Yesterday was Memorial Day in the US. We used this quiet interlude to continue the commencement address nobody wants to hear…
You are heirs to a great society, a great economy, a great government…and more snaky illusions than you can shake a stick at.
Memorial Day gave us an opportunity to salute the fallen. Without a moment’s hesitation or thought (which is the only way to do it) those who protect us rush to the barricades or recruiting offices.
Germans, French, Vietnamese…Protestant, Catholic and Muslim…Nazis, Bolsheviks and Democrats…royalists and revolutionaries…mad kings…evil dictators…oligarchs, patriarchs and string pullers — all the world’s elites should pause for a minute and give thanks to the poor suckers who protect them. And you, the Class of ’14, after 12 years in prison-like schools…and another four or more in college…now you are ready to take your place among them.
But let’s look at what you are getting yourselves into…
Specifically, let’s look at the financial system. It’s not the same financial system that your parents came into. And it has some new features that are going to make you the biggest chumps in history.
Did I mention the Cantillon Effect, ‘intertemporal discoordination’ and Baumol’s cost disease?
These are just ways economists have tried to understand the financial distortions and economic perversions caused by today’s money system. Look, I don’t have time to explain the entire universe to you…but here is what you need to know…
The whole system is rigged against you.
Even college. Did you ever wonder why you went to college? And why it was so expensive? You pay an average of $30,000 a year, plus another $10,000 for room and board!
As I explained on Friday, the unlimited credit of the post-1970s period favoured talkers and meddlers over doers and makers.
For 90% of people, real wages have been flat since 1968. The other 10% had jobs that were mostly for college graduates — in finance and administration. That’s why you’re here: You wanted to be in that small group of Americans with rising incomes.
The last four years should have been the best years of your life. You were as alert, energetic and strong as you ever will be. And what did you really get for it? Did you learn more in school than you would have learned in real life? I doubt it.
Real life is tough. Infinitely complex. Unlimited in its subtlety and ambiguity.
You never know when you’ll be tested in real life…and you never know what the test will cover. So you have to be on your toes. In college you can get through courses with CliffsNotes and cram sessions. In real life, you have to use your brain.
In college, life is stripped down, simplified to the point of caricature. People are turned into stick figures. History, politics, sociology, psychology, government, economics — all are reduced to simple narratives that can be taught, studied and learned.
An infinite variety of facts and nuances must be distilled into just a few. The flesh must be boiled off the bone. What you end up with is bare — with 10% useful insights…and 90% claptrap. And we don’t even need to mention literature, art, and gender studies.
Now that you’re graduating, you must think you know something. But unless you’re in the sciences or engineering, what you know is probably not worth knowing. It’s not how real life works. And the longer you spend in school studying this artificial world, the less able you are to function in the real world.
Most of history’s successful people spent little time in formal education. Alexander the Great, Julius Caesar, Aristotle, Hannibal, Abraham Lincoln, Cornelius Vanderbilt, Henry Ford, Charles Dickens. And thousands of others.
Steve Jobs, Bill Gates and Mark Zuckerberg dropped out of college. But today, big employers want you to have a college degree. Especially the biggest employer of all: the government.
Heck, today Jesus of Nazareth could apply for a job as a social worker in any town in the US. He wouldn’t get it. He didn’t have a diploma. Socrates could offer to teach a class in philosophy; almost every university would turn him down.
‘Where’s your PhD?’ they’d ask. Archimedes, the greatest engineering genius of all time, wouldn’t be allowed to design a county storm drain.
What kind of a system wastes strong backs and ignores strong minds?
More to come…
for Markets and Money
From the Archives…
When Nobody is Responsible for Your Retirement
23-05-2014 – Nick Hubble