Tech and Higher Education

February 21, 2018

Tech and Higher Education

Universities pride themselves on producing creative ideas that disrupt the rest of society, yet higher-education teaching techniques continue to evolve at a glacial pace. Given education’s centrality to raising productivity, shouldn’t efforts to reinvigorate today’s sclerotic Western economies focus on how to reinvent higher education?

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CAMBRIDGE – In the early 1990s, at the dawn of the Internet era, an explosion in academic productivity seemed to be around the corner. But the corner never appeared. Instead, teaching techniques at colleges and universities, which pride themselves on spewing out creative ideas that disrupt the rest of society, have continued to evolve at a glacial pace.

Sure, PowerPoint presentations have displaced chalkboards, enrollments in “massive open online courses” often exceed 100,000 (though the number of engaged students tends to be much smaller), and “flipped classrooms” replace homework with watching taped lectures, while class time is spent discussing homework exercises. But, given education’s centrality to raising productivity, shouldn’t efforts to reinvigorate today’s sclerotic Western economies focus on how to reinvent higher education?

One can understand why change is slow to take root at the primary and secondary school level, where the social and political obstacles are massive. But colleges and universities have far more capacity to experiment; indeed, in many ways, that is their raison d’être.

For example, what sense does it make for each college in the United States to offer its own highly idiosyncratic lectures on core topics like freshman calculus, economics, and US history, often with classes of 500 students or more? Sometimes these giant classes are great, but anyone who has gone to college can tell you that is not the norm.

At least for large-scale introductory courses, why not let students everywhere watch highly produced recordings by the world’s best professors and lecturers, much as we do with music, sports, and entertainment? This does not mean a one-size-fits-all scenario: there could be a competitive market, as there already is for textbooks, with perhaps a dozen people dominating much of the market.

And videos could be used in modules, so a school could choose to use, say, one package to teach the first part of a course, and a completely different package to teach the second part. Professors could still mix in live lectures on their favorite topics, but as a treat, not as a boring routine.

A shift to recorded lectures is only one example. The potential for developing specialized software and apps to advance higher education is endless. There is already some experimentation with using software to help understand individual students’ challenges and deficiencies in ways that guide teachers on how to give the most constructive feedback. But so far, such initiatives are very limited.

Perhaps change in tertiary education is so glacial because the learning is deeply interpersonal, making human teachers essential. But wouldn’t it make more sense for the bulk of faculty teaching time to be devoted to helping students engage in active learning through discussion and exercises, rather than to sometimes hundredth-best lecture performances?3

Yes, outside of traditional brick-and-mortar universities, there has been some remarkable innovation. The Khan Academy has produced a treasure trove of lectures on a variety of topics, and it is particularly strong in teaching basic mathematics. Although the main target audience is advanced high school students, there is a lot of material that college students (or anyone) would find useful.

Moreover, there are some great websites, including Crash Course and Ted-Ed, that contain short general education videos on a huge variety of subjects, from philosophy to biology to history. But while a small number of innovative professors are using such methods to reinvent their courses, the tremendous resistance they face from other faculty holds down the size of the market and makes it hard to justify the investments needed to produce more rapid change.

Let’s face it, college faculty are no keener to see technology cut into their jobs than any other group. And, unlike most factory workers, university faculty members have enormous power over the administration. Any university president that tries to run roughshod over them will usually lose her job long before any faculty member does.

Of course, change will eventually come, and when it does, the potential effect on economic growth and social welfare will be enormous. It is difficult to suggest an exact monetary figure, because, like many things in the modern tech world, money spent on education does not capture the full social impact. But even the most conservative estimates suggest the vast potential. In the US, tertiary education accounts for over 2.5% of GDP (roughly $500 billion), and yet much of this is spent quite inefficiently. The real cost, though, is not the squandered tax money, but the fact that today’s youth could be learning so much more than they do.

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Universities and colleges are pivotal to the future of our societies. But, given impressive and ongoing advances in technology and artificial intelligence, it is hard to see how they can continue playing this role without reinventing themselves over the next two decades. Education innovation will disrupt academic employment, but the benefits to jobs everywhere else could be enormous. If there were more disruption within the ivory tower, economies just might become more resilient to disruption outside it.

School system needs to match transformation society has undergone

January 20, 2018

School system needs to match transformation society has undergone

Despite emergence of small families and well-educated but working parents, education structure has changed little in past five decades, Michael Heng points out


Schools in Hong Kong and many cities elsewhere in Asia have not undergone significant changes since the 1960s while family structure, the economy and other elements of society have experienced great transformations. Just to name four changes that have direct bearing on education. First, families have become smaller; many children have either one or no sibling. Second, most parents today are pretty well-educated — at the very least they are literate. Third, jobs for university or polytechnic graduates are more difficult to come by. Fourth, there is an ample supply of teachers’ college graduates.

In the 1960s, schools focused mainly on transmitting knowledge to students. In line with this exam results were the key criteria to measure school performance. Not many schools had well-trained teachers. Where students felt their teachers failed their expectations, they had to turn to some kind hearted and brainy fellow classmates for help. In many cases, their parents were too poorly educated to help, and they could not afford private tuition. In such conditions, other important matters related to full development of an individual were pushed into the background. One hardly heard of schools being responsible for helping students develop social and communication skills and guide them in coping with personal problems, failures in life, etc.

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Fast-forward to the 2010s, schools have changed. Though there has been open recognition of the roles of schools in the full development of an individual, the main emphasis is still on exam results. Even with a growing army of well-trained teachers and better-educated parents, we see a booming private-tuition industry. Our mindset and practices on educating our young are stuck in the 1960s, despite conditions having changed so much.

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With only one sibling or no sibling, a child has lost the family environment and does not acquire the habits and skills to cope with older and younger siblings. This inadequacy is often not addressed by schools, which put children of the same age in the same class. As an alternative, primary schools can have just two kinds of classes. One kind comprises classes with children aged 6, 7 and 8, and the higher for children aged 9, 10 and 11. They not only learn from the teachers, but from each other. The younger ones do content-learning from the older ones, while the older ones learn how to teach the younger ones. There is a “risk” the older ones will fail to teach the content correctly to younger ones. But there are textbooks, well-trained teachers, and well-educated parents to correct errors. Moreover, children are exposed from a young age to develop independent thinking and to absorb materials through questioning and critical thinking. Such mental habits are immensely useful for independent pursuit of knowledge. For those familiar with Montessori educational philosophy, the approach sounds familiar.

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Schools should also be reorganized in terms of time and space. Since both parents of most young families work, schools can be organized to keep students at school while parents are working. All kinds of interesting activities can be organized to fill in the hours. Homework in the traditional sense should be done during these hours. “Weaker” students should be assisted by “stronger” students, making tuition redundant. Off-school hours are free from homework and can be fruitfully spent on such activities as community work or learning extra languages.

As a very rich city, Hong Kong can afford to have small classes. Unlike a class of 40 students, where teachers sometimes have to struggle just to maintain discipline and order, what about a class of 20 to 25 students? Any person with teaching experience can testify to the benefits of small classes in schools. To offset the negative aspects of living in a concrete jungle, schools should have bushes, flowers, vegetables, plants and trees to cultivate an early respect for the natural environment.

Besides transmitting book knowledge, there are other dimensions of education — cultivating good character, attitude toward work, social-justice awareness, proper human interaction and ability to cope with failures and setbacks in life.

Good character is more than integrity and being upright. It includes the ability to help others, especially the weak and disadvantaged. Here schools should design incentives to encourage such behavior. For example, classes can be assessed on cooperation and mutual assistance among students, as a balance to competitive exams.

The major spiritual traditions attach great value to productive work, whether well-paid or otherwise. Such attitude is important especially in the current labor market where well-paid professionals may lose their jobs through no fault of their own. Those who perceive all productive work as respectable will be more flexible in facing the situation. Of course, social attitudes must also change to make it easier for redundant staff.

The author is a retired professor who had academic appointments in Australia, the Netherlands, and at six universities in Asia. He has been trained as a school teacher and has also taught in secondary schools. 


Economic Policy making under Trump Presidency

January 28, 2018

Economic Policy making under Trump Presidency

Commentary from Project Syndicate

by Edmund H Phelps

We are living in worrisome economic times. One year ago, I observed that US President Donald Trump’s bullying of companies and individuals who get in his way is reminiscent of Benito Mussolini in the 1920s. Like Mussolini, Trump poses a clear danger to the rule of law.–Edmund


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For decades, America has suffered from a long-run productivity slowdown that has sapped the economy of its former dynamism, and left median wages stagnant. Will the tax legislation recently enacted by congressional republicans and the Trump administration finally reverse this trend, or will it make a bad situation worse?

PHILADELPHIA – We are living in worrisome economic times. One year ago, I observed that US President Donald Trump’s bullying of companies and individuals who get in his way is reminiscent of Benito Mussolini in the 1920s. Like Mussolini, Trump poses a clear danger to the rule of law.

My subject here, however, is the tax legislation that Trump signed into law in December, on the promise that reducing the rate at which corporate profits are taxed will help an ailing US economy.

Political Responses to  the Malaise

For several decades, the US economy has exhibited various symptoms of economic malaise. Now, we have a political upheaval on our hands. While real (inflation-adjusted) median wages have been nearly stagnant for decades, private saving from profits and enormous capital gains have continued apace. As asset prices – to say nothing of the wealth-wage ratio – have climbed to vertiginous levels, established wealth has grown more powerful, and wealth managers have done well.

Worse still, in industries hit hard by foreign trade or automation, many jobs have been eliminated, and real wages have actually declined. As these new developments continued over the past few decades, they placed increasing pressure on society as a whole. Ultimately, there was an electoral realignment, marked by a shift in voting patterns among key economic constituencies.

Remarkably, neither Democrats nor Republicans seemed to register these economic and social ailments, or the consequences they could have. When Hillary Clinton launched her 2016 presidential campaign with a speech on Roosevelt Island, she focused heavily on achieving social justice for marginalized groups. She did not address the fact that, some six decades ago, the US economy lost the sustained growth it had been generating since the 1820s, despite depressions and inflationary cycles.

While Democrats became increasingly fixated on notions of “fairness” and what academics call the “just economy,” they apparently didn’t notice that the country had been operating for decades without a good economy. Countless people have had little or no chance of feeling fully included in economic life. They have been deprived of jobs that are actually engaging, and of opportunities to feel that they have succeeded at something.

As the renowned Columbia University philosopher David Sidorsky recently pointed out to me, ancient philosophers spoke of “the good and the just” (boni et aequi), not “the just and the good.” Clearly, the Democrats put the cart before the horse. First, we need a good economy. Only then can we devise a just way to reward participants for contributions that the economy empowers them to make.

An Attempt at a Cure

After securing the presidency – in addition to both houses of Congress – in 2016, Republicans have tried to run the ball through the opening left by the Democrats. Throughout 2017, they pursued a range of reforms to address weak investment and stagnant wages, and ended the year with the newly enacted tax legislation, which cuts the tax rate on corporate profits from 35% to 21%.

Economists who support the Republicans’ tax legislation have relied on a textbook growth model to claim that it will boost investment activity. According to their model, investment will drive up the capital stock until it reaches the steady-state level where the after-tax rate of return falls to the level of the real interest rate. The real interest rate is exogenous, and reflects investors’ time preferences, world interest rates, and other factors. The point where the rate of return intersects with the real interest rate is shown in Figure 1. (A more classical case, in which the rate of return is pulled down by capital accumulation, is shown in Figure 2.)

Supporters of the tax legislation reason that if the tax cut pushes up the after-tax rate of return, investment activity will increase, and the capital stock will expand, boosting productivity until the capital stock reaches a new steady state, which they calculate will happen in around ten years.

But, as is always the case with supply-side economics and more radical forms of Keynesianism, this approach is profoundly short-sighted. After ten years, there is no reason to think the faster growth will continue.

Without the same level of indigenous innovation that was achieved during the golden era of high growth rates, from the 1820s to around 1970, the Republican tax law will amount to nothing more than a stop-gap measure. And even over the next decade, it will not deliver truly rapid growth.

The Problem with Models

More fundamentally, we ought to ask whether it is right to expect tax cuts to translate into higher productivity growth. I would argue that, because the tax package will add to the annual fiscal deficit and the public debt, it might actually block investment, and thus derail a productivity pickup.

When I was a young economist working on my 1965 monograph, Fiscal Neutrality Toward Economic Growth, I would have looked at today’s favorable short-term conditions and actually called for a tax increase across the board, in order to stanch the federal government’s fiscal hemorrhaging. A tax hike might push down bond yields, and thus bring about higher share prices and a considerable drop in interest rates over the entire yield curve, provided the US Federal Reserve didn’t offset the move by unwinding its bond holdings.

Thinking back even further, to when I was a young student, I can remember congressional Republicans voicing their opposition to fiscal deficits, and President Harry Truman, a Democrat, enacting a run of fiscal surpluses aimed at mopping up the federal debt. These policies, helped by inflation (which lowered the real value of the debt), did not lead to a depression. There was only the 1949-1950 recession.

Nowadays, a crude form of Keynesianism is so deeply ingrained in voters’ minds that any program aimed at achieving a fiscal surplus, or even balance, has become unthinkable. Yet one wonders if the new tax law will arouse worries about the sustainability of the growing federal debt, which is already high after the presidencies of George W. Bush, a supply-sider, and Barack Obama, a Keynesian. If so, such concerns would push up interest-rate risk premia in anticipation of a depreciating dollar. Yes, the Republican plan does include some provisions to raise revenue or cut spending, but that is not entirely reassuring.

Of course, those who support the law would argue that the supposed increase in investment activity will immediately push up the dollar’s exchange rate, and that the dollar’s real value would then depreciate gradually to where it had been. Otherwise, no one would want to continue holding foreign capital. This points to a paradox in the law. Trump ran on the promise of boosting American exports, but in standard models, an appreciating dollar will depress export demand.

On the other hand, a stronger dollar will prompt domestic firms in import-competing industries to cut their markups so that potential foreign rivals will be less inclined to invade the US market. As a result, wage rates might be pulled up along with the amount of labor supplied. These particular industries, then, would experience an expansion of output and employment.

An Uncertain Prognosis

But for those who do not share the perspective of the law’s supporters, this scenario is hardly a sure thing. After all, who’s to say if the tax package will drive up business investment until the marginal productivity of capital has fallen enough to raise substantially the marginal productivity of labor? That scenario might be possible; but it is in no way assured. As New York University’s Roman Frydman and I argued in a commentary last month, the real-life US economy is not a “mechanical system in which changes in tax parameters and other inputs explain exactly why and how investment occurs and the economy grows.”

Unfortunately, the economics profession has ignored the potential implications of human agency. If far more people were to start conceiving and creating innovations, investment and wage rates might rise well beyond what the textbook model would have predicted. By the same token, if fewer people engage in innovation, investment and wages rates may rise less than expected, or even fall.

In other words, the innovation factor could very well dwarf the effect of the cut in the corporate-tax rate over the next ten years. By that point, we might not have enough evidence to determine if the tax cut was effective, or merely an inconsequential drop in the bucket.

And the uncertainty goes deeper than that. The problem is not just that the traditional model’s disturbance terms may be so large that they overshadow the effects of the tax cut, but also that the coefficients for measuring the tax law’s effect on investment or wages might not even be knowable. The innovators driving (or failing to drive) gains in productivity cannot be certain ahead of time what form their new products or methods will take, or whether they will be adopted at all. How, then, could economists ever foretell precise changes in investment patterns as a result of a tax cut, or what effects new investments will have on the marginal productivity of labor?

As I suggested in November, what we call the “natural” unemployment rate can be affected by insecurity and fear. Similarly, if an unfunded tax cut conjures visions of insolvency, corporate executives might be wary of making new investments. Or they might decide to invest predominantly in labor-saving technologies, which could actually reduce wages and eliminate jobs in some industries. Given that possibility, one cannot be sure whether the tax law will have a positive or negative effect on wages, employment, or productivity.

None of this is to say that we should avoid new departures. Certainly, we must keep trying in the hopes of making progress. Or, as Candide (in the musical) tells Cunégonde after they have both endured many difficulties, “We’ll do the best we know.”

About the Author:

Edmund S. Phelps, the 2006 Nobel laureate in Economics, is Director of the Center on Capitalism and Society at Columbia University and the author of Mass Flourishing.

© 1995 – 2018 Project Syndicate

The Psychology of Inequality

January 10, 2018

The Psychology of Inequality

Researchers find that much of the damage done by being poor comes from feeling poor.

In 2016, the highest-paid employee of the State of California was Jim Mora, the head coach of U.C.L.A.’s football team. (He has since been fired.) That year, Mora pulled in $3.58 million. Coming in second, with a salary of $2.93 million, was Cuonzo Martin, at the time the head coach of the men’s basketball team at the University of California, Berkeley. Victor Khalil, the chief dentist at the Department of State Hospitals, made six hundred and eighty-six thousand dollars; Anne Neville, the director of the California Research Bureau, earned a hundred and thirty-five thousand dollars; and John Smith, a seasonal clerk at the Franchise Tax Board, earned twelve thousand nine hundred dollars.

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I learned all this from a database maintained by the Sacramento Bee. The database, which is open to the public, is searchable by name and by department, and contains precise salary information for the more than three hundred thousand people who work for California. Today, most state employees probably know about the database. But that wasn’t the case when it was first created, in 2008. This made possible an experiment.

The experiment, conducted by four economists, was designed to test rival theories of inequity. According to one theory, the so-called rational-updating model, people assess their salaries in terms of opportunities. If they discover that they are being paid less than their co-workers, they will “update” their projections about future earnings and conclude that their prospects of a raise are good. Conversely, people who learn that they earn more than their co-workers will be discouraged by that news. They’ll update their expectations in the opposite direction.

According to a rival theory, people respond to inequity not rationally but emotionally. If they discover that they’re being paid less than their colleagues, they won’t see this as a signal to expect a raise but as evidence that they are underappreciated. (The researchers refer to this as the “relative income” model.) By this theory, people who learn that their salaries are at the low end will be pissed. Those who discover that they’re at the high end will be gratified.

The economists conducting the study sent an e-mail to thousands of employees at three University of California schools—Santa Cruz, San Diego, and Los Angeles—alerting them to the existence of the Bee’s database. This nudge produced a spike in visits to the Web site as workers, in effect, peeked at one another’s paychecks.

A few days later, the researchers sent a follow-up e-mail, this one with questions. “How satisfied are you with your job?” it asked. “How satisfied are you with your wage/salary on this job?” They also sent the survey to workers who hadn’t been nudged toward the database. Then they compared the results. What they found didn’t conform to either theory, exactly.


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By bridging the fields of anthropology, evolutionary biology, behavioral ecology, geopolitics, and social science, trailblazing scientist Jared Diamond (b. September 10, 1937) has done more than anyone since Margaret Mead to decondition the Eurocentric approach to history and debunk the biological fallacies on which the monster of racism feeds. His Pulitzer-winning 1997 book Guns, Germs, and Steel: The Fates of Human Societies (public library) is a foundational text illuminating the conditions that led to inequality in the modern world and combating the broken logic that perpetuates these toxic beliefs.

At the heart of Diamond’s work is the notion that in order to understand any one society, we must contextualize it in the larger ecosystem of humanity and therefore must understand all societies. Only by grasping the richness and diversity of the entire ecosystem can we begin to dismantle our assumptions about the value of others and realize that people from different groups fared differently in history not due to their innate abilities but due to a complex cluster of environmental and geopolitical forces.

Jared Diamond

As the relative-income model predicted, those who’d learned that they were earning less than their peers were ticked off. Compared with the control group, they reported being less satisfied with their jobs and more interested in finding new ones. But the relative-income model broke down when it came to those at the top. Workers who discovered that they were doing better than their colleagues evinced no pleasure. They were merely indifferent. As the economists put it in a paper that they eventually wrote about the study, access to the database had a “negative effect on workers paid below the median for their unit and occupation” but “no effect on workers paid above median.”

The message the economists took from their research was that employers “have a strong incentive” to keep salaries secret. Assuming that California workers are representative of the broader population, the experiment also suggests a larger, more disturbing conclusion. In a society where economic gains are concentrated at the top—a society, in other words, like our own—there are no real winners and a multitude of losers.

Keith Payne, a psychologist, remembers the exact moment when he learned he was poor. He was in fourth grade, standing in line in the cafeteria of his elementary school, in western Kentucky. Payne didn’t pay for meals—his family’s income was low enough that he qualified for free school lunch—and normally the cashier just waved him through. But on this particular day there was someone new at the register, and she asked Payne for a dollar twenty-five, which he didn’t have. He was mortified. Suddenly, he realized that he was different from the other kids, who were walking around with cash in their pockets.

“That moment changed everything for me,” Payne writes, in “The Broken Ladder: How Inequality Affects the Way We Think, Live, and Die.” Although in strictly economic terms nothing had happened—Payne’s family had just as much (or as little) money as it had the day before—that afternoon in the cafeteria he became aware of which rung on the ladder he occupied. He grew embarrassed about his clothes, his way of talking, even his hair, which was cut at home with a bowl. “Always a shy kid, I became almost completely silent at school,” he recalls.

Payne is now a professor at the University of North Carolina, Chapel Hill. He has come to believe that what’s really damaging about being poor, at least in a country like the United States—where, as he notes, even most people living below the poverty line possess TVs, microwaves, and cell phones—is the subjective experience of feeling poor. This feeling is not limited to those in the bottom quintile; in a world where people measure themselves against their neighbors, it’s possible to earn good money and still feel deprived. “Unlike the rigid columns of numbers that make up a bank ledger, status is always a moving target, because it is defined by ongoing comparisons to others,” Payne writes.

Feeling poor, meanwhile, has consequences that go well beyond feeling. People who see themselves as poor make different decisions, and, generally, worse ones. Consider gambling. Spending two bucks on a Powerball ticket, which has roughly a one-in-three-hundred-million chance of paying out, is never a good bet. It’s especially ill-advised for those struggling to make ends meet. Yet low-income Americans buy a disproportionate share of lottery tickets, so much so that the whole enterprise is sometimes referred to as a “tax on the poor.”

One explanation for this is that poor people engage in riskier behavior, which is why they are poor in the first place. By Payne’s account, this way of thinking gets things backward. He cites a study on gambling performed by Canadian psychologists. After asking participants a series of probing questions about their finances, the researchers asked them to rank themselves along something called the Normative Discretionary Income Index. In fact, the scale was fictitious and the scores were manipulated. It didn’t matter what their finances actually looked like: some of the participants were led to believe that they had more discretionary income than their peers and some were led to believe the opposite. Finally, participants were given twenty dollars and the choice to either pocket it or gamble it on a computer card game. Those who believed they ranked low on the scale were much more likely to risk the money on the card game. Or, as Payne puts it, “feeling poor made people more willing to roll the dice.”

In another study, this one conducted by Payne and some colleagues, participants were divided into two groups and asked to make a series of bets. For each bet, they were offered a low-risk / low-reward option (say, a hundred-per-cent chance of winning fifteen cents) and a high-risk / high-reward option (a ten-per-cent chance of winning a dollar-fifty). Before the exercise began, the two groups were told different stories (once again, fictitious) about how previous participants had fared. The first group was informed that the spread in winnings between the most and the least successful players was only a few cents, the second that the gap was a lot wider. Those in the second group went on to place much chancier bets than those in the first. The experiment, Payne contends, “provided the first evidence that inequality itself can cause risky behavior.”

People’s attitude toward race, too, he argues, is linked to the experience of deprivation. Here Payne cites work done by psychologists at N.Y.U., who offered subjects ten dollars with which to play an online game. Some of the subjects were told that, had they been more fortunate, they would have received a hundred dollars. The subjects, all white, were then shown pairs of faces and asked which looked “most black.” All the images were composites that had been manipulated in various ways. Subjects in the “unfortunate” group, on average, chose images that were darker than those the control group picked. “Feeling disadvantaged magnified their perception of racial differences,” Payne writes.

“Every year he regifts himself to me.”

“The Broken Ladder” is full of studies like this. Some are more convincing than others, and, not infrequently, Payne’s inferences seem to run ahead of the data. But the wealth of evidence that he amasses is compelling. People who are made to feel deprived see themselves as less competent. They are more susceptible to conspiracy theories. And they are more likely to have medical problems. A study of British civil servants showed that where people ranked themselves in terms of status was a better predictor of their health than their education level or their actual income was.

All of which leads Payne to worry about where we’re headed. In terms of per-capita income, the U.S. ranks near the top among nations. But, thanks to the growing gap between the one per cent and everyone else, the subjective effect is of widespread impoverishment. “Inequality so mimics poverty in our minds that the United States of America . . . has a lot of features that better resemble a developing nation than a superpower,” he writes.

Rachel Sherman is a professor of sociology at the New School, and, like Payne, she studies inequality. But Sherman’s focus is much narrower. “Although images of the wealthy proliferate in the media, we know very little about what it is like to be wealthy in the current historical moment,” she writes in the introduction to “Uneasy Street: The Anxieties of Affluence.”

Sherman’s first discovery about the wealthy is that they don’t want to talk to her. Subjects who agree to be interviewed suddenly stop responding to her e-mails. One woman begs off, saying she’s “swamped” with her children; Sherman subsequently learns that the kids are at camp. After a lot of legwork, she manages to sit down with fifty members of the haut monde in and around Manhattan. Most have family incomes of more than five hundred thousand dollars a year, and about half have incomes of more than a million dollars a year or assets of more than eight million dollars, or both. (At least, this is what they tell Sherman; after a while, she comes to believe that they are underreporting their earnings.) Her subjects are so concerned about confidentiality that Sherman omits any details that might make them identifiable to those who have visited their brownstones or their summer places.

“I poked into bathrooms with soaking tubs or steam showers” is as far as she goes. “I conducted interviews in open kitchens, often outfitted with white Carrara marble or handmade tiles.”

A second finding Sherman makes, which perhaps follows from the first, is that the privileged prefer not to think of themselves that way. One woman, who has an apartment overlooking the Hudson, a second home in the Hamptons, and a household income of at least two million dollars a year, tells Sherman that she considers herself middle class. “I feel like, no matter what you have, somebody has about a hundred times that,” she explains. Another woman with a similar household income, mostly earned by her corporate-lawyer husband, describes her family’s situation as “fine.”

“I mean, there are all the bankers that are heads and heels, you know, way above us,” she says. A third woman, with an even higher household income—two and a half million dollars a year—objects to Sherman’s use of the word “affluent.”

“ ‘Affluent’ is relative,” the woman observes. Some friends of hers have recently flown off on vacation on a private plane. “That’s affluence,” she says.

This sort of talk dovetails neatly with Payne’s work. If affluence is in the eye of the beholder, then even the super-rich, when they compare their situation with that of the ultra-rich, can feel sorry for themselves. The woman who takes exception to the word “affluent” makes a point of placing herself at the “very, very bottom” of the one per cent. “The disparity between the bottom of the 1 percent and the top of the 1 percent is huge,” she observes.

Sherman construes things differently. Her subjects, she believes, are reluctant to categorize themselves as affluent because of what the label implies. “These New Yorkers are trying to see themselves as ‘good people,’ ” she writes. “Good people work hard. They live prudently, within their means. . . . They don’t brag or show off.” At another point, she observes that she was “surprised” at how often her subjects expressed conflicted emotions about spending. “Over time, I came to see that these were often moral conflicts about having privilege in general.”

Whatever its source—envy or ethics—the discomfort that Sherman documents matches the results of the University of California study. Inequity is, apparently, asymmetrical. For all the distress it causes those on the bottom, it brings relatively little joy to those at the top.

As any parent knows, children watch carefully when goodies are divvied up. A few years ago, a team of psychologists set out to study how kids too young to wield the word “unfair” would respond to unfairness. They recruited a bunch of preschoolers and grouped them in pairs. The children were offered some blocks to play with and then, after a while, were asked to put them away. As a reward for tidying up, the kids were given stickers. No matter how much each child had contributed to the cleanup effort, one received four stickers and the other two. According to the Centers for Disease Control and Prevention, children shouldn’t be expected to grasp the idea of counting before the age of four. But even three-year-olds seemed to understand when they’d been screwed. Most of the two-sticker recipients looked enviously at the holdings of their partners. Some said they wanted more. A number of the four-sticker recipients also seemed dismayed by the distribution, or perhaps by their partners’ protests, and handed over some of their winnings. “We can . . . be confident that these actions were guided by an understanding of equality, because in all cases they offered one and only one sticker, which made the outcomes equal,” the researchers reported. The results, they concluded, show that “the emotional response to unfairness emerges very early.”

If this emotional response is experienced by toddlers, it suggests that it may be hardwired—a product of evolution rather than of culture. Scientists at the Yerkes National Primate Research Center, outside Atlanta, work with brown capuchin monkeys, which are native to South America. The scientists trained the monkeys to exchange a token for a slice of cucumber. Then they paired the monkeys up, and offered one a better reward—a grape. The monkeys that continued to get cucumbers, which earlier they’d munched on cheerfully, were incensed. Some stopped handing over their tokens. Others refused to take the cucumbers or, in a few cases, threw the slices back at the researchers. Like humans, capuchin monkeys, the researchers wrote, “seem to measure reward in relative terms.”

Preschoolers, brown capuchin monkeys, California state workers, college students recruited for psychological experiments—everyone, it seems, resents inequity. This is true even though what counts as being disadvantaged varies from place to place and from year to year. As Payne points out, Thomas Jefferson, living at Monticello without hot water or overhead lighting, would, by the standards of contemporary America, be considered “poorer than the poor.” No doubt inequity, which, by many accounts, is a precondition for civilization, has been a driving force behind the kinds of innovations that have made indoor plumbing and electricity, not to mention refrigeration, central heating, and Wi-Fi, come, in the intervening centuries, to seem necessities in the U.S.

Still, there are choices to be made. The tax bill recently approved by Congress directs, in ways both big and small, even more gains to the country’s plutocrats. Supporters insist that the measure will generate so much prosperity that the poor and the middle class will also end up benefitting. But even if this proves true—and all evidence suggests that it will not—the measure doesn’t address the real problem. It’s not greater wealth but greater equity that will make us all feel richer. ♦

This article appears in the print edition of the January 15, 2018, issue, with the headline “Feeling Low.”

English in the National Schooling System: Time for a Policy Shift

November 30, 2017

English in the National Schooling System: Time for a Policy Shift

by Dr. Lim Teck Ghee

The past few weeks has seen renewed attention on the re-establishment of English medium schools (EMS) in the country.

A combination of concerned and highly credible stake-players has come out in favour of the return to what was previously not just a medium of national schooling for young Malaysians. EMS was also the source of most of the leadership capability in economy and society, and a major reason for the country’s high international standing.

Image result for hrh sultan of johor

Led by royalty in the person of HRH Sultan of Johor, Sultan Ibrahim Sultan Iskandar, the campaign for EMS is now supported by Minister in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan and concerned civil society leaders from the G25 group.

For a long time, it was the indefatigable Datin Noor Azimah Abdul Rahim, chairman of the Parent Action Group for Education (PAGE), whose group waged an often-lonely battle to promote the expanded use of English in our national educational system.

Image result for Datin Noor Azimah Abdul Rahim

The indefatigable Datin Noor Azimah Abdul Rahim

Today the drive to restore ECMs to similar status as Chinese and Tami schools in the national system has been expanded. But it needs to be taken up by our political leaders if it is to succeed.

For what has been standing in it way – and it continues today – has been basically politics which has triumphed over national interest and the freedom for parents to choose the medium of instruction they want for their children.

As pointed out by HRH Johor Sultan, there are politicians who are in “self-denial” and who choose to play politics with education by being “heroes of their races”.

“They talk about “nationalism” but they too send their children to boarding schools in Australia and the United Kingdom.”

HRH Sultan has also expressed confidence that “if we have an education system based on a single stream for students from a young age, we will be able to create a community which is more harmonious and can work together to face challenges in the future.”

Malay Disadvantage

Although all communities have been disadvantaged by the absence of English medium schools in the national system, it is beyond doubt that it is the Malay community which has been most handicapped or punished by the political policy and insistence by misguided cultural zealots for the Malay masses to be restricted in their choice of schools to Malay medium ones, or to Islamic schools where the medium of instruction is Arabic.

Should a study be undertaken of the class divide which has emerged in Malay society during the last two or three decades, it is very likely that it will find that a contributory – perhaps the major – factor has been the ability of upper class Malays to access English education either in the MARA system or through private English education medium schools locally and abroad.

Students in the national Malay medium schools and graduates from public universities with Malay as the medium of instruction are not only severely handicapped in local private sector employment where English language fluency is a prerequisite especially for higher end jobs. They are also increasingly marginalized in this era of global markets and competition where a command and mastery of the English language is indispensable to knowledge acquisition and upward mobility.

Malaysia needs to re-establish itself as a bilingual country

This fact of growing Malay disadvantage and deepening socio-economic inequality – should there be no policy change – was not spelt out by the influential G25 grouping in its recent press statement which supported the call by Johoreans for English medium schools.

But it was probably in the minds of G25 members as they seek a return to establishing Malaysia as a bilingual country with Bahasa Melayu as the national language, and English the second language as is found in many of the most advanced non-English speaking nations of the world.

In a press statement, G25 noted that as a trading nation Malaysia needs to have a workforce with a high proficiency in English.

“G25 supports the establishment of the EMS as an alternative stream under the national school system. English is a language for acquiring knowledge. We are in support of initiatives that will help in the growth of the economy and improve the well-being of Malaysians”

Taking Finland as an example, the group has argued that “Finland’s education success is based on ensuring that everyone has equal opportunities to study.”

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Image result for Education in Finland In Malaysia UMNO idiots meddle in Education while they send their kids to study abroad.

This is not the case in Malaysia where there is no level playing field between the private and national school systems and where parents who wish to have their children enrolled in English medium schools cannot afford the expensive fees that are the norm for private schools.

G25’s call needs be emphasized: “We need to learn from past mistakes, and ensure that the implementation of the English-medium schools follows a model with a proven track record”

ASEAN leaders should embrace 4IR for another 50 years of peace, growth

November 24, 2017

ASEAN leaders should embrace 4IR for another 50 years of peace, growth

by Jayant Menon and Anna Fink, ADB

The 10-member ASEAN is celebrating this year its 50th anniversary.
The 10-member ASEAN is celebrating this year its 50th anniversary.

When the leaders of the Association of Southeast Asian Nations (ASEAN) gather for their 31st Summit in the Philippines this week, they will also celebrate “ASEAN@50” – testimony to ASEAN’s endurance and durability, as the longest-running regional grouping of developing countries in the world.

A major item on the agenda will be regional security and addressing the rising tide of terrorism.  This takes ASEAN back to its roots, having been born as a politico-security pact during the Vietnam War in 1967.

Indeed, ASEAN’s role in sustaining peace and stability in Southeast Asia is often undervalued, if not overlooked. It’s easy to see why. War cannot go unnoticed but peace can, easily. ASEAN deserves its share of the credit for delivering the peace dividend. Moving forward, its economic success may depend on a different kind of revolution.

Inclusive, innovation-led growth

The summary of Key Outcomes from the 49th ASEAN Economic Ministers Meeting in September noted that the overall thematic priority of this year’s Summit would be “Inclusive, Innovation-led Growth”.  This would be supported by three strategic measures: increasing trade and investment, integrating micro, small and medium-sized enterprises (MSMEs) into global value chains, and developing an innovation-driven economy.

The trade slowdown appears to have bottomed out, and there are early indications that both domestic private investment and foreign direct investment are showing promising signs of recovery in countries like Malaysia and Indonesia, and continue to increase impressively in the Mekong countries. To sustain this growth, reforms will need to continue. Achievements on tariff liberalization have been partially offset by a rise in non-tariff measures which are a much more significant barrier to trade.

  Innovation-driven ASEAN economy must address 4IR

A new and growing trend in cross-border investment involves MSMEs, so much so that the last ASEAN Investment Report took this as its theme. And an innovation-driven economy has to address the challenges and opportunities presented by the so-called Fourth Industrial Revolution (4IR).

Image result for ASEAN and the 4th Industrial Revolution

All three strategic items are linked, especially the last two, as discussed in a joint Asian Development Bank-World Economic Forum report titled, What does the 4IR mean for ASEAN Regional Economic Integration?, to be presented to leaders at the upcoming Summit.

The report notes the differing level of preparedness of member countries, negatively correlated to their level of development, and how this may widen rather than narrow development gaps if not addressed.

4IR brings challenges and opportunities

One of the major challenges of the 4IR will be the loss of jobs caused by automation and increasingly advanced robotics and artificial intelligence. Jobs losses will affect some countries more than others. Low-skilled, repetitive jobs (such as assembly line workers) are most at risk, but increasingly service jobs (such as business process outsourcing) will be threatened.

As an immediate response, enabling greater mobility of unskilled workers would curtail unemployment in sending countries and help sustain growth in receiving countries, while also helping counter growing economic inequality within and between countries.

Image result for ASEAN and the 4th Industrial Revolution

In the medium term, new industries will grow and workers will need new skills. Investing in improving human capital must start now. The skills needed extend beyond technical capabilities to include creativity and innovative problem solving. What’s more, the accelerating pace of change calls for adult training and life-long learning not just early-life education. In addition, mutual recognition agreements must expand to cover new occupations, while expediting the harmonizing and streamlining of employment visas.

Integrating MSMEs into global value chains

One of the major opportunities of the 4IR, as highlighted in the report, is the potential of “disruptive technologies” to empower MSMEs. More than 90% of enterprises within ASEAN are MSMEs and they provide most of the employment in member states.

MSMEs are often constrained by lack of access to business and financial services. Blockchain technology has the potential to dramatically increase the security of cross-border financial transactions and logistics even in countries where these services are relatively underdeveloped. This technology has the potential to benefit the smallest firms in the poorest countries of ASEAN.

The rise of online marketplaces also provides platforms for MSMEs to access regional and global markets.

  4IR can help integrate ASEAN MSMEs into global value chains

The 4IR, therefore, provides an opportunity for ASEAN to meet its goal of greater inclusion by integrating MSMEs into global value chains. But it also presents a challenge to the region to invest in human capital to continue to trade and attract investment, and to enable innovation-driven economies.

Given the unequal impact of new technologies in the region, the promotion of inclusive growth must also be seen as a key pillar in underpinning peace in the region. Growing economic inequality could quickly contribute to social unrest and political instability.

Embracing the 4IR, and inclusive, innovation-led growth will be essential to securing another 50 years of peace in ASEAN.

Jayant Menon is Lead Economist in the Economic Research and Regional Cooperation Department at the Asian Development Bank, and Adjunct Fellow of the Arndt–Corden Division of Economics, The Australian National University.

Anna Fink is Economist in the Economic Research and Regional Cooperation Department at the Asian Development Bank.

This blog was first published as an op-ed by the Jakarta Globe, Singapore Business Times, Phnom Penh Post, Agence Kampuchea Presse, Myanmar Times, Philippine StarEast Asia Forum, Daily Star (Bangladesh), and the Bangkok Post.