around this specific topic. Some good nuggets are in this comment section -- as is usually the case for HN.
The essay format allows me to spend a month writing an essay about the intersection of Game Theory, Anime, Military Strategy, AI, and Political Economy without stressing about any grander narrative, which I very much enjoy...
This is a very good articulation of my points, thanks for laying it out so crisply. Worth noting that this is already a reality at a select few places. While there is continual agitating in America for our Gov. to provide free college, it turns out that some elite private institutions are already in a position to do so, or will be in the next decade. Food for thought, including the follow-on social implications of the headline: "Tuition Now Free At Harvard! Still $50,000/year At Your Local State University Though"
Regarding agency effects / moral hazard:
Someone asked me on another forum what predictions, if any, I would be willing to make in defense of this article.
I tried to rattle off a few off the top of my head with low conviction. One that I comes back to me still is:
"Professor Salaries will have an increasing Gini coefficient vs. today (i.e. profs at Harvard make a higher multiple of Profs at State Colleges 25 years from now)"
Given that the Top institutions will be competing for talent with Compound Returns while everyone else must compete with Tuition increases, I think this would be interesting to study & observe. I have zero data on this unfortunately, so it's just an unsupported hypothesis for now...
You're definitely right that "educating undergrads" is not the "primary purpose" of these institutions. I definitely did not & do not believe that. If that came through in the essay, I apologize for being inaccurate. If anything, I expected the response to be that I was assuming the primary product of a research university was Investment Returns, which is at least closer to a point I tried to make.
Regarding Research: "Research" in the abstract is -- I believe -- considered a tax-deductible expense in America, and the IRS treats it pretty favorably and that's probably for the best.
However, engaging in "research" to some capacity does not -- to the very best of my knowledge -- allow you to claim a full tax-shield on the Investment Profits of $10 billion+ merely by virtue of the fact that you engage in "research" (compare: Big Pharma, which actually has to write off expenses in order to reduce taxes, or Google or Boston Dynamics).
That is VERY different from how Education works today. To be a University is to be a Charity operating in the Education space. Additional Revenues and Expenses in Research areas are not important for this designation. Once the designation is established, the returns on your Investment Profits (invested in both the open and closed markets) are tax-free, forever.
That's a pretty big deal in the finance world as it relates to your ability to accumulate capital and build Wealth.
Whatever the "primary purpose" of that Wealth might be, the fact remains that (at MIT) that Wealth has grown 1,500% over the last 25 years, while the operating budget has grown ~250%. I believe that is somewhat noteworthy, and I could not avoid noticing how critical the Education-Charity tax-shield was to this compound growth.
The question I tried to raise was: "if your Education was affordable, would we allow the service provider to be considered a Charity?"
Regarding finances & more data: every institution named in this essay has it's 2017-full-year financial report linked, which I spent some time going over to better understand revenue sources (i.e. to understand the truly minimal importance of Tuition) and expenses (to understand the nature of the costs involved).
Sadly that data doesn't appear to segment anything by "research intensity", but it usually pulls research out at least research in all forms. And you're right, that Research usually dominates both "Instruction" and "General & Administrative" in terms of spend. (Quick example here: https://web.mit.edu/facts/financial.html, the other institutions have their fully detailed reports linked in the bullets at the start of the essay )
The comparison to artificially-constrained SF housing is very apt (as a current SF resident, I know it well).
I tried to touch on this idea in the “Case for Charity: A Charity Case” section, but my approach is to view it idealistically / as things should or might be.
And in a hypothetical world where Colleges charge double-digit fractions of a family’s net worth, while generating as much investment profit as our best companies and hedge funds, but where 0% of students received any “aid”......
.....and the institution was still allowed to remain a non-profit and have returns tax-sheltered....
....I can’t imagine that such a state of affairs would be allowed to continue.
Which organizations are allowed to be considered 501(c)(3) and on what basis and what privileges that affords them is a matter that is hypothetically at the prerogative of Congress.
I know trust in Congress/the political process is pretty damn low these days.
But my point with the “best play it safe” comment was basically...if I were colleges, I wouldn’t roll the dice.
The TL;DR of this essay might perhaps be:
- College degrees are more valuable than ever in post-industrial economies, so applicants to top-tier schools are up 240% over the last 25 years
- Meanwhile, available spots at top-tier colleges in America have increased just 2% over the last 25 years (Thanks to Tyler Cowen & others for complaining about this publicly)
- Microeconomics 101: Fixed Supply + Increased Demand = Increased Price
- That’s the obvious part
- The non-obvious part is that this is intentional...
- ...because the Charity-status ( 501(c)(3) ) of Colleges in America depends on more-than-half of their students being unable to afford the education (read: “receiving financial aid”)
- That Charity-status protects the Investment Returns of College Endowments from Uncle Sam & the IRS
- Investment Returns Compound over time, and there is no more powerful force on Earth — anyone not playing the game to maximize Compound-returns will lose to everyone who is
- Thus: if Colleges want to keep their Investment Returns tax-free, Tuition MUST remain unaffordable for at least 50% of undergrads
Look, on the one hand this can get a bit too cynical, to the extent that you start looking for a "grim cabal" (quoting myself, not you) to blame. There are no lizard people etc. etc. :) So you have to phrase things carefully.
On the other hand, this quote from the article is me trying to highlight...exactly what you're saying here about optimizing human output:
"The slave works for his owner. The indentured servant for his master. The communist for everyone. The American for himself. It’s a powerful idea, a powerful motivator, and a powerful system. A grand competition, where advancement can be achieved through merit and competence — so don’t be shocked when those with merit and competence flock to compete. And they make perfect competitors."
I wanted to dodge the Culture War / Politics questions a bit. This was more about specifying the pain points than proposing My Genius Solution To The Utopia Problem #729.
But I didn't want to let it go unsaid that the American system powerfully motivates the sorts of people most-apt-to-compete to do exactly that.
For sure, this was a bit intentionally glib. My own understanding of macroeconomics is relatively light, so I linked to two different perspectives on this event and glossed by it a bit.
The point I was trying to make (suggest? raise?) was that regardless of your views on printing $2,000,000,000,000, the crazy Cost-Disease-funded-by-debt does not appear to be a symptom of a banking system gone mad chasing risk (ala 2008). Which means it can rationally go higher still, which means it will keep going higher, past the point where all surplus wealth generated by the median Americans is consumed.
I was just trying understand what was fueling this fire, and whether it was rational or irrational exuberance.
Thanks for summarizing this here. This is spot on. And of course I'm being a bit hyperbolic -- like I said, the median American still gets to build wealth. Just not as much as their parents. Or their parents' parents.
The only "expectation" I took as a granted was that a given person not-so-far-from-the-median can build Wealth in America. If you're willing to set THAT one lower, then perhaps there is no problem now or on the horizon...
I commented elsewhere that it doesn't seem to me that "Economic Surplus" / "Building Wealth" is an axiom of any system. So perhaps that expectation should in fact be lowered. But that's certainly not something my peers or I are willing to do. Thus the race.
Yeah, this is exactly a rephrasing of the point I was trying to get across.
(Just spent a few hours reading on this based on another comment in this thread so trying to learn how the "sourcing things below Amazon price" piece works...)
This was actually fascinating to me and I've spent the last 3 hours reading stuff from your links. Just trying to wrap my head around how you built enough inbounds to make that sort of revenue...
It may be a perfect example of the "secular bias" the publication references, but I too groaned inwardly when I went to check out the "about" section after completing my read. Not because I changed my mind on the content of the article, but because I was imagining sharing it and having to deal with an argument about publication bias (in the media) for an essay about (among other things) publication bia (in the sciences)
I'm sure that will irk both sides to some degree. But regardless of the stated motives, I've found it to be a pretty accurate (as someone who identifies as neither). Of course there are many examples of partisan interests, actors acting contrary to stated positions once in power and/or being in bed with entrenched political/business interests. All that jazz.
But on a given position I've found it's usually accurate that liberals will value equality for all, including the smallest minorities. Vice versa conservatives and liberty (where even the 1% is a minority).
I'm not taking a stand here beyond that, and hopefully we can avoid pointing out all the instances where party dynamics (see: PG's essay on Identity) cause this to breakdown in inconsistent ways. Abortion, drugs, etc.
I've met many smart, educated, eloquent conservatives who have expressed entirely reasonable views if you take the fundamental assumption of individual liberty as your founding principle, some of whom have changed my own mind. Likewise liberals, so long as you take equality as your ideal.
Hopefully this doesn't step on too many identity-toes.
I'm not saying it was wrong or that his delivery was bad. But I remember reading the Class Notes from Thiel's class after Blake made them available and thinking "Wow, there's some original thoughts in here I haven't come across before."
Maybe it's because PG already put it all to paper, and some of these other figures just added post scripts. Maybe it was a solved problem by the time Sam got a seat at the table. Just some food for thought. Looking forward to the other lectures regardless.
The only thing I wanted to add here is that the article & subsequent discussion seems to be about whether or not it's acceptable for men/women/other to be judged based on anything except their competence. I think that's what can make this topic tricky - because companies, in my (admittedly limited) experience don't just hire based on competence.
Most people would think it was acceptable not to hire someone because they didn't "fit" with the company's culture. Maybe they were a jerk, maybe they were hugely arrogant, maybe they didn't shower, maybe they showed up in a three-piece suit to your shorts and flip-flops interview, whatever it is. So really this whole discussion ought to be about what things are acceptable to discriminate against to determine "fit" and what things aren't.
Which I think requires taking a look at what it means to assess someone for "fit" - because I can see how easy it is for "attractiveness" to be a part of that definition. So should it not be? What should - and on what grounds? I think the discussion becomes subjective quite quickly...which is what makes it all so hard to discuss.