Monday, July 24, 2017

Terra Nullius of the Mind - Anyone Up for Change?

“Pleased as we are with possession, we seem afraid to look back to the means by which it was acquired, as if fearful of some defect in our title; or at least we rest satisfied with the decision of the laws in our favour.”

Commentaries on the Laws of England (18th Ed.) Vol. 2.  1823.

King George V, King of the United Kingdom and the British Dominions and Emperor of India was the grandson of Queen Victoria.  In 1910 under his seal, the British Parliament passed a series of laws dictating the form and substance of education in Australia – laws that to this day define much of how Australian education is delivered.  This same King and Parliament, during the same period, were operating with the sublime consciousness that determined that Aboriginal children should be wards of the State justifying the kidnapping of children from their own parents.  This same King and Parliament promulgated a series of laws in which the term “Caste” and “Half-Caste” were commonplace.  To this day, the system that King George V put in place in Australia serves as the defining structure for the caste-based education system of Australia in which the elite and entitled are afforded one path to learning while the disenfranchised are ushered into trades and technical skills that don’t require “disinterested thinking” (Sir Eric Ashby, 1946).  
Portrait at Government House, Melbourne

Today, King George V is dead but his legacy is alive and well.  His Education Act 1910 (Law No. 2301 enacted 4 January 1911) put into motion what is now the Technical and Further Education (TAFE) tertiary education system in Australia.  Organized to efficiently provide the labor to extract the wealth of a land colonized under the genocidal terra nullius principle which suggested a land and resources that belonged to no one, technical education was not for the betterment of the mind or of the learner.  Rather, as with the doctrine of terra nullius, it presumed that the rank and file Australian – the common laborer – was as vacant-minded as the land they were trained to pillage.  And missing from the vast reaches of the humanity of the citizens of Australia is the equivalent to Mabo v. Queensland (1992) and Wik Peoples v. The State of Queensland (1996) – the sentinel cases that began to unravel the carnage wrought by the colonial unconsciousness. 

When enacted, the technical education mandate was to confirm basic competency for laborers to meet the proficiency standards for the tasks they to which they were to indenture their lives.  During the Depression in the 1930s, the system took on a broader social mandate as a means to deal with rampant unemployment.  In 1957, the Committee on Australian Universities warned that technical education, “may be led by a false sense of values to try its hand at producing another type, the professional engineer or technologist and so lessen its effectiveness for its own particular task.”  As recently as 1998, the Review of Higher Education Financing and Policy concluded that technical training institutions should teach “competencies and maintain the strong focus on skills and higher education should cultivate attributes.”  And with Liberal and Labor Governments from the 1970s to the present assuring the population that technical education should be seen as an equivalent alternative to higher education at the university level, each of them have failed to add substance to the diaphanous veil of caste separation implicit in the very system they allege to laud. 

For every recognition of the structural inadequacy of the educational and social engineering model, the response is to form a commission, generate a report, and then perpetuate the same social and commercial irrelevance as the preceding, equally ineffective impulse.  To read the history of technical education in Australia is to hear the echo of Charlton Ogburn’s 1957 quote misattributed by an Australian scholar to Emperor Nero’s Arbiter Gaius Petronius (AD66), “we tend to meet any new situation by reorganizing...a wonderful method it can be for creating the illusion of progress while producing inefficiency and demoralization.”  Ironically, had either the public or the government familiarized themselves with the actual writings of Petronius, they could have encountered the quite apropos admonition, “A man who is always ready to believe what is told him will never do well.” (Section 43 of Satyricon). 

What makes the emancipation of the mind as important as the reconciliation with the First Nations?  What difference would it make if serious reform were contemplated in the education framework of Australia? 

Well, let’s start and the uncomfortable reality that faces the caste system.  Australia doesn’t have – nor has it ever had – a holistically functioning economy.  From the first Dutch navigator Willem Janszoon (1606) that rocked up in Perth to the celebrated First Fleet, to the gleaming titans of today’s skylines in Brisbane, Perth, Adelaide, Melbourne, and Sydney, Australia’s terra nullius legacy has meant that its celebrated history has been that of a price taker – not a market maker.  And while we can localize, assemble, and extract with trained and qualified aplomb, there’s no part of the Australian ecosystem that fosters the ability to integrate synthetic critical thinking with foresight to play in a market leading role at transformative scale.  From mining and agriculture to financial services and defence, Australia’s default posture is to acquire and assimilate. 

But here’s the trouble with that.  Purchasers of services and technology surrogate their confidence on their suppliers.  The resident talent to approach the world through synthetic systems engineering logic and commercial industrial experience is anemic.  We can spend $150 billion in France, Germany, and the U.S. to defend ourselves against a threat manufactured by those who sell us their defences but when I discuss hydrogen gassing batteries, anti-cavitation propulsion, combined projectile land vehicle vulnerabilities, cyber security, concentration capital risks, or intelligent covaler conductive laminates, I’m met with incredulity, or worse.  In a world of competency-based training (both at the technical and university level), critical assumptions are accepted as stipulated by an anonymous other rather than independently examined or verified.  (The very gullibility Emperor Nero’s chief aestheticist warned against in the first century.)  The two largest defense procurements in Australia suffer from known vulnerabilities (both technical and financial) and the response is inaction.  Over $400 billion dollars are invested in pensions and superannuation funds in the U.S. and U.K. and no one can explain why performance lags retail index market performance (or the undisclosed fees that Australian’s are charged).  In short, the university elite are sure that there’s a technical someone somewhere doing their job and the technical skills masses assume that there’s someone smarter than them looking over the details.  And NEITHER is right or capable of verifying the assumptions.

Someone else.  Somewhere else.  It’s no surprise that a system built by a near Russian oligarch who sat on the throne in Britain in 1910 expressly for the purpose of taking riches from a land he presumed was devoid of any one has failed modernity.  It is sad to see the amount of effort poured by so many into the maintenance thereof.

But what if we had a different narrative?  What if we built the next 150 years about regenerating the land through the engagement of ALL its inhabitants?  What if we explicitly built an economic and social model around the repatriation of value that has been distributed across the globe?  What if we had the audacity to become social and technological innovators and exporters to a world currently in the throes of moral and leadership bankruptcy?  What if we defended ourselves not against manufactured foes that serve ideologues but instead against the predilection to classify, denigrate, and appropriate?  What if our national infrastructure was conscripted to serve as a model for – not an acquiescent beneficiary to – the rest of the world?  Sound interesting?  Has a better ring than “caste”, doesn’t it?

Well, to do so will require more than an overhaul of the education system and its delivery.  It’s going to require each individual to step up and engage in a more thoughtful process.  We’re going to need to learn about the matter and energy around us – not for its export and commodity value but for its regenerative engagement.  We’re going to need to examine our worldviews and the metrics that constrain our insight and emancipate the same to enhance our awareness.  We’re going to need to learn from others – not rote facts and figures but deep structure narratives of new organizational thinking.  We’re going to re-evaluate our values so that we don’t keep running up a real-estate bubble, inflating the already over 180% indebtedness to earnings gluttonous consumption, and indenturing our future for acquisitions and procurements that serve the needs of others oblivious to our own.  We’re going to need to engineer rather than acquire the innovations we use taking advantage of the vast open-innovation resources that the world has laid at our fingertips.  And finally, we’re going to have to seriously decide that our liberty doesn’t come when we diminish and indenture those around us.  It’s time to replace minimum competencies with informed confidences.

Or…we could go to school again on Monday and keep serving an anonymous monarch.  It’s time to choose

Sunday, July 2, 2017

Risk Aversion: A Statistical Primer for Public Servants


This is a rare post for me as it is the prequel to a series that I suspect will grow more macabre in each installment.  My grandfather, William H. Parsons Jr. advised me to, “never attribute to malevolence what is ignorance.”  This aphorism – variously ascribed as the work of Goethe, Jane West and many others – was likely known to my grandfather as his contraction of the Albert Camus observation in his 1947 work The Plague in which he states:

“The evil that is in the world always comes of ignorance, and good intentions may do as much harm as malevolence, if they lack understanding. On the whole, men are more good than bad; that, however, isn’t the real point. But they are more or less ignorant, and it is this that we call vice or virtue; the most incorrigible vice being that of an ignorance that fancies it knows everything and therefore claims for itself the right to kill. The soul of the murderer is blind; and there can be no true goodness nor true love without the utmost clear-sightedness.
Therefore, in the interest of addressing the vice of ignorance, I offer the following.

It is nearly daily that I hear public servants and bureaucrats admonish me that, “Australians are risk-averse.”  This, along with other dismissive excuses for inaction and breach of public duty, has become a fascination of mine leading me to wonder if statisticians in Australia forgot to teach classes on two-tailed distributions of hypothecated metrics.  “Risk” is a deviation from an expected return or outcome.  And deviation happens both in the positive and negative sense.  After living in this country for nearly 9 months, I can confidently state that I’ve seldom, if ever, found a population more risk tolerant (and blind) than Australia’s public sector.  The risk that the public sector takes with the profligacy of a drunken sailor is the near certainty that the public in Australia will be incapable of holding them accountable for avoidable ill-advised actions. 

Clearly, Australian investors will never find out that their pensions and superannuation funds have returned less than passive market exposure would have delivered.  And not just a little less.  Median performance for superannuation in 2016 was about 7.7%.  During the same period, internationally managed passive investment products returned over twice that amount.  But Australians would not want the additional $33.8 billion they could have received last year and the Australian Treasury wouldn’t have wanted the taxes on those earnings. 

Clearly, Australian tax payers will not ever concern themselves with the over $30 billion spent annually on procurements ranging from submarines to combat vehicles to ships and planes.  At no point will the public learn of the propulsion and battery systems in submarines that could expose Australia’s navy to detection with known counter-measured technology included in the current plans.  That is no point until a submarine filled with Australians is sunk in the South China sea at which point we will officially mourn the loss of life that was potentially avoidable today.  At no point will the public know that local businesses supporting the land and sea vehicles will last only as long as the procurement after which known patent estates held by European defence companies selling to Australia will block or control Australia’s export market.

Oh, and before I go any further, two advertising and media relations agencies have advised me that the Australian public and media are unable to see the “relevance” of information like this. 

But, I digress.

Risk is deviation from an expected or modeled outcome.  In a country that tells itself dogmatically that it has had 26 years of uninterrupted economic growth – purportedly holding the record for the longest recession-free growth for developed economies – it’s nearly impossible to discuss risk.  That’s because, like the definition of “risk”, Australia also has a univariate view of the term “economy”. 

Let’s get something abundantly clear.  Australia is the world’s 22nd largest exporter.  And over 60% of the exports from Australia have little to no value add.  In other words, the $191 billion in exports are largely Iron Ore, Coal, Petroleum and Gas, Copper Ore, Gold, Aluminum, Nickel, and Zinc.  The price for these – that’s right – the thing that fuels the “economy” are not set by or in Australia.  By luck of the geology on land (who’s elders past and present, we give lip-service to respecting), the economic record is based on the rest of the world’s demand for the periodic table we live on – not the industries we build or the products that we design and export.  And over the past 50 years, Australia’s Economic Complexity Rating has fallen from 22 to 53. 

Unfortunately, what this means is that Australia is allowing inertia – not innovation – to animate its economy more than many other countries.  And this is VERY RISKY!  Somewhere between 30-40% of Australia’s investment capital is off-shore in funds that are underperforming reasonable benchmarks.  This is VERY RISKY.  Australia’s reliance on imports of technology and usable products – in excess of its exports – means that we’re dependent on a world more than being depended upon.  Oh, and in the recent comedy of education budget conversations, Vice Chancellors are quite ready to admit that the “education sector” is being underwritten by foreign students  With about 1/3 of the student population from overseas paying as much as 400% the Australian tuition rate, one can readily see that Australia’s leading institutions of higher learning are reliant on the influx of students from overseas – not on the productivity of innovation and scholarship from their institutions – to keep them afloat.  Risk averse?  Hardly! 

Allow me to make the following uncomfortable observation.  Stewardship and public accountability are in short supply across the globe.  That’s not unique to Australia.  But the reflexive defense of a status quo alleging risk aversion puts Australia on a collision course with the likes of Japan – an economy that hasn’t recovered from the 1998 financial crisis.  Because, like Japan, unconsidered complacency fueled by exogenous factors that are not explicitly acknowledged leaves Australia vulnerable to significant and possibly permanent negative growth risk.  Ireland’s tax haven economy (now busted by the EU and U.S. tax appetites) lasted 78 quarters.  It’s GONE.   Poland’s “cheap” labor market worked until accession was in full bloom and those 77 quarters aren’t coming back soon. 

But not to worry…recent studies published by Drs. Michael C. Clarke, Duncan Seddon and Mr. Greg Ambrose in the Ausimm Bulletin (December 2014) have suggested that Australia’s next “mineral boom” may be to dislodge the waning U.S. monopoly on Helium.  And pumping that out of the ground and into the illusion may keep the music playing while the public continues to lose. 

[Image from AnaesthesiaUK]