Saville's Shout

Feb 24, 2014

Saville’s Shout: school’s out at Google … financial advice: don’t bother …

Do you really need a university education? And should you pay for secondary school? Plus why a blind monkey could invest better than your broker.

Margot Saville — <em>Crikey</em> Sydney reporter

Margot Saville

Crikey Sydney reporter

We don't need no education. As tertiary students around the country pack their bags for O Week, parents are turning their minds to the issue of what they are actually getting for their money. Anyone who thinks the purpose of higher education is employment should read Thomas Friedman’s column in The New York Times, "How to Get a Job at Google". In it, Laszlo Bock, Google’s head of "people operations", is quoted as saying that "GPAs [grade point averages, or university results] are worthless as a criteria for hiring, and test scores are worthless ... We found that they don’t predict anything." He also notes that the "proportion of people without any college [university] education at Google has increased over time" and is now as high as 14% on some teams. Bock says the most important attribute managers are looking for is general cognitive ability, which is not the same as IQ:
"It’s the ability to process on the fly ... to pull together disparate bits of information. We assess that using structured behavioural interviews that we validate to make sure they’re predictive."
And university can be a waste of time -- and money:
"Too many colleges don’t deliver on what they promise. You generate a ton of debt, you don’t learn the most important things for your life. It’s [just] an extended adolescence."
School fees don't pay. For those of us who still have children in the school system, David Gillespie’s new book, Free Schools, is a cracker read. Gillespie, a former IT consultant and corporate lawyer, is a kind of Australian version of United States iconoclast Michael Moore, who made movies like Sicko and Bowling for Columbine. Like Moore, Gillespie takes aim at sacred cows, previously writing game-changing books about the sugar and diet industries. In this book, Gillespie has forensically analysed the education sector. Privately educated himself at one of Brisbane’s most elite schools, he and his wife calculated that sending their six children to similar schools would cost them $1.3 million in school fees, without the extras. His conclusion?
"There’s no correlation between how much you pay and the quality of the education your child is likely to receive."
The book has created a storm of controversy, of course, and for taking aim at such a commonly held belief, Gillespie may have to go into the witness-protection program, or at least avoid his school reunions. But how could you not love a book containing a comment like this:
"Australia is the only OECD country that runs three different brands of government school, and pretends that two of them are private."
He has also printed a graph entitled "Enrolments versus Money", which shows government schools have a higher level of recurrent spending (which is mainly staff salaries) than capital spending (buildings). Catholic schools and independent schools, however, spend less money on recurrent spending than capital. All the money parents spend on independent school fees isn’t "changing educational outcomes at the individual level", he said:
"Studies have consistently shown that when you adjust for the socio-economic status of the children in the systems, all three Australian systems are equally effective (or equally ineffective)."
In fact, an Organisation for Economic Co-operation and Development report released last week pointed to the fact that our education outcomes are lagging. Results from the OECD Program of International Student Assessment, which tests 15-year-olds around the world, showed the children of garbage collectors in Shanghai had better maths results than the children of Australian doctors and lawyers. Which means we should all be shipping our children off to boarding schools in China to learn maths, manners and the violin -- and wouldn’t that be a worthwhile investment? In other parenting news, a new book by US child psychiatrist Jasper Lambsharkssen -- entitled Because I’m Older Than You, Because You Have the Brain of a Squirrel, and Because I Fucking Said So: Why Being Friends With Your Kids is Dumb -- is about to released. I am buying several copies. The house always wins. As several thousand more Australians hit the dole queue next month, investment advisers will be champing at the bit to get their hands on some of those six-figure redundancies. But potential investors should tread carefully, heeding the warnings in an article entitled "The Best Investment Advice You’ll Never Get", by San Francisco magazine’s Mark Dowie. Written in 2004 but recently republished on Bill Ritholtz’s excellent blog The Big Picture, it quotes numerous investment experts saying variations of one simple concept -- "you can’t beat the market". In the article, the writer interviews a senior executive of Google just before it floated in 2004. He was so concerned about his soon-to-be-rich employees that he had organised for some eminent investment specialists to come in and give lectures on how to manage money. Stanford University’s Bill Sharpe, the 1990 Nobel Laureate economist, told the employees to put their savings into indexed funds, "which will make you just as much money (if not more) at much less cost by following the market’s natural ebb and flow". Next it was Burton Malkiel,  a professor of economics at Princeton, who thinks that a "blindfolded monkey" will, in the long run, have as much luck picking a winning investment portfolio as a professional money manager. In 1994, in his annual letter to his shareholders, Warren Buffett advised both institutional and individual investors:
"... that the best way to own common stocks is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) delivered by the great majority of investment professionals."
As the Australian government tries to water down consumer protection in the financial planning industry, it may be easier to just opt out of the system, start a self-managed super fund, and then "set and forget". Writing's on the wall. Don’t miss Sol LeWitt: Your mind is exactly at that line at the Art Gallery of NSW, which opened last week and will run until August 3. The exhibition looks at 40 years of LeWitt's practice and includes four new wall drawings, three of which will be created in Australia for the first time ...

Sol LeWitt

LeWitt’s personal art collection included 30 indigenous Australian artworks. This exhibition places his work with paintings from Emily Kam Ngwarray and Gloria Tamerre Petyarre and includes correspondence in which LeWitt describes his deep admiration for Ngwarray’s work, which were a source of inspiration.

Sol LeWitt

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13 thoughts on “Saville’s Shout: school’s out at Google … financial advice: don’t bother …

  1. Richard Pennycuick

    “Independent” schools is what private schools choose to call themselves. They’re getting money from the public purse so “independent” is a misnomer in the same league as those other lies, “free to air” television, and “Liberal” Party. Please call them private schools or religious schools, because that’s what they are.

  2. Catherine Scott

    I published an article in The Conversation about a year ago in which I reported on research I’d done using school results available on My School. The only possible conclusion I could reach was that you can’t predict the academic outcomes of any school purely on the basis of the system it belongs to (Justine Ferrara I think it was found something similar a few years ago).

    There were good bad and indifferent private, Catholic and public schools. In truth the only schools I found where children’s attainments went backwards were some very pricey private schools, however.

    I got some pretty nasty comments but I haven’t had to go into the witness protection program.

  3. Shaniq'ua Shardonn'ay

    Re: Financial advisers; we had one ring and ask where he could do a short course to become a Certified Property Valuer. He got very narkey when we pointed out that he would probably have to do at least 2 year postgrad. Says all I needed to know about the professionalism of that industry.

  4. Margot Saville

    Fascinating. Thanks for the comments.

  5. Dogs breakfast

    As an uncredentialled employee of a major university, I am forever amazed at the lack of correlation between tertiary education and intelligence, or effectiveness, or the very good term used here, ‘cognitive ability’.

    Re schooling, yes, anyone with the slightest analytical skills will know that sending your kids to a private, or independent, let’s just call it expensive, school is unquestionably the poorest investment you can make.

  6. Dom

    You didn’t cite The New Yorker but I’m pretty sure Jasper Lambsharkssen (and his book) is something they just made up.

  7. Freddy T

    The argument regarding public versus private is almost always full of emotion and anecdotal experiences. You’d need an excel spreadsheet to document all the different factors that contribute to a single students achievements. It’s all about choice and there’s nothing wrong with that. I chose my child’s school based on a multitude of factors. In my opinion class sizes were very important. My kids were in classes of 12-14 in junior school and in year12 classes of 8-12. I knew the teachers and other parents well. I was involved in my community.
    All kids deserve funding for their schooling. If I pay extra that’s my choice. I respect your choice not to.

  8. obama44

    Freddy T: Why should public money be used to subsidize private choice? Public money ought to be for public services. A school which is only open to students from households that can afford a particular fee, or that subscribe to a particular religion, is not open to the entire public. Therefore it is not providing a public service and the case for public subsidy is very weak indeed. People are free to consume a private service but they ought to pay for it entirely with their own private means.

    Everybody benefits from a well-funded public education system – including people who send their children to private schools and people who don’t have children at all. We all benefit from living in a society of mass literacy, high levels of knowledge and skill, and low levels of crime and anti-social behaviour. In the end it is the public schools, which accept all comers, that make these outcomes possible. Therefore everybody should be required to pay their full, fair share of taxes towards public schools – no refunds, no rebates.

  9. Margot Saville

    I so hope The New Yorker wasn’t pulling my leg…perhaps I’ll have to write my own version, starting with the story on the front page of the SMH today about the King’s School old boy and the will.

  10. Catherine Scott

    After I’d seen the boost for Gillespie’s book I (virtually) toddled off to Amazon and downloaded it on to my Kindle. It’s a mixed bag.

    Truly the more you know the more you see and the author’s interested amateur status shows to those of us with expertise in the area of education.

    A lot of the material he cites comes from the States and it helps to understand the background and context.

    With the unleashing of the neo-liberal dream of the market as sole model for everything and the attack on the idea let alone the reality of public services, wealthy interests came to see (and advocate for) the spending of money on public education as a waste. That money should go to them you see. Increasingly US public schools have been shut down and the right to educate kids sold off to for profit providers, many or most of whom know nothing about education and a worryingly large number of whom have turned out to be dishonest in varying degrees. The US is now in the somewhat gobsmacking situation of having many of its once public schools in the possession of a Turkish business and all the schools in that ‘chain’ now have Turkish men as principals.

    The people who thought the money for running schools should go into their pockets rightly realised that teachers, whose motives are looking after and educating kids, would object to the sale of education to those whose only interest was making money. The money men started a campaign against teachers and teachers’ unions. EDUCATION IS A MESS AND IT’S ALL TEACHERS’FAULT!

    Unfortunately it has been so successful that even people in Australia, like Gillespie, have bought it lock, stock and barrel and regard teachers and unions as the enemy.

    When Enron went belly up no-one blamed the employees, but somehow it’s acceptable to blame the employees when Australia’s education system starts to under-perform. Teachers have very little power over most of what goes on in education. The real culprits are those who have encouraged Australian society and its education system to become more unequal. There is a clear relationship between (in)equality and educational outcomes, one you can see graphed beautifully in OECD reports on education. The relationship between Australia’s increasing inequality and declining educational performance is a beautifully linear one.

    Gillespie probably doesn’t know this and relies on what he reads in the papers. He should have checked the facts about the massive fraud concerning the ‘outstanding success’ of selling off Louisiana schools to for profits before he retailed it as fact.

    So, if you want to see Australian public education sold to overseas interests (they are eyeing our ‘market’ as we speak) then go right ahead and countenance attacks on our teachers as lazy, worthless know-nothings.

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