Emanuel Derman

The business of universities is … education? Excellence? Job placement?

Emanuel Derman
Apr 30, 2012 01:32 UTC

Every day I seem to come across new articles or incidents concerning universities that indicate the increasing strength of the tidal forces pulling at them and their denizens:

Ethical problems: University of Pennsylvania sloppy about hiring someone with a fake PhD, then reluctant to fire him.

Profit-making as a dominant goal: The New Yorker on Stanford as Get-Rich U. Universities used to be safe jobs whose sole glamor was intellectual. Now not only university presidents but even faculty can make large amounts of money by patents, connections with business, consulting, boards, angel investing. There are massive discrepancies in salary across the faculty.

The relentless desire to grow at all costs: NYU faculty complain.

Part of the trouble is the perplexity as to where universities lie in the spectrum of higher learning vs business. Forty years ago, at least in my imagination from the student side of things, it was simple: as far as admissions, your grades were supposed to be all that mattered (in England and South Africa, provided in the latter case, of course, that you were the right color) and everything else counted for nothing. Universities were supposed to be dedicated to learning and teaching, and tenure provided some freedom.

Now, universities are different.

They patent algorithms.

Pharma companies reside on their premises.

Administrators think it’s their job to be entrepreneurs & fund raisers and multinational foreign-campus operators. They have PR departments. They worry about U.S. News & World rankings, and adjust to optimize them.

No more inhibition

Emanuel Derman
Apr 20, 2012 16:22 UTC

When I used to blog for Wilmott, I used to be a frivolous uninhibited person. But now, I’ve noticed, the gravitas of Reuters, and the fact that every post has to go through their editorial staff who have standards to uphold and probably don’t want to get sued either, has inhibited me. I think twice or even three times about writing unweighty garbage. Will it be long and significant enough? I don’t want to sound stupid.

The hell with that.

The other day I used the Chase app on my iPhone to deposit a check from my health insurance for $17.32. The app made me enter the amount,  and then asked me to use my iPhone’s camera to photograph both the back and front of the check. Then it sent it off, and later, I got an email telling me that the check had cleared.

Impressed, I sent out a short tweet saying “Chase iPhone app lets you deposit checks by photographing them. Just did. I’m hoping you can soon deposit cash the same way.”

The End

Emanuel Derman
Apr 16, 2012 13:00 UTC

When the era of rationality finally dawned, it became clear to everyone that love doesn’t last. Furthermore, everyone agreed that humans spend too much of their youth immersed in and distracted by the misery of courtship and the agony of unfulfilled sexual attraction, and so much of their middle and old age in the sadness of waning attraction and regret. No one in the era of rationality was in favor of unavoidable human pain. So, when the entire human race decided that the complications caused by lust weren’t, in the end, worth it, they concluded that people would live much more calmly and pleasantly in a society where sexual competition was absent. It soon became clear that humans would be better off if everyone simply stopped reproducing.

Some people argued that one should end not just the human experiment but the entire life-on-earth experiment, and humans did briefly consider putting an end to the reproduction of all life forms. Other people argued persuasively that (a) it wasn’t practical to eliminate every single species, especially the invisible ones, and (b) it wasn’t up to humans to make decisions for others. What was most convincing about the plea to let other species be was the argument that, since eliminating sexuality was really an attempt to eliminate pain, humans had no right to inflict on other animals the pain of forcible elimination of sex. This argument won the day. So, humans simply decided to stop reproducing, voluntarily, but to let animals and germs and viruses be. Some people suggested that in that way evolution might throw up something better, but no one really cared. It wasn’t their business.

It turned out to be easy to convince people to try to stop reproducing. And once everyone agreed, it wasn’t that hard to put into practice. People took to the idea surprisingly quickly. For a brief time some continued with occasional acts of contracepted sexual intimacy, but soon found that the greater ideal of human interactions free of the strains of lust was workable and preferable. Boys and girls became really good friends, even post adolescence; competition between people of the same sex and between the sexes themselves decreased; husbands and wives stopped arguing; eventually even gay couples whose continued sexual behavior would have been compatible with the cessation of the human race found that they weren’t really that interested in the act itself. As a result, everyone went about their work more seriously and the experiment became a movement and a success. Life became pleasant, though never ecstatic, and that seemed good.

Professionalism and its discontents

Emanuel Derman
Apr 10, 2012 13:46 UTC

“I must accept that my body cannot do too many things at once. I must learn to say, ‘No.’ I must take care to get sleep. I must think of myself. I must do things that are fun. I must get the ‘musts’ out of my life.”

The instructions a therapist in Sweden gave to an apparently fairly healthy
golf-playing woman who was on state-paid disability for three or more years.
2002 article in the NY Times

I recalled and then tracked down the existence of this self-indulgent-sounding paragraph in an article I read ten years ago. I was kind of struggling to do a thorough job at something I must do but didn’t feel like doing, and suddenly it popped into my head.

Partner$ in crime

Emanuel Derman
Apr 4, 2012 16:36 UTC

I don’t understand money too well, the idea of it, what exactly it is. For a class I’m teaching I just read an enlightening British book on that subject, Where Does Money Come From?, recommended to me by Perry Mehrling, the author of a biography of Fischer Black. (Perry is giving a talk at Columbia on The Inherent Hierarchy of Money in a seminar I run next week.)

As I understand the money book, which focuses on Britain, money is at bottom created by commercial banks every time they make a loan. But the currency they loan in is created by the sovereign/state (or whatever passes for it) that gives the money practical legitimacy (for paying taxes, etc).  When states or sovereigns pass on, so, often, does their money. As John Kenneth Galbraith once said, “The process by which money is created is so simple that the mind is repelled.”

So, banks and states are cronies.  The state gives the banks (and credit unions, to a much smaller extent) the right to create new money. And the state borrows from banks, and bails them out when necessary.