DaveShearon

Productivity = Prosperity

The Power of Productivity: Live 8 and 16th Century Spain.

Education is important for...

Why should the public put resources into educating all young people?  Two answers are often proposed:  (1) to be competitive internationally economically and (2) so they can function as citizens in the most advanced economy and leading democracy in the world. 

I've posted before on The Power of Productivity by Willaim Lewis.  Good book.  In it, he establishes that America is THE standard for productivity in almost every industry and overall by a long shot.   That's why our standard of living is higher.  However, as a result, we're having to figure out what governmental, legal, societal and regulatory schemes will allow further improvements in productivity by trial and error.  We have no place to look where a better structure to encourage productivity has been evolved.  As a result, his comments on education and it's role in helping or hindering the development of poor nations do not apply here, but, overall, they are interesting:

"I have begun to suspect that economic development causes education to develop even if governments don't force it as Korea has done.  After all, that's how education got started.  When we were all hunters and gatherers 10,000 years ago, we did not have time for education.  we did not even have time to wonder much about anything besides finding enough food.  Only when our productivity for food production increased did we hve time for other things.

Jared Diamond gives us a good explanation of this transition.  We wanted to do things that would make us richer and more powerful.  We also wanted to know things about which we were simply curious. Who are we?  What are we?  Where are we?  Why are we? Education arose naturally as successive generations wanted to learn what those going before them had learned and thought.  We began to make the trade-off between simply working more now and learning more to work in more valuable ways later.  We also wanted to learn more to satisfy our curiosity.  The more productive we became, the more we had time for education.  we demanded that education.

No doubt, as education increased, our productivity potential increased.  If our policies pushed us to achieve that potential, then we could afford more education.  As I will come back to in chapter 1`1, this increasingly high level of education probably is necessary, but not sufficent, for the complex political systems necessaryt for advanced economic performance.  It's possible that poor countries today will not get out of their poverty traps without political changes.  Those political changes may only be possible with broader education.  The point is, however, that education is not a constraint on the ability of today's workforces to achieve substantial productivity improvement around the world.  It's the other way around. Constraints on productivity improvement are the reason education is not developing faster around the world.

Japanese Schools, Education & Culture

The 11/3/04 edition of the Wall Street Journal has a front page article that begins as follows:

New Math
As Test Scores Fall,
Japanese Schools
Get Harsh Lesson

Experiment in Creativity Flops,
Leaving Mr. Kageyama
At the Head of the Class

His 3 R's Include Rote Drills

By MARTIN FACKLER
Staff Reporter of THE WALL STREET JOURNAL
November 3, 2004; Page A10

ONOMICHI, Japan -- For years, Japanese schools have been struggling to overcome the criticism that they churned out apathetic, fact-regurgitating robots. So why is Japan's most popular elementary school principal preaching an extra-strict regimen of drills and rote memorization?

"Cramming facts is good for students," says Hideo Kageyama , head of the Tsuchido Elementary School in western Japan. "It energizes the brain, just like booting up a PC."

In a typical fifth-grade class at Mr. Kageyama 's school in this shipbuilding port, the children began a recent day at their desks, pencils poised over sheets of paper. On cue, they began furiously scribbling, racing to write long-division tables from memory as a teacher timed them with a stopwatch. Once finished, they jumped to attention and started reciting 19th-century Japanese poems over and over, each time more quickly than the last. Still standing ramrod straight, they switched to English, shouting in unison sentences like "I'm good at P.E." and "Do you like fried chicken?"

The highly regimented classes are extreme even by the standards of Japan's famously rigorous schools, and they've drawn harsh criticism from government educators. But Mr. Kageyama has become a national celebrity in Japan as part of a backlash against recent education reforms that many here blame for causing a worrisome trend: declining standardized test scores.

Now I know some folks are going to just die from apoplexy at the thought of such classes.  BUT -- are you sure the kids don't like them.  This is fifth grade, remember.  Kids like to succeed, and here they are all succeeding as a group.  Kids like energy and doing things, and that's happening here.  They like playing games, and to some extent this seems like a game (though I suspect there has to be variation as the year goes along, at least in the activities if not in the energy and focus -- maybe that variation is something the kids "earn" by mastering the current lessons).  And, moreover, is this that much different from, say, Marva Collins?

The article then goes on to describe the worry in Japan some years ago that they weren't turning out creative thinkers and the move away from content by their Ministry of Education.  Now, some schools are moving back on their own initiative.  And Mr. Kageyama argues his school is both helping students learn more and helping them learn to think:

Meanwhile, he quietly monitored the progress of his first batch of drill-method students, an unusually large number of whom won acceptance to top universities. Of his 50 students, 10 were accepted into Japan's rigorous national universities, about twice the average acceptance rate, he says.

He also claims his drills do more than just improve test scores, but even make children more creative and analytical. The drills, he says, serve as mental calisthenics that strengthen the brain and build self-confidence, helping children voice opinions and explore new ideas -- exactly what the Education Ministry hoped to accomplish with its reforms. "I share the same goal ... but achieve it in an entirely different way," Mr. Kageyama says.

The Ministry disagrees, and they cite surveys they did in 1999 and 2000 showing that American adults know more about science than Japanese adults.  (Anyone seen these surveys?)  They argue this shows that Japanese students do not continue learning after leaving school as much as American adults do.

All very interesting, but, does the approach of a country's schools affect the innovation of that country? Not according to The Power of Productivity by William W. Lewis.  Mr. Lewis reports that competition fosters innovation, and that Japan (and Europe) suffer from political problems that inhibit the need to innovate or to adapt to innovation in other countries. 

For example, the Japanese example in automobile manufacturing did far less to improve European car makers than  it did American because of protective quotas on Japanese imports.  Thus, once the Japanese began to take on the Europeans in higher-cost, luxury cars, the European manufacturers were not in as good a position to respond as they might have been had they faced the Japanese comeptition at the low end more squarely.

Japan's retailing industry sees no innovation because it's "Mom and Pop" businesses are heavily subsidized and protected, making it impossible for American and European innovations in retailing to have an effect.

Similarly, the Japanese and  much European housing industry is far less productive than in American because the political structure does not place the  responsibility for infrastructure (roads, sewers, etc.) at the same level as the ability to tax to pay for that infrastructure.  Thus, there is a great deal of impediment to building new housing to discourage the need for new infrastructure.

Schools are great institutions, and every country cares about theirs.  And, I believe our schools can be MUCH better for kids and teachers than they are today.  But, they don't seem to have that much to do with national levels of innovation or productivity.

The Power of Productivity

I don't usually put books up on this site until I've read them, but I'm making an exception for The Power of Productivity: Wealth, Poverty, and the Threat to Global Stability. Mr. Lewis was founding director of the McKinsey Global Institute in 1990, remained in that position for over a decade, and is now Director Emeritus. I'm only 75 pages in, but this is obviously a major book. If you believe that global economic disparity is a danger to America and want to understand the area, I recommend this book. Is he right? Don't know yet, but I think he's worth studying. I'll definitely be commenting further on the ideas from this book, but, to give you a taste, here are his ten main conclusions and a sample of what I think will be the most common criticism of the book:

Wallmart's made us all richer!

Today's WSJ has a book review by Hugo Restall of the William Lewis book The Power of Productivity. Based on 12 years of research for the McKinsey Global Institute, the book reports that Walmart's shakeup of the wholesaling/retailing world in the 1990's contributed half o the 2.5% annual productivity growth of 1995-1999.

"The U.S. is more open than almost all other countries to new business models and more prosperous as measured by per capita gross domestic product."

He further argues that developing countries could prosper by embracing competition and small government. The small government means a government too small to respond to protectionist demands.