Of models and academic rigor

‘The real world is full of uncertainties . . . and why the value of education is the training of the mind to think, not the learning of many facts, as Einstein says’ – the writer counsels a doctoral student. She attends a couple of his workshops, demonstrates discipline in her problem-solving. She subsequently requests the writer to critique her proposed published article, a step prior to completing her dissertation. And so he has a big smile reading how she qualifies the outcome of a quantitative model in a predictive exercise – acknowledging the necessity of future studies to dissect the impact of a firm’s competitive efforts. (Two Nobel laureates will always be tied with LTCM that imploded in 1998; the hedge fund had delivered annual returns shy of 40% owing to a model they designed . . . until its demise.)

The thought comes when the writer and the wife are at the daughter’s place chatting with her friends: a Chinese from Shanghai working in Boston, and an Italian and an English chap, both London residents. Two of them share something in common, the highly-rated American university within the financial community. One with a 10-year stint in international investment banking and urged to earn a graduate degree because he is to sit on the board of clients, and needs the credentials – and so the writer adds in jest, because you look like a high school kid! And both he and the colleague start poking fun at their school work. So the writer invokes the Einstein quote. They agree but can’t help give a dig: how quickly they can synthesize and conclude class discussions simply because they have done the real deal at work not simply an exercise! And the writer wants to add: you don’t have to be a New Yorker to be full of yourself!

How do we explain 40-50 years of marginal economic performance? We have well-developed disciplines and very smart people. Is there something in our heritage, history, culture and tradition that influence our worldview? What about the abundance of academic rigor we throw into our problem-solving? One of the lessons the writer recognizes doing business globally is that the value of Western models, just like that of education, is not the models themselves but the training of the mind to think – which he keeps reminding himself when in Eastern Europe. Mistakes do occur and thus the need to stay positive, focused, and to keep the spirit alive . . . and move on. As importantly, problem-solving differs location by location – say, in a small enterprise in Africa, in the US, Canada or even in Puerto Rico.

Yet the model is the same: make the undertaking competitive in order to sustain growth; and consequently the economic impact becomes broader, beyond self-interest. Makeshift, on the other hand, doesn’t cut it thus lateral or creative thinking in both rich and poor countries is an imperative, unfortunately undermined by a restrictive, parochial perspective? Something Medvedev concedes hence criticizes Russia’s economic backwardness and is pushing for greater investment, innovation and relevance to the 21^st century beyond entrenched oligarchy (that cuts poor countries in the knees, but are unfortunately clueless) and beyond oil-dependence, OFW-dependence in our case!

Discipline and focus are inherent in world-class athletes, including Jackie Chan playing the role of a kung fu master: he chides the cocky and fresh American turned Karate Kid, ‘Empty your mind and focus’. . . ‘Take off your jacket, put it down, pick it up, put it up; put it on; take it off, put it down, pick it up, put it up, put it on; take it off, put it down, pick it up, put it up, put it on; take it off, put it down, pick it up, put it up, put it on . . .’

Do we want to expand our worldview beyond our borders? Do we want to recognize that the value of Western models is not the models themselves? And do we want to embrace discipline and focus?

The writer’s family joins him in extending best wishes to one and all . . . through the Season and the New Year!