Sunday, October 23, 2011

Will Dropouts Save America?

Michael Ellsberg,author of “The Education of Millionaires: It’s Not What You Think and It’s Not Too Late," writes in NYT:

I TYPED these words on a computer designed by Apple, co-founded by the college dropout Steve Jobs. The program I used to write it was created by Microsoft, started by the college dropouts Bill Gates and Paul Allen.

And as soon as it is published, I will share it with my friends via Twitter, co-founded by the college dropouts Jack Dorsey and Evan Williams and Biz Stone, and Facebook — invented, among others, by the college dropouts Mark Zuckerberg and Dustin Moskovitz, and nurtured by the degreeless Sean Parker...

In a detailed analysis, the National Bureau of Economic Research found that nearly all net job creation in America comes from start-up businesses, not small businesses per se. (Since most start-ups start small, we tend to conflate two variables — the size of a business and its age — and incorrectly assume the former was the relevant one, when in fact the latter is.

If start-up activity is the true engine of job creation in America, one thing is clear: our current educational system is acting as the brakes. Simply put, from kindergarten through undergraduate and grad school, you learn very few skills or attitudes that would ever help you start a business. Skills like sales, networking, creativity and comfort with failure.

No business in America — and therefore no job creation — happens without someone buying something. But most students learn nothing about sales in college; they are more likely to take a course on why sales (and capitalism) are evil.

Moreover, very few start-ups get off the ground without a wide, vibrant network of advisers and mentors, potential customers and clients, quality vendors and valuable talent to employ. You don’t learn how to network crouched over a desk studying for multiple-choice exams. You learn it outside the classroom, talking to fellow human beings face-to-face.

Start-ups are a creative endeavor by definition. Yet our current classrooms, geared toward tests on narrowly defined academic subjects, stifle creativity. If a young person happens to retain enough creative spirit to start a business upon graduation, she does so in spite of her schooling, not because of it.

Finally, entrepreneurs must embrace failure. I spent the last two years interviewing college dropouts who went on to become millionaires and billionaires. All spoke passionately about the importance of their business failures in leading them to success. Our education system encourages students to play it safe and retreat at the first sign of failure (assuming that any failure will look bad on their college applications and résumés).
Ellsberg is correct in what he writes here, but he fails to understand that the problem is because of government intervention in education. Government doesn't want creative teaching and radical ideas. It rewards teachers who gain advanced degrees within the system, rather than those who might be creative. It's because of this that those attracted to teaching are the non-risk taking. It's no wonder that the great risk takers and entrepreneurs drop out of this system. But again, I must emphasise it is the government influence over education that is the cause, not education itself. If government left the sector, you would have all kinds of creative types moving in and making education a truly vibrant, exciting environment. That's why it is shocking when Ellsberg, after recognizing the problem with current education writes:

Classroom skills may put you at an advantage in the formal market, but in the informal market, street-smart skills and real-world networking are infinitely more important.

Yet our children grow up amid an echo chamber of voices telling them to get good grades, do well on their SATs, and spend an average of $45,000 on tuition — after accounting for scholarships — while taking on $23,000 in debt to get a private four-year college education.

It’s time that we as a nation accepted a basic — and seldom-mentioned — fact. You don’t need a degree (and certainly not an M.B.A.) to start a business and create jobs, nor is it even that helpful, compared with cheaper, faster alternatives.

Parents could turn the system on its head if they weren’t so caught up in outmoded mentalities about education forged in the stable economy of the 1950s (but profoundly misguided in today’s chaotic, entrepreneurial economy).

Employers could alter this landscape if they explicitly offered routes to employment for those who didn’t get a degree because they were out building businesses.

And the government could divert some of the money it now spends encouraging college for all, and instead promote the idea that creating a start-up is a worthy, respectable alternative to academics. This would go a long way to helping our unemployment problem.
Yikes, Ellsberg is strong, until he starts recommending that government divert money to start-ups. The success of start-ups is because the government doesn't interfere. The same bureaucratic, suffocating system will develop for start ups, if government puts money there instead of the education system. The non-risk taking, boring, follow the rules, teachers that lose their jobs in teaching will be the ones who end up approving start ups.

Government should be kept out of start ups AND be removed from any role in education. That's the way to improve an economy, not by moving government to a new sector of influence after they have already screwed up other sectors.


  1. I don't think he realizes he's advocating homeschooling and unschooling.

  2. No Obama 2012 will save America. HAHA

  3. The ancients seemed to have some insights into what higher education should be about. See here

  4. Government should be kept out of civil society.
    Let's just realize this.

  5. The short answer is "no". Here is the long "why".

    This guy doesn't seem to have a clue about the points he is making. "Apple designed his computer" + "Jobs co-founded Apple" = "dropout Jobs designed his computer". If that guy knew the first thing about designing computers, or Apple's history for that matter, he would not use Jobs to make his point on education. The amount of magic – yes, magic, because that is the only way such people can perceive the science and engineering involved – inside that computer or iPhone is beyond his imagination. Millions of people spent at least 5 years each to even enter the industries involved. Without that, Jobs would be selling lemonade or doing calligraphy for lemonade ads. And here is the punch line: like it or not, we are in the 21 century – accept it or die. To make anything of value, other than lemonade or calligraphy, one has to study science and engineering for many years, than practice it in the industry with the pros, and only then they are ready to make things of value. Those material things, the real economy, not books on stupefying a nation. Germans do it, and their engineering school is their national treasure. Asians are studying science and engineering like their life is on the line, and in a way it is. They are making progress at breathtaking speed. Look at Chinese military - the things they are making now, the sheer tempo of their progress. What will this guy sell to them in 10, 20 years? Organic vegetables, books, designer lemonade, donor organs, may be sex?

    I am not taking sides in that whole "love/hate government" debate. But I know two uniquely productive things a government can and should do that no one else would.
    1. Set a minimum education level, and enforce it. There is no place for cultivated idiots in the 21 century. Science, technology - pick and choose, but it must be useful, not “liberal female troubles studies” or such. That is 21 century literacy.
    2. Once in a generation, set big goals for all industries. Eradication of specific diseases, a colony on Mars, fusion power – really hard and risky things. Private sector never touches that because it takes decades and the risk of failure is too high. Hedge freaking funds are a safer bet, eh. Want to argue on this? I know a fusion scientist that is confident that they are a few $billions in investment away from the economic fusion power reactor. They can really do it, the science is in place, the technology is in place. They will not get that money from the private sector, ever – too risky. And everybody loves ITER anyway, so why bother even considering something else fusion. That’s how things are. You won’t see a crowd of VCs circling an obscure fusion power lab unless they have a prototype, but it costs a few $billions to get to that stage. There is always such a gap, and no private “volunteers” to fill it, ever, period. So government is the only player in such big things, and THEN, only then, the crowd comes to “commercialize”, when the risk is taken away by that nasty stupid government (i.e. DOD or DOE).

    The USA got to the moon that way, and the best result of it was a generation or two of scientists and engineers who were inspired and motivated to build EVERYTHING around you and that freaking writer. Once a generation there should be such an event, a productive strain to the limit and beyond, and only a government has the power and occasionally the will to set such goals and see them through. Then some of the byproduct engineers invent things those entrepreneurs will sell. Without that there won’t be any “jobs” but the lemonade industry.

    Sorry for the rant, he blew my aggression inhibitors.

  6. @Anon 9:46 PM,

    Aristotle and Plato? Ha! What did THEY know? They're just a couple of dead guys who lived a long time ago who couldn't have possibly understood much. Certainly not anything about education.

    Pass me that tanning lotion will you please?

  7. @Anon 12:16 AM,

    Amen to that with the key word being "civil".

  8. You will never be able to get the stupid violent democracy monkeys to put down their government guns...dropouts or not. Get acquainted with fascism.

  9. "...really hard and risky things. Private sector never touches that "

    Yeah, the silly private sector just touches the things that we _need_ like putting a car in every garage, a radio, TV, computer and cell phone in every home, a world-wide network of commerce and division of labor that helps us live better than the kings of yesteryear. Who needs all that?

    Maybe the "risky" things are risky because no sensible person can see a potential payoff compared to the amount of time, money and effort that would go into it. Coercing people to take the risk through a government program is immoral, impractical and a drain on the other useful things that the private sector is involved in.

  10. Love it when someone claims to be objective by saying, "I'm not going to get into the whole love/hate government things" and then lists all the reasons we should love government.

    The government has RUINED education. As a college professor, I should know. In the eighteenth and nineteenth centuries in this country, with little to no public education, most people were far more literate than most people who "earn" high-school diplomas today.

  11. Most people do realize that government is force and yet they support government and it's initiated violence toward their fellow man. Pro government people are parasitic psychopaths...They are not just stupid.