Whenever an undergraduate student asks me for advice about what to do after graduation, I always recommend two things. A gap year, if possible. And some work experience, especially if the next degree they plan to acquire is an MBA.
The gap year because I think our society needs to learn how to learn outside of college. That is a whole other blogpost, and I’ll get to it this Friday.
The work experience before embarking on an MBA? Because you need to learn what folks in HR do (and don’t do) before you learn about HR in an MBA course. Because you need to experience the agony of a performance appraisal before learning about management in an MBA course. Because you need to fight for budgets for your team before learning about finance. Because you need to know what a deliverable is in the real world before earning the right to moan about assignments in college. Doing an MBA without having worked is a little like learning how to ride a bicycle without ever having seen one, and without actually riding one while learning how to ride it. If that makes no sense to you, great. That’s what that metaphor was supposed to do.
And Gulzar Natarajan says much the same thing, with two crucial differences. He admonishes, rather than advises. And the folks he admonishes happen to have won the Nobel Prize in Economics, so the audience is ever so slightly different:
I think India is a good example of [a country] where they literally had not thought through their own plumbing. If you think of what happened to the urban migrants, India’s welfare system is actually completely designed on the assumption that people live in their stable families which live in one place for year after year. In your village, you’re entitled to apply for the public distribution, which is essentially nearly free food . . . and in rural areas there is the rural employment guarantee system. Both of those are designed for rural citizens who live in their own village. You’re not entitled to go to any village and say: ‘I want my employment guarantee.’ There might be as many as 50m of these low-income migrants who temporarily live in cities. They can’t connect to the welfare system. That’s why there were pictures in the first lockdown of people walking 1,000 kilometres . . . there was no way for them to survive. They just had to go home. That is pure plumbing failure.
https://www.ft.com/content/f998d48a-dd8a-43de-81e5-d530dd9df004
That’s the Banerjee/Duflo quote, taken from Gulzar Natarajan’s blogpost, as is the link itself (I’m not rich enough to subscribe to the FT!).
This is his response:
This is pure rhetoric. It’s the classic hatchet job – form your hypothesis (a system where migrant workers can access food and other welfare benefits), set up a straw man (the public distribution system, PDS, or any welfare benefit), demonstrate how the straw man fails the hypothesis test (the example of covid induced migration), and blame the system (the government “did not think through their own plumbing” on its programs). Before passing such sweeping judgement on something like the PDS or NREGS, it’s useful to understand its original purpose and its trajectory of evolution. It’s also classic hindsight-based judgement.
http://gulzar05.blogspot.com/2021/06/more-on-why-economists-make-bad-plumbers.html
As always, read the rest of the blogpost. Anything written by Gulzar Natarajan is self-recommending. And while you’re at it, read this post (and all of the posts that he links to!)
But the larger lesson you should take away from his blogpost – if you ask me – is this: designing something is very different from implementing it. If you want to be a good designer, you must have worked in implementation for a bit.
Whether it is MBA after having gained work experience or economists working on policy design – or anything else, for that matter, it is worth keeping this in mind: first the trenches, and then the command centre.
And lastly, while on the theme, here’s a book recommendation for you: Skin in the Game, by Nicholas Nassim Taleb.
And this post too, please:
Hammurabi’s Code is among the oldest translatable writings. It consists of 282 laws, most concerning punishment. Each law takes into account the perpetrator’s status. The code also includes the earliest known construction laws, designed to align the incentives of builder and occupant to ensure that builders created safe homes:
- If a builder builds a house for a man and does not make its construction firm, and the house which he has built collapses and causes the death of the owner of the house, that builder shall be put to death.
- If it causes the death of the son of the owner of the house, they shall put to death a son of that builder.
- If it causes the death of a slave of the owner of the house, he shall give to the owner of the house a slave of equal value.
- If it destroys property, he shall restore whatever it destroyed, and because he did not make the house which he builds firm and it collapsed, he shall rebuild the house which collapsed at his own expense.
- If a builder builds a house for a man and does not make its construction meet the requirements and a wall falls in, that builder shall strengthen the wall at his own expense.
EconForEverybody 