Grantcoulson's Blog

from the book: Shadow Dancing on the Grave of Hope:

     “As long as they get paid, they’ll keep doin’ what they’re doin’”. This was folk wisdom from the working class about poor snow plowing in the parking lot of a private building. As every powerful rule of human behavior, it applies to all human activity under all circumstances. As a matter of fact, the plower of snow was arrogant enough to state that plowing snow properly “was not his job”, a statement sure to bring about job loss for poor performance in the real economy. The person doing it wrong was fired. After that, the job was done properly by someone else. And that’s free enterprise for you.

    None of this is to imply that economic consequences are the only relevant motivators for human beings. Surely some government workers are hard working and efficient. Surely some self-employed people are lazy and inefficient. These people do not last long in their jobs, self-employed or employed by others. Unless there are strong unions (employment insurance for the incompetent.) the non-hard working and inefficient will not last in private industry.   

     Although Friedman, one of the few economists who knows of what he speaks, uses different language for describing these outcomes, he outlines the contingency sets for spending-consumption. This is the logical set of possibilities which apply to spending money depending on whose money it is and whether the product is to be enjoyed by oneself or someone else.

        The production side contingencies would look like this:

1).    When a man works for himself, pays his own costs, and the quality of his work has economic consequences, he will concentrate on the costs of production and the quality of his work because both have economic consequences. He needs to produce the highest quality with the lowest cost. He will rarely seek to do the least amount of work because this will have an impact on quality (what his customers value) and quantity (how much money he will make).

2).    When a man works for himself and someone else pays the cost, he will concentrate on quality, less on cost and work as hard and efficiently as he needs to.

3).    When a man works for someone else, but pays the costs himself, he will concentrate on costs and concentrate on quality to the level required by his employer.

4).    When a man works for someone else who pays the cost, and his results have no economic consequences, he will work neither hard nor efficiently. Since  quality and cost has no impact on him, attention will be paid to neither and costs will be high with quality low. That’s government for you.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

      So ends the month that makes me cringe as I hear Feb-ew-ary or Febr-rary.

    Here follows one of the most important ideas in economics and psychology, anticipated and articulated by thousands, but articulated by Adam Smith and Milton Friedman, centuries apart.

from the book: Shadow Dancing on the Grave of Hope:

     Human affairs follow paths determined by “The Law of Contingencies”, which is as valid as any law in physics. If effectiveness is not required, effectiveness does not occur. If one is spending other people’s money, profligacy occurs. If competition is absent, inefficiency occurs. The Law of Contingencies pays no attention to the Screed of Intentions.

INCENTIVES, REAL CUSTOMERS AND REAL PRODUCTION

    Milton Friedman,  economist, and Nobel Laureate, noted:

    "When a man spends his own money to buy something for himself, he is very careful about how much he spends and how he spends it.

    When a man spends his own money to buy something for someone else, he is still very careful about how much he spends, but somewhat less what he spends it on.

    When a man spends someone else’s money to buy something for himself, he is very careful about what he buys, but doesn’t care at all how much he spends.

    And when a man spends someone else’s money on someone else, he doesn’t care how much he spends or what he spends it on. And that’s government for you."

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

from the book: Shadow Dancing on the Grave of Hope:

     The errors of human action are endless, and cataloging and correcting them one by one would be tedious and pointless. A self-correcting system, dependent on economic feedback, will eliminate errors quickly, sometimes by eliminating the system, sometimes by fixing the errors. Whether the corrections are large or small, the errors get eliminated. In a government system, where errors do not provide consequential feedback, feedback which must be obeyed, errors stay. The same analysis holds for efficiencies. When something pays off by saving money or improving product, feedback via economic consequences requires retention and such efficiencies are sought out.

    The problem with economics is that it is counterintuitive. Knowledge is scarce, but intuition plentiful. “Some ideas sound so plausible that they can fail nine times in a row and still be believed the tenth time. Other ideas sound so implausible that they can succeed nine times in a row and still not be believed the tenth time. Government controls in the economy are among the first kinds of ideas and the operation of a free market is among the second kind.”  Thomas Sowell.

     All effectiveness revolves on the axle of incentives.The actions of no one in the social sciences can be understood without knowing the contingencies affecting these actions.

    The Law of Contingencies connects the INTEND with the IS and the IS with the DOES. The DOES is usually fruitful under free exchange when contingencies are dependent on real output, not show, spin or pageantry. To be useful, IS must be very detailed and not a vague statement of intention and DOES has to be useful to someone to the extent he will pay for it.       

    “The real and effectual discipline which is exercised over a workman is…that of his customers. It is the fear of losing their employment which restrains his frauds and corrects his negligence.” Adam Smith. To paraphrase, if you try to cheat customers or don’t perform, they go elsewhere.

    "Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.” Adam Smith

    The United Auto Workers, after decades of being propped up by governments, can testify to the ruination that results from concentrating on producers rather than consumers.”We’re not working, but we’re not working at really good jobs with fantastic benefits. Social justice has been served.” Eventually, market discipline is visited upon everyone, like it or not whatever the power of your spin machine. Anyone who knew about the union-inspired waste of labor inside a Big Three auto plant would wonder what the spinners were talking about.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

  “One in four Americans work(sic) for companies with federal contracts, and administration officials see an opportunity to lift more families into the middle class.” New York Times, February 26, 2010. That’s what produces economic progress, federal diktat about wages. Goodness me, how many people believe any of this except for politicians? Just raise wages. FDR did it during the Great Depression and it helped make that depression Great. Let’s do it again.

    Government is the most broken when it’s working best.

from the Book: Shadow Dancing on the Grave of Hope:

      Socialism is such a failure that it exists in partial form only where it can be supported by free enterprise. The postal service, school system, the medical system in many countries, etc. all exist because of external support, not internally generated revenue. Thence, they are inefficient in the extreme and produce the most bizarre and slovenly behaviors in the people who work in them. As an example, over the years, several hundred parcels have been sent to me. These parcels were supposed to be delivered by the Canadian postal system, a government agency. Although my business is open seven days a week from 9 a.m. until 8 p.m. on all but two days of the year, only about 12 of these parcels were delivered. Notices for most of  the others were left in the postal box. They didn’t even make the effort to put the notice on the door of my office where delivery was supposed to occur so they could at least pretend they tried to do their job. The private delivery businesses always deliver inside our door. Just to complete the cycle, the Canadian postal service purchased a package delivery business which has the same dismal delivery techniques and tries its best not to deliver packages. Unionized government services are not known for service. This is too easy, but–The government does not deliver.  As an added bonus, Canada has a government agency which controls cable access which limits competition and makes Canadian internet providers much less efficient and more costly than their U.S. counterparts.

    “Many people are so preoccupied with the notion that their own knowledge exceeds the average knowledge of millions of other people that they overlook the more important fact that their knowledge is not even one-tenth of the total knowledge of those millions. That is the crucial fallacy behind the repeated failures of central planning and other forms of social engineering which concentrate power in the hands of people with less knowledge and more presumption.” Thomas Sowell.

    There is relentless propaganda for state control and intervention in spite of thousands of examples of it not being a very good idea. For example, in Walkerton, Ontario, Canada, seven people died and many hundreds became ill because of e. coli in the town’s drinking water. There was a large outcry about the perils of privatization in public services in spite of the fact that, in the whole chain of errors which led to the tragedy, only the private laboratory provided the correct information. The public servants responsible spent more time drinking beer than doing their jobs, were found criminally guilty for their trouble, but the public faith in government workers remained, and remains, unshaken. The Romance with Socialism lives on with no regard for facts.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

     Today’s news is a rich source of “I told you so” and “It cannot be any different when third parties spend my money.” There are three stories:

    The First:

Ontario power risk: Hydro One: Rising debt, higher costs, falling income–National Post, February 25,2010

     “Ontario electricity distributor has 38% more employees delivering 9% less power.”

    This article traces the inevitable decline in productivity from two factors: The “Green Energy” hysteria and inefficiency of a publically-backed utility.

    The Second:

Hit the Brakes–National Post, February 25, 2010.

     “According to Statistics Canada, there are 3.5 million Canadians employed in the public sector out of 16.9 million working Canadians — 20.7%! This means one in five working Canadians are employed by the public sector. These jobs are funded from the taxes paid by the other 80% of Canadians working in the private sector. This has been a worsening condition over the past 40 years. In an inflation-adjusted comparison, the federal government spends 360% more today than it did 40 years ago. In 1969, program spending was $12.9-billion — $75-billion adjusted to 2009 dollars. It has exploded to $273-billion in 2009-10. If spending had grown at the same rate as population and inflation, it would only stand around $150-billion today.”

    Each public employee has the potential to produce three problems. The first two occurs for all of them, the third only for those who hold some regulatory power.  The first is the cost of employing such a person. The second is the loss of having a public employee doing a job which could be done much more efficiently by someone else. The third is the regulatory costs, both direct and indirect,  which stem from such an employee. Bad results all ‘round.

    The Third:

    This is a story of a low-performing high school in Rhode Island where all the teachers will be “fired”. The stories is reported by many sources. The following quotes are from a New York Times article linked to the Central Falls Journal.

    The school has not performed well for years. Instead of starting effective instruction, the usual welter of excuses is offered. Like the caterwauling of all public employees, the results are simultaneously funny and pathetic.

      “We’re carrying this immense burden here,” said George McLaughlin, 60, a guidance counselor at the school. “We have a bag of bricks on our back that you don’t get at places where it’s taken for granted that everyone will succeed.”

     “I leave here at 6, 7 at night, working with kids, coaching, getting lesson plans, doing interactive literacy. That’s what people don’t see,” said Frank DelBonis, who teaches history to English as a Second Language students in a school where 70 percent of students are Hispanic.”

    “Interactive literacy” is an ominous phrase. Why don’t they use effective instruction, one could ask. Public educators do not know about things that work, so that avenue is closed. Being a high school, the teachers do have to contend with lack of effective preparation in the primary grades, but many examples exist of effective instruction beginning in high school.

    I will bet that all of these “fired” teachers who want to be will be employed by the same school board next school year after the posturing is over.

    All three kinds of  mischief come from violating the fundament law of Human Nature, The Law of Contingencies.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

from the book: Shadow Dancing on the Grave of Hope:

     "The smallest minority on earth is the individual. Those who deny individual rights cannot claim to be defenders of minorities." Ayn Rand

    The debate between socialism, known as, “The Grand Plan which Controls Everything and is operated by Our Betters who Know How Everyone Should Live”, and Individual Striving, known as individuals making their own decisions, has been in consciousness for thousands of years. Believers in the Grand Plan need coercion and regulation so that people will Behave Properly while those who support Individual Striving require freedom from coercion and regulation. Socialism holds that the only rationale for existence is to be useful to Society while Society reciprocates by teaching the individual to be virtuous and altruistic. The belief that property should be held and operated in common has been in philosophical writing since early history when Plato suggested “Guardians” manage things and raise children in his hypothetical Republic and warned against “selfishness”. Socialism elevates the State, a hypothetical entity, to dominion over the individual, a real entity. The list of failures of this way of organizing society is endless, as is the enthusiasm which its adherents approach the latest version and expect  to “get it right this time.” They show, in glowing detail, how their new  “New Society” will be far superior to all others, especially those where pesky individualism produces greed and exploitation. Socialism concentrates on "freedom from" such things as poverty and poor housing. Its opposite, libertarianism requires "freedom to" do certain things such as freedom to engage in trade. Always curious is the notion that after all of the high flights of rhetoric and polysyllabic words, socialism always depends on the threat and delivery of brute force. Naturally, socialism is most popular in universities which live on government money and only need to produce hypothetical social orders which depend on control by the elite. In any public debate about socialism, the state enters the argument with “…an unearned aura of virtue”, (Walberg and Bast, p. 173) due to the assumption that state control and operation is the most efficient way to proceed in any enterprise.  The varieties of socialism have ranged from Communism in the Soviet Union, through the National Socialist German Workers’ Party (Nazi), to the relatively benign, costly and disastrous nationalization of the British coal industry. The reverse process occurred when the British electricity system was privatized. Several layers of bureaucracy were removed and the producers became responsible directly to the consumers.

    The best-known blueprints for these two visions of life come from Adam Smith’s, The Wealth of Nations and Karl Marx’s, Das Kapital. Smith’s book is a summary of successful and unsuccessful economic principles based on observation. Marx’s book is a blueprint of how things should work based on theory. Smith’s is a DOES analysis while Marx’s  is  an INTEND-IS analysis. The INTEND-IS analyses are always paramount in academia because academics need not be concerned with results and INTEND-IS is where one introduces the marvelous complexities beloved of academics.

    Social science professions are like religion in the Middle Ages or, for that matter, cults in any age. The practitioners make others believe that their speciality alone controls the Only Road to Salvation. Those paid by the public purse support the belief in an officially sanctioned Road to Deliverance and Nirvana. All inequities will be eliminated when the destination is reached. This Shadow Dance  has been going on as long as civilization. Add myth, hope and lies, and you have something which can’t work but which is kept going by faith, official sanction, and beliefs and wishes about what must be true.

      Walberg, H.J., and Bast, J.L. (2003). Education and Capitalism: How Overcoming Our Fear of Markets and Economics Can Improve America’s Schools, Stanford, Stanford University Press.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

    Al Gore won an Academy Award and a Nobel Prize, proving once again, that those with prestige and status  usually produce the opposite of truth. Drop your carbon trading right now or sell it short. You heard it here.

    This is a graphical representation of the inflation-adjusted commodity prices of 19 items from the energy, precious metals and commercial metals categories from 1934 to the present. If the world were running out of precious resources, the trend would be rising. Now that this, Global Warming and the H1N1 have proved such disappointments on the way to the Apocalypse, what will they warn us about next?

    Textbook Creation–Inside the Sausage Factory

Some years ago, I signed on as an editor at a major publisher of elementary school and high school textbooks, filled with the idealistic belief that I’d be working with equally idealistic authors to create books that would excite teachers and fill young minds with Big Ideas.

Not so.

I got a hint of things to come when I overheard my boss lamenting, "The books are done and we still don’t have an author! I must sign someone today!"

Every time a friend with kids in school tells me textbooks are too generic, I think back to that moment. "Who writes these things?" people ask me. I have to tell them, without a hint of irony, "No one." It’s symptomatic of the whole muddled mess that is the $4.3 billion textbook business.

Textbooks are a core part of the curriculum, as crucial to the teacher as a blueprint is to a carpenter, so one might assume they are conceived, researched, written, and published as unique contributions to advancing knowledge.

In fact, most of these books fall far short of their important role in the educational scheme of things. They are processed into existence using the pulp of what already exists, rising like swamp things from the compost of the past. The mulch is turned and tended by many layers of editors who scrub it of anything possibly objectionable before it is fed into a government-run "adoption" system that provides mediocre material to students of all ages.

Welcome to the Machine

The first product I helped create was a basal language arts program. The word basal refers to a comprehensive package that includes students’ textbooks for a sequence of grades, plus associated teachers’ manuals and endless workbooks, tests, answer keys, transparencies, and other "ancillaries." My company had dominated this market for years, but the brass felt that our flagship program was dated. They wanted something new, built from scratch.
assessment

Sounds like a mandate for innovation, right? It wasn’t. We got all the language arts textbooks in use and went through them carefully, jotting down every topic, subtopic, skill, and subskill we could find at each grade level. We compiled these into a master list, eliminated the redundancies, and came up with the core content of our new textbook. Or, as I like to call it, the "chum."

But wait. If every publisher was going through this same process (and they were), how was ours to stand out? Time to stir in a philosophy.

By philosophy, I mean a pedagogical idea. These conceptual enthusiasms surge through the education universe in waves. Textbook editors try to see the next one coming and shape their program to embody it.

The new ideas are born at universities and wash down to publishers through research papers and conferences. Textbook editors swarm to events like the five-day International Reading Association conference to pick up the buzz. They all run around wondering, What’s the coming thing? Is it critical thinking? Metacognition? Constructivism? Project learning?

At those same conferences, senior editors look for up-and-coming academics and influential educational consultants to sign as "authors" of the textbooks that the worker bees are already putting together back at the shop.

Once a philosophy has been fixed on and added, we shape the pulp to fit key curriculum guidelines. Every state has a prescribed compendium of what kids should learn — tedious lists of bulleted objectives consisting mostly of sentences like this:

"The student shall be provided content necessary to formulate, discuss, critique, and review hypotheses, theories, laws, and principles and their strengths and weaknesses."

If you should meet a textbook editor and he or she seems eccentric (odd hair, facial tics, et cetera), it’s because this is a person who has spent hundreds of hours scrutinizing countless pages filled with such action items, trying to determine if the textbook can arguably be said to support each objective.

    There is more here:

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

     There’s a spam going around which provides virus protection against the Conflicker (note spelling) virus. Clicking it open gives you the Conficker (note spelling) virus. This sound like a government program. It produces the same thing it warns against but with enough difference to plausibly argue innocence.

    Where is the H1N1 pandemic? The world wonders.

    Today’s question about the media is, “Why is Tiger Woods, a professional golfer, being excoriated for carnal sins while John F. Kennedy, President of the United States, was given a free ride for his much more frequent liaisons which occurred on the public dime?”

    Tiger Woods is entering therapy which will apparently cure moral failings. Didn’t know it could do that. I’ll have to do more research. 

     more from :Michael J. Podgursky, Matthew G. Springer (2007). Teacher performance pay: A review. Journal of Policy Analysis and Management, 26, Pages: 909-949.

  “For example, in a large-scale study of certification status and new teacher effectiveness in New York City Public Schools, Kane, Rockoff, and Staiger (2006, p. 40) write: There is not much difference between certified, uncertified, and alternately certified teachers overall, but effectiveness varies substantially among each group of teachers. To put it simply, teachers vary considerably in the extent to which they promote student learning, but whether a teacher is certified or not is largely irrelevant to predicting their effectiveness.” (emphasis added)(p. 931).

    And, on pursuing energy independence:

    “Commercial nuclear power is the most heavily subsidized industry in the history of the world and the single biggest money-loser in the history of business.”  Lawrence Solomon–National Post, February 20, 2010.

    “An aboriginal-run university loses funding because of corruption.”  Losing government funding for a favored group takes some doin’. Giving free money to “victims” never works, but never ends.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies