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Coronavirus On the Beach

Danger Looms for Cape Town.

Unless you understand mathematics, this is going to sound like Neville Shute's - On the Beach.

First the good news. As I pointed out in my last bulletin, the SA authorites have reset the origin to 27 march. Notice we no longer talk about that "miracle hook" in fact it is now obvious  to even the most positive Capetonians that, in the outbreak  areas,  the lock down is not working. The good news is that some Provinces have worked and the regulations are now  tightening up provincial borders , too late, but at least we have begun. The executive ARE getting the idea of compartments. We have a  model for the release from the lock down, too complicated, but it is a start. ,

Now the bad news. The SIR style epidemiologists have still not understood the veracity of the infection vector. If you have taken the time to study the Dengue model, you will see that the infection vector (misquitos in Dengue)  is  driven by the "essential workers" in COVID. Rather than fearing for their lives or at least appreciating that they are risking the lives of others, essential workers enjoy the status of being essential and the income priveleges that come with that status. While their wages depend on not understanding this logic, they will never get what I am talking about. By the time that our leaders (they are essential themselves) figure out that they are themselves,  the infection vector that causes the spread, it will be too late.


Bulletin 30 April 2020 - bulletin30apr.pdf

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Doctors vs Actuaries



Economics is not called the dark science for nothing. Smith and Marshal dealt with utility 200 years ago - "Interpersonal utility comparisons are not valid". The doctors 'wife gets her second Rolls Royce before the orphan gets pudding not because of justice, but only because her husband puts up the money. The scarce ventilator in Madrid gets moved to the younger female patient simply because she has more chance of survival, not because she enjoys life more than the old guy.

You and I work no differently. I will explain why Adam Smith's moving hand crosses my palm with silver and puts me on the side of the doctors.

Right now its investment bankers vs doctors. Actuaries and mathematical economists just follow the money - like me. The winner will be the one that puts in the most resources. Investment bankers of all people should understand this. For the first time in a while, the investment bankers are losing. It is not Coronavirus, but their own myopia that is doing it. Right now everyone is spooked and the politicians and doctors have the microphones. While they are making money and getting touted as "frontline heros", they are going nowhere. For the actuaries and economists to push them off the stage, they will have to present the case and run the gambit of "in-humanism".

Interpersonal utility comparisons is exactly what we have to do. Life expectancy is a core concept in actuarial Science. There is even a mathematical term for it - dx . Insurance companies deal with these concepts every day. Right now the kill rate of coronavirus - 10% in 70s plus and 20% in 80s plus is about the same as old white people sitting in the cancer-causing UV sunlight. Aged people will not sit in the sunlight getting sunburn, t4hy stay inside at noon. They should also not go out and sit next to potential virus carriers. I don't know the micro biology, but coronaviruses are not rare - they are all over the place, they could have been hitting us like this for the last Million years. Its only the 7 Bn urban density that makes the modern transmission so dangerous.

Acknowledging the danger of introducing the strawman argument, an analogy would be to be surprised that we may get hit by a massive meteorite. You have only to look up at the moon to see the pockmarks. The moon is smaller than earth and still pulls in so many meteorites, only our atmosphere cleans up out scars. We should be expecting a big one any day now. Short run certainties are death and taxes. Long run certainties are viruses and meteorites.

However, it takes a little bit more work than @Glasgow Tap and @Tim - who are just plain wrong on the FT comments. Death rates go up 4 times when Coronavirus breaks out!COVID-19 really kills people. Every 80-year-old man has every right to piss in his nappies when someone nearby coughs. Even Donald Trump, should start checking that his will is in order. The lock-down would be a very good time for him to do his tax returns.

The key to moving forward is not to try to diminish the health guys' argument, but proving that investors save more lives than doctors. Proving this will mean taking the life tables and mapping it to the SIR and SAGE models. So far I have not met anyone else doing this. I do it to build up the content on the Copeman Academy.

Right at the beginning of this outbreak, I approached every major insurance company in South Africa to build and motivate a coherent macroeconomic lobby. No-one understood what I was talking about. The cost to them has been Billions. Their heads are so busy, trying to protect their short term premium income, that they do not have the time to stop and think about the macroeconomics of the problem. That is why they have lost the initiative to the doctors. Notice you never see an actuary at any of the press briefings. After a while, I felt I was bothering them, so I gave up. I did try to warn them.

If I got $10 from every company that has $ 100M invested in recovery from the Depression, I would code and write the full paper that is required to motivate this. Otherwise what I have to do is follow the market. Some of us have actually started to benefit from the current world state of affairs!

While the employees of the big accounting companies are at home playing with their kids and filling out UIF forms, working in isolated rooms all over the world, we have been rolling out a remote version of TurboCASH with online banking and email. TurboCASH 5.2 is like an anti-cloud measure - make every isolated accountant a server, take him off central dependence. The "crazy side benefit" that sparks the revolutionary in me., is that this will allow users to leave the financial grid and use blockchain and non-fiat scalars to manage a distributed informal trade economy. 98% of the TurboCASH project already runs like this. We manage $ 4 Bn in turnover with little exchange of cash.

Old people still have assets and leverage to work for them. In the last month, 70-year-old accountants in aged communities all over the world find people asking them to manage logistics. At first, everyone was spooked, but now TurboCASH has a little boom going selling accounting packages to isolated accountants including septuagenarian accountants in aged care homes.

Investment bankers and other soon to be unemployed readers of the FT, should stay at home or make themselves useful delivering food parcels.

Right now I am on the side of the 80 years olds - if only because they are the ones paying me the $10.
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Okuns GDP Gap

The economy is never cool after a stock market crash. When is it going to recover?

I have been looking at the question since 1982 when it first perplexed me. Financial people will never talk about it because for most of the cycle they are too busy studying quarterly returns (and 52% of the time they are winning). Only analysis that moves beyond quarters can deal with Okuns GDP Gap. Only a massive drop in the Stock market gets this problem attention.

This stock market drop was waiting for us even before the virus. You can think of the Virus as a War, and while we focus on it, we bury ourselves further and further into Okun's GDP Gap.

This debate squats like a toad over economic history and development economics. Why do we struggle to maintain potential GDP? After looking at it for 40 years I have to conclude that  it is our cost of having the capitalist system on our side. This will be heresy to financial analysts because they cannot move out of the framework that the market is the ultimate allocator of capital - it is not. The market has no vision  -  it always thinks too short-run. Payments on the Porshe dominate the market's thinking.

There is a nasty book called The Deluge, by Adam Tooze  ( I read it at Pinnacle Point in Dec) that covers the 1914- 1929 period. Churchill got the Nobel prize for literature for his study on this period. Both Churchill and Tooze bind the cycle not from 1929 to 1945, but all the way back to Widrow Wilson in 1914. The period  1914 to 1945 is known in economic political history as the Second 30 Year War.

In the same way, as the US moved in the post-1929 period to become GDP dominant, expect China to do the same - the US is likely to be the big loser here, starting with this $2.2 Trn package spilling out into nowhere. It has nowhere to go except to possibly inflate financial assets and food prices, but it can't fix GDP.  You can't eat sháres and in the modern digital day you can't even wípe your ass with them, you need to binge-buy toilet paper to do that.

It is a 200-year-old problem, as old as capitalism itself. Without War, capitalism is not able to bootstrap itself out of deflation.


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Coronavirus March

Lnk to May 


Bulletin 15April 2020 : coronascript15April.pdf

Bulletin 10April 2020 : coronascript10april.pdf

 Bulletin 31 March 2020 : bulletin31mar.pdf

Bulletin 28 March 2020 :bulletin28mar.pdf

Bulletin 27 March 2020 : bulletin27mar.pdf

Bulletin 26 March 2020 : bulletin26mar.pdf


The things matter over the next few weeks:

define the compartments and appoint leadership

enforcing the isolation

food to the poor to boost them


early treatment




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Stepping stone jobs

Subject: Economics

Case Study: South Africa Inc (unemployment, inequality, growth model)

3663191414?profile=RESIZE_710xPut yourselves in the shoes of someone advising the President.

The problem we are dealing with is the 29% unemployment of 10 Million South Africans, the rate climbing to 60% for black youth.

Treasury has suggested a plan to create 1 Million jobs in 3 years. This proposal is made in the full knowledge that 500,000  new job seekers enter the South African Economy every year.  Treasury's plan is thus a plan to INCREASE unemployment by a minimum of 500,000 jobs. The Copeman Academy challenges its users to come up with a comprehensive solution to create 10 Million jobs in 3 years and thus reduce unemployment to near zero.

Stepping Stone Jobs

Proposal to create 1 Million jobs.

Stepping stone jobs are jobs like Car Guards, Waiters, Cleaners, Caddies, Personal assistants, seasonal agricultural labor, security guards. Talented young people start these jobs very early age and at very bad pay, do them for a few months and they move onto other jobs .(I started doing these jobs when I was 13). These jobs are not so much about earning revenue as about learning the way the employment process works. Be polite to a customers even if they are wrong, always reporting on the outcome of tasks, complete all tasks before stopping the day, never steal the companies assets, always look to make profit for the company.

Typically in South Africa, stepping stone jobs get taken up by African immigrants and middle aged South Africans. This has a devastating effect on the economy. The first is that middle aged people try to "make a career" out of stepping stone jobs. They make a career out of a job that should never have been. No amount of unionization or protest can solve the fact that the job simply does not produce enough to deliver a decent wage. Great unhappiness ensues.

Worse is that fact that in a year, that low paying stepping stone job would have employed 4 youths temporarily, who would then leave and move on to take up better employment. If that Stepping stone job is held for 5 years buy a middle age person, 20 youths miss the opportunity to enter into the market. Great unhappiness ensues.

BEE and the employment act start out with the good intention of helping youth employment, but have the exact opposite effect. Instead of offering a future to twenty youths who could be hired ground through the rough an tumble of low paid employment, we swop this for one unhappy person stuck forever in a poverty trap.

When you start rambling about minimum wages, employment brokers, casualisation  employment equity and employment controls, you destroy stepping stone jobs and you destroy the future.

250,000 stepping stone jobs shared among 1,25 Million people, creates 1 MIllion jobs.

#coepmanacademy #southafricainc

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South African 2019 Q1 GDP Growth Tanks

South Africa posted a 2019 Q1 GDP growth decline of minus 3,2%.

Economic apologists tout this as the worst performance in 10 years. Worse! Back up 33 years to find self-inflicted stupidity of this magnitude. In the Court of Economic History, President Rhamaphosa and Finance Minister Mboweni stand in the dock alongside PW Botha and Barend Du Plessis as the worst economic executives to have held office. Go back 190 years to Lord Charles Somerset and Sir Harry Smith to find comparable incompetence.

Breathtaking - minus 3,2%.

A small number, yet considered, the enormity of the R300 Bn GDP gap, comes sharply into focus. Next - 300,000 pink slips, as actual jobs or bright young #feesmustfall graduates, that don't move out of University digs into a company apartment, but stay at home, sharing a room with baby Katlego and the twins. Revised career prospects are now poker games, soccer pools, traditional weddings.

The 2008 implosion of world markets and the 1992 dying Apartheid regime cranking interest rates to 24% are acts of desperation. Go back to The Rubicon Speech of 1986 or the 1976 Soweto Riots - 33 years to match 2019 Q1 made spectacular that it happened while the rest of the world marched onto maximum growth, stock market highs and full employment.


EWC - Expropriation Without Compensation

In the boozy gloom of 2018, Rhamaphosa meets his election advisory team. The inspiration flash is putting EWC at the forefront of the election campaign, the ANC heads off the EFF Land challenge. After the election, back to business, forget the promises, not a peep about EWC.


EWC worked! Who can forget the old woman in Erkhuleni visited by a campaigning President bursting into tears of joy as he explained on National television how her ANC vote would get her a plot of Land, a bond to build a house and security for an R150,000 overdraft to start the business she has always been denied. A big jump from a lifetime of poverty. In Africa - that promise is a vote in the bag.

There is however a cost side.

Decrying EWC is deemed, counter-revolutionary. The pungent argument that EWC is merely a ploy with no real Land Reform, is dismissed. The joy gushes from the left as they watch spooked Landowners, fret about losing their career savings. A political triumph!In Africa, the rich not only dominate the economy. They ARE the economy. When they tank, we all tank.Investors disappear like virgins at a matric dance. Property buyers scatter like rats up a drainpipe. Bank managers cut bonuses, cancel vacations, call in loans. Last year's pestering call center agents offering overdrafts? Retrenched or moved to collections. Standard Bank closes 100 Branches.The Q1 GDP figure is the first bill, court summons and blacklisting judgment still coming - GDP implosion with multipliers.Land reform, more urgent than ever, is now at what cost? The ANC election campaign cost R 300 Bn! R30,000 a vote exceeds even the per guest budget of the Gupta wedding. R300 Bn is more than double (nay triple) the total amount spent on Land restitution since 1994!

Not even a single farm took yet.

Land Reform - where South Africa loses capital - offers nothing. Say “Expropriation Without Compensation” to a Landowner. It matters not what follows, she is already checking European Bond rates online, not shopping, opening a new factory or employing more staff. Plain to see – GDP growth minus 3.8%.

South Africa, it is time for a serious rethink on where EWC is going.

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AP Maths

English Speaking countries do not do well in Pisa rankings. The Copeman Academy strives to give the English speaking student  a boost in Maths education. We do this by supplementing  analytical training with Deep Learning based Pattern Recognition. We cover South Africa, UK, USA, Canada, Australia.

South Africa is ranked 138 out of 140 countries at Maths education. What is less known is that South Africa  is one of the most unequal Maths societies in the world. Our top 1 % of students rank as good as the Asians  (not rigourously proven, people get a bit prickly about admitting the advantages of privileged students). One of the reasons for this success is that thanks to the IEB, we have one of the best  developed Advanced Maths Programs. A student following Core Maths and APMaths in South Africa comes out ahead of GED and AS Level students in the US and UK respectively.

AP Maths is an innovative exam offered by the IEB. Every serious Grade 12 student should take AP Maths. This is because it is an opening link to A Level Maths and University Maths 1 and 2.

Here is a list of topics covered.

Here is an example of an exam (Paper 1). Work your way through these questions with Video answers to establish how good you are. If you are heading for University then APMATHS will never be a waste of your time and will improve your core maths.

Great option comming - Stats, Financial Models, Graph theory and Matrices.

South Africa

If you are in grade 11 or grade 12 find out from your school what are your options to doing AP Maths. Either way doing APMaths now will save you doing these topics later. The assessment has been benchmarked by UK Naric (National Academic Recognition Information Centre), the UK equivalent of the SA Qualifications Authority, and is considered equivalent to the UK A-levels.


UK/Cambridge International

If you are a UK A-Levels student then APMaths coincides 90% with your A-Level Core and Further Maths Syllabi.

These are all core concepts to A-Levels Maths and A-Levels Further Maths.

Cambridge A-Level Maths :

Cambridge A-Level Further Maths :


GDE students Have 4 modules Algebra 1 and 2, Geometry and Precalculus. AP Maths and Greade 12 Core Maths cover around 90% of your topics and introduce about 10% of topics not required (Noteably financial mathematics)

will shortly recocile these differences. I would recommend AP Maths for GDE students, because it will prepare you for the inevitable confrintation of College Maths.


There is a basic cannon of maths, Geometery, Trig, Algebra, Calculus and everyone needs an introduction to Mechanics, Stats and Applied Maths. Adults have the luxury of not having to follow a  rigourous syllabus. AP Maths is a gentle introduction to teriary Maths if you have High school maths waxed.





Those who light their candle with mine, do not diminish my flame. 
Thomas Jefferesen
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Multi Tasking Sucks

Those of you that have read my education blogs will have picked up my disdain for the classroom system.   My claim is that online working can "increase your education productivity by 5 times". Failure at Mathematics is arely the ability of the student but usually the inability to handle the classroom system.  It may seem a crazy claim, that can't easily be measured, but let me prove it by illustration.

Don't just take my word for it.

A typical student attending a typical classroom lecture at a typical brick and mortar institution is thrown each morning into  a multitasking nightme.  Find your way to class - argue about you seat - deal with the ADD kid in the seat next to you - watch the lecturer make announcements - write down an equation - cockblock the dreamy kid looking at you two rows down - listen to an inane question from some dumbass - write down another equation - listen to an unintelligible esoteric question from some boy genious - more from the ADD Kid- another equation - focus on holding in a pee - more home work announcements - check your cell phone messages for announcements on the next science lecture - another equation - rush to the toilet.  The hyper  busy environment of the classroom regime, occurs because it it a sausage factory trying to balance the needs of the teachers with the needs of the students. It is a mess. 

OK so what is so bad about Multitasking? You have all heard mum brag about her multi tasking skills.  Some of the most busy people at work seem to be those that are best at multitasking?


You are much more efficient if you shut everything else out focus on the issue at hand.  I am going to prove it to you:


Consider the multi tasking probelm of write down three symbols and increment them   like this:

Arabic  numeral    Alphabet            Roman numeral

 1                          A                          I

then write the next row

2                           B                           II

and then

3                           C                           III


Keep going


4                           D                            IV

5                           E                             V

6                           F                             VI   





10                        J                                X


Thats Multi Tasking. Now put away Multi tasking and focus on one column at a time












and then


1                         A

2                          B

3                          C

4                          .

5                          .

6                          .






Can you see (even before taking on Roman Numerals) that the Column approach is much easier? The one that uses focus? We should stop calling it multi-tasking, and call it “switch-tasking.” It is 5 time less efficient when it comes to measuring up classroom against managed online learning.

That is why multi taskng is only an illusion of productivity and why the classroom system sucks.  






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 We are often reminded that South Africns are on the bottom rungs of world maths education,  by some estimates beating only Yemen. This does not tell the whole story.

Rounding out the numbers, around 1.6 % of South African learners get a distinction for Grade 12 Maths (8 000 out of 500 000). This compared to UK GCSE where 3% of learners get a distinction. However our NSC Grade 12 Maths exam is a level more difficult than GCSE including areas of financial maths, statistics and calculus.

What is interesting is that when you examine Private Schools in South Africa, the distinction rate jumps closer to 20% at top schools. Far from producing the worst results, South African private schools produce closer to the best maths results in the world. The result is that 15% of top University entrants come from IEB schools. Maths distinction graduates are nearly fully employed whereas the national average of young unemployed is over 50%.

The limiting factor is the quality of teachers and the access to technology. Quality teachers are hard to come by and will always be a limiting factor. However an opportunity awaits us. Adopting technology should be a priority. Machines simply make better maths teachers. We have the opportunity that in more developed countries the maths teachers unions are more militant and resist replacing human teachers with machines. Ironically the second worst country in the world is best placed to do this. Small studies are already showing that access to broadband video and deep learning techniques can raise the distinction rate dramatically. Machines are tireless and almost unlimited in productivity. A determined roll out of maths teaching technology can raise our distinction rate ten fold.

That is why at the Copeman Academy we put our emphasis on Creative Commons and AI Pattern recognition. So far so good. We have a 100% distinction success rate.

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The Land Issue

Consider that the Land Issue may never be solved.


Land is simply a proxy for wealth and when we say people are dispossessed of Land, what we really mean is they are dispossessed of wealth.


When we mean - give Land - what we really mean is - give wealth - to those that do not have enough. The problem with the concept is that in order to do that, you have to take it away from someone else first. Few people feel that they have too much wealth and would like it all taken away, to release the burden of owning wealth.


Thorstein Veblen dealt extensively with this problem 100 years ago. While Marx predicted the demise of capitalism, Veblen predicted that the masses would emulate the ruling classes. Unlimited wants with limited resources is the fundamental problem of economics and no amount of indignity, self justification or unsupported aggression can solve it.

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The Consumer Surplus

The consumer surplus is one of the most beautiful things in market capitalism, something that is shared by all of us. Yes rich people get more of it than poor people, so it is shared unequally, but it is there for every one to take.

If you understand that prices are determined by supply and demand in markets and the marginal principle determines the final price, the consumer surplus is the integral of the demand curve from zero to the amount supplied less the market price of that demand. (The blue area in the diagram)

For example as a rich person I would be prepared to pay $10 for a price of bread if that was the price. The market price is actually $6. Then the consumer surplus for me is $4. I am getting a bargain on bread because I am paying $4 less than I would have paid – I would have been prepared to pay $10.

Like I said one of the most beautiful things in market capitalism – we all benefit.

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A Gini for Grade 12 Maths

South African ranks in the highest for economic inequality (Gini 0.67) and in the lowest for mathematics and science education (WEF 137). But there's the rub …

South African society is ruthless. While our system consigns the masses to a future mired in misery and poverty, our 1% are destined for greatness. If you lie awake at night worrying about egalitarian equality for all African children, don't read any further ...

While much economic analysis has been done on the poverty of Nations by looking at the 99% and the Analysis of the Gini coefficient, we should suppress the urge to fit a function to the Lorenz curve and then integrate that function. I do it anyway (simple non linear regression on a published dataset) - in South Africa I estimate the Lorentz curve for Grade 12 Mathematics outcomes to be y = 30 + exp(x ^ 2.7/59000) – see graph.

At the Copeman Academy we focus on the 1% and there you get a completely different picture. When we pit our top 1% of students against the 1% of the leading Maths nations. (Singapore, Finland) You find that our 1% leads them not follows them!

The bottom line is that students willing to leave the 20th century “teacher focused” methodology and move to a tech focused AI technology have the advantage, no matter what country they are in. The best maths teaching countries are still geared to produce mediocrity - in buckets!

How does this happen?

Top performing Maths countries with a higher level of Maths education and a lower Gini coefficient of inequality may produce an overall level of Maths and Science, but their use of “better teachers” actually works against them in the 1%. The top students get lumped in for longer with the 99%. In South Africa because our Government Education is so low, the 1% are forced to leave the grid early. They actually end up ahead of the students in the developed countries that stick to the grid.

Essentially because those institutions in South Africa teaching Maths and Science to the 1% are independent of the failing Government system. Here at the Copeman Academy we take no Government funding and are not beholden to bind with the 99% attached to the grid in a lifetime of mathematical poverty.

The unexpected outcome is that those students in developed countries construed to be more successful (better teachers) have their 1% dragged down to the level of their 99%. Whatever time you spend in the system for the 99% (whatever country) is essentially wasted. In South Africa we spent 92% of our education budget on teachers salaries and 8% on infrastructure and technology. At the Copeman Academy we spend 90% of our budget on technology and 10% on teachers salaries. Because technology is the most important component of Maths education. Those that break with the Grid and focus on technology based outcomes actually exceed the outcomes achieved by the 1% in the more egalitarian societies.

This leads to a dark scenario for the 99% and a bright one for the 1% who make the jump. Like I said, we are a ruthless society.

Further Reading Links

Open source and Economic Inequality

World Maths Ranking

Primer on the Lorentz Curve

Play with the code

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Stagnant Jobs growth

Read through the recent announcement of Pali Lahohla, Director General Statitistics about stagnant job growth in South Africa and you see a gloomy future. Blips and outliers aside, jobs are not growing. However each year around 500,000 new entrants seek employment. The greatest pressure is on youth and that means black youth.
Jolly as he is, the DG falls into racist thinking that can damage us structurally. Believing that unemployment is caused by race, leads to tilting at windmills, employment equity quotas, BEE, NSFAS, RET and any number of initiatives that have yielded well – nothing. (the DGs results not mine) White youth are largely fully employed and the other groups have issues. Yes but that is not the cause of problem.
You can't legislate against the 1% because their skills are simply too mobile. The reason that racists legislation fails to increase employment in the 99% is that race is not the cause.
To understand why race is the result and not the cause, you have to understand Granger Causality. Yes there may be a correlation between race and unemployment, but the cause is lack of mathematics. If you leave race out of it, you will find that the 5000 or 1% of the 500,000 that achieved a distinction for Maths have a golden future. While others discuss hustling for a living, the Quants are looking at racking up jobs at R 50,000 a month. The demand supply is so skew that you can't even find the candidates to fill the outstanding vacancies . The hustlers will join the unemployment ques or at best be paid intern wages.
Welcome to the rollerball economy, or knowledge economy to those that seek to avoid the ugly truth - The knowledge economy is upon us. Machines work better than people. The best for people is programming the machines. Did anyone notice that the value of Naspers now exceeds the entire capitalization of the South African Mining Industry? This, while it employs a fraction of the workers.
Take the data and rearrange. Instead of using race as a criteria, use grade 12 Maths Distinction pass and I will wager a cyber-wallet of crypto that you will see a 90% correlation, and Granger Causation. This is why I have spent such a great deal of the last year developing a MOOC that starts with Grade 12 Maths.
At a macro level, our languishing at the bottom of the WEF rankings on Maths education is why the rest of the world has recovered from the recession and we are plummeting.
If you have a child or know a child in or approaching Grade 12. The best thing you can do for them is put them on the right path to getting a distinction for Mathematics. It may be the most important exam of their lives. That, more than any other factor than inheriting a family fortune, is their gateway to the 1%.
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Diamonds and Rhodes

E101Economics : Land

To illustrate where Land turns to Capital and Entrepreneurs we should to discuss the Diamond business.

Diamonds  go back 2 Billion years.

What gets squirted out in the Kimberly Pipe is a molten belch. Current Geo Economic theory says that there are probably diamonds the size of cars driving around in the mantle that could take a wrong turn and pop out at any moment. Not Nature, Australopithecus,  Homo erectus, The Khoisan's, The Dutch, The Griquas, The Basters, The Afrikaners or The German and British Settlers were able to commercialize this resource. For 2 Billion Years less 140,  no one turns the idea into money until a brilliant strategist, Cecil John Rhodes comes up with the idea that he is going to control the flow of Diamonds onto the market and take Millions of Dollars off the Jews and Homosexuals, years in advance of him actually taking the stones out of the ground!

The money does not comes from Africa, Africans, African traders, African workers, Settler greed,  Rhodes or the Oppenheimers. The money comes from the Ghettos of Europe via the Merchant Bankers of the USA.

Generations of Griquas had stepped over the shiny stones until, in 1866, Schalk van Niekerk purchased the Eureka Diamond from the Erasmus family. Opportunists piled into New Rush grabbing at the alluvial deposits, levelling Colesburg Kopie shovelling out the ever deeper sand.  By the time their overcrowded, waterlogged claims hit blue-stone, the diamond industry was in turmoil.

In nineteenth century Europe, Jews are not welcome at the Club and homosexuality is a jail-able pffense.

Rhodes has to sell the idea that diamonds have lasting value. He is faced with the immediate record that under the Afrikaners and Settlers (Kimberley's 1880 version of white monopoly capital) , the Diamond Business has the attention span of a two year old. Under their watch, the  DeBeers brothers sell DuToitspan for £8,000 and by 1875 most diamond traders are bankrupt.  The stressed out participants left are seeking to get out. Swimming against the tide of popular opinion, Rhodes is able to raise enough capital in Europe to buy out the bit players and make De Beers the first really important public Company in Africa.

Using the charm and showmanship of a nineteenth century Larry Page and Elton John, Rhodes becomes the richest man in the world in a little over five years. The Jews and the Homosexuals believe him, The Jewish Homosexuals bankroll him and the Anti Semites and homophobics are gobsmacked. The Afrikaners become Cattle farmers, The Settlers moved off to Joburg in search of Gold and the Sothos show little interest in Diamond mining beyond getting together enough savings to buy a rifle and head for the rurals.

Rhodes is the ultimate outsider. Reviled for his sexuality, he turns to other victims of predjudice and they build an Empire with little more than tenacity and perseverance.  How you get from Rhodes juggling sausages in 1875  to pulling down his statue in 2015, parallels  the modern political history of South Africa

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The Trouble with Modern Universities

The Neoliberal working world that we have come to believe in, no longer exists. (See The Rollerball Economy)

Universities are scattered over 5 levels  : denial, anger, bargaining, depression, acceptance.

Modern brick and mortor Universities that dominate today's tertiary education tend to move slower than events around them. This is not to say that there are not great places offering great opportunities to great futures. There are. However, the very term "Ivy League" conjures up social images of balmy afternoons spent languishing on the lawns of campus in the company of students from a wide cross section of disciplines. The Business Student should be cautioned against the pitfalls that exist in such a world.

Modern Universities with the campus community, social architecture and "all round education" offered, tend to have been built in the 20th century, or are run by academics trained in the 20th century. That means that when they were formed the Internet did not exist. The knowledge economy as we know it was theoretical and open source was not a mainstream culture. Where there is  no such thing as free lunch you find closed access journals publishing obscure psuedo-mathematical digests, lecturers earning royalties from copyright texts and a financial system of stipends, put in place to lock any prospective graduate into a prohibitive debt cycle. Students following this path are likely to spend the majority of their twenties mired in debt and their thirties placed in the grey world of the working 90%, with an outside chance of ascending in their forties  to the 10%. In this world the worst lack all conviction are the best are full of passionate intensity.

We have not seen a world as unequal as ours since 1913. 100 years ago the outcome was disastrous. Some say the War is imminent. Some say the War has already begun. Its a new War fought between the 1%, where the 99% are irrelevant to the outcome and rather than marched  to the front - they face a far worse fate- they are ignored and sent to watch football.  The War will not wait for you. Dorothy, if you spend your twenties skating around in the twentieth century, do not be surprised what when you wake up you find that Kansas has gone bye bye and you are watching from the sidelines in the cheap seats.

In a constant state of denial, most Universities are more interested in preserving the known traditions, preserving the employment status of their staff and providing safe pathways for the young minds entrusted to them. Business students are particularly susceptible to the dangers associated with this approach.  The Rollerball economy tells us that the safe paths lead to the football stadium and that the vast majority of people will be excluded from labor in the near future. Only a very few (Performers, Capital Managers and Capitalists) will be disruptors. The rest will live in shallows and misery.

To their credit Universities have tried rapidly to adjust to the new world. Online facilities are available and use of open source is encouraged. Yet no matter how hard they try, Universities are run by bureaucrats. The regulations set up by the Education Departments that oversee tertiary education add an evaluative layer of red tape that ties down real innovation. In a world where courses take upwards of three years to approve from concept to delivery,  Universities, no matter how they try are by definition as much as 5 years out of date. 5 years ago, Uber did not exist. ISIS did not exists, Newspapers still had a future and Reality TV Stars did not win elections.

To the Business student, the future is particularly important, even if that is a future that holds a gripping darkness for 99% of the people!

Modern Universities are notoriously retrospective. The 1 to 60 Lecture in which a "Font of Wisdom" Professor repeats the same lecture year after year to a less and less relevant audience can no longer compete with The MOOC, which uses the Internet Delivery of the state of the art production of the topic under consideration. Combined with the input of peers from multiple countries and cultures, the MOOC (Mass Open Online Course) provides not only a competitive alternative,but a superior alternative. A first class graduate from a well designed MOOC will outperform all comers in the knowledge economy. This lean, mean apparatus does not suit the bloated administrations.

If that is not enough here comes the grimy underbelly. In most multi discipline Universities and Colleges, the Business Students are usually the majority and they subsidize the more specialized courses! In a financial model that no longer works, Universities have begun to cannibalize themselves. Business careers, the only outcomes that can lead to a lucrative future, sacrifice quality to pay for their neighbors to pretend that they are studying for careers that will create return.  Now this may have worked for prospective Capitalists in the 20th century, where we subsidized the poor people who would spend the rest of their lives working for us.  In the Rollerball Economy Labor loses value for all but the few performers. The current system has already begun to breakdown and the anger is palpable. Riots plague the less privilege and the privileged blanket themselves in a fee structure that is designed more to induce the illusion of  financial advantage than to address the pressing problems of Post Capitalism

To their credit, many Universities have begun bargaining with the Rollerball Economy. They are using "blended learning" as a supplement to their brick and mortor activities, but however well intention-ed, their online efforts are, they are  trapped in the old model. Carrying the old fashioned debt heavy package may work for the staff , but  consigns the graduates to the underclass.  The sclerotic Government supported, debt packaged offering is no longer financially justifiable and as this reality sets in depression is inevitable.

The MOOC brings the opportunity of free education. It also brings new challenges. The MOOC replaces the Font-of-Wisdom with the worlds-best-presenter and replaces the clock work system of industrial organization design with an open online collaboration that never sleeps. The world of business and learning blend naturally and the new 1% begin to emerge.


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