Arnold Kling  

Learning from Experience

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Tyler Cowen invites me to add to a list of experiences that he recommends for a young economics major. His list is a good one.

One thing that I would add is that you spend several months living in a "red-state" community if you come from a "blue-state" community. (If you come from a red-state community, then just being on a college campus gives you a blue-state community experience.)

I think that working on Capitol Hill is a great way to learn the constraints on rationality and decision-making there. When people ask me how I became a libertarian, I cite my brief Senate internship in 1973 as one episode that nudged me in that direction.

Also valuable for me was working at Freddie Mac, and seeing how a large organization, in spite of being profit-driven, is filled with internal conflicts, rivalries, and biases against innovation. You can only live in fear of large corporations if you have never worked in middle management for one of them.

I think that trying to take a new idea to market, both as an entrepreneur and in the context of a large organization, taught me a great deal. Those experiences did much to shape my views about the messiness of the innovation process.

An experience that I never had which I believe would have been valuable would be serving in the military. The reality is that those of us who are highly educated exert considerable influence over the missions assigned to the military, and yet we are disconnected from the day-to-day reality of military service. That is disturbing.

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CATEGORIES: Economic Education

COMMENTS (9 to date)
Randy writes:

"You can only live in fear of large corporations if you have never worked in middle management for one of them."

Amen to that!

dearieme writes:

Arnold armed? God save us all!

Randy writes:

"The reality is that those of us who are highly educated exert considerable influence over the missions assigned to the military, and yet we are disconnected from the day-to-day reality of military service. That is disturbing."

True, but not so disturbing. The US military is a highly professional organization. Its a job - to apply force whenever and wherever it is needed. Civilians do have a tendancy to dramatize the military, but then they dramatize the police and medical people too. If we ever get into another world war kind of conflict, about a third of the population will be back on the line. The primary mission is to avoid this, and the professional military has done a pretty good job of doing so, so far.

P.S. The military has a great many highly educated people. The average NCO has at least some college, senior NCOs often have a Bachelors or Masters, its nearly impossible to make Colonel without a Masters, and PhDs are quite common in the top ranks. Nearly everyone spends months and sometimes years in leadership schools and academys, and specialists receive some of the best training in the world in their selected fields.

David writes:

Arnold, I would not say that living on a college campus gives a good idea of the blue state experience. Most of those college liberals are going to become conservatives the moment they sign their first property tax check. It's important to see how blue state voters can pay taxes, serve on city councils, worry about crime, and agonize over local economic growth and yet remain blue state voters. For that, you need to live in Portland, San Francisco, Austin, or another such place and enjoy its pleasures.

Also, let me add that I completely agree about seeing the inside of a corporation. It's important to know that the vast majority of corporate management is made of pretty typical (good) people. The desire to see evil intent behind every evil effect is especially polarizing in the case of corporations, because it leads to demonization of corporate management by those who clearly see the evil effects of corporations and to blindness to corporate misdeeds on the part of those who are personally familiar with the corporate environment and the people who work there. Corporations need to be seen as economic tools with upsides that deserve appreciation and downsides that need to be watched and moderated. That requires depersonalization, which requires appreciation of the disconnect between the intentions of individual corporate workers and the resulting behavior of the corporations where they work.

David writes:

PS: For the typical college student, going to college means hanging out with a bunch of green, ignorant, shrill 18 to 25-year olds. The only seasoned and knowledgable people they meet are manipulative authority figures who force students to spend their time on what is deemed good for them (e.g., reading books and writing papers) rather than allowing them to pursue their own interests as they see fit, because they are assumed to be irresponsible children who would do nothing but pursue animal pleasures.

You might as well have told them to read Animal Farm. If living in a blue state were really like this, everyone would move to Kansas. Young economics majors should just try living in one of the cities I mentioned above and see how they like it.

Bill writes:

My wife is a young econ major and we live in San Francisco. She is also a German citizen. She has seen enough socialist idiocy to last a lifetime. She is a libertarian, more or less.

James writes:

Re: the military, I can think of at least one way that selling six years of my life has benefitted me as an economist. My experiences there settled the issue of whether the neoclassicals or the Austrians are right about why centrally planned economies can't work.

Recall the Vienna vs. Chicago debate as to why socialism fails. According to the Chicago view, the problem is that no one has an incentive to work. The Austrians claim that even if the Trotskian "New Socialist Man" existed to overcome incentive problems, calculation problems would make planning impossible. Well, I can assure you that Trotski got this one right. If you ever want to see the NSM in action, the military is the place. Special forces types are the prototypical example, but I even saw the same thing in the truck drivers, mechanics and cooks. People would live on a steady diet of coffee and cigarettes and work 70 hours a week on a fixed salary just because they believed that they were doing good for the collective and because their fellow workers were doing the same.

My job in the military, at least officially (unofficially I turned wrenches on jets, drank coffee and cursed for a living) was to be a sort of number crunching central planner, and I did that job as conscientiously as I could. Here and there I noticed certain problems. Many of the brackets on my airplane had to be made in the base machine shop, rather than purchased from some big firm like Lockheed-Martin. The going practice was to make one each time we needed one. When I proposed saving production time by making a few dozen and warehousing them, the response I got was that storing them was too costly. I took the position that cancelling a sortie for lack of a small aluminum bracket was too costly. But since we had no price system by which to value sorties or warehouse space, we had no rational way to decide, despite the fact that everyone concerned really wanted nothing more than to do the "right thing." So the incentives were there, but the calculation problem was unavoidable.

liberty writes:

"So the incentives were there, but the calculation problem was unavoidable."

And that even though you were in an island of socialism in a sea of market -- the vast majority of prices were available via the outside world, not true in a complete socialist society.

James writes:


Yes, somewhat, although there was no external market to establish the price of a training mission for a combat aviator. For nearly everything else though, you're right.

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