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Wisdom of others: best books I read in 2016

Note that these are books I read in 2016, not necessarily those that were published in 2016.

Wealth of Humans – Ryan Avent

A great overview of the major trends that will affect employment, wages, and politics over the coming decades. This book significantly increased my belief that wage subsidies may be a key policy for increasing individual meaning and societal stability as we transition to the digital age. I reviewed the book here.

The Sovereign Individual: Mastering the Transition to the Information Age – James Dale Davidson and Lord William Rees-Mogg

This books wins the award for “highest authorial confidence in opinions I disagree with” – yet it made me think a lot, and I value books for the thoughts they generate just as much as the claims that are made.

The Age of Em: Work, Love and Life when Robots Rule the Earth – Robin Hanson

A fascinating book of predictions based on the idea of (1) applying social science literature to (2) hard science trends to (3) try to predict the future. I reviewed the book here.

Blood Oil: Tyrants, Violence, and the Rules that Run the World -Leif Wenar

Wenar’s argument – that we should not buy oil and minerals from states where the people have not given their assent for the sale – seems morally correct and politically impossible, for now. But the seeds of change often begin with clear arguments. Hopefully Wenar will have influence over the coming decades.

The Scapegoat – Rene Girard

Girard, a Christian, makes the argument that profoundness of Jesus’ death stems from the fact that it marks a historical shift in empathy: instead of siding with the mob that kills the outsider, with Jesus we side with the outsider.

I found this to be a compelling and beautiful argument. It also supports my belief that the origins of Christianity and Buddhism are intertwined with the transition from hunter and gather to agricultural societies. In a hunter and gather society, the group is everything. In agricultural societies, high degrees of inequality create more within group class based conflict, which opens up space for spiritual traditions based on poverty / outsiders / individual suffering / etc.

A People’s History of the United States – Howard Zinn

I’d never read it before. I’m only 25% finished as it’s so brutal to read. But it adds important context to the tales we’ve been told.

The Spoils of War: Greed, Power, and the Conflicts That Made Our Greatest PresidentsBruce Bueno de Mesquita, Alastair Smith

A good company on to Zinn. I didn’t agree with everything in this book but I like the framework: analyzing presidential war time decisions based on personal desires and psychology rather than simply national interest. I found the arguments about the Revolutionary War to be most compelling (war fueled in part by desire for territorial expansion and land owner wealth accumulation). Also right notes that we give too much status to war time presidents and not enough status to economic growth / peace presidents.

The Attention Merchants: The Epic Scramble to Get Inside Our Heads – Tim Wu

Wu makes a strong argument that “fake news” is a structural problem with deep historical roots: so long as advertisements drive revenues for media, we’ll always have problems with the consequences of fighting for eyeballs.

The Populist Explosion: How the Great Recession Transformed American and European Politics – Judis

Most interesting takeaway: leftist populist movements tend to involve two groups (the people vs. the elite) while right wing populist movements tend to involve three groups (the people vs. the elite + an out group).

The Last Days of Night: A Novel – Graham Moore

A great historical fiction novel about the corporate wars to win the race of making money off the electrification of America.

Hillbilly Elegy: A Memoir of a Family and Culture in Crisis – J.D. Vance

Made me think deeper about the historical perseverance of culture.

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World – Ruchir Sharma

Re-enforced the power of creating frameworks that combine the right metrics with psycho / social / cultural analysis. You need both to do diligence on countries or companies or people.

Younger Next Year: A Guide to Living Like 50 Until You’re 80 and Beyond – Chris Cowley and Henry Lodge

Ignore the occasional off-putting sexism and you’ll get great advice (I think). I have 100% adopted the physical routine but am still struggling with the dietary routine.

Good Profit: How Creating Value for Others Built One of the World’s Most Successful Companies – Charles Koch

Whatever you think of Koch politics, this is an insightful read on how a founder’s philosophy, psychology, and personal values infuse a company, for better or for worse.

Miracle Man – William Leibowitz

A fun read!

 

Here’s a better framework for thinking about Trump

As I’m reading anti-Trump and pro-Trump commentary, I’m finding very few pieces that fully explore the different possibilities of a Trump presidency.

So I tried to create a graph to chart what I think are three dominant considerations we should be using to understand the president elect.

A Framework for Understanding the President Elect 

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This framework captures 3 primary spectra:

Social Liberalism: Does a leader have respect for people of all races, gender, sexuality, religion, and places of birth?

Economics: Does a leader lean more toward populist economics (which often involves trade protectionism and anti-immigration stances) or globalist economics (which generally leans towards free trade and more immigration)?

Rule of Law: Does a leader behave within the established norms of domestic democracy and international rule of law, or does she lead by greatly damaging democratic institutions and grossly violating international law?

To chart some historical examples, I spent a few minutes trying to plot the last few American presidents and Hitler. I was just aiming to be directionally correct but am in no way trying to argue that I plotted these perfectly.

Each Variable is Very Important, But I Think Rule of Law is Probably Most Important

You could make reasonable arguments for each variable being the most important consideration.

If I had to argue for social liberalism, I’d say that even someone who works within the rule of law can do terrible harm to minority populations.

If I had to argue for economics, I’d say that someone who wrecks the international economic system could unleash untold suffering on the poor of the world.

In arguing for rule of law, I’m mostly arguing from this recent historical fact that so many of the world’s major mass deaths have been caused by dictators, such as Hitler, Mao and Stalin.

This graph is illustrative:

dictators

I’d need to think harder before having stronger opinions on the relative importance of each variable.

The only thing I am confident in is that they’re all important.

When to Build Bridges, When to Join the Resistance 

I think both Trump and Clinton supporters have reasonable grievances about the world.

I don’t think that it’s in our country’s best long-term interest for each side to: (1) argue loudly about their legitimate grievances (2) not listen to the other side’s legitimate grievances and (3) not differentiate between policy differences and threats to the survival of the nation.

I think economics and immigration are policy differences.

I think respect for rule of law is an issue that gets at the survival of our nation.

And I think social liberalism sits between the two, in that it determines who receives the full benefit of the rule of law within our country, which in its most severe form can threaten the survival of our nation (slavery) but in other cases can be solved through the political process (gay marriage).

I think it’s worth trying to build bridges around policy and less severe forms of social illiberalism.

I think it’s worth considering more radical forms of resistance in cases of major threats to the rule of law and severe cases of social illiberalism.

In Sum

Our country is deeply divided about many issues.

It’s important to tease out the differences between these issues, both to understand ourselves and to understand the president elect.

I know that this is a rather unemotional way of trying to understand issues riven with deep emotions.

I’ve felt a lot over the past week – it’s been especially hard to hear stories of children in our schools who don’t feel safe – and I’ll continue to listen to these emotions.

But I also want to try and understand the way forward, and, for me, frameworks help.

Book Review: The Wealth of Humans

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I just finished Ryan Avent’s The Wealth of Humans: Work, Power, and Status in the Twenty-First Century.

Summary: Economic Disruptions Require New Social Contracts, which can be a Bloody Process 

Ryan’s primary argument is as follows:

1. Periods of rapid technological innovation usually lead to increased prosperity, but the transition can be very disruptive to the existing social and economic order.

2. During these periods of disruption, workers, the economic elite, and those in governmental power have to create the social contract will be for the new order. This is a very difficult process that involves a lot of trial and error.

3. The last time this happened was after the industrial revolution, where numerous wars and revolutions eventually led to a few dominant orders: capitalism and the welfare state (in the West, South and Central America, and parts of the East), socialist dictatorship (in China), and resource based dictatorships (primarily in the Middle East). Of these different variations, capitalism + the welfare state have proven most successful.

4. The digital revolution, which is being driven by continuing gains in computing power, will requite a new social order, especially if this revolution leads to massive surpluses of labor.

5. Creating a new social contact for this age could be just as bloody – or bloodier – than the last go around (WWI, WWII, Mao, the Cold War, etc.).

Reflection #1: Time Between Disruptions is Decreasing, Power of Weapons is Increasing 

I generally agree with Ryan’s argument. One additional issue to consider is that the time between economic singularities is decreasing. It took us a very, very longtime to get from hunter gathers to farmers, and a very longtime to get from farming to the industrial revolution.

It’s barely taken us a 150 year to get from the industrial revolution to the computing revolution.

And it’s likely that the computing revolution will seed another revolution (perhaps general artificial intelligence) in another 50-100 years – and who knows what next economic singularity will spring from superior artificial intelligence…

Additionally, technological advancement increases the power and scope of our weapons. We will likely continue to build new weapons that can wipe out humanity, such as synthetic viruses.

In short, the time between the rolls of the dice will decrease, while our odds of losing any given die roll may increase.

One way to reduce the odds of losing is to disperse ourselves and / or our decendents amongst the cosmos in order to decrease the fragility of single planet living.

Reflection #2: A Minor Guess of How to Ease Into the Next Social Order

The more I puzzle over the accelerating impacts of the digital revolution, the more I come back to wage subsidies as the best tool we have for stumbling our way into the next social order.

While universal basic incomes might at some time be warranted, this will be incredibly expensive (given current productivity) and we don’t yet know how to structure a modern society where many people simply don’t work.

Wage subsidies, on the other hand: (1) maintain the connection between work and income (2) lead to less economic distortion, especially compared to minimum wage raises (3) can be raised over time to maintain a sense of economic progress, and (4) help avoid an economy where purchasing power (and presumably social power) consolidates with the top 10%.

Reflection #3: What is Inflationary? What is Deflationary?

Over the past few decades, goods have faced deflationary pressures (most things you buy for day-to-day uses are cheaper now).

Education and healthcare, on the other hand, have been subject to inflationary pressures (they cost more than they used to).

From a pure material progress standpoint, a deflationary future means that wage subsidies might not be necessary to keep improving welfare.

However, if healthcare, housing, and education continue to eat up budgets, people will need higher wages to keep up, especially those that don’t receive government subsidies in these areas.

Lastly, it’s possible that even if purchasing power increases, if income inequality is still increasing, social unrest could still be a major issue.

All this is to say: it’s worth looking at both income and expense.

Reflection #4: Consider Yourself, Consider the Monkey, Consider the Dog 

To the extent humans survive the new social order that comes after an artificial intelligence singularity, it’s worth considering what this existence might be like.

Dogs, for example, have done quite well during the era of human dominance. Specifically, they were bred to be happier.

Dogs have also been provided a universal basic income in the form of shelter, food, and treats.

I often struggle with the gap between what I believe to be the best version of myself and the actual reality of the current version of myself. I sometimes get depressed by the lack of progress I’m making.

The fact is that it’s incredibly difficult to become an even better person once you’ve eaten up the low-hanging fruit of adopting classical liberal beliefs and not murdering your fellow humans.

So it’s worth noting that humans (perhaps?) have created the best version of dogs.

Perhaps our descendants will do the same for us, especially if we are able to bring value to whatever is they are seeking in life. Interestingly enough, more intelligent primates have not faired as well as dogs and cats. So don’t assume being #2 on the intelligence pecking order means you’ll be ok.

This may all sound crazy, but it seems extremely unlikely that humans are the endpoint of evolution. So it’s worth considering – what comes next?

Charter Schools Get Their Mojo Back

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It’s been a tough summer for charter schools.

From John Oliver to the NAACP to Elizabeth Warren, there’s been a lot of unfortunate takedowns.

And while these criticisms should not be ignored, they should also not be viewed as the final etchings on a tombstone – especially when the best of the charter school movement is delivering amazing victories across the country.

Mojo Moment #1: A Quarter Billion to Scale 

Elizabeth Warren aside, it’s worth remembering that a Democratic president (Bill Clinton) started the federal charter school program and a bipartisan majority in congress has continued to expand the program to this year’s current $250 million allocation.

See here for the winners.

In a time of federal dysfunction, it’s heartening to see the federal government at its best: investing in  educators to launch amazing new schools.

Mojo Moment #2: 50 Million to Build the Future of Schooling

The XQ prize was just announced and half of the ten winners were charter schools.

Of late, it has been common to criticize charter for failing to innovate.

Well, how about: a school developing virtually reality courses as a way to reinvent instruction; a mobile school to serve homeless students wherever they might be; and a school aiming to build a tech platform that could be the operating system for thousands of schools across the country?

Time will tell if these innovations can scale, but the breadth of their ambition is inspiring.

Mojo Moment #3: Thousands Rally for 100,000 More Charter Seats

Thousands of families and educators, joined by special guest Common, marched in New York City to support the doubling of the charter sector from 100,000 to 200,000 students.

I wish that those who criticize charters would grapple with the reality that families who are forced to send their children to failing public schools are marching in the streets for more high-quality charter schools.

With these rallies as a backdrop, calling for a moratorium on charter schools seems out of touch at best and malevolent at worst.

Government and civic leaders should be serving, not denying, families in need.

Scale, Innovation, Demand

When you’re growing great schools, reinventing what school can be, and thousands of families are asking for more – it’s worth taking some time to feel the wind at your back.

And it’s worth reminding yourself, that, to date, charter quality and charter market share have only moved in one direction: up.

Elon Musk vs. the Environmentalists – Some Lessons

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One of the core values of our team is: we face and solve brutal realities.

Another on of our values is: we ask why. 

Recently, at a team retreat, we read and discussed Musk’s biography. It is well worth reading.

In reading the book – and reflecting on our values – I was struck by how Musk differs from many environmentalists.

Facing the Brutal Reality of Climate Change

Both Musk and the environmentalists care about the future of humanity.

Both Musk and environmentalists believe that humanity is at-risk due to human induced climate change.

In this sense: each has faced the brutal reality of the dangers of climate change.

Because of this brutal reality, environmentalists are doing important policy and conservation work.

Because of this brutal reality, Musk launched Solar City and Tesla.

Facing the Brutal Reality of Single Planetary Existence 

But Musk, in considering the threat of environmental disaster, did not stop asking “why” when it comes to the risk of human extinction.

Rather than being satisfied with the (true) morality tale of humans destroying the planet; he kept on asking why humans were so exposed to environmental collapse on Earth in the first place.

The answer is of course obvious: Earth is the only planet we live on. As it goes, so do we.

In terms of human continuity, it is very fragile to only live on one planet. Ultimately, even natural environmental shifts (volcano explosion, meteor, etc.) can destroy humanity. Musk realized this was a major problem that many environmentalists did not seem to be working on.

Yes, slowing human made climate change is important, but it is only a stop-gap solution. Leaving Earth is the more sustainable solution.

Completing this logic pathway (of asking why humanity is truly at risk) only requires the knowledge one might pick up in high school.

Ultimately, getting  down to the root solutions is as much as about mental habits as it is about knowledge: facing brutal realities, continuing to ask “why,” having the boldness of vision to put forth a solution – this is what is needed…. as well as having the operational capacity to make a good attempt to realize this vision.

It is rare that all these qualities sit in one person. This is what makes Musk so special.

And it is why we have Space X.

Our Work 

I’d like to think that some of our greatest successes in New Orleans were because we faced brutal realities and we asked “why” a lot.

Some of our biggest failures likely came from a failure to live out these two values.

When it comes to facing brutal realities, I find the following to be of use: soberly analyzing existing performance data; reading the criticisms of thoughtful people in other tribes; taking the time to quantitatively role forward your expected impact over 10-20 years.

When it comes to asking “why,” I find the following to be useful: sitting on potential solutions before acting on them; setting-up a culture and process for rigorous team questioning; having a board of directors that constantly questions your work; reading broadly to build-up false solution pattern recognition.

 

The Current Brutal Reality of Education Reform and Wage Growth

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Going from 16K to 18K in Annual Wages 

Last week, I did a post on Fryer and Debbie’s excellent new study on the Texas charter sector.

I emailed the authors about my hypothesis that the growth of high-quality charters – even if they aren’t that much better than average traditional schools – could still be of great value if these new charters displaced chronically failing schools.

Roland was kind enough to respond but pushed that even if my hypothesis is true, the story still might be a depressing one.

His point: the numbers from his study indicate that even if we replaced all these failing schools with high-performing charters, we’re still only talking about ~1-2K in extra earnings per year for these students.

Given that many of these students end up lower income brackets, this might mean going from 16K to 18K a year in annual salary. Hardly game changing in terms of life outcomes – and surely not a ticket to the middle class.

Confronting this Potential Reality

When a study tells you what you don’t want to hear, the first reaction is often to not deal with it (in some ways I did this in my previous post).

So everyone in education reform needs to deal with this potential reality: there is some possibility that the best that education reform has to offer can only, on average, move a student from 16K to 18K a year.

Of course, this is only one study of one state. We don’t yet know if these numbers will hold under different contexts, methodologies, or timeframes.

But, at the very least, your belief that a great school can radically increase wages should be a little lower after reading this study.

Other Considerations

I’m still mulling this over, but in conversations with Roland and folks I work with, certain ideas bubbled up:

The data doesn’t capture recent improvements: A lot of the best charters have only really started focusing on college and career over the past 5 years or so. As such, the students who received the full suite of redesigned high schools, counseling, and career support aren’t represented in this study. To the extent you believe the best charters are problem solving machines, you might believe this to be true.

The work is generational: Perhaps reformed schools can only, on average, push students who would have been in deep poverty to achieve average poverty / lower middle-class status. And perhaps their children, who will grow up in better educated environments, will the be ones  to more fully make it into the middle class. But this story could be unwound through raised expectations: if we told kids they were going to make it to the middle class, and they don’t, how will they react?

Colleges are the bottleneck: Perhaps these real gains in learning are being wasted by ineffective two year and four year colleges – and that without higher education reform we won’t be able to translate K-12 gains into wage increases.

Society is tough: Just because you’re better educated doesn’t mean you can overcome racism, lack of social capital, and an over-reliance on signaling.

More interventions are needed: Great schools can’t solve everything; interventions that work on family poverty, health, and parenting are needed for schools to really move kids as far as they need to be moved.

The schools aren’t really that good: A bunch of teaching to the test just jacks up crystallized knowledge but doesn’t really give kids the human capital qualities they need to succeed in the workforce.

What Do you Do in the Face of Ambiguity?

Leaders need to make hard decisions in the face of incomplete data.

Often times, this means relying on some combination of probabilistic thinking, intuition, ideology, and philosophy.

But, at some point, you need to walk away if the data is telling you what you’re doing is not working.

I don’t think one study is enough to walk away from the promise of urban charter schools, especially since they’ve achieved so much on less penultimate markers.  I think there’s a lot more experimentation and research that needs to be done to help us understand if we can translate academic gains into wage growth.

But it’s worth thinking about when you would walk away.

Because if there is no point at which you’d walk away, then what do you really stand for?

An Alternative Interpretation of the Fryer / Dobbie Texas Charter School Study

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Roland Fryer and Will Dobbie just published an excellent study on the Texas charter school sector.

But it’s unclear to me that they captured a very important implication of their research.

I. Study Overview

The study found that charter schools in Texas, on average, have no impact on test scores and a slightly negative impact on earnings.

More interestingly, the study found that No Excuses charter schools increase test scores but only have a small and statistically insignificant impact on earnings.

Their paper ends with this cautionary statement:

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II. Walking Through Low Effect Size and High Effect Size Schools 

The famous Anna Karena quote goes something like this: “Happy families are all alike; every unhappy family is unhappy in its own way.”

I think the opposite is true of schools.

When I visit low effect size schools, I am often saddened by the level of dysfunction. Students walk the halls aimlessly, teachers seem woefully unprepared for working in a low-income environment, and the principal generally spends her day putting out fires.

When I visit high effect size schools, I’m often struck by how different they are. While most hit the basics of a calm culture and thoughtful instruction, they vary greatly in atmosphere, curriculum, and staffing models – as well as the overall student experience. A Summit school is very different than a Collegiate Academies school, despite both achieving high effects. Even No Excuses schools can feel fairly different from each other, though they do tend to gravitate around some core practices (that Fryer has helped illuminate).

I also think I would struggle mightily in a blind walk through of .1 and .2 effect size schools; it is highly unlikely I would be able to tell you which school has which effect.

So while it’s easy to identify schools that are a total mess, it’s a little difficult to tease out what’s going well in non-dysfuctional schools, as well as to distinguish between high-performing and very-high-performing schools.

III. Bad Schools Have Bad Effects on Earnings, Good Schools Have Neutral Effects on Earnings

I found this to be the most interesting chart in the study:

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What you see here is that going from (-.2) to (0) effect really matters for earnings. This is indicated by the rising slope in the bottom left quadrant.

Interestingly enough, once you hit (0) effect, going to (.2) effect has little effect on earnings. This is indicated by the relatively flat slope in the the bottom right quadrant.

In short, getting rid of bad schools could have a major effect on the earnings of graduates in an education system (assuming our economy is not a zero sum signaling game).

In a sense, this fits my experiences in spending time in schools. It’s very easy to see how a totally dysfunctional environment could negatively impact students, whereas it’s a little more difficult to tease out the additional impact on students once the basics are in place.

IV. Portfolio Management: What Happens When Charter Schools Grow?

In a world where states and districts are managing their portfolio of schools, the growth of functional schools will be accompanied by the phasing out of dysfunctional schools.

In the best possible world, the growth of new effective charter schools will be accompanied with a reduction in under-performing traditional and charter schools.

Overtime, a system can potentially rid itself of failing schools.

This is what happened in New Orleans.

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While the above analysis is more weighted toward absolute scores (rather than effect sizes), my hunch is that the story would stand with effect sizes as well (I have not run this data yet).

I think much of New Orleans’ gains were driven by the phasing out of failing schools.

It is much less clear to me that schools in New Orleans, to date, have figured out to crack the code of creating schools that are radically superior to your average functioning traditional school.

Hopefully they will.

V. No Excuses Charter Schools May Allow Us to Eliminate Failing Schools and Raise the Aggregate Earnings of Low-Income Students in the United States 

So another way to interpret this study is that the growth of No Excuses charter schools could be the key to eliminating failing schools and raising wages of low-income students who would have otherwise have attended failing schools.

Two things would have to hold true for this to be the case: (1) government action or family choice lead to the phasing out of failing schools and (2) No Excuses schools can maintain their neutral effects on earnings even if they enroll the most challenging students from the phased out failing schools.

In other words, for now, the importance of charter school growth might be much more directly tied to eliminating failing schools rather than vastly outperforming functional district schools.

If this is right, No Excuses charter schools might still very well be the most important education reform of the past quarter century.