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Archive for the ‘brainpower’ Category

Are you a Biller or a Player?

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Excellent article by Arnold Kling and Nick Schulz. “Winner take most” markets, the upper-upper and upper-lower income gaps, and more.

Inequality and the Sergey Brin effect

…A final trend that promotes income inequality is that more Americans may be engaging in a kind of gambling behavior in their choice of occupation. They are increasingly choosing to play in winners-take-most tournaments, such as the contest to build the leading Internet search engine. For every Sergey Brin, there were thousands of software engineers who played in the search-engine contest and lost.

As best-selling writer and investor Nassim Nicholas Taleb points out in The Black Swan, safe occupations are those where the worker is paid a fixed amount per unit of time. An accountant or a nurse is not going to become extremely rich or extremely poor; they could be called “billers,” because they bill for their time. On the other hand, a professional singer or a software entrepreneur is playing in a winners-take-most tournament. The difference in talent between an international pop star and an unknown lounge singer may actually be quite small. However, the nature of these fields is that the difference in rewards can be enormous. People who choose these sorts of occupations could be called “players.”

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October 2, 2008 at 8:07 pm

Human capital

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The Role of Education Quality for Economic Growth
Eric A. Hanushek and Ludger Woessmann (http://ssrn.com/abstract=960379)

The figure shows, by country, the share of students that scored very low (< 400 rough PISA equivalent, “scientifically and mathematically illiterate”) or very high (> 600) on cognitive tests administered over the last 40 years. The results give a good indication of the quality of human capital in the country’s workforce. Click for larger version.

From the paper:

…To create our measure of quality of education employed in this study, we use a simple average of the transformed mathematics and science scores over all the available international tests in which a country participated, combining data from up to nine international testing occasions and thirty individual test point observations. This procedure of averaging performance over a forty year period is meant to proxy the educational performance of the whole labor force, because the basic objective is not to measure the quality of students but to obtain an index of the quality of the workers in a country.

If the quality of schools and skills of graduates are constant over time, this averaging is appropriate and uses the available information to obtain the most reliable estimate of quality. If on the other hand there is changing performance, this averaging will introduce measurement error of varying degrees. [i.e., younger workers in developing countries probably have better skills than indicated in the data.]

More PISA fun.

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September 30, 2008 at 7:52 pm

Survivor: theoretical physics

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Some very interesting data here on jobs in particle theory, cosmology, string theory and gravity over the last 15 years in the US (1994 — present).

Based on these numbers and the quality of the talent pool I would guess theoretical physics is the most competitive field in academia, by a large margin. (Your luck will be much, much better in computer science, engineering, biology, …)

The average number of years between completing the PhD and first faculty job is between 5-6. That would make the typical new assistant professor about 33, and almost 40 by the time they receive tenure.

Here are the top schools for producing professors in these fields:

1. Princeton 23 (string theory rules! or ruled… or something)
2. Harvard 18
3. Berkeley 16

This is over 15 years, so that means even at the top three schools only 1 or at most 2 PhDs from a given year typically gets a job in the US. The US is by far the most competitive market. If you follow the link you will see that the list of PhD institutions of US faculty members is truly international, including Tokyo, Berlin, Moscow, etc. (Note I think the jobs data also includes positions at Canadian research universities.)

The field is very much dominated by the top departments; the next most successful include MIT, Stanford, Caltech, Chicago, etc.

Here are some well-known schools that only produced 1 professor of theoretical physics over 15 years: UCLA, UC Davis, U Illinois, U Virginia, U Arizona, Boston University, U Penn, Northwestern, Moscow State University (top university in USSR), Insitute for Nuclear Research (INR) Moscow

Here are some well-known schools that only produced 2 professors over 15 years: Ohio State, U Minnesota, Michigan State, U Colorado, Brown

Here are some well-known schools that only produced 3 professors over 15 years: Columbia, CERN, Johns Hopkins, U Maryland, Yale, Pisa SNS (Scoula Normale Superiore; the most elite university in Italy), Novisibirsk (giant physics lab in USSR)

You can see that by the time we reach 3 professors produced over 15 years we are talking about very, very good physics departments. Even many of the schools in the 1 and 2 category are extremely good. These schools have all hired multiple professors over 15 years, but the people hired tend to have been produced by the very top departments. The flow is from the top down.

This dataset describes a very big talent pool — I would guess that a top 50 department (in the world) produces 3-5 PhDs a year in theoretical physics. If most of them only place a student every 5 years or so, that means the majority of their students end up doing something else!

How many professors do you think are / were straight with their PhD students about the odds of survival?

I only knew one professor at Berkeley who had kept records and knew the odds. One day in the theory lounge at LBNL Mahiko Suzuki (PhD, University of Tokyo) told me and some other shocked grad students and postdocs that about 1 in 4 theory PhDs from Berkeley would get permanent positions. His estimate was remarkably accurate.

How many professors do you think had / have a serious discussion with their students about alternative career paths?

How many have even a vague understanding of what the vast majority of their former students do in finance, silicon valley, …?

Related posts: A tale of two geeks , Out on the tail

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September 24, 2008 at 4:17 pm

Academic trends in pictures

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From GNXP, some beautiful graphs which depict the rise and fall of certain academic fads. My wife is a professor in the humanities (she did her graduate work at Berkeley in comp lit during the height of “theory”), and she got a big kick out of these!

Judith Butler, your 15 minutes are over 🙂 (Bad academic writing awards; see below figures for sample.)

Certain higher dimensional theories of fundamental physics might be next 😉

I searched the archives of JSTOR, which houses a cornucopia of academic journals, for certain keywords that appear in the full text of an article or review (since sometimes the big ideas appear in books rather than journals). This provides an estimate of how popular the idea is — not only the true believers, but their opponents too, will use the term. Once no one believes it anymore, then the adherents, opponents, and neutral spectators will have less occasion to use the term. I excluded data from 2003 onward because most JSTOR journals don’t deposit their articles in JSTOR until 3 to 5 years after the original publication. Still, most of the declines are visible even as of 2002.

No, this is not a joke — at least as far as I know.

Professor Butler’s first-prize sentence appears in “Further Reflections on the Conversations of Our Time,” an article in the scholarly journal Diacritics (1997):

The move from a structuralist account in which capital is understood to structure social relations in relatively homologous ways to a view of hegemony in which power relations are subject to repetition, convergence, and rearticulation brought the question of temporality into the thinking of structure, and marked a shift from a form of Althusserian theory that takes structural totalities as theoretical objects to one in which the insights into the contingent possibility of structure inaugurate a renewed conception of hegemony as bound up with the contingent sites and strategies of the rearticulation of power.

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September 23, 2008 at 4:04 am

The professor called the shot

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It has been clear for a while that, unless the home price bubble were to miraculously stabilize in mid collapse, the US government itself would have to socialize the entire problem in order to solve it.

It looks like Ben Bernanke (AB Harvard, PhD MIT, Professor at Princeton) made the call. Paulson is no slouch (AB Dartmouth, MBA Harvard, CEO and Chairman of Goldman Sachs), but when the biggest financial decision of our generation was made, the geeky PhD told the Harvard MBA what to do.

NYTimes: The ad hoc approach Mr. Bernanke and Mr. Paulson had been trying was no longer enough.

Talking into the speaker phone on a coffee table in his office, Mr. Bernanke told Mr. Paulson that it was time to stop treating the symptoms by bailing out distressed companies and instead start attacking the root problem with a comprehensive strategy.

Congress would have to sign off, and it would fall to Mr. Paulson, as the envoy of the executive branch, to take the lead.

Mr. Paulson understood.

…“Going back a long time, maybe a year ago, Ben, as a world-class economist, said to me, when you look at the housing bubble and the correction, if the price decline was significant enough,” the only solution might be a large-scale government intervention, Mr. Paulson said. “He talked about what had happened when there had been other situations historically. And basically he said in his view the time might ultimately come when something like this was necessary.

Mr. Paulson said he agreed but hoped it would not come to that. “I knew he was right theoretically,” he said. “But I also had, and we both did, some hope that, with all the liquidity out there from investors, that after a certain decline that we would reach a bottom.”

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September 20, 2008 at 7:10 pm

Carly on Palin

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I’m not a big fan of Carly Fiorina, but she’s at least an experienced CEO who knows what a meritocracy of ability is about. She’s also one of McCains key economic advisors. Here’s what she said about Palin yesterday during a radio interview:

Do you think she [Palin] has the experience to run a major company like Hewlett-Packard?”

“No, I don’t,” Ms. Fiorina said.

I said there’s no way she could run Goldman, and I agree there is no way she could run HP. But apparently she’s good enough to run the country.

I can’t imagine how McCain, Palin and their economic advisors (among them Fiorina) would fare in dealing with the current mortgage problems. Bush is very lucky his last Treasury Secretary is not a dud like the first two. Thanks, Goldman!

Common incorrect belief: it doesn’t matter who the president is, or what his IQ is, he’ll just bring in the right advisors. Now replace the word “president” with CEO (or Lab Director or Head Trader or Commander in Chief…) and tell me whether you still believe it. Smart people bring in even smarter advisors, and are better at deciding between conflicting streams of advice. As we say in science: first rate people hire first rate people. Second rate people are in danger of hiring third rate people.

…The Obama campaign could not have been more gleeful: “If John McCain’s top economic adviser doesn’t think he can run a corporation,” said Tommy Vietor, an Obama spokesman, “how on Earth can he run the largest economy in the world in the midst of a financial crisis?”

Let me clarify something: I’m not an IQ fundamentalist. There are many smart people would not make great leaders. They cannot connect with average people, lack common sense, are not pragmatic, etc. To be a great leader, one needs all of those qualities and intelligence.

The very fact that Obama was able to defeat Hilary in the primary implies that he can effectively run a big, complex organization. His silicon valley approach to fund raising was novel and wildly successful. Any of the other candidates (D or R) could have tried it, but no one else did. Does that mean Obama is a technologist? No! But he was smart enough to understand and adopt the proposal when it was brought to him by technologists! That’s why I think he has the pragmatic smarts to be a good president.

As of the spring: nearly $200 million raised from over a million donors. In February, the Obama campaign reported that 94 percent of their donations came in increments of $200 or less, versus 26 percent for Clinton and 13 percent for McCain.

To understand how Obama’s war chest has grown so rapidly, it helps to think of his Web site as an extension of the social-networking boom that has consumed Silicon Valley over the past few years. The purpose of social networking is to connect friends and share information… A precursor, Meetup.com, helped supporters of Howard Dean organize gatherings during the last Democratic primary season, but compared with today’s sites, it was a blunt instrument.

Obama’s campaign moved first. Staffers credit the candidate himself with recognizing the importance of this new tool and claim that his years as a community organizer in Chicago allowed him to see its usefulness. Another view is that he benefited greatly from encouraging a culture of innovation and lucked out in the personnel department, with his own pair of 20-something wizards. Joe Rospars, a veteran of Dean’s campaign who had gone on to found an Internet fund-raising company, signed on as Obama’s new-media director. And Chris Hughes, a co-founder of Facebook, took a sabbatical from the company and came to Chicago to work on the campaign full-time.

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September 17, 2008 at 4:41 pm

Hank in charge

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This Times article details who is running the show when it comes to the Fannie and Freddie bailout.

NYTimes: …“Bush was in charge when it was cut taxes, deregulate, have free trade, etc.,” said Representative Barney Frank, the Massachusetts Democrat and chairman of the House Financial Services Committee. “But then the old paradigm broke down, and it fell, frankly, to more serious thinkers to figure out how to cope with the current reality.”

…Mr. Paulson, a former chairman of Goldman Sachs, joined the White House in July 2006 after an intense courtship by Mr. Bush’s chief of staff, Joshua B. Bolten. He demanded clout and got it, in part because “Paulson did not need the job; the administration needed Paulson,” said Vincent R. Reinhart, a monetary economist at the American Enterprise Institute in Washington.

Mr. Reinhart says Mr. Paulson, like Mr. Bush, would ordinarily resist government intervention. “I think the economy is taking Bush and Paulson to a place where they wouldn’t go on their own,” he said. “In a crisis, you start bending principles, and Paulson bent principles.”

By relying so heavily on Mr. Paulson, Mr. Bush is doing more than bend conservative principles. He is taking himself out of public view in the one area of policy making that matters most to Americans: the economy. Mr. Wehner, Mr. Bush’s former adviser, does not see that as a problem so long as the markets stabilize. And Mr. Frank, the Democratic congressman, said Mr. Bush’s reliance on the Treasury secretary is “one of those things that, historically, will be to his credit.”

Do the people who think Sarah Palin is up to the job of President of the United States think she could have been CEO of Goldman Sachs as Paulson was? (“After all, Alaska is a lot bigger than Goldman Sachs! And, it’s closer to Russia! How much oil does Goldman have, anyway? Hey, she does have a journalism degree from U Idaho!”) Anti-elitism can only go so far…

Who has more responsibility, the President or CEO of Goldman?

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September 9, 2008 at 5:16 pm