Rational actions

Thomas Levenson's "Newton and the Counterfeiter" is a great book. It's about Sir Isaac Newton's time as Master of the Royal Mint, but the backdrop is the catastrophic state of the British currency at the end of the 17th century. Silver was in short supply and half of all the coins in circulation disappeared, meaning that trade was grinding to a halt. The Secretary to the Treasury wrote to bankers and wise men of the realm to ask for help in averting economic collapse.

Newton, being the cleverest person who ever lived, quickly analysed the situation and found that the crisis was caused by, as an economist would phrase it today, rational actors responding to uncomplicated incentives. The British government was fixing the price of silver artificially low so that the metal was worth less in coins than it was as bullion. With the entirely predictable consequence that the coins were clipped or melted wholesale and the bullion sold in the Low Countries.

Rational actors responding to uncomplicated incentives were much in evidence in the newspaper today. There has been an astonishing 669% rise in children studying for an ICT qualification instead of history, geography, science etc. Aha! You might think that this would bode well for Britain's engineering future. But no: it's an educational version of Gresham's Law, made possible by the government fixing the wrong exchange rate, just as they did for silver under William and Mary. By saying that this apparently worthless ICT qualification is the equivalent of 4 GCSEs (which, of course, it isn't) the government has given both pupils and more importantly schools (because league tables are calculated on the number of GCSEs passed, irrespective of which GCSEs they are) an overwhelming incentive to substitute "hard" GCSEs.

A report last year by Ofsted, the education watchdog, found that qualifications such as the one run by OCR were “less demanding” than other mainstream exams. It said pupils were able to pass “whether or not they had understood what they had done”.

[From Pupils flock to 'less demanding' ICT course - Telegraph]

If this continues, we have no chance of competing on the global stage of the future. We will soon have an bizarre kind of apartheid in place, where private school pupils study physics, chemistry, maths, history, languages and so on while public school pupils study interpretive dance, OCR IT and media studies. Then all of the private schools kids will go to good universities and then leave to work in China or the USA. What is the technology sector going to do to stop this from happening?