Two of the hardest things in modern society to realize are that that one’s intelligence, especially according to standardized tests, and income do not completely determine your worth as a person. Even with my contrarian mindset, I still find myself falling for this cultural inclination. The myth of the effortless, intelligent consultant who is able to identify and solve all of your problems with the use of data and analysis was extremely appealing to my younger, naive self. However, too often measurement and metrics backfire. The very act of trying to score something is likely to have unintended consequences that do not align with the goal or mission of the organization, and all of that intellectual energy is rendered useless, at best. Even worse, many people are paid to not only damage their organization but also society, making money a very poor metric for human worth.
Private equity is the perfect example of a prestigious job that imposes a massive financial and brain drain on society. Rana Foroohar claims in Makers and Takers that “employment generally declines in companies that spend too much time in private equity’s hand.” The traditional private equity model is used to implement cost-cutting measures, load the company up with debt and sell their prize to the highest bidder. Focus on short-term profits is almost always bad for the “real economy,” but private equity is only after big returns, necessitating this short-term strategy.
After the American housing meltdown, Blackstone became the largest investor landlord in the company and have been a notoriously harsh landlord, often choosing to only buy properties in areas with the least renter protection. Investment banks have provided credit to boost the property acquisitions of these private equity firms. In turn, the private equity firms have taken loans and bundled them together as a new asset and re-sold them, similar to mortgages prior to the financial crisis. Many have speculated that these rent-backed securities will go bust eventually, and those who ignorantly bought the instruments (including mutual funds) will be left with nothing while private equity escapes unscathed. People buying houses are often one of the biggest boons to economic growth, as they need to furnish and maintain their asset. Instead of this reality though, those who have more than enough have realized the gains of the housing recovery, which has done nothing except drag on “the real economy.”
Perhaps even worse than being poor in American society, is being stupid. Popular entertainment regularly humiliates stupid people with things like Darwin Awards and with quips like, “he is dumber than a bag of hammers.” However, despite the fact IQ is highly correlated with earnings (which once again, do not define you), it is not all upside when you hire “smart” people for every job. Of course some jobs do require extreme smarts, but many have suggested “emotional” qualities such as self-awareness and relatability can be “better predictors of strong job performance.”
As part of this social stigma of intelligence, more and more positions have been requiring a college degree. While going to college is undoubtedly good for an individual’s future, making college a near requirement poses a massive strain on society. Caplan claims college doesn’t do much for most kids, and the time costs and monetary costs to this “college experience” are mind-boggling. Reflecting on my college experience, I agree strongly with Caplan; I really regret most of the time I spent in college, as it felt like a drunken waste of time.
Caplan goes even further to argue that even kindergarten education needs an overhaul, as kids learn things that are completely useless for the modern job market. While I can argue that catering to the job market isn’t completely the point of school, especially at a young age, we do need to question what school is for. In my opinion, the goal of school should either be to learn how to think or to learn future job skills. Currently, most schooling fulfills neither of these two aspirations.
I do not want to go so far as to say that there is anything wrong with having money or being witty, but I believe everyone should have a little bit more consciousness and compassion in realizing that what you have in the bank and where you went to college (or didn’t go) have absolutely no bearing on your ability to have a positive impact on society, which would be a much better measure of human worth.