living standards are going down because of a power shift from labour to capital

Imagine. You’re in a tunnel and it’s dark, then you hear a thunderous noise and see an approaching light. Wouldn’t the sensible thing to do be to accept that an oncoming train is happening and prepare for it? Hit the deck and you might survive it.

When it comes to falling average wages in the West, however, the approach seems to be to ignore what is happening and yell out “living standards are going down! It’s unfair! How can we stop this!”. It’s a vote-winner maybe, but it isn’t effective. From an individual point of view – the response should be to try and get ahead of the curve. Consume less – and sign off the treadmill of Buying More Stuff Makes You Happy.

This applies particularly to the so-called ‘middle class’ – you are the people that are in the line of fire. If you don’t believe me, look at what Blackrock has shown is happening in the US in a throwaway chart in its 2014 Investment Outlook

Capital is getting more of the pie than labour for years now (source - BlackRock)
Capital is getting more of the pie than labour for years now (source – BlackRock)

What happened after 2000, then? The Happy Investors title is questionable, after haven’t we heard often enough that the stock market has been trading sideways ever since the dotcom bust

S&P500 - log Y axis
S&P500 – log Y axis

Well, it seems to have broken out of that now, and of course what isn’t shown on the chart is the dividend income. So what did happen after 2000 then?

I would hazard a guess at improved communications from the Internet, improved data processing, and the arrival of a shed-load of keen young workers from what used to be called the third world. Although it’s been fashionable for the likes of the Resolution Foundation to pretend that government action can push back on this:

The US experience also shows us that the fate of everyday workers in America is a product of economic and social policy choices, rather than the inevitable result of globalization, technological change and immigration.

In other words, we too have a choice: it is possible to reverse the trends in living standards that are beginning to emerge here in the UK.

I don’t think they’re right at all. For sure, government action may be able to ameliorate the effects of this via redistribution, but only up to a point. These improved communications and technology means that capital can flee taxation and regulation. Capital, labour and land/mineral resources are the factors of production, and it makes sense for capital to move towards where labour is cheaper.

Others blame the damn baby boomers for it all, and the yell goes up that it’s all so unfair, Living standards are going down. I would actually challenge that statement -I think living standards are going up for humanity as a whole.

Although not strictly about wealth, Hans Rosling’s time series shows improved living standards across the world in a pretty fundamental way. Seeing a lower proportion of of your kids die before 5 has got to be a step up in living standards!

It’s part of why people don’t talk about the Third World any more. It wasn’t aid that helped them up – it was trade. That trade made our goods a lot cheaper and a lot more varied in the 2000s, but it also brought a hell of a lot of competition into the workplace. And while living standards for humanity as a whole are going up, the backdraft of that means that wages will fall in the West relative to what they were for any typical skill level, until they roughly equalise globally. Robert Peston had a program on Europe and Niall Ferguson on China – both of them called out some inconvenient truths about competition and living standards in the West. President Obama called it out in two years ago in a State of the Union address.

“Many people watching tonight can probably remember a time when finding a good job meant showing up at a nearby factory or a business downtown. You didn’t always need a degree, and your competition was pretty much limited to your neighbours. If you worked hard, chances are you’d have a job for life, with a decent paycheck, good benefits, and the occasional promotion. Maybe you’d even have the pride of seeing your kids work at the same company. That world has changed. And for many, the change has been painful.”

That’s what globalisation does – it means you can buy a DVD player for £18 in Tesco [ref]That still sounds awesome to me because I remember buying my first VCR secondhand ex-rental for £150 – about £400 in today’s money[/ref]. But the downside of that is your kids will struggle to get a job if they are of average ability, so all of a sudden cheap doesn’t look so cheap, really.

Your wages will fall, compared to what you’re used to, if you have a middle class job.

You will have less than your parents, if they were doing the same sort of job. They were competing against the rest of the West, you will be competing with half the world. Your gadgets will be far better and varied, and cheaper than theirs were. You will be healthier and live longer. But they had a more stable work environment, their employers were better because they had less choice. You will find it much easier, arguably too easy, to borrow money. Just because you can doesn’t mean you should.

Maybe Baby? Maybe not

You will find it much dearer to have children than your parents, because  consumer society is now set anticipating dual income households. The opportunity cost of children is more that it was for your parents. Having it all was never an option, though perhaps your grandchildren may get it if resource crunches or global warming don’t get humanity first. [ref]If Hans Rosling is right, there may one day become a day when the fertility rate has fallen so low that governments may actively promote new citizens for economic reasons, and then you may have it all. At the moment it is far easier and cheaper to import them, and the world is not short of humans at the moment.[/ref]

So for God’s sake do some forward planning. Think about the big things in life – who/if you marry/partner with. Think about where you are going to work, and live. Think about whether you can afford to have children before you have them. You are unlikely to be able to afford to have as many as your parents did, and if you do, your disposable income will be squeezed more than theirs was, all other things being equal.

You cna own your house. You can have four chidlren. What you can't do, Shona, is do both, not on your money.
You can own your house. You can have four children. What you can’t do, Shona, is both, not on your money.

Think about how much house you buy, and remember that a bigger house needs more maintenance, heating and furnishing than a smaller one. That also impacts the children decision – having children is a responsibility, not a right. Consider Shona Sibary as a cautionary tale  – far too many children for her means is the fundamental problem there, though it’s compounded by a lack of strategic planning and general economic muppetry.

Having children is a emotive subject, and there are some physical constraints. However, unlike some former generations, it is a choice nowadays. There has been a lot of focus on relative child poverty in the last administration, but one of the best ways of reducing child poverty is for people to have fewer children if resources are limited. Hans Rosling’s video shows that for what we may think of as poor countries, but Britain is becoming a poorer country for most people. The logic still applies even if the results of the poverty aren’t so stark. You incur a debt to the child as soon as you bring it into the word – the debt of nurturing and love – it isn’t simply a means of self-actualisation in creating a mini-me. It’s a responsibility, not a right that others have to help you with, despite what some people seem to think

The UK housing nightmare

Housing is a particular pathology in the UK, for several reasons. Thatcher’s sale of council housing to buy votes destabilised an effective system of social housing for those who couldn’t afford to buy, and the damage this did to the housing market, together with the rotten terms of the assured shorthold tenancies that prevail in UK renting gives owner-occupation a particularly privileged position. Owner occupation is a crap deal for tenancy for the owner, with huge fixed costs (moving, estate agent’s fees, Stamp Duty in some cases, redecoration/furnishing) and the risk of frozen capital if you have to move to chase work – all of which are more likely now as jobs are less secure and more mobile now than in Thatcher’s time. However, although it’s a crap deal, it’s a lot less crap than strings of assured threshold tenancies (AST) which is the alternative. Which is why people aspire to own rather than rent in the UK despite ownership being a very bad fit for modern working patterns.

There don’t seem to be any good answers here. Other European countries seem to have made renting a lot more attractive, and people are happy in accommodation that is often a lot denser in cities. The British preference for  houses rather than flats means housing is much dearer, and distances to amenities end up longer. This seems to be where the crunch is happening at the moment with living standards – we simply tie far too much of our earnings up in bricks and mortar. If you buy a house at a 4-5 times income multiple, that will consume about 8 times your gross salary [ref]at typical UK long-term interest rates of 4-6% you pay roughly double for your house over 25 years[/ref]. You pay out about a third of your gross salary in tax, so you are agreeing to pour your entire earnings for about 10 years into that house. The situation is improved by inflation (you want lots, as long as your earnings track, which they aren’t likely to nowadays), and many people get some career progression. The arithmetic is ugly, and rents follow the cost of housing by substitution since everyone needs to live somewhere.

Live intentionally – to live well

The global  competition isn’t going away any time real soon, and that means the value of Western middle class labour is going to fall because it’s no longer the only game in town. This is a long-term secular trend, it isn’t particularly about the credit crunch or this particular financial crisis, but the crisis throws a harsh light on it – in the UK the welfare system was used to soften the blow, but that’s likely to be scaled back more and more. These trends will adversely affect the lower end and the middle, they will probably favour the top 10%. That means that essentials like housing, energy and food will cost more than they used to, relatively speaking, because more people with the means to pay will be competing for it globally.

Gadgets and consumer frippery will probably cost less, because there will be more production and a far larger supply of skilled workers in the design and production side, as well as automation removing the need for medium-skilled workers, reducing costs. Looking more widely, the time will come in 5-20 years when a lot of the NHS will be so financially constrained that you will want to have options to go private for some elective treatments.  About £6,000 will get you most elective treatments. It isn’t a bad deal when you look at the fear and loathing that is the US system, but you will probably want to save towards that. Where the NHS scores is in acute and in chronic treatments, but I’m not banking on relying on it for elective medical intervention. It should be noted that saving to a medical emergency fund is not the only way of investing in health. As an early retiree who owns their own time, I choose to walk to places far more than when I was working. Keeping the machinery running is an indirect investment in health, and best of all it is free. Better than free, indeed – as it saves the bus fare/fuel for driving.

Much of the unhappiness about living standards is from unfulfilled expectations – if you are aware of the trends and accept the results of your actions, you will have less of the pain, because you are living intentionally. Whereas if it comes as a surprise to you because you feel you are fundamentally entitled to a steady increase, then you will feel sore and angry. One of the enduring myths of the West was that things always got better.

It’s not even true in living memory, it’s just been a while since the exceptions. Real incomes have fallen in the periods 1974-1977 and 1979-1982 [ref]IFS[/ref]. Britain will still be a rich country even if living standards fall to the levels of the 1990s. Many Britons had a good time then. It really wasn’t so terrible. So if we plan for that, and suddenly some magic happens and the economy takes off and median wages get dragged up, well, we get to have more parties. Whereas if expectations are set to more parties and we end up with 1990s living standards a lot of people will be pissed off. It just seems wise to set expectations lower. Buy less crap, and avoid building too many fixed costs into your life  –

the key to financial success is never taking financial responsibility for anything that eats

Jonathan Pond

As consumers, we are part of the problem

How did the world end up in such a screwed up state? Well, as consumers, we are also part of the problem, because capitalism is values-blind. I went to town to get some replacement bulbs for some Christmas lights, and watched in amazement at people spending shitloads of money on crap. Mainly cheap crap – in 99p and pound shops, this was stuff that should never have been made, never mind shipped here and sold. I eventually bought a replacement set of lights for £2.50, because they deliberately change the lamp bases so spares are only available for a couple of years. There’s no good reason for that, it is designed obsolescence. [ref]You can, however, retain the old bases and pick out the lamps, so I made sure to match the voltage and power, so I will scavenge the old set for lamps to insert into the plastic bases of the new set as the bulbs fail. The price of replacement bulbs is usurous – you get three for £1 or 20 for £2.50 – in a new set ;)[/ref]

We are part of the problem, because we want our stuff cheap. And getting stuff cheap means we buy from Amazon, supporting shit working conditions. We buy £2 chickens from Tesco, supporting shit animal welfare, and buying a load of overpriced water too. I saw a woman buy 20 boxes of Thornton’s chocolates in Wilkinson because they told her it was half-price, and £3, not £6. What they didn’t tell her was that these were non-standard boxes and the weight was lower 😉 She was rewarding deceptive marketing practices.

We fall for cynical marketing – an Apple iPhone is deliberately designed not to last a long time and have non-user replaceable parts, because you are renting an experience from Apple, with the rent levied on the capital cost of the gadget[ref]You may explicitly rent the device capital cost subsidized as part of a mobile phone contract[/ref] – the rental period is defined by the average service life. Even if you look after it, as the operating system moves on, older hardware becomes unsupported, and since you use apps rather than open standards an unsupported device becomes unusable, and destined for landfill even if it works correctly as originally designed. Contrast this with a preamplifier I purchased when I started my first job 31 years ago for £1500, the equivalent of £4000 in today’s money. Financially it was a damn fool thing to have done at that point, though at least I bought it on interest-free credit and paid on time. It is still in service.

The whole way we make electronics anything now is focused on new manufacture, planned obsolescence and no expectation of repair. I repaired a Maplin 150W inverter recently – it cost me a fiver to change two power transistors and a driver transistor. I could buy a new one for £20 – I repaired the old one because I just didn’t want to keep on adding needlessly to the mountains of e-waste when I could do otherwise. That worked for me because I had the skills – for most people this would be beyond economical repair once past the guarantee period.

If we wonder why many jobs are so shit now compared to what they were, occasionally we have to be prepared to charge the face in the mirror. Capital cares only about the bottom line, and it is gaining power, because whenever somebody presents us with a bill for protecting labour, we don’t want to pay the levy. So it goes away and does what we tell it to do – cut costs – do whatever it takes. At the moment capitalism is probably serving humanity okay from a global perspective as it lifts billions out of poverty. It’s not serving many people in the UK that well, because of this, which I’ve swiped from the Resolution Foundation

Median wages are tracing down, and that's what most people feel (from the Resolution Foundaton)
Median wages are tracking down as a share of GDP, and that’s what most people feel (from the Resolution Foundation)

Although I agree with their narrative, I don’t agree with their solution. In the end the fundamental problem is that middle-ability jobs are being leached from the economy. You can’t legislate for more GDP going to labour, because what will happen is that capital will scarper to places where it can produce GDP without being taxed for redistribution. Of course, we could renationalise the energy industry, which is where Ed Miliband is probably going in the end. In which case the question will change to “how would Sir like to pay for the increasing cost of energy? Higher bills or higher taxes, bit of both? It’s your call.”

You can run, but you can’t hide…

That global competition is coming your way. You can deal with is several ways. You can upskill, if you are bright enough, which will bring more in. You can hop from one leg to another and make a low keening noise that it isn’t fair, which won’t help your situation but will make you feel better for a while. You can downshift or not take on as many commitments – in the form of smaller housing, fewer children, fewer consumer purchases and knick-knacks or do what Jacob from ERE does. Or you can stick your fingers in your ears and go “la-lal-la-la-la”. Only two of those responses will help you avoid getting flattened by the oncoming train of falling average wages…

Of course, one of the ways of avoiding this is to add income from capital to the mix. But the rub here is that you need about 20 times your annual income from capital as a capital stake, and it isn’t easy to save that much up over a 40-year working life while being a good little consumer and buying crap all the time. However, if you are prepared to live differently and dramatically below your means you can make this work for you – it is part of the RITERE and MMM way. These guys will be better insulated from falling wages – because their income is coming from capital as time goes by, rather than labour, and the 21st seems to be the Century of Capital where the 20th was the Century of Labour – in the West at least.


Interesting times on the stock market again?

May you live in interesting times

American proverb and non-Chinese non-curse

The stock market has been tedious for a lot of this year. I’m a net buyer, and probably will continue to be for about 10 years. So the whole ‘I’ve no ‘king idea what we are doing up here mate… market level hasn’t really got me going that much. Yes, it’s dandy to look at my ISA and see it has risen a lot. However, I have less than half my target amount in the market – more than half is locked up in my AVC fund and only released when I take my pension, which for various reasons doesn’t make sense yet.

Often this time of year there’s a sudden rush of blood to the head anyway,  the Santa Rally. I had to sell a load of The Firm’s shares in my ISA to release enough for the Royal Mail float, which was then cut down dramatically. So I’ve had some of the cash to redeploy – but there hasn’t been much to tempt me. I’ve been playing the diversification card – RDSB as it was a sector I didn’t have, but what I also need is a modest exposure to emerging markets, to lean against the overwhelmingly UK and EU bias of my HYP.

I’m not looking for a huge amount, let’s face it EM is all about potential growth rather than the exciting divi. About 10% would be plenty.

A couple of potential targets have been MYI and AAS, and the latter has just dropped to a discount, with the share price heading south. I’ve tended to spread myself out with things like than, buying about £1k a go spread over a couple of months. That works badly with a trading cost of £13.5 (plus the 0.5% stamp duty, but that would be there anyway). That means I eat a 1.2% entry fee that I could halve by buying twice as much, but I’m prepared to pay the extra to spread my purchases and integrate the share price over time.

Aberdeen Asian Smaller Cos IT - going down...
Aberdeen Asian Smaller Cos IT – going down…

After all, this is going down. It could go down more, or not. Spreading my purchases out over time derisks that. If it sky rockets, I stop. If it goes down further then I was wise not to buy all in one go. This policy has worked well for me for collective investments – I used it on CLDN a couple of years ago in 2011 early and than through the Summer of Rage – my holding is built of about five itty-bitty purchases around th £500 mark. The whole ISA is bigger now so £1k is roughly the minimum purchase these days…

An alert of Murray International’s share price also came through – I find it easier to set alerts on stocks dropping below levels I consider interesting, then get on with the rest of life.

Murray International - Sp going down
Murray International – SP going down

but they’re still on a premium, I don’t buy investment trusts on a premium, so I’ve reset the alert a bit lower

still on a premium, but getting there
still on a premium, but getting there

I’ve had a European slant of late – well, for some reason European shares have been good value, I do wonder what everybody is so scared of, maybe the doom and death spiral of the Euro 😉 MYI is sort of a mix of EM and EU shares and a scattering of others, it has a lowish UK exposure so it’s a good fit. I’ve reset my alert to a bit lower as this premium really does have to go. If it does go then the stock is interesting – the yield is a bit more exciting than AAS and would pull its weight in a HYP these days 😉

Of course, Dr Doom predicted the mother of all dooms in 2013, so those interesting times might be on the way again, despite Osborne telling us all about the green shoots. I recall the last time I heard about green shoots, that was in the early 1990s when I was paying mortgage rates of 14%. That’s the trouble with green shoots, they’re always on somebody else’s patch, which is what makes their grass greener…

I’ve only got about £1000 of ISA cash left now, so I’ll let Dr Doom off if his doom is a little on the drag, y’know, like after April. I’ve become a bit more sanguine about buying in my unsheltered account if the opportunity arises and bed and ISA-ing  that when the opportunity arising. That works better with funds than shares, but on a good rout like the Summer of Rage it’s better to pay the purchase fee twice than lose out. So bring it on, Nouriel, make my day…

Talking of chancellors, seems like employees now get to save up to £500 a month into Sharesave rather than the £250 that is was all through my working life with The Firm. Nobody else is going to go round giving you a £6000 p.a. one-way bet on a share price. Even if you think your employer is going to tank, take ’em up on it, probably spreading your years out across five years worth of schemes. JFDI – it’s only now that I am beating out the win I achieved with sharesave with the appreciation in my ISA. The SIP scheme rate seems to have been upped slightly, from the £1500 p.a. in my day to £1800. This is of particular attraction to higher rate taxpayers and particularly HRT child benefistas – I’m still not quite sure I understand why we should be paying for 40% taxpayers to have kids but it’s a way of knocking £1800 off your taxable salary, so those child benefistas in the £50k to 60k twilight zone can use this together with pension contributions to become poor enough to get Government help with their children 😉



UK OECD PISA scores – the hand-wringing starts again…

Oh boy, the OECD keeps the bad news coming for Britain’s teens, well according to our press, anyway. I debunked the last attack from the retired colonels at the Telegraph about the OECD scores, but this one seems more serious. I figured I really ought to take a look at the enemy first, and courtesy of the Torygraph I had a go at what PISA call the maths. I am pleased to say that this retired old git managed to do okay in maths. I do have one grouse on the terminology, because when I went to school this sort of thing was called ‘rithmetic – maths started with algebra and trigonometry, your multiplication and division, ie your sums, did not enter the lofty realms of maths, which started at first grade in grammar school, whatever benighted key stage whatever that is called now. It appears that when the OECD and PISA test if you can do maths, they are testing your sums… Meh.

an ermine did okay, despite my skooldaze being three and a half decades ago
an ermine did okay, despite my skooldaze being three and a half decades ago

Even the Grauniad, the paper of choice of the chattering classes and teachers all round, stuck the boot in to the kidz,

UK students stuck in educational doldrums, OECD study finds

Cripes. How did our bilious retired colonels take it then over at the torygraph? Straight in the kisser, it seems, and they know exactly what is wrong.

OECD league tables: UK pupils ‘fail to work hard enough

There. That’ll learn ’em, lazy good for nothings. I’m not quite sure I dare see what the Daily Fail has to say on the matter. I had to pinch this next graphic from the Grauniad because the PISA site has barfed, or more specifically the compareyourcontry bit, presumably sagging under the load of parents and journalists tearing their hair out and wringing their hands, respectively.

1312_OECDLITERACYCHART0212pngNow the first thing is all the papers have chosen the ranking to grizzle about, but if you look at the actual scores they are compressed towards the top. the UK is worst at ‘rithmetic, but 60 points are between us and the top score versus 85 to the bottom score, and yet we’re a bit more than halfway down there. For all that, it’s fair dos to South Korea, Japan, Finland and Poland, who show and excellent score and excellent balance. The Swiss are all round better than the UK scores but are less balanced, and  other countries are less balanced than the UK result, which surprises me.

I don’t actually find this so terrible either, Perhaps I am complacent, but I think the UK comes off okay in terms of the balance of the education achieved by school leavers. It’s an easy headline to yell that the UK slips below 20th in ranking (I’m not quite sure how the Graun got the UK at 26, 23 and 20 in maths, reading and science as it doesn’t really tally with the numbers they’ve lined up on the right, maybe they are showing the rotten UK education of their interns while the staff went down the pub).

I can’t face rekeying in the data to place this on a linear scale to show the compression towards the top. I’m also surprised at some of the results – take Israel for instance, which has a seriously good high-tech industry, in particular some areas of software, codecs and compression, the poor showing in science and maths is odd. The US shows a poorer result than the UK, so God knows how they get to be the largest single economy in the world with such an absence of smarts, and we presume that the Swedes were generally out to lunch when the PISA team came round 😉

Obviously the UK could and should strive to do better. It probably is fair to say that some Asian countries place a very high premium on studying even at school level – in which case trying to replicate those systems will rub up badly against more individualistic Western cultural preferences. More importantly we need to ask what we want of our education system – in general it seems to be creating citizens that can add value in the economy. Hopefully PISA score line up with that.

Getting better scores really shouldn’t be that hard. I could manage to do my bit for Britain score, despite there being an presumption that skills start to decay immediately on leaving university (from the OECD paper referenced in the earlier article). I’d be a little bit disturbed if the 50+ year old ermine’s education had decayed back to the level of a 15 year old simply due to the passage of time! US Slate’s article hints that an excessive focus on testing and test results hampers PISA scores, as they are also tests of inference and analysis, whereas from what I’ve seen of modern school tests (it isn’t a lot) is that the questions strike me as spoon-fed, no inference necessary. And yet inference is necessary to apply knowledge to the real world and turn it into wisdom.

So once again, leave them kids alone 😉 it could be better, but it isn’t dire. In many ways educating our schoolchildren in some key intangibles would be a better win – doing better at deferring gratification, and the fact that often in life you have to stick at something to actually get anywhere could make them a lot more effective. I am not so sure that the problems of Britain’s young are all placed at their education, it is their upbringing and the values their parents seem to fail to instil in them that seem to be thwarting effective behaviour when they grow up. Perhaps the excess focus on testing and metrics is trammeling thought too narrowly, it wouldn’t be the first case in recent times where an excessive focus on process and metrics delivered lots of what we say we want but failed to deliver things we couldn’t easily measure but really do want.

Although I am with Lord Kelvin’s grouse about qualitative information for things like battery life, I suspect in business and in education we have too much measurement of the things that are easy to measure and are taking our eye off the ball as far as the good things that are hard to measure. Metrics without values is a nasty road to hell IMO despite the good intentions.

After writing this I came across this which has an interesting angle on the remarkable success of the Asian countries at improving things greatly relative to Western countries. Although he considers that the UK is very average, he says a key difference with Asian countries is

The OECD argue that the single biggest reason why the Far East does so well is that they do not have the fixation with innate ability that many Western countries have

Now I do have this fixation, though it was partly a result of my selective experience. Selective education worked for me, because it got rid of the chavs kicking holes in the classroom walls. In educational theory if you throw enough adults at the problem you can discover what is troubling the chavs enough to raise their self-esteem so they don’t kick the damn walls in and crap on everyone else who are cowering trying to avoid getting a thump from these little shits.  1960s Britain was not rich enough to do that, and selective education at least save some people, the young Ermine included, though it let the less able go hang[ref]This wasn’t as harsh in those days as it would be now, at the time the economy had jobs for the non-academic in abundance.[/ref]

So pardon me if I am thoroughly of the opinion that you have to triage kids in education because otherwise some of the little blighters will wreck the life chances of others in order to express their precious little selves. Too much of the anti-selective narrative is about the life chances of the ones that failed the 11+ being wrecked. I’d find it more convincing if it acknowledged that lumping everybody together has its issues too – it only takes a few little bleeders to stiff the chances of everyone in a class of 31. Despite that delightful experience I do accept that the plural of anecdote isn’t data, and theoretically perhaps nonselective education might work. I don’t believe it, but because I have nothing to do with education what I think doesn’t matter so it doesn’t harm any kids’ education 😉

I do agree that pretty much anyone could be taught how to achieve a decent score in PISA. As I said above, the maths section in PISA is not maths, it is arithmetic, and unless you are the wrong side of Boris’s 16% – and maybe even into that, you can be taught how to do basic sums, and perhaps how to apply this in the real world.

However, getting decent PISA scores isn’t going to make you advance human knowledge. At the higher levels, innate ability, combined with competent teaching, is where the leading edge will out. My maths[ref]maths is knowing what div and curl are, how to wrangle tensors, calculus and statistical methods. It isn’t working out the average speed of a kid’s pushbike :)[/ref] is relatively poor despite doing fine with PISA. I flunked university second year maths because I had no talent for it – and solving differential equations was where I ran out of road. There are some aspects of maths that you either get, or you don’t. Yes, reading the old textbooks now and with no pressure I might be able to comprehend it a little better, but I will never be good at it. I was one of the early users of the DOS version of Mathcad at work because I knew I was weak there, so I looked for ways to work round it[ref]that doesn’t always help, but it was good enough for analogue filter design, nowadays you’d use computer programs, simulation or more likely do it in DSP[/ref]. And when it comes to knowledge, I’d say the few percent at the leading edge are what matters to push a technological economy forward. I’m not sure that we should give up this fixation with innate ability at the highest levels, although I do take the point when it comes to school.

It probably costs an awful lot of money to drag the bottom end up to PISA standards, but it appears it can be done. Whether that is a worthwhile economic proposition for society I don’t know, but if it’s considered so in Asia and they get the results then it’s worth considering. However, I figure they have far better discipline in schools than we have – the crowd control aspect of teaching due to piss poor parental values in many cases could stymie attempts to bring everyone up to a decent level of PISA attainment. And before my money is spent in nonselective attempts to bring everyone up I’d like something to be done about discipline and attendance. It may be that to achieve Asian level attainment we will need to spend a hell of a lot more money and violate some of the rights of some parents to not give a shit. Which may not square with Western individualism and the right to self-determination and pursuit of happiness.