Stumbling and Mumbling

Debt lessons?

The government plans to introduce five-minute lessons into schools, and there are calls for lessons in financial education, to help people avoid debt.
This is a nice coincidence, because it only takes five minutes to teach someone about debt.
A bank loan is just like a van. A van transfers goods from one place to another. A loan transfers goods from one time to another - from the future to the present. Interest on a loan is just like the fee charged by the van driver. And just as if you've got goods in one place they can't be in another, so if you spend today, you can't spend tomorrow.
End of.
Why, then, should anyone think kids need long lessons in handling debt? I suspect they might be committing a form of category error.
What matters is not financial planning, which is the world's most boring thing, but character planning. Insofar as people make errors in accumulating debt, the problem is not that they mistake the cost of debt, but rather that they misperceive their future selves. They think spending now will provide lasting happiness, when it often doesn't.
Instead,  happiness consists not in the accumulation of goods, but in adjusting oneself to one's circumstances, to losing oneself in "flow",  or in pursuing personal excellence.  Money buys happiness not because it buys goods, but insofar as it buys peace of mind. True financial wealth consists mainly of "fuck you money."
But only life can teach us this. Some things can't be taught in school.

The technology of human development

What makes a successful person? This new paper (pdf) by James Heckman provides a fascinating survey. Here's one remarkable point:

Ability gaps between individuals and across socioeconomic groups open up at early ages, both for cognitive and non-cognitive skills....Levels of child cognitive and non-cognitive skills are highly correlated with family background factors like parental education and maternal ability, which, when statistically controlled for, largely eliminate these gaps  (my emphasis.)

Note that this does not mean differences in ability are purely genetic. As Heckman says, the nature-nurture debate is obsolete. Genes and environment inter-act, as richer parents provide a better environment for child development.
Heckman infers from this that early interventions to help poorer children are a good idea - not least because skills feed on themselves. Polly Toynbee's support for Sure Start has therefore some justification.
But there's another issue raised here. If differences in family background largely determine differences in skills, doesn't this mean people's fate is sealed (insofar as skills matter) at a very early age? If so, doesn't it follow that meaningful equality of opportunity - an ideal our new Prime Minister claims to support - is impossible to achieve without equality of outcome?

Joining the Spence Club

Bryan Caplan wants to start the Spence club, for economists who believe in the signaling model of education. Sign me up. Here's some  evidence from the UK that corroborates signaling theory.
1. Men who went to private school earn 4.4% more (pdf) a year, on average, than oiks, even controlling for qualifications, university and subject studied. This is difficult to reconcile with human capital theory,  as the result controls for qualifications and experience. But it's consistent with signaling - coming from a posh school signals that one has good attitudes that employers value.
2. Men (but not women) with arts degrees earn less (pdf) than if they had not gone to university at all. Perhaps this is because an arts degree signals that a man is airy-fairy. But as studying arts is a suitable subject for girls, no such adverse signal is sent by female arts graduates.
3. Returns to many vocational qualifications - but not degrees - are zero in the public sector, and returns to NVQs are generally negative.  This could be because although such qualifications help build human capital, they also signal that their holders were not smart enough to pursue general education.
4. University drop-outs earn less than those who never went to university at all. This is inconsistent with human capital theory, which predicts that two years of university education should be roughly as good as two-thirds of a degree. But it's consistent with signaling theory, which says that dropouts signal a lack of application and self-discipline, and that the value of a degree consists in the signal sent by the piece of paper.

Differences in educational attainment

What sort of people do well at school? This report from DfES sheds some fascinating light. Some key points:
1. There are big class differences in attainment. Only 4.6% of children in the most deprived quartile are high attainers (ie, in the top 10% of performers) at Key Stage 2 (age 11). But 16.7% of children from the least deprived quartile are high attainers. The figures are similar for 16-year-olds.
2. Ethnic differences are even bigger than class differences. At age 11, 25.4% of Chinese pupils are high attainers. That compares to 3.9% of Black Caribbeans, 10.5% of British whites, 13.4% of Indians and 4.4% of Pakistanis. Again, the differences are similar at 16.
3. High attainment doesn't always persist. Only 45% of kids who were in the top 10% at age 11 were in the top 10% at 16.
Is this an argument against grammar schools? Yes, in the sense that many good-performing 11-year-olds subsequently do less well. No, in the sense that the odds of a high-achieving 11-year-old doing well at 16 are far higher than the odds of a random pupil doing so well.
For me, these figures raise questions about egalitarian politics.
Start from the fact that there are systematic differences in achievement according to class and ethnicity even at a young age - 11. And let's assume - subject to the caveat in point 3 - that these differences are correlated (imperfectly) with lifetime attainment. Let's also posit that 11-year-olds lack full moral agency and so cannot be held wholly responsible for their test scores.
It then follows that people do badly in life (partly) through no fault of their own.
Is this just?
If so, what can be done about it?
There are two answers I'm not happy with.
One is the equality of opportunity proposal to spend more on educating black or deprived children, to equalize their chances of attainment. The problem here is that it requires massive differences in spending to equalize opportunity, because the link between educational spending and achievement is weak.
The other is New Labour's proposal to end child poverty. One problem with this is that the link between attainment and income is monotonic; kids from the richest quartile do better than those in the second-richest quartile. Abolishing child poverty, therefore, would not equalize differences in attainment. Another problem is that it doesn't tackle ethnic differences in attainment.
So, what (if any) are the answers?

Equalizing exam grades: a defence

In the comments on this post, D2 objects to my proposal for equalizing exam results across schools. Employers, he says, would look at what school applicants attended. The result would be that an employer would overlook someone with good grades from Knowsley Comp in favour of someone with worse grades (but perhaps better actual scores) from Eton - in the same way that employers now prefer graduates from Cambridge over South Bank University. The bright kid from Knowsley would therefore lose the valuable signal of his brightness.
I'm not sure how strong this objection is, for three reasons:
1. Put yourself in the position of an employer choosing between a candidate with As from Knowsley Comp and one with Bs from Eton. You know - insofar as exam grades measure anything - that the Knowsley kid has unusual effort and ability for his type, and has the strength of character to resist peer pressure. He might also be exceptionally bright - good enough to get As anywhere. You also know that the Etonian is a second-rater of his type.
Sure, the latter might - only might - have higher absolute test scores. But many - not all, of course - employers would surely prefer the strength of character or natural intelligence of the Knowsley graduate. Under my scheme, this gets signalled better.
2. The analogy with universities is a weak one. Employers prefer Cambridge graduates to SBU graduates partly because being a Cambridge graduate signals that one had higher ability at age 18 than being an SBU graduate does - though the signal's imperfect. But the signal sent by the fact that you went to a "good" school rather than a "bad" one is that you have richer or pushier parents. Fewer employers would value this.
3. Equalizing grades across schools would help reduce differences between schools. Under the current system, parents have every incentive to seek out good schools. Under my system, this incentive is greatly blunted. Indeed, I suspect many parents would actually want their kids to go to bad schools, because they'd think Tarquin would have a better chance of getting As there. These parents would then put pressure on the school to raise average performance (insofar as this helps Tarquin as much as the other pupils.)
I suspect, then, that D2's objections aren't crushing. Sure, some employers would prefer the dull Etonian to the bright comprehensive lad - but perhaps no more than do so today.

Do we deserve a good start?

Graham Brady complains about the lack of grammar schools:

Thousands of young people are being deprived of the start in life that they deserve. Politicians owe it to the public to get angry about this appalling state of affairs.

But why is it appalling that talented people don’t get opportunities? Two separate lines of thinking suggest it isn’t.
Line one is the utilitarian objection. This says that most people adapt to their circumstances, with the result that differences in well-being are small.
This paper (pdf) explains. It shows that people with high education and high income are happier than others. But the difference is small. It’s only around one point on the 36-point Likert scale. To put that in perspective, three-quarters of the population fall between a score of 20 and 30.
The loss of happiness caused by depriving people of opportunities is therefore small – as is the gain from giving them opportunities.
My biography corroborates this. I’m exactly the sort of person Graham thinks benefited from a grammar school; mine took me from a poor single-parent family to Oxford and thence to a highish income. But this came at the price of social isolation. Grammar school certainly raised my income, but I’m not sure it raised my well-being; the happiness literature suggests that marriage and friends (pdf)  matter more for well-being than quite large incomes.
You might object here that adaptation is an argument against many policy reforms; if people adapt to their circumstances, these will have low pay-offs. True – but this is an argument Conservatives have used for centuries. It’s ironic that they’ve begun to abandon it just when empirical social science has produced evidence for it.
The second line is the libertarian one. Why should tax-payers be coerced to pay for what a talented youngster deserves? We could add the Rawlsian argument – that as people don’t deserve their natural talents, they don’t deserve what flows from them, such as a grammar school education.
Put it this way. Say my innate talent at age 11 entitles me to a chance of good education and the great wealth that possibly flows from it. Why, then, shouldn’t my talents entitle me to the full fruits of my labour thereafter. Why should I have a right to an opportunity – paid for by coercing others –but not a right to an income paid by voluntarily by my employer? There’s an inconsistent attitude towards self-ownership here.
So, to support Graham’s position you must be neither a Rawlsian, nor a libertarian, nor a utilitarian. So what must you be?

Talent: Willetts versus Smith

In that speech, David Willetts said:

The experiences children have had by the age of 11 are so different that it is a fantasy that you can somehow fairly distinguish between them at that age.

Most of the criticism he's got for saying this comes from those who believe we can fairly distinguish between children of different ability, and so should practice academic selection.
But might both be wrong? Could it be that children in fact have very similar ability and aptitudes?
Sounds like 1960s lefty liberal drivel? Maybe. But here's Adam Smith:

The difference of natural talents in different men is, in reality, much less than we are aware of; and the very different genius which appears to distinguish men of different professions, when grown up to maturity, is not upon many occasions so much the cause, as the effect of the division of labour. The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature, as from habit, custom, and education. When they came into the world, and for the first six or eight years of their existence, they were perhaps, very much alike, and neither their parents nor playfellows could perceive any remarkable difference. (Wealth of Nations, I.2.4)

This raises three possibilities.
One is that Smith was just wrong.
Another - mentioned by Willetts - is that things have changed since then. Parents invest more, and differentially, in young children, and perhaps assortative mating is more common now than then, so 6-8 year-olds are no longer very much alike.
The third possibility is that Smith was in fact onto something. Perhaps the salience today of two rare fields in which natural talent is important - sport and professional music - have led us to believe that innate talent is important when in fact the work of Anders Ericsson suggests it might not be. Perhaps instead the difference between street porters and philosophers is due to socialization rather than natural ability.

What's education for?

What is the point of education? The question's at least as old as Socrates, but I suspect a lot of confusion about education policy - in both main parties - arises from a failure to answer this question, and to see the trade-offs between the answers.
There are (at least) three possible functions of education:
1. To improve social mobility or increase equality of opportunity.
2. To transmit technical learning, acheiving high educational attainment.
3. To (help) create a virtuous or even happy citizenry.
The thing is,  these three goals conflict. For example, increasing overall educational attainment might well require that parents be able to choose among competing schools. But this would reduce equality of opportunity, as better parents would nab better school places.
Also, for choice to be meaningful, schools would have to be more autonomous. But if they are, some will teach things - religion, creationism, whatever - which many believe to be incompatible with truth or virtue.
There's also a trade-off between teaching virtues or happiness and teaching technical skills - simply because there's a limit on the length of the school day.
And there's a trade-off between improving social mobility and teaching virtue and happiness. The latter tells people not to be ambitious. Social mobility requires that they be so.
I take only one message from this. Education policy cannot be a merely technocratic subject - though of course experts can help tell us what's feasible. It is inherently political, in the noblest sense of that word - in that it asks us to choose between competing values.
But could we at least try to reduce confusion by formulating the questions properly?

School vouchers and the left

Andrew at Bloggers4Labour advocates school vouchers but fears such a view won't endear him to fellow Labour supporters?
Why won't it? Our existing system, of allocating the best school places to families who can afford expensive houses, is so inegalitarian that Labour supporters should be keen to consider any alternative.
And vouchers can, in principle, promote equality. One could allocate more of them to low-income families, or forbid them being topped up by cash so they don't act as a subsidy to rich parents buying private schooling.
Perhaps, therefore, Labour's opposition to school vouchers reflects a status quo bias - when it comes to public services, the left is instinctively conservative.
Or does it. Although US research - such as this pdf by Caroline Hoxby - suggests that choice raises educational attainment, UK evidence is more mixed. This pdf by Olmo Silva and colleagues says there is "little evidence of a link between choice and achievement." (shorter pdf).
Perhaps it's not vouchers in themselves that would improve outcomes, but a mix of vouchers plus more school autonomy. But would the teaching unions welcome this?

Ideological state apparatuses

Fabian Tassano and friends are rightly campaigning against educational conscription. They'll not thank me for this, but this is one area where libertarianism meets Marxism.
Louis Althusser called schools ideological state apparatuses. They're one of the means by which workers are indoctrinated into modes of thought favourable to the continuation of capitalism. There are (at least) four ways in which this happens:
1. Schools inculcate a culture of presenteeism. In bullying students to attend even unnecessary classes, schools prepare them for a world in which they'll have to attend factories and offices not  (just?) because it is technologically necessary to do so, but because presenteeism permits easy oversight by capitalists of workers.
2. Schools normalize alienation. The school uniform, and the fact that schools are sometimes a long way from home, send a message: your individuality must be suppressed.
3. Schools teach that success depends upon obeying rules, and subordinating yourself to authority.
4. Schools help legitimate authority. In well-run schools, teachers have both authority over students and superior knowledge. This coincidence inculcates the belief that authority is always to be identified with superior wisdom. It is only after you become a skilled worker that you realize this to be a fiction.
Now, the thing about these mechanisms is that they operate without the intention of any particular teachers. Indeed, I suspect their existence is a lucky accident, rather than anyone's design; some things are the result of human behaviour but not intention.
However, it's an accident that accords well with New Labour ideology. One feature of this - seen in its desire to get people into work and prepare them for the "challenges of globalization" - is the belief that government should operate as a human resources department. To New Labour, people must change to meet the needs of the economy, rather than vice versa.
The question is: are there any possible viable alternatives? I'm not at all sure.