Friday, July 25, 2008

Instant Versus Delayed Gratification

I just read a news item on Yahoo! worldwide news on the economic outlook in Britain. According to a British research report, "Over a third of the people would run out of money in less than a fortnight (2 weeks) if they were unable to work, according to a new research." Here is the link to the story:

Now, isn't it funny that we are also reading similar stories about families in the US? Can there be a common thread to this? Besides speaking the same language, can we also be sharing a common behavior pattern that leads us both to the same predicament?

Remarkably, at about the same time, another story appeared on Yahoo! Finance. It was titled "Instant Gratification Nation: Can We Still Sacrifice for the Future?" Here is the link for this story:

The latter story starts with a study conducted at Stanford University on young children. Here is the first part in quotes: "In the late 1960s and early 1970s, researchers at Stanford University conducted a now-famous experiment using young children enrolled at Stanford's preschool facility. Experimenters sat the students at a table set with assorted objects that children of that age would find desirable (marshmallows, colored plastic poker chips, stick pretzels, and the like). The students were asked which of the objects they preferred.

Once that was determined, each student was offered an explicit choice that tested his or her ability to defer gratification: Get a reward now or a bigger reward later. The experimenter left the room, leaving a bell on the table in front of the student. If the student rang the bell before the experimenter returned, he or she would get a reward, albeit a less preferred one (a single marshmallow instead of two). However, if the student resisted ringing the bell until the experimenter returned (typically after 15 or 20 minutes), he or she would get something even better -- two marshmallows.

The remarkable thing about the study is that a student's ability at age four to defer gratification is correlated with better outcomes much later in life, such as academic and social competence. For example, one follow-up paper found a statistically significant relationship between how long a student waited to ring the bell and -- more than a decade later -- their "ability to cope with frustration and stress in adolescence.""

I have not found a follow up study yet on whether the four year olds got their tendencies through their upbringing or genetics. But once they get it, it appears to stay with them through their lives. Now, it is important to note that these kids are of pre school age. So, schooling apparently did not have anything to do with the outcome.

Now, what could those in each population do that affects our collective behavior? Those who preferred instant gratification, as the study implies, take a path that leads them to shoot for easier goals, spend more, save less, and make more impulsive decisions. Those who defer gratification are likely to sacrifice short term pleasures to shoot for more long term, challenging goals. For example, they may decide to defer social life to take more challenging courses in school. They may decide to work to pay their way through college instead of borrowing. They may spend a little extra time in college to get that graduate degree. And they are more likely to inculcate the same habits in their children at a very young age. A majority of people with the delayed gratification mentality will mean a nation of smart savers, and judicious spenders. When time comes to making a decision, whether in their profession or their personal lives, they will first look towards the long term viability of that decision, rather than the all too often "quick buck" decision making we see in businesses and personal lives of many people.

Contrast this to some other developed countries like Japan. During the 1970s oil crisis, the US Congress passed tough mileage requirements. The story goes that the Japanese auto industry hired 1000 more engineers to implement the change, whereas the Detroit automakers hired 1000 lawyers to fight the change. Today, Ford announced its biggest quarterly loss in History. Both Ford and General Motors today are worth about $17 billion, whereas Toyota is worth $144 billion, more than 8 times the total of both Ford and GM. This is only one case where delayed gratification has paid off. There are countless other examples of such decisions. Japan is not the only country with such practices. Korea, China, India, Singapore, Taiwan and other eastern countries have long observed such practices. India is investing in doubling its technical workforce by a factor of two in the next decade, while a third of its population lives on below subsistence wages. In 2004, there were 200,000 engineering graduates. In 2009, there will be 450,000. In 2014, there will be close to a million. The US numbers for the same professions have been shrinking, and are currently around 60,000 per year. There are no published programs or plans to increase this number significantly, despite all the noise about increasing the focus on math and science in schools. The culture we have in this country treats technical professions with disdain. Unless the culture changes, the outcomes are not likely to change.

So, is this some ethnic/national trait? History would say no. Both Britons and Americans deferred gratification during the two World Wars and the Great Depression. One can argue that there was no choice. There is some merit to this argument, because when times got better, the old behaviors returned. But it also means that if the same Depression era circumstances were to return, the behavior will also return. However, it is a case of the medicine being worse than the disease.

That only leaves the collective wills of people to change voluntarily, before circumstances force the inevitable. I am not betting on it, because in a democracy, the evidence needs to precede the need to change. But when convincing evidence appears, it may take a generation or longer to turn this ship around.

It is going to be a long and bumpy ride....hold on tight!


Saturday, July 19, 2008

What Goes Around, Comes Around

Boy, isn't this a year full of ironies!

What triggered the above reaction is an innocent looking email from a job recruiter, to my newly graduated, college educated son with an MIS degree. In addition to the usual boilerplate, the email mentioned that the employer was a "large Indian corporation" and the chosen candidates were going to be sent to an "8 week intensive training camp in Bangalore, India, before they would be posted to their jobs in various US locations."

Come again?

Wasn't this supposed to be backwards? Like recruiters in Mumbai or Bangalore calling up fresh grads, and selling them a junket to Europe or the US before they got posted to their jobs in India? Whatever happened to the "World Class University System" that cranks out graduates with desirable degrees and enviable skills? Apparently, this company does not think a fresh US graduate from the most prestigious state university is good enough for their entry level job.

So, here I sit, having gone through several years of fighting the public K-12 system. I should have known that the pig will eventually make its way through the python some day. Just to be sure, I had my son go have a chat with a friend who is a software pro, just to see what kind of training he received as an MIS (management information systems) degree holder. His assessment was that the training was bare minimum needed in today's job environment, and he will need a lot of remedial training to make himself an attractive candidate in today's job market.

OK, now it started to make sense. A college diploma is just a necessary evil to get one's foot in the door, but not a guarantee to obtain even an entry level job. I guess the Indian companies have realized this and have their own internal training programs to make up for the deficiencies. I recalled that during the rise of the Japanese auto industry, they too had the same philosophy. All growth came organically (without acquisitions), and all new hires were hired as trainees. The best ones got the plum entry level assignments in the most prestigious divisions.

My opinion is that the Japanese and Indian companies take a longer term view of their business, building a solid technical foundation first, which then allowed them to build solid, high quality products. The US corporations are notoriously short sighted, relying on on-the-job training most of the time. Because the Wall Street ensures that the short sightedness remains as a permanent feature of the US corporation, their decisions come back to haunt them decades later. When Intel lays off 20,000 workers to go from 100,000+ employees to 80,000 employees, Wall Street cheers. At the same time, companies like Infosys in Bangalore quietly hire 10,000 more employees to go from 90,000 to over 100,000 this year. And they have plans to continue to grow organically, well into the future, while companies like Intel will be under pressure to reduce their workforce.

This is in stark contrast to what was happening just 30 years ago, when all the technology jobs were being created in the US, and a fresh graduate from an Indian university had to fly halfway around the world to find a good graduate school, and maybe employment.

So, I guess what goes around, comes around.



Saturday, July 5, 2008

Intellectual sports - why don't we hear about them in the press any more?

Hope you had a happy July 4th.

Here is another example of intellectual accomplishments not being part of the mainstream news in this country. The Philadelphia International Chess Tournament just concluded last weekend. This event gets more press internationally than within the US, since it is one of the most prestigious international chess events held in this country.

Here is a story that appeared on the OnLine edition of the Indian Express, but lost in obscurity in American press. The event was won by a 15 year old Indian chess player from New Delhi, the first time an Indian player has won the event. By comparison, Bobby Fischer had only won his first US title at this age, and had never won an international event. The world championship in chess was claimed by an Indian, Vishwanathan Anand, for the first time ever, last year. He is still the top rated player in the world, according to the World Chess Federation (called with its French acronym FIDE').

Link to the tournament results attached:

But the mainstream media has never picked up on chess as a sport on which to report.

Leave it to the Indian press to pick up what we do not do here.

FYI - I was so disillusioned with the lack of emphasis on intellectual activities in the state I lived in (Oregon), I helped start the non profit Oregon Scholastic Chess Federation ( ) , which sponsors chess clubs in schools, and to date has signed up more than 2000 competing members, and has held three state championships. My younger two have been chess players all their academic lives, and routinely participate in state and national tournaments. The Indian culture, which gave birth to the game of chess, still considers this the ultimate mental challenge. When I visit my hometown of Mangalore, I take my kids to the local chess club, where the top kids are rated internationally. My kids are usually humbled by competition that is several years younger.



Friday, July 4, 2008

My remarks on Ed Week Commentary on "Education Myths" by Iris Rotberg

These are my attempted remarks on an article "Myths That Continue to Confound Us" By Iris C. Rotberg , which appeared on Ed Week on line on June 9, 2008.

My overall assessment of this article is that it is attempting to play down the consistently poor scoring by our students in international tests, and pinning the blame on poverty. Nice try, but I was not swayed by the arguments given. Please read on.

First off, I want to mention some ground rules that I follow when I examine articles like this. I tend to overreact to anything that makes sweeping statements like "myth". It is usually an attempt by the author to summarily dismiss something, so that no further discussion is apparently warranted on that topic. I tend to go a little deeper, and more often than not, you find some hidden truths under the "myths". I also look at comments made by authors in areas that are apparently out of their comfort zones. Fortunately, this author has left most of those in the form of questions, with no answers given. Here are my comments, myth by myth, followed by my attempted answers to some of the questions.

1. Myth - "we can “fix” our schools without addressing the problems of poverty"

I believe this to be partially true. If nothing else changed in our system that delivers education to students, then the only variable that appears to help is resources from well off parents, trying to make up for the deficiencies in the system. What gets swept under the rug with this myth, in my opinion, is that if the system can change, then fixing the schools will take surprisingly little extra money. For example, what if a school district decided to cut their high school football programs to fund headstart? What if every high risk school switched to Saxon math from Everyday Math? What if the extra coaches and TOSAs were assigned to after school homework or help clubs so their parents can work a full day? What if the elementary teachers were allowed to specialize in math and reading? Apparently, all these solutions do not get brought up for discussion. Instead, the author seems to be asking the poor parents to get rich fast (which, as one can see, is a convenient "out of the system" problem that the system is not responsible for). A hard nosed taxpayer should demand that every solution be on the table. Having the discretion to be rich or poor in this economy is pretty much out of an average taxpayer's hands. But let me take a counterexample. The Dominican Republic is by many measures one of the poorest countries in the world. But they produce, per capita, the highest number of major league baseball players in the US. How did they achieve this without fixing the problem of poverty? That is a question that I would like to see answered.

2. Myth - "international test-score comparisons are valid measures of the quality of education"

I am baffled by this statement. At a minimum, the international test scores are the only thing we have to make a comparison. Why shoot the messenger? Again, I think it is symptomatic of a system that is self congratulatory on what it thinks is right, the results be damned. If, as most people in our education establishment would like to believe, we have the best education system in the world, should it matter who gets tested, or which socioeconomic group they come from?

3. Myth - " that international test-score comparisons are valid measures of a country’s ability to compete in the global economy. "

Now, here is something that is showing the author's naivete' on the subject. Quality of education, as measured by the test scores, is widely believed to be a NECESSARY condition, but not a SUFFICIENT condition to compete in the global economy. The two emerging economies, China and India, had excellent education systems for decades. They are only now starting to appear on the global radar. Why? Because it takes a free and competitive marketplace, and favorable conditions for risk taking (like intellectual property protection, bankruptcy protection, easy availability of venture capital etc.). Without these conditions, you would have what we used to call in India "rickshaw drivers who could recite Shakespeare". Well, guess what? Both China and India have gradually incorporated these favorable conditions in their economies over the last couple of decades. And because test scores tend to be some of the leading indicators of what is in store for an economy a few decades down the road, I think we have not even seen the full impact of what is in store for this country as a result of these changes.

The last part where the author starts asking questions - I pretty much agree with the questions. They are being asked by almost every person familiar with the issues. The questions are in quotes and italics, and my attempted answers below each question in normal font:

"I would like to pose a few questions, which I will leave to the reader to answer. Did the United States lose the leather, textile, and steel industries because of its ranking on test-score comparisons? Did General Motors lose sales to Toyota in the U.S. market because of American students’ math performance? And, at a more sophisticated level, are we losing out in high-tech innovation and information technology at Microsoft and Apple because the iPod is manufactured in China?
Even if some of our software and innovation come from other countries, is it because our education system has produced insufficient numbers of high-quality scientists, mathematicians, and engineers? Is there a shortage of U.S. scientists, as some firms have reported, or is there a shortage at the wages the firms would prefer to pay? Are companies outsourcing jobs to China and India because Americans are not qualified for them, or because the firms can pay much lower wages to workers in these countries? Did Italy outsource the production of designer shoes to China because there are no skilled craftsmen left in Italy?
Did the United States lose the leather, textile, and steel industries because of its ranking on test-score comparisons? "

The author has stated the questions in such a way that hey imply a cause-and-effect relationship between test scores and the continuing trend of de-industrialization of the US. Whereas if you look in my response to myth #3, it is likely to be only ONE of the causes. The typical US corporation makes decisions based on a lot of factors, the quality and productivity of labor being only one of them. Typically, however, the typical US public corporation tends to be swayed more by Wall Street than any other single entity. Since Wall Street does not have a very long horizon (typically less than a year) for its vision, the US firm tends to be short sighted as well. Bottom line decisions are made primarily to cut costs. Most of the de-industrialization was brought about due to cheaper labor outside the US. The fact that the labor was also of higher quality came as a bonus, historically speaking. The saving grace, we were told, was that we keep the high paying R&D jobs in this country, and export the low paying manufacturing jobs. But that implies we train enough PhDs in technical fields to keep those R&D jobs. But most technical PhDs are being granted to foreign nationals, who are forced to go back to their home countries due to visa restrictions. The US corporation follows the talent, so they are setting up R&D centers in places like Bangalore and Beijing. So, now, even the high paying R&D jobs are starting to be exported. R&D and the intellectual property it creates is the root of most if not all historic wealth in this country. The net effect is that the entire wealth creating machine is starting to be dismantled and moved off shore. I have no idea what will happen if you drain a country of the very fuel that got it this far.

"Is the underrepresentation of native-born U.S. students in some science, mathematics, and engineering Ph.D. programs the result of a failure of our education system, or of personal decisions made by students to select other fields—perhaps more-lucrative fields like investment banking, law, or business? "

I hope this is a rhetorical question. Because the answer is in the question itself. I do not know how to separate a person making a decision from the prior education he or she has had. If a person received inadequate preparation for scientific and technical fields from the school system, of course the decision will be made to go to the other fields. For example, if someone were told that Everyday Math/CMP/ IMP sequence prepares one to take calculus just as well as traditional math, Algebra, Geometry, and Trigonometry, and the student believed the system, he or she would be very unlikely to succeed in a technical profession. So, in this case, did the student decide to choose something other than a technical field, or did the system leave the student with no other choice? This scenario has been played out over and over again in many states over the last two decades. This is just unethical, to say the least. Also, the sweeping conclusion on the alternative professions as "more lucrative" is uncalled for. It sounds like a preconceived notion by the author, and I do not believe them to be more lucrative. Investment banking is a notoriously fickle industry, which hires and fires at will. Business is inherently risky. As far as law goes, well, I saw a statistic that said we have 50 lawyers for every PhD scientist in the US. So, by not opting to go into technical fields, the students are putting their future careers at a greater risk, albeit the rewards are higher for a small percentage of the players. If we take this mentality to an extreme, we will be buying lottery tickets to finance our futures.

"Now to my question: Given the complexity of that global context, do you believe that our problems in economic competitiveness would be solved, or even alleviated, if U.S. students answered a few more questions correctly on international assessments?"

The answer from me is a definite yes, and more. I firmly believe in getting what I pay for. The US education spending per student comes within the top 10 nations in the world. So, I expect that the international ranking should be consistently in the top 10 as well. More than that, I would like to see the US appear in the top 5 "bang for the buck" category (which may be measured by something like = test score/$ spent per student). Currently, both these categories are dominated by countries like Singapore, Finland, and S. Korea. Test scores are a leading indicator of what is in store for the economy in a decade to two decades. So, we can still be comfortable today while our students do poorly in these tests. But by the time our students become part of the workforce, it would be too late. What is different this time compared to what the author cites from history? Every time we felt some competition in the past, be it from Japan, Korea, Germany, Russia etc., it was from economies and populations either equal to or smaller than ours. But the workforce in just two of the emerging economies, namely China and India, is roughly 8 times that of the US. To complicate matters, the world has suddenly gone flat, according to Thomas Friedman, due to a sudden explosion in global connectivity. In this flat world, the forces arrayed in competition with our graduates have no precedent in history, so historical comparisons have lost most of their relevance, in my mind. I think our graduates will have a much harder time making a living compared to the current workers, and the only way it can be changed is for them to strive to be the most competitive in the world in a wealth building field. I firmly believe that the education system should reform itself before it is found irrelevant by this global economy, and a large percentage of its products (future graduates) are relegated to the ranks of a permanent underclass, with little relevant knowledge, and few marketable skills.
More on the social ills in a future discourse.