David Foster

Myths of the Knowledge Society

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Continuing my retro-reading of old Forbes ASAP issues. In the October 1993 issue, Rich Karlgaard, arguing that book value is of declining importance in evaluating companies, says:

Human intelligence and intellectual resources are now any company’s most valuable assets.

(Note that word “now”…we’ll be coming back to it)

Rich quotes Walter Wriston:

Indeed, the new source of wealth is not material, it is information,knowledge applied to work to create value…A person with the skills to write a complex software program that can produce a billion dollars of revenue can walk past any customs officer in the world with nothing of ‘value’ to declare.

I think Rich Karlgaard (now publisher of Forbes) is a very smart and insightful guy. (His blog is here.) And Walter Wriston was one of the giants of banking, back when it was possible to use such a phrase without snickering. But in this case, I think they are seriously overestimating the newness of the importance of knowledge in the economy. And such overestimation has continued and increased in the years since 1993.

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The Return of the Blob

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Ever see the 1958 movie The Blob? Commenter George V, at this Neptunus Lex post, watched it during Halloween, and wrote a pretty funny comment.

In the movie, quick-thinking citizens use CO2 fire extinguishers to freeze the outer-space blob which is threatening humanity, after which the USAF flies it to the arctic and drops it on an ice floe, where it will stay forever…”As long as the Artic doesn’t melt” says Steve McQueen’s character.

Today, of course, citizens would never be allowed to react to the threat in such a direct and immediate fashion. Either OSHA or CPSIA..probably both..would object to the use of fire extinguishers in a way not specifically authorized…amateur blob-suppressors would also get in trouble with several unions which would assert blog-freezing as their exclusive territory. Not to mention EPA issues with all that CO2 release.

People would be told to leave the matter in the hands of the authorities, namely Homeland Security…which would tell Congress they needed more money if they were to be expected to add blob-fighting to their mission. Congress would still be debating the matter (especially which extinguishing/freezing agent should be used instead of CO2 and which companies get the enormous fire-extinguisher contracts) when the blob reached Washington DC.

Hatin’ on Palin

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In George MacDonald Fraser’s picaresque novel Flashman (which is set in 1839-1842), the hero (actually more of an antihero) marries the daughter of a very wealthy Scottish mill owner. This creates problems with Lord Cardigan, the commander of the fashionable regiment in which Flashman is serving–indeed, Cardigan has insisted that Flashman leave the regiment. Here’s Flashman, trying to get the decision reversed:

Just the sight of him, in his morning coat, looking as though he had been inspecting God on parade, took the wind out of me. When he demanded to know, in his coldest way, why I intruded on him, I stuttered out my question: why was he sending me out of the regiment?

“Because of your marriage, Fwashman,” says he. “You must have known very well what the consequences would be. The lady, I have no doubt, is an excellent young woman, but she is–nobody. In these circumstances your resignation is imperative.”

“But she is respectable, my lord,” I said. “I assure you she is from an excellent family; her father–”

“Owns a factory,” he cut in. “Haw-haw. It will not do. My dear sir, did you not think of your position? Of the wegiment? Could I answer, sir, if I were asked: ‘And who is Mr Fwashman’s wife’ ‘Oh, her father is a Gwasgow weaver, don’t you know?'”

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Mathematics versus The Blob

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(…and so far, the blob seems to be winning)

Here’s a New York Daily News article on mathematical ignorance among City University of New York students:

During their first math class at one of CUNY’s four-year colleges, 90% of 200 students tested couldn’t solve a simple algebra problem, the report by the CUNY Council of Math Chairs found. Only a third could convert a fraction into a decimal.

And here’s Sandra Stotsky, discussing some of the reasons for poor math performance in America’s schools:

But the president’s worthy aims (to improve math and science education–ed) won’t be reached so long as assessment experts, technology salesmen, and math educators—the professors, usually with education degrees, who teach prospective teachers of math from K12—dominate the development of the content of school curricula and determine the pedagogy used, into which they’ve brought theories lacking any evidence of success and that emphasize political and social ends, not mastery of mathematics.

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Management Advice From George Eliot

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Fancy what a game of chess would be if all the chessman had passions and intellects, more or less small and cunning; if you were not only uncertain about your adversary’s men, but a little uncertain also about your own . . . You would be especially likely to be beaten if you depended arrogantly on your mathematical imagination, and regarded your passionate pieces with contempt. Yet this imaginary chess is easy compared with a game man has to play against his fellow-men with other fellow-men for instruments.

–George Eliot, in Felix Holt, the Radical (1866)

Lots of political leaders and their academic advisors, and also more than a few business executives, fail to understand this point about the kind of “chess” that they are playing.

See also investing advice from George Eliot.