Middle School MBA Blog

Defending GenX

A lot’s been written about the problems with “Generation X”.  This is another case of over-aggregation leading to a false conclusion.

Sure, there are way too many whiny, self-absorbed, clueless snowflakes.  But while these snowflakes get all the attention there’s a swath of kids in Gens X, Y, and Z that are lightyears ahead of where anybody else has ever been at that age.  These kids are smart, talented, tough, and visionary far beyond their years.  Maybe we should call them stardusted or stardusters.  They are making the most of the tools and knowledge available today, and they are going to rock our world.

Meanwhile, the snowflakes among them will melt away and run off like so many gallons of rain water hitting the storm drain, never to be heard from or thought about again.

So stop letting snowflakes tarnish your view of Gens X, Y, or Zed.  Maybe the distribution is wider today – a greater proportion of attention seeking crybabies on the bottom end – but those on the top end are way out on the top end.  Just a handful of stardusters will overshadow thousands of sniffling snowflakes.

So here’s to these awesome kids coming down the pike!

Adaptive v. Routine Experts

Here is a great article from Vanderbilt on what expertise is and how to develop it.

“There is a difference between adaptive experts, whose metacognitive skills allow the transfer of knowledge from one setting to another, and routine experts, whose expertise allows them to function well in standard settings but doesn’t serve them well when conditions are different.” [emphasis added]

Our goal at EA is to create adaptive experts – kids who can deconstruct, analyze, and adapt what they know.  We call that true understanding, as opposed to an ability to regurgitate facts.

The article then goes on to discuss the challenges of getting from novice to expert.  These points are excellent:

  • The development and retention of new knowledge depends in large part on the relationship between what one is learning and what one already knows. Because novices in a field typically don’t know much of the content in that field, they have little to which they can relate the things they’re attempting to learn. So they retain less.
  • Since novices typically don’t grasp the fundamental principles in a field, they don’t see the patterns grounded in those principles. They tend therefore to adopt anidiosyncratic organizational scheme for what they are learning. This organizational scheme might function well enough in a particular context (e.g., in the particular unit they’re covering in a part of a class) but it doesn’t serve them well in other areas of the field. It doesn’t transfer well.
  • The expert’s fluency can conceal the very principles and strategies that the novice must learn in order to become more expert. These principles and strategies are often invisible even to the expert precisely because they are second nature. And they’re invisible to the novice observing the expert because they’re implicit in the expert’s work.

At EA we focus on building ladders with low, closely spaced rungs.  These ladders lead the student to a clear understanding of fundamental principals which can be applied not only to different situations within the entrepreneurial arts, but to other fields as well.  We start where they are (their experiences and abilities) and take them bit by bit toward expertise.

Time happened!

Historically there’s been a lot of suspicion regarding Interest. In ancient times people understood that if you let someone use your land to grow crops, then it was proper that you be payed rent. After all, the farmer couldn’t grow the crops without your land. And clearly something new was created by the cooperation between you and the farmer: food.

But if I give the farmer money today and he gives me the same money back next year, why should he pay rent on the MONEY? It’s the same money – nothing new has been created. Why should there be interest?

I related this to a class of 6th-graders last week and asked what was going on. Clearly something happened in renting the field, but something also happened in the case of lending money. It’s just not as obvious. What happened?

A boy over in the corner raised his hand and said, “Time happened.”

BINGO! Unseen and unheard, time happened. The function of interest is to indicate the time value of money: how much more is a dollar worth today than next year.

I’m proud of all the kids but I was especially proud of that one that day…

Wants v. Needs

“That’s only a want, not a need”, a student dismissively said this week of an item he didn’t consider important. But the wants/needs approach is problematic. Unless you define a need as something which you can’t survive without (air), the definition becomes subjective. And if you do define a need objectively (according to absolute survival), then everyone alive today is obviously having all of their “needs” met. Not very helpful.

Let’s take a look at the margins. Would you agree that water is a need? Me too. But what about CLEAN water? Really, you can survive drinking murky-looking stuff. So is clean water a want or a need?? Is a house a need? Let’s say it is, but does that mean an air-conditioned house with a fridge is a need? Clearly not. In the West we are so far past the “needs” level that it doesn’t make sense to talk about it; we’re totally in the wants arena.

The subjective theory of value tells us that stuff is valued according to the subjective desires of consumers. These are not objective NEEDS, but rather subjective WANTS. And these wants are ranked in importance by each individual, inside each’s head. That is, no one except that individual can rank their wants. And, of course, each person will rank their “needs” very highly.

The bottom line is that we only need to talk about wants. We can be sure that needs are highly ranked among those wants, but we cannot say which things are needs, nor which things are the most urgent needs of a given individual. Thus, the wants/needs approach is just a distraction when it comes to thinking about market activity. Worse, it gives us the false impression that we’re able to objectively rank some goods above others and tempts us to impose our ranking on others.

You may object that it’s cold and cruel to ignore “needs” and only focus on serving “wants”. But the truth is that the needs of millions, even billions, of people have been best served by markets which are left alone to satisfy “wants” (among which are all the “needs”).

Guest Post!

Editor’s note: my friend Anne is a software engineer who immigrated from Viet Nam years ago. Her story about croissants has broad applicants in business, teaching, and life. I’ve cut down her original piece to fit our space guidelines, so apologies for any errors I’ve introduced or flavor I’ve deleted…

A few years ago, I am thinking of learning how to make French butter
croissants from scratch. I found a recipe on the web, followed steps by steps, to my surprise, the croissants turn out very good. Tried again second time – even better. Hmm! Making real croissants is not that hard!

About a year ago, I made croissant again, To my surprise, I failed: the croissants were stale, heavy and tasteless. I tried again, and again and kept failing. Somebody told me that I needed to use European butter withhigher melting temperature. So I did, still failed. And then another told me I needed to use flour imported from French, need to use good yeast, keep room temperature at 68 F, need a chamber to proof the croissant, etcetera, et cetera. Does not matter how hard I try, how much money I spend, seem I cannot make them anymore. I am about to give up. And then I think:croissant is a common pastry in French, so it must be cheap, and not that hard to make. Let’s try one last time, this time, use whatever available in the pantry: cheap butter for cooking from Kroger, cheap flour from Walmart, remaining of yeast,…If fails, give up for good and “move on with my life”. Guess what: they are delicious! Switch to another type of butter, still good. From then on, no matter what ingredient I use, I cannot fail :). I just realize:
1. If you success at first, does not mean you have talent or know things, some times it is just luck, or you just happened to be at the right place at the right time
2. Listen for advise from others but don’t follow these advise blindly. Most of the time, these advises are wrong (for you).
3. Expensive is not necessary equivalent with good.
4. Don’t make things complicated. The best usually comes from the most pure, simple form. Most of the time, they make things more complicated than it is so they can charge you tons of money.
5. Don’t give up, if you keep trying, you will succeed some day. Well, consider if you still alive and afford to try again.

On further questioning by your intrepid editor Anne revealed the following…

Why the croissant failed? For many reason: success too fast and too easy made me become cocky => I forgot to pay attention to detail. After a few failures, I chasing some advises, they might be good advises but they are not the reason that my croissants failed => listen to wrong advices. Third: thinking that using expensive material such as import flour from French, Organic European butter would be the keys, but they are not. Now I can use any ingredients and still make good croissants.

So, for me, the keys are: pay attention to details, understand what you are doing and why you are doing those steps, and most of all, doit with love.

So there you have it. Don’t let success go to your head, seek wise counsel, know what you’re doing, and do it with love. Many thanks to Anne for sharing and, hey, where’s my croissant?!

War is good for… what?

“War is good for the economy.” Perhaps the ugliest fallacy on the planet. How do we know it’s wrong? Bastiat exploded the Broken Window fallacy long ago: investopedia.com/ask/answers/08/broken-window-fallacy.asp. In more general terms, the economy’s purpose is to improve people’s standard of living. Siphoning off resources to build rockets which are then used to destroy someone else’s resources makes the world poorer (specific players, like military contractors, can benefit but the net overall effect is that we have less stuff and a lower standard of living). In addition to the material losses, war usually brings losses of freedom as domestic spying and internal security measures are ramped up. Clearly war is not “good” for the economy.

Yet, the inescapable logical conclusion of the brand of economics called Keynesianism is indeed that war is good for the economy. This alone should be enough to discredit or at least cast doubt on Keynes. But far too few economists value intellectual consistency or bother to critically examine what their textbooks told them. Instead, they follow Keynes in substituting shallow catch phrases for actual thinking. Thus war can be good for the economy even though it has a “negative social product”. Got that? Social product, presumably the very thing the economy is supposed to INCREASE, can DECREASE in a good economy. In fact, that very decrease in social product is what is DRIVING a better economy. Basically, the harder you step on the gas with your car in reverse, the faster you will move forward.

It is one of the great indictments on academia that an absurdity of this size can survive and propagate on its watch.

Friends and mirrors

Show me your friends and I’ll show you your future. This is an important maxim we should share with all kids. Another expression of it is, “you will become the average of the five people you spend the most time with.” This variant may be more accessible for kids. It’s a bit more concrete. Share it with your classes!

Could it lead to unhealthy competition as students all strive to hang out with the “best” kids?
a) There is no unhealthy competition… b) This competition is already happening, but maybe not for the right reasons. If kids explicitly think about who they want to become, they will make the decision of who to hang out with based on deeper consideration rather than a shallow attraction to bling. They may in fact decide to hang out more with their teachers, parents, and mentors rather than the cool kid of the moment.

Upstaged. Yay!

Been in the classroom lately with Ms. E, who’s taking her first laps with EA. And she’s absolutely killing it. She’s quickly mastered the concepts and then proceeded to deliver them the way only a gifted teacher can. She’s so much better than I am at teaching the coursework I developed. It’s been beautiful to watch EA come to life for her kids through her. I’m so grateful for these awesome teachers.

Social Sci – Not

Economics is sometimes called a “social science”, a potentially misleading term and maybe even an oxymoron.  In the “hard sciences” we study things.  Things never change their behavior because their behavior is built into what they are.  In fact, the behavior of water, boiling at 100 C, is one of the factors that help us identify a substance as being water.

In social studies (the term I prefer) we are studying the behaviors and interactions of people, and people, unlike things, can and do change their behavior.  As a result we cannot do side by side tests against a control to see the impact of changing a given variable.  Experiments can’t be repeated across time and geography and researcher to confirm results.  For example, there’s no way we can go back and have Napoleon win at Waterloo and see whether Tomas Paine still escapes execution by the French many years later.

Anyone in the social studies should recognize this limitation and resist the temptation to ape the vocabulary and methods of the hard sciences.  It turns out that social studies can’t predict as many things as the hard sciences, but the fairly limited conclusions we can draw are profoundly important.  For instance, simply having universal understanding and respect for the laws of supply and demand would alleviate untold misery and mischief across the globe.  Perhaps a contribution on par with the steam engine.

Gender Matters I

Do boys and girls think differently?  Are their brains actually different?  Leonard Sax, in Why Gender Matters, says yes to both.  Much of our society will recoil at this idea; we’ve all been brought up to believe the blank slate theory.  But Sax has some compelling things to say about why so many boys are diagnosed as ADHD and put on drugs.  I’m certain that too many kids are on that train and if for no other reason than this, Sax deserves a thorough hearing.  So I’ll have a few posts on his book.

Most germane right now with respect to EA are his thoughts on teaching physics to boys and girls.  On pages 255-257, Sax says that in the 1800’s more women studied physics than men and he attributes that to the teaching methods.  He claims that in the 1800’s the focus was on understanding, while today the emphasis is on skateboards, bullets, and bombs.  He doesn’t explicitly say so but my take is that he’s saying that today’s physics focus on what happens and formulae can provide those answers.  The why isn’t answered with formulae and he says that girls don’t find simply plugging numbers into formulae very satisfying.

Well, I’m a male who never found plugging numbers in a formula satisfying.  I found it to be a necessary evil throughout my engineering education (and almost intolerable in physics). I’m postulating that there is a subset of boys for whom manipulating formulae is interesting and they are very good at it.  They excel in “physics” and the girls and the rest of the boys tend not to.  My experiences teaching males and females is that there’s a near universal attraction to delivering understanding.  So the formulae oriented methodology may be blocking out many boys as well as lots of girls.

At EA we strive for understanding, arrived at intuitively within a clear context.  I confess that up to now I haven’t been alert to gender differences in my classes and have not taken any such thing into account in our curriculum.  My observation to date is the both genders are able to grasp business and economics far younger than is commonly thought by using the approach above.  But henceforth I’ll be on the look out, and should I see gender impacts, will look for ways to make our curriculum better suited for both genders.

Regardless, I’m appreciative to Sax for opening this new window for me.

Cry for Venezuela

About two months ago Venezuela announced that the military would take over food distribution. Now there are reports of that military trafficking the food to enrich themselves.

VE is a classic example of a vicious cycle in which the gov’t intervenes in the economy, things get worse, and so the gov’t intervenes even more, making things worse yet.  Rinse and repeat until people are dying wholesale from starvation, upheaval, or suppression.

Sadly, these episodes are completely avoidable.  Whenever some “leader” comes along proposing “bold experiments” run the other way.  All of these experiments have been tried and we have the body count to prove it (USSR, Cambodia, China, Cuba, go down the list.).

Only a market economy can create the wealth needed for humans to flourish.  A market economy requires respect for individuals’ rights and property, thus persecution is minimized.  People around the globe have to stop falling for the “charismatic leader” who claims to know better than the markets.




Crit Think

EA strives to promote critical thinking in all activities and lessons.  But people differ in what they mean by critical thinking, so here’s what we mean.  We mean not accepting an idea until you understand it completely; until you can logically build it upon premises you have already thoroughly vetted.  And you have to do this in your own head.  You cannot sub out critical thinking.  You have to put forth the mental effort to examine each step of the logic and muster the integrity to be honest with yourself in this examination.

One great hurdle to critical thinking is reliance on “authorities”.  Often the “authority” is nothing more than famous, with no competence in the subject at hand.  It’s fine to consider what others think, particularly if there’s some reason to believe that they have special knowledge.  But any authority has to make their case in such a way that you can follow it from beginning to end.  If they don’t, never assume that you’re not smart enough to understand such a great intellect.  People who really know what they’re talking about can explain it in ways anyone can understand.  If they can’t, that’s big red flag.

That’s why we encourage students NOT to believe us.  We want them to believe only what adds up for them in their own heads.  The “curve balls” which we encourage teachers to throw are meant to keep kids on their toes, always questioning, always vetting each word that comes their way.  We want them to be critical thinkers.

Myth of Marxism

Why does adopting Marxism ALWAYS cause such misery and destruction (USSR, China, N. Korea, Venezuela)?  Because Marx’s theories were wrong; they were at odds with the facts on planet Earth.  The harder you try to cram a square peg into a round hole the more damage you do to both peg and hole.

At the root of Marxism is the Labor Theory of Value (the value of a product is derived from the amount of labor that went into making it).  At the time Marx published his first volume, the Labor Theory had at least one gaping hole which was widely known (returns to capital are equal across the value chain, in contradiction to the labor theory).  Shortly after Marx published his first volume, the labor theory was utterly destroyed by the Subjective Theory of Value, which is still in use today.

Despite having the rug pulled from under him, Marx went on to publish a second volume, which contained some obvious omissions.  Marx promised to fill in the blanks in his next volume, which never came.

Bad enough that Marx carried on with a completely debunked foundation.  Worse, Lenin and his ilk implemented this flawed theory to the tragic detriment of millions.  Ideas have consequences…



Early Exits

Get this: some folks get together for the weekend for the purpose of starting a business.  By the end of the weekend they have designed a product, built it, advertised it on the web, and have sales by Monday.  Wow.  Obviously we’re talking about a technology business and the product is an ap or electronic tool, not the next driverless car, but still that’s amazingly fast.

I read this story in Basil Peters book, Early Exits. If I could think of a way to bring this activity to a classroom, I would.  But I can’t right now.  Why not have a couple of kids from your class tag along on one of these and put together a video about the experience?  If you can’t bring Mohammed to the mountain…