I came across this little piece today on my hard drive. I have meant to work on it for some time. I think I first wrote about it in 2009, perhaps 2010. I re-read it and am sad to say it remains valid.
Hedge funds and the Economics of Grades (2009)
I hit upon a new ‘economic grade’ term this afternoon in class. It began with a student asking if there were going to be any other projects than the term paper. I replied that I hadn’t thought about it and asked why the need to get another project mark. “Oh, well, its just that I am really good at projects.” she said. I then said, “Your paper should be a good read then.” To which she replied, “Probably not and that’s why I want to do another project like we did last year with puppets. I got a really good mark for that and it was fun.” “Ahhh,” I said, “It’s just like the new unit on economics we start tomorrow. “You want a hedge fund! Do you know what that is?”
There were blank stares and shaking heads around the room.
“It’s when you make investments, like when you do your homework, in order to gain marks. You study for tests to help you do better in the market of grades. Some days if you have two things to do you will decide which will give you the best marks and just do the one that gives the highest and forget the lowest – that is cost benefit analysis. Some other days you will have two different pieces of homework from different subjects and you’ll use cost benefit analysis again and comparative advantage (which subject you are best at and get the easiest and the highest marks for) to help you decide which to apply most or least effort to in order to maximise your marks and overall grade for the least amount of effort. And sometimes teachers give you grades just for showing up, or for putting your name on a paper, or for good behavior. These are welfare grades, marks available to those who can’t, or won’t, get good grades any other way. With me so far?“
Then there were hesitant nods sprinkled throughout the room. I went on…
“Well, what you want now is easy extra marks for an extra project to add to your over all mark, right?”
Nods all over this time!
“This is to ensure that in case you do not acquire as much grades as you had hoped in the regular investment of the term paper, in the same way that if your money investments tank like they have over the past 6 months, you want to have a hedge fund, an extra project, where you can get extra easy ‘for sure’ marks to make up for the possible shortfall in grades earnings on the term paper so the hit, or loss, won’t be as bad. Does this about sum up what you want?”
Guilty nods all around – I laughed like crazy! They must have thought me a mad economist!
“NO!“ I emphatically said to them.
“So,” I said as I went on, “to continue this line of thinking…if the worst happens and your brains fall out and you get the paper wrong, do all the wrong format, get all the wrong information and poorly write it up and then fail all your tests, because you studied all the wrong material or didn’t study at all, and skipped all my classes from here to the end of June all because you hoped your extra project ‘sure thing’ hedge fund would come to your rescue and fill the grade void. But, surprise, surprise, you still end up failing. In economics that’s called moral hazard where you are responsible for the outcome of your decisions, you could lose your invested grades or your invested money. That being so, you probably try not to make these bad decisions right?”
Nods all around.
“Okay, but, what if you were so confident and went right ahead and made these bad decisions anyway, would you expect a Principal’s bailout for your bad decisions so you could at least get 50%, your high school diploma and get a half decent job even though you screwed it all up? And you are walking the stage at grad because of this bailout, feeling big and important, and walk with the others who worked hard and risked carefully? Would they think you deserved it? Would they think that their own work has been cheapened by this?”
They were shocked at my inferences to their morality even though there were a few who very vigorously nodded affirmatively, the ones who made the right decisions, sacrificed, worked hard and rightly earned their grades and diploma.
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Later I analysed this further…
It had all made me laugh like crazy BUT it also made me see that perhaps this pervasive form of ‘Let the market decide’ philosophy in our society over the past 30 years still requires the hope and glimmer of humanism and a socialistic way out of the moral dilemma of personal responsibility for everything one does, especially when it turns out badly. People who screw up hope to receive clemency from the rest of us, and we generally have done so leading to the expectation of this occurring and the negation of moral hazard as a natural consequence of poor decision making.
This all melds quite nicely with cost benefit analysis, comparative advantage, and welfare grades. Its no wonder our kids are such good consumers of education. They don’t learn much, and I don’t mean that in a negative sense – they REALLY don’t learn much as electronic devices have all the content required, but they sure consume, consume and consume some more. For example, I ran a quick test in my grade 12 class and asked quickly of random students what mark they got in various subjects in grade 9. Most knew in an instant. I then asked who was the first Prime Minister, some answered, most didn’t. Who was the second? Who was the one before the current one? I asked questions relating to their grade 9 curriculum. They were stumped. The content is secondary to the grade and so what was learned as content was only temporary, needed for only as long as it took to write the final exam, the mark was the dividend and of real value and something to be remembered. It somewhat goes to prove that they go to school for the marks economy, not for the content involved. What IS important is the process of acquiring grades, the how to learn, the how to gain grades, takes precedence over what was learned, the dreaded content. The kids do know how to DO process, they look toward leaders (teachers mostly) to tell them what to do, blast through worksheets or assignment questions from the book, usually by just copying and pasting the answer without much deep thinking or struggle. Indeed, there is no struggle on their part, the information as facts is given to them, the questions to think about as well and in many cases the answers partially uncovered to make it easier for them to ‘discover’. And to make matters worse students were given grades at every step, leading them in the end to demand the grade no matter what. This leads to the comments of the knowledge based educated people, “Today’s kids don’t know anything, and if left alone to figure it out just sit there until someone shows them, and still they expect to get paid for the time they spent unproductively just sitting there.”
The notion of education as a ‘business’ with the parents as ‘clients’ and their children as the ‘widgets’ to be buffed, shined and pushed out the door ready for the real world has done mighty damage to our society as well as the expectations of parents and students. Teachers are constantly viewed as industrial workers, not the highly educated and dedicated people that they are. Principals of schools are no longer master teachers but rather building and personnel managers with responsibilities not of fostering an environment of good teaching and learning but rather of efficiency and accountability. School based management with ever shrinking funding leads to stresses and strains on a public social institution that has the same expectations as a private business. Public institutions cannot be held to the same standard as a private business. In fact, the public institution, particularly that of public education, has a higher moral and ethical standard than that of private business and to have brought it down to that same level has led to no end of problems. It is the greatest error and calamity to have hit public education since its inception and nothing will be better, not student achievement nor teacher practice, until this is finally understood and dealt with.