A Question for Lant Pritchett

This interview went viral (well, about as viral as interviews of economists can be) recently. And it was this excerpt that made the rounds:

India never changed its mind about having a selection system rather than an education system. A selection system is where you put all children in a classroom, but provide a poor or indifferent environment for learning, and see what happens. The students that learn in that environment must be brilliant. As for those who do not learn, teachers will say they must be the type of children who cannot learn. India took that option because they expected that 2-3% of the population would be an educated elite, and that would be good enough. And so, they committed themselves to selection rather than education. Things will only change once they fundamentally change their ideas, which they are hopefully in the process of doing now.

https://www.cde.org.za/wp-content/uploads/2021/06/Lant-Pritchett-in-conversation-with-Ann-Bernstein.pdf

Tyler Cowen chose a different bit of the same question to excerpt:

Ann Bernstein: From your knowledge of India and Indonesia, what are the core causes of their lack of educational progress? These are places with highly qualified civil servants and, at least in India’s case, a democratic government. How do you see this problem? How do we get out of this trap?
Lant Pritchett: I’m head of this very large research project called RISE and we’re spending millions of dollars to find out the answer to that question. One of the countries where education improvements have been dramatic is Vietnam. At a tiny fraction of the spending in most countries – including South Africa – Vietnam is achieving OECD levels of learning. When we asked our Vietnam team why the country has produced this amazing success, they told us: ‘because they wanted it’.
On one level, that seems silly; on another level, it is the key. Unless, as a society, you agree on a set of achievable objectives and actually act in a way that reveals that you really want those objectives, you cannot achieve anything.

https://marginalrevolution.com/marginalrevolution/2021/06/ann-bernstein-interview-with-lant-pritchett.html

Me, I’m dying to ask Lant Pritchett a question, and I really wish it was asked in that interview:

What made the Vietnamese want educational progress?


I finished yesterday’s post by asking what needs to change in terms of societal incentives for my Almost Ideal University to have even a chance at existing. Same question, except it seems to not be a theoretical one in Vietnam’s case – and so I’m dying to know: what made the Vietnamese want educational progress?

More generally, what makes any society want educational progress?


I sometimes worry that I have found such a good hammer that the whole world looks like a nail, but please tell me how my answer is wrong: a society that agrees that life is a non-zero sum game is a society that will want educational progress.

Status driven societies, for example. If which college you go to matters more than what you learn in that college, you live in what these days is called a status driven society. And since, by definition, there are only so many “top” colleges in a given geographic area, there are only so many seats to go around. Those that get in have “won”, at the expense of everybody else who has “lost”. And the incentive for the college in question is to not increase the number of seats, for that would drive down its status.

I wonder if that conclusion is as befuddling for everybody else as it is for me? The best college in town should not admit more students because that very act will ensure that it is no longer going to be thought of as the best college in town. We have successfully Groucho Marxed the education sector in India.1 He meant it as a joke, we think it to be a great way to dispense quality education.

(Scaling up will have a negative impact on quality, especially when it comes to education. Therefore replicability rather than scale. That is, there is an argument to be made that the “top” colleges admit more folks than they do right now. But their bigger responsibility is to help other colleges become better, in my opinion.)


It’s the whole college as a bundle problem all over again: when you spend the time and money getting educated from a top college, you’re hoping, as a student, to get at least two things (there’s a third, but that’s not relevant right now):

  1. A great education
  2. The license to say, “… from XYZ” in addition to whatever your educational qualification is. XYZ could be Harvard, could be IIT, could be Fergusson College in Pune. But hey, only so many additional people get to say that every year. Status!

Parents want to be able to say that their kid went to a great college. Kids want to go to a great college. Companies want to recruit from great colleges. Professors want to work in great colleges.

And in a zero sum world (or status driven societies, if you prefer), there can, by definition, only be so many “great” colleges.

Go back to a part of the excerpt from Lant Pritchett’s interview at the top of this post:

And so, they committed themselves to selection rather than education.

https://www.cde.org.za/wp-content/uploads/2021/06/Lant-Pritchett-in-conversation-with-Ann-Bernstein.pdf

Yes, indeed we did. And my contention is that we did so because we prioritized status over education. LinkedIn over Coursera, in my framing.


And that, unfortunately, leads us to a chicken and egg problem. Because the only way to change priorities at a societal level is through… education.

So, three conclusions, and before that, one problem.

The problem: if what I’ve said here makes sense, we have a really, really big battle up ahead of us. How to use a broken education system to nudge society towards a better education system that isn’t broken is a hard thing to think about – and I would therefore love to understand how I might be wrong. Please tell me!

The three conclusions:

  1. Depending on only the education system to provide higher education isn’t a great idea (“But then what else?” is a question I do not have an answer to at the moment).
  2. I need to read more about education in Vietnam
  3. Teaching more people that life is best thought of as a non-zero sum game is a great mission to have in life. No?

  1. Not just in India, of course. But given where I am, and given who I am, I will naturally focus much more on India[]

On Gamification

Ana Lorena Fabrega, who you should absolutely follow on Twitter, recently came up with a wonderful thread on gamification.

What is gamification?

Gamification is the strategic attempt to enhance systems, services, organisations, and activities in order to create similar experiences to those experienced when playing games in order to motivate and engage users.

https://en.wikipedia.org/wiki/Gamification

Rather than do a dull and dreary task, try to turn that dreary task into a game. It won’t (hopefully) be quite as dull and dreary anymore. There is much more to it than that, of course, but my own succinct definition of gamification (for my own purposes) is simply this: try to make learning interesting by turning it into a game.


But what does turning something into a game mean, and what elements of games should one retain in the gamification of, say, learning?

How to get students to learn about, say, project management? Come up with a course on project management is one (obvious) answer.

Can I gamify a course on project management? Sure: points for attending classes, for example. Extra points for doing assignments better. Points being deducted for less than ideal behavior. House with the most points wins. You’re familiar with how it goes.

But that’s tricking (incentivizing) people into doing what we want them to do, as Ana says. It’s better than nothing, but that isn’t gamification.


Ana has a word for this, and I really like it: pointsification. You do this to get that. And before you know it, Goodhart’s Law raises its ugly ol’ head again. As Ana says, you end up taking the least essential things of a game and end up making them the core of the experience.


There are four things that end up making a good game, as per her Twitter thread: a goal, rules, a feedback mechanism and voluntary participation.

Building out a podcast with your batchmates is a “game”. The goal is to come up with an episode a week for the three “teams” playing the game.

There are rules: scripts to be put up for review by a particular day, a schedule for shipping the episodes, artwork and trailers to be shipped by a particular day, etc.

There is feedback about how the scripts could be better, about voice modulation, about the technical aspects and so on and so forth.

And it is, of course, entirely voluntary.

That’s gamification.


Please read the entire thread by Ana, it’s fantastic. Her own example of a game is even more lovely, and I wished I could have been a part of it.

But there’s one point that I wanted to emphasize in addition to all of what Ana has said, and therefore this blogpost: games when built well are, by definition, non-zero sum games.

My podcast example, or Ana’s example of the book in the library game aren’t about pointsification1. There are no points, there’s no winning by defeating somebody else. In fact, quite the contrary: winning is about everybody meeting their deadlines, and since the group wins if everybody finishes, it is in your interest to help the others finish.

You win by helping others. You don’t win by making sure others scored less than you.


What sucks the life out of me as a teacher is questions along the lines of “Can you please let me know why I scored so less?”.

Because what the student is really asking is this “But why did the others score more?”

That’s a zero sum game. You “win” at marks by scoring more, and there are two ways to score more: either score more than the others, or make sure that the others score less than you. But both are about winning by defeating others, not by helping others also win.


And particularly as a person who is supposed to be teaching students about economics – the double thank you moments, trade being a voluntary exchange that leaves both parties better off, and therefore a non-zero-sum game are all such fundamental building blocks of my subject – arguments about marks are therefore especially soul destroying.

And that’s why gamification (when done well) and project based learning are so much better. Because we teach students how to build out a podcast, sure, but we also teach them about the following:

  • The world is a non zero sum game. Or at least, it should be viewed as one. The world shouldn’t need you whining about why others scored more.
  • Work happens best when you work with each other, not against each other
  • Working in a team is hard, can be frustrating, but is ultimately the best practice for the world outside. You will not get along with everybody. Quarrels will happen. Personality clashes are inevitable. Working around all of these, and working with people you wouldn’t really want to hang out with is what teamwork is all about.
  • The objective is to “win” the game. Teamwork is the best way to get this done. You won’t get along with all your team members, but the work they do is invaluable. So learn the art of getting along enough for all of you to win.
  • And once you’ve won, set up a new (non-zero sum) game, and get back to struggling again. And again, and again.

That’s gamification.

And the larger lesson you should take away from playing a game such as this is not just about learning podcasting, or dashboarding, or survey design, or setting up a website, or about running a summer school on philosophy or journalism. It’s about figuring out how to gamify your life, whether in college or later.

Because the alternative is just too damn boring to think about.

No?

  1. what a lovely word![]

Understand the beast that is finance

We’ve been building a series on finance here, and we’re not even at basecamp level just yet in terms of our ascent on Mount Finance. But I just realized that while I’ve started the series, I have not laid out two ideas that I think are central to thinking about finance. One idea for today, and the other for tomorrow.

Today’s idea is about zero sum games.

I’m big on non-zero sum games. Students at GIPE are probably sick and tired of hearing me uttering the phrase now, but it’s never going to stop. The world is where it is today precisely because of the fact that it is a non-zero sum game, and most of our problems in life and society would go away if only we understood and applied the principle in all walks of life. But that’s a separate post, and I’ll get to it one day.

For those of you who are unfamiliar with the concept, a trade in which both parties are left better off than they were before is called a non-zero sum game. Also called a double thank you moment, by the way.

Here’s the thing about finance.

It is not a non-zero sum game.

For me to win, you have to lose. There’s debate about whether this is true for all of finance or only a part of it, but options theory in particular is (at least in my view) definitely a zero sum game.

Options and futures trading is the closest practical example to a zero-sum game scenario because the contracts are agreements between two parties, and, if one person loses, then the other party gains. While this is a very simplified explanation of options and futures, generally, if the price of that commodity or underlying asset rises (usually against market expectations) within a set time frame, an investor can close the futures contract at a profit. Thus, if an investor makes money from that bet, there will be a corresponding loss, and the net result is a transfer of wealth from one investor to another.

https://www.investopedia.com/terms/z/zero-sumgame.asp

Speaking of the “for me to win, you have to lose” line of argument, consider this snippet of an excellent conversation between Tyler Cowen and Clifford Asness:

AUDIENCE MEMBER: How confident can you be that there will continue to be the steady supply of stupider investors on the other side of the trade so that you continue to make money?
ASNESS: That’s a great set of questions.
Backing up, you’re not going to believe me, you’re going to think I’m just copying you. But myself and a colleague, Antti Ilmanen — he’s Finnish, he didn’t just have odd parents — have been planning, we haven’t written it yet, to write a paper with the literal title, “Who is On the Other Side?” Just a little shorter version of what you said, because we do think that is a very disciplining question.

https://conversationswithtyler.com/episodes/cliff-asness/

In fact, if you ask me, this is the core differentiator between economics and finance. The study of economics is (ought to be?) about non-zero sum games. The study of finance is about zero sum games. It’s confrontational, it’s risky, it’s like sports. For there to be a winner, there has to be a loser.

Why I like watching and playing sports even when sports is very much a zero-sum game is also another post by the way. One day.

Still, back to my main point: finance is a zero sum game.

If you want to get into this jungle, do so with eyes wide open. I’m just sayin’.

Links for 4th March, 2019

  1. “Under Uma, the NRCB has built Asia’s largest gene bank of 360 banana varieties. The popularity of Grand Nain—the long, pale yellow bananas that one encounters in most supermarket shelves (promoted by the giant Swiss horticultural conglomerate, Chiquita)—is such that it has been pulping production of more nutritious native bananas. Monoculture, or large-scale cropping of one strain without diversity, makes the crop susceptible to deadly disease attacks that could wipe out its production. There’s also the added risk of permanently losing indigenous varieties. This is one of the many threats Trichy’s famed banana growers face. The perennial scarcity of water has also meant that Tamil Nadu’s Theni district toppled Trichy from its top banana status. ”
    Only one excerpt from a very long article about the Cauvery  -and this long article is only part deux of a two part series. There was much to learn from reading it, about a whole variety of issues. Recommended.
  2. “Economic historian Barry Eichengreen has shown how countries that have experienced rapid economic growth during their escape from the clutches of mass poverty tend to falter in their subsequent move to mass prosperity. His research suggests that the most common point when inertia sets in, is when average incomes are either around $11,000 or $15,000 a year. This is the famous middle income trap. Fewer countries emerge from it than enter it.”
    Recommended for a variety of reasons – a good way to learn about the middle income trap, about China’s slowdown, about India’s opportunities, and about the implied risks for both China and India. Niranjan Rajadhakshya on China’s slowdown.
  3. “Ms. Ocasio-Cortez’s policy adviser, Dan Riffle, contends that “every billionaire is a policy failure” (that’s the tagline on his Twitter handle) because “the acquisition of that much wealth has bad consequences” and “a moral society needs guardrails against it.” He’d like to see the 2020 Democratic primary contenders answer a question: Can it be morally appropriate for anyone to be a billionaire? ”
    Or, put another way, is the world a zero sum game or  a non-zero sum game? This blog is unapologetically in the latter camp. Economics, in fact, is defined by being a non-zero sum game.
  4. ““I’ve been very cautious about saying that until we got these results, but now I’m not so sure,” he said. “I think that a striped T-shirt might work very nicely.””
    The most fun way you will ever learn about evolution. Well, maybe not the most fun way, but you’ll enjoy reading this for sure.
  5. “As the process of Brexit unfolds, we are discovering how many pleasant aspects of modern life in Britain are closely linked to EU membership. A good relationship between Britain and Ireland should be added to that list.”
    Gideon Rachman on how Brexit might (make that will) affect relationships between Britain and Ireland.