Mimsy Were the Borogoves

Editorials: Where I rant to the wall about politics. And sometimes the wall rants back.

Bill Gates’s education

Jerry Stratton, January 20, 2016

Equality Donuts: Full income equality: coffee and donuts for everyone!; Great Depression; income mobility; income inequality

Remember the days when going out looking for a job meant you might miss the call from another potential employer? If you were born after the eighties, you probably don’t, because you carried your phone with you. You are richer, and more employable, than previous generations, simply because you have access to technology that only rich people had before you were born.

Paul Graham has been writing lately about income inequality, and how it’s the wrong metric to measure if we want to reduce poverty. He pointedly says that the only way to reduce income inequality is to reduce the number of startups we have, which will mean reducing jobs and retarding progress—both technological and economic, that is, reducing poverty.

Here, he’s in direct opposition to most progressives, who believe that reducing income inequality is more important than reducing poverty. President Obama famously said that he would raise the capital gains tax even if lowering it would increase tax revenues, “for purposes of fairness”.

The problem is, progressives don’t like progress. The vast progress made since I was born has greatly increased economic inequality—while at the same time vastly decreasing real poverty. In order to keep government functionaries in business, we’ve had to redefine poverty as something that the poor of past eras would have considered rich.

More economic inequality clearly does not mean more poverty.

But there’s something else, more an aside, in Paul Graham’s response to Ezra Klein that is even more important.

Some measures for decreasing poverty could well increase economic inequality. For example, if you gave every child in America the same quality of education Bill Gates had, that would surely decrease poverty. But you would then create a lot of new Bill Gateses as well. These kids wouldn’t all stop short at middle class. The more ambitious ones would shoot right out the other side.

That would be a great problem to have, you say? I think so too.

If every child in America had the same education Bill Gates had, economic inequality would go up, and poverty would go way, way down.

And what education did Bill Gates—and for that matter, his rival Steve Jobs—have? Doing things. Both Bill Gates and Steve Jobs dropped out of college to do things. That’s how children learn. As Mike Rowe eloquently wrote in his post about the Dixon Ticonderoga, we have confused qualifications with competency. Wealth is grown through competency, and poverty is dispelled by wealth.

Our college years—especially now that “college years” has expanded to five, six, seven, or more years—are the most productive years when new businesses and even new ways of doing business are created. Forcing everyone to waste those years in college means that society as a whole is not as wealthy as it could be, and that means more poverty.

This has always been the case. As Thomas Sowell wrote in the indispensable Basic Economics:

The industrial revolution was not created by highly educated people but by people with practical industrial experience. The airplane was invented by a couple of bicycle mechanics who had never gone to college. Electricity and many inventions run by electricity became central parts of the modern world because of a man with only three months of formal schooling, Thomas Edison.

When Henry Ford walked from the farm where he worked all the way into Detroit, in order to look for a job, he clearly did not have the kind of money needed to manufacture millions of automobiles. Where did he get that money, then? Obviously, someone else thought enough of his ideas and abilities to risk some money backing him to get started. As he proved himself at one step after another, more and more people were willing to put their money behind him, in order to cash in on the product and the mass-production industry that he was creating.

Nor was Henry Ford unique. The Hewlett Packard hi-tech corporate empire began in a garage rented with borrowed money… This is often looked at in terms of a benefit to a fortunate few who are allowed to rise in the economic system but its more consequential impact is in allowing whole populations to rise in property by tapping the talents and insights of people scattered across a vast social spectrum.

What Paul Graham is talking about is that increasing society’s wealth is hard work: it requires years of hard work while often losing money. There is no way for a Bill Gates or a Steve Jobs to do it alone. They need investors. And investors aren’t going to be willing to lose money for ten years if they can’t make money in the subsequent ten years.

To further quote Sowell:

People who deplore greed often show a disdain for wealth. Although a disdain for wealth is often admired, only those who already have a certain amount of wealth can afford to disdain any further pursuit of it. Wealth means options and who would want fewer options? More important, from the standpoint of society as a whole, wealth is the only thing that can prevent poverty. Yet many people who claim to be concerned about poverty show remarkable little interest in how wealth is generated or which policies make it harder or easier to create more.

Emphasis added. For all that they talk about helping people, the policies of progressives—near-mandatory college education keeping adults out of the workforce and denigration of investment—seem designed to keep people in their place. When they measure income inequality, they deliberately measure “classes” of people rather than people themselves, because income inequality also means that people with low incomes almost all rise to high incomes over time.

The left wants to take that away.

In response to Can schools compete with the Internet by clicking?: Fat, drunk, and clicking is no way to go through life.

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