Those who have been operating the managerial levers of the financial system have failed embarassingly and massively to comprehend the processes for which they are responsible. They have loaned money avidly and recklessly to people who couldn’t pay it back. They fudged data to get loans approved and recalculated . Then they sausaged fragile figments of moneyreality into new “products” which could be sold around the world to investors eager to enjoy the surprising returns which often accompany theft, managerial incompetence, and fraud.
One result is that our hard-nurtured national assets are being sold to foreign governments, our dollar which represents a share in our whole economy is at a portentous low while shrewd investors make bets on its continued decline. Houses and cars are being repossessed, pension funds shrink like bad shirts, people even hold off buying cheeseburgers it’s that bad.
When it comes to responsibility for all this, there appears to be no one here but us spring chickens. Not only that but the overseers of the bitter debacle may lose their jobs for a month but nonetheless fill their wheelbarrows with company money and “severance” when they leave to tide them over until the next corner office becomes available. Surrealists appear to write the scripts for the drama. Stanley O’Neal was the lavishly – paid king of Merrill Lynch who – oops – mislaid about 22 billion dollars before he was shoved out the door. Sad. Shattered dreams. But he was speedily named to the Board of Directors of Alcoa! So you don’t have to worry about yet another incompetent member of an increasingly overpaid and underskilled financial ruling class.
It is always tempting to assign blame. As well as a prosecutorial responsibility, there willl be ample employment for those who try to remedy the situation, assist its victims both wealthy and poor, and review the structure which permitted its own dismal emergence.
However the situation is so expansive and so atmospherically part of the contemporary universe of work and discourse that it may be necessary or at least desirable to seek broader cultural and systemic causes – to go beyond simple and complex criminality, the cultivation of false optimism, and the sheer size of contemporary financial action.
Has this to do with the university and the educational system in general?
Yes, let me raise a simple question which may point to a partial answer. Why do students seeking certification of their competence in teaching, law, medicine, admission to virtually any higher education, get tested equally on mathematics as on everything else? SAT, GRE and LSAT and similar scores are based on a mandatory evaluation of math skills as as significant as tests of factual knowledge and intellectual skiils. Results in such math tests count for nearly as much as virtually everything else on the exams in which a person needs to perform well in order to snatch one of the glittering shares of the high pile of world money.
But Homo sapiens acquired a portfolio of skills and interests which sustained our economic and social survival in an array of trying and often dire circumstances. We carry these in our heads still. They involve the ability to communicate with others, read their behavior, know how groups work, and track the links between ideas and successful survival action. In all this, the ability to do higher and even modest mathematics could scarcely be more unimportant. We have elevated an arcane and behaviorally limited technical capacity into a robust necessity of daily accomplishment when in fact it is no such thing.
I have a French friend who runs an airline engineering company who complains that his engineers are “unable to non-optimize”, so committed are they to the technical beauty of their calculations. As a result they try to generate products that are technically perfect but difficult and costly to use, and also irritating which is almost worse. The reason he gives is that the only surefire way to success in engineering schools in France is through mathematics. Those who may have other skills, such as wondering what kind of products people might like and use, are nonetheless likely to be working for or with Masters of Math. And it is only these Masters of the Theoretical Universe who wield the higher knowledge and baffling math skills and are the only ones able to produce proofs of their correctness with ironclad certainty even if it is opaque to ordinary humans.
The same story with our banking systems. The “quants” who are good with numbers which describe the system show no particular skill or judgement in knowing the people and groups in the system. They fly by numbers and they either make investment decisions themselves or work for folks who feel as comfortable with math talk as with studying dance on a high wire. They get their way and buttressed with computers can manage phenomenal complexity and vast amounts of data. All the remarkably named investment vehicles which have had such reverses and the many banks which sold balloons called sub-prime (stinky) mortgages and pins called paying them back (real life) turned the whole army of events into structured investment vehicles which could drive anywhere and everywhere. This was especially so after receipt of benediction from the rating agencies conveniently paid by those they rate. So a stupid investment in Nevada becomes part of the portfolio of a Spanish pension fund and suddenly pin the tail on the donkey becomes the game of the day.
The recent Societe General fiasco in Paris is reported by the New York Times as “founded in a solid teaching in math and finance, the key to excellence in financial fields, and on an important hive of university-level talent.” Not only that, “..because it relies so much on computer programs and systems rather than manpower, the business is highly profitable.”
Meanwhile, the mathists carry on their work since they are the only ones who understand how the fiscal gizmos work. Were they to take away the owner’s manual, no one would be able to know in which bed their money was sleeping.
Has this to do with overestimating the importance of mathematics in the school system? I think so, because our system of educational credentials rewards folks who master technique but not necessarily judgement about its use and its meaning for human lives. Look at it coldly. You will be puzzled by whatever made our system so dependent an arcane technical skill which has proved so difficult for people wielding only judgement to supervise and guide.
Time to think and rethink arithmetic.