The Economics of Education


EJP Photo

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The non-profit world is filled with passionate and intelligent people who fail because of the stigma around raising money. They fail because despite this stigma, organizations need money to accomplish their goals.

The world of education suffers from the same problem. There are fierce arguments about whether we should privatize education or keep it public, but these debates miss the point.

We need to raise capital within the education system in a way that actually increases the quality of students' education.

Creating and Capturing Value

There is at least one rule that all successful organizations must follow: all organizations must create value in the world “X” and they must capture some percentage of that value, “Y”. X and Y are completely independent variables, except that by definition, Y can never be larger than X. Successful organizations aren’t ones that capture the highest percentage of X, but rather the ones who capture the right percentage of X and distribute the remainder “Z” in the proper way, so far as they can influence it.


Y is typically defined as revenue, but revenue is often non-monetary.

In the current approach to education, the student’s goal is to capture as much of X as possible, and that is what we call learning. However, there is a total loss to education institutions—schools capture zero percent of the value they create through students. Students expend time and energy on school work, and it is graded and thrown away. We rationalize this by saying that we are creating a net gain to society in the distant future, or that we are being greedy if we capture any percent of the value that students produce.

But by doing this, we ignore the fact that our education system is based on an unsustainable business model. We sink enormous amounts of energy and money into schools each year without getting a direct return to sustain it. No institution can function like this in the long-term, no matter how altruistic or important its purpose. This fact is undeniably true.

In schools, students produce work that has no extrinsic value: an assignment is completed, graded, and thrown away. As a society, we are losing out on an enormous amount of value. However, each assignment is an opportunity for students to create something of extrinsic value, and this has the happy consequence of increasing the assignment's intrinsic value as well. If we do this, we not only create a way of sustaining our education system, but we incidentally increase the intrinsic value to the student as well.

As we redesign education, we need to do so in a way that gives us a "Y" greater than zero. This is another way of saying that our students' work should have value not only to them, but to the school and society as well. 

Without this, the education system will remain in crisis indefinitely.

HackSchool is doing this. Students solve the problems of real communities and learn tremendously in the process. Check out and subscribe to HackSchool's blog for updates, student project summaries, and so on.

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Innovation: Problems of Science and Technology

[Total read time = 6 minutes]
[Bolded read time = 1 minute] 

"I'm interested in seeing where the curiosity will lead to, not, 'Where have we been?'"
-Clifford Stoll in the above video

I'm uncomfortable with the language of "innovation." Recently, it seems as if "innovation" has become Innovation™. The activity of creative problem-solving has been packaged and is now being distributed. It is traded on the non-fiction market: people are reworking the fundamentals, delivering happiness, and building lean startups. Don't get me wrong: I'm obsessed with all of this and I love Stanford's approach.

However, in the world of innovation, we seem not to actually understand the kind of work we're doing. We treat the innovative process as a commodity and expect to create, with it, entirely new solutions to problems. But here's the problem: a commodity is a product of technology. What we're searching for requires science. Let me explain.

The first time you do something, it's science. The second time, it's engineering. The third, it's technology (Stoll).

  • Science seeks to discover systems of principles that explain the world's happenings.
  • Engineering uses these systems to design useful tools.
  • Technology takes these useful tools, connects them with others, and packages them into distributable solutions (aka, commodities) based on the available science and engineering.

Note: the term "science" does not imply anything except for what the definition says (I'm not talking specifically about physics, chemistry, etc.), and "technology" does not imply anything specifically digital or computer related.

The problem is this: our technology and engineering can be rock-solid, but if our science is wrong, everything that follows helps on a surface level, but fundamentally makes the problem worse. In education, our science is wrong. Or to be more accurate, our science is first invisible, then wrong. I've discussed this point in more depth previously, so I won't dwell on it now.

We in the education innovation world like to hide behind Innovation™ and it lets us avoid problems of science. Again, I'm not talking about hard sciences like physics, chemistry, etc. I mean science as the process through which we seek to discover systems of principles that explain the world's happenings. If we can focus on identifying a problem, designing a solution, prototyping, iterating, testing, rinsing, and repeating, then we can ignore the uncomfortable and difficult questions like, "Am I even looking at the fundamental systems in the right way?" Most of us hardly know what it means to ask, let alone begin to answer this question.

Systems of principles (products of science) must be present before practical problems (precursors to technology) can even emerge. If we perfectly solve a practical problem (e.g., increasing test scores) but it turns out it's based on a bad system of principles (e.g., education as a system of knowledge acquisition), we will solve a very short term problem, but compound and deepen the troubles of the problem-solving space as a whole. It makes the problem worse because it falsely validates the bad science from which the technology emerges. Play this out over a century+ as we have in the United States, and bad science becomes the unquestioned foundation. Big problem.

Further, there aren't even really places where this kind of science development can take place. We have incubators and VC firms help with the engineering, entrepreneurs/foundations/funds to take care of the technology, but nowhere to do the science required to fix the education system. I once suspected that universities played this role, but turns out I couldn't have been more wrong. This work needs to be done, and we need to create a place in which to do it.

At this point, I want to pause, because I feel like I'm picking on "innovation" quite a bit, and in fact it plays a very important role.

  • Innovation means to change or renew something old into something new and different. It stems from the Latin "in" and "novus" which literally means "into new."
  • Invention means to create something original that is fundamentally different than all things before it. It stems from the Latin "inventus" which translates roughly as "to discover or devise."

Notice that innovation relies on something old as a jumping-off point: a problem. Invention, on the other hand, requires no old jumping-off point, only a set of principles. Innovation implies reasoning by analogy, while invention implies reasoning by principles.

There is an important difference between reasoning by analogy vs. reasoning by principles. We need to be able to reason by analogy because if we didn't, we couldn't get through the day. It helps us make adjustments and adapt to slightly unfamiliar situations. But when we want to do something new, we have to reason by principles, which equates to creating or using sciences (science, by our definition above). Reasoning by principles allows us to discover new things that are counterintuitive, like Einstein's special relativity. He couldn't have discovered special relativity through analogy because there were no analogies that would have led him there in the first place. Only principles. (Note: Einstein by Walter Isaacson is the most brilliant biography I have come across.)

By definition, it is impossible to create entirely new solutions to problems with technology. The technology we're talking about here goes by the name "innovation." When we think we're creating entirely new things with technology, we're confused. Instead, if we want to make something new, we need to use processes of invention (discussed briefly here) to rework the science that funds our problem-solving activities in education. Once we're moderately confident with our science--confident due to rigor, not ignorance--we should then boldly and cautiously move on to engineering and technology.

There is a reason that computers were not invented before the advent of quantum mechanics. Quantum mechanics (science) informed the invention of the transistor (engineering), which created the conditions through which computers (technology) could then emerge.

Similarly, in education, if we do not focus on the science, we will never invent our version of "the computer." Again, by "science," I once again mean processes that seek to discover systems of principles that explain the world's happenings. Unfortunately I have very, very rarely seen research in the field of education that attempts this, and have talked directly about why in a previous post. One notable exception to this is the method through which Maria Montessori conducted research, which is far from perfect, but fundamentally dealt with science nonetheless.

Having said all of this about reasoning by analogy, it can be and often (but not always) is part of the process of invention. Reasoning by analogy provides us with a framework from which we work backwards to discover how one system of principles maps on to another. This is actually much closer to how Einstein made his discoveries, and the real powerhouse is reasoning by principles. Reasoning by analogy must take a back seat.

That's all for now. Click here and I'll let you know when I publish future posts.



A note for my philosopher compatriots:

As I discuss notions of principles here, I do not mean principles in the formal sense. I mean instrumentalist principles, in the way that Rorty, James, or Kuhn might use the term to describe non-objective, non-universal ways of describing how things might be described as working. Kuhn puts it well:

From "The Structure of Scientific Revolutions"

"...It makes little sense to suggest that verification is establishing the agreement of fact with theory. All historically significant theories have agreed with the facts, but only more or less. There is no more precise answer to the question whether or how well an individual theory fits the facts. But questions much like that can be asked when theories are taken collectively or even in pairs. It makes a great deal of sense to ask which of two actual and competing theories fits the facts better."

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What is Philosophy, and Why Does It Matter? (Especially to Education)


There are few things that matter to America's future as much as philosophy. Philosophy is necessary if we're going to make any significant leaps forward as a society. But we can't fix a problem we can't see, so let's take a look.

First, forget everything you know about philosophy. I will give you new definitions, so pretty please pretend that you've never heard the word before.

In short, philosophy is the science of thinking. The better you are at philosophy, the better you are at thinking. The best analogy is language: you can get by with a little basic instruction and by listening to others, but you can't produce anything truly great without a deep understanding of how to use it.

Let me repeat: you can't produce anything truly great without a deep understanding of the root of your craft. This is obvious enough if we're talking about authors, engineers, artists, and so on. The author's craft is language and it goes without saying that great authors are exceptional with language. If your goal is to fix or advance civil-social society, your craft is thinking. Why? To create something great, you need to understand the materials you're manipulating--authors manipulate words; society-fixers manipulate ideas.

If you're any sort of society-fixer, you need philosophy. And by "need," I don't mean, "it would help." I mean that if you are without philosophy (the science of thinking), your work should not be taken seriously. That sounds a bit inflammatory, so let me explain.

Philosophy: A Brief Summary (History)

Philosophy is stereotypically seen as a heady exercise reserved for ivory tower intellectuals and deadbeat potheads. Like many stereotypes, this is based somewhat in reality.

There are really two main, ways that people approach philosophy:

  1. Philosophy as insight: the part of philosophy that is responsible for the "deep ideas" and paints us a picture of a stone man, chin-on-hand, deeply pondering "the meaning of life." Our deadbeat pothead trades exclusively in this.
  2. Philosophy as analysis: the science of thought. This includes logic, methods of justification/proof, procedural systems, and provides the rules for all meta-cognative analysis. The origin of mathematics and science. Ivory tower intellectuals love this stuff.

As illustrated by our potheads and intellectuals, if one approach to philosophy is taken without the other, it loses credibility. We need both in order to do legitimate philosophy (legitimate "science of thinking").

Very few people (especially philosophers) see this distinction, and that's a big problem...

And now, a story to illustrate why:

Back in the days of old, philosophy (or philosophia, as it was called) contained within itself all other fields: mathematics, medicine, engineering, physics, etc. All of these things were effectively just "part of philosophy." Philosophy was credited with advances in all of these now-distinct fields. But as technology advanced, distinct disciplines began to mark themselves as separate from philosophy. Complex thoughts about numbers and shapes gradually developed, and eventually mathematics was born as a field unto itself. Tools for measuring physical phenomena eventually came around, and out popped physics.

With each advance in intellectual or physical technology, philosophy birthed a new field and lost a bit of its jurisdiction. Each field separated itself from philosophy because the new technology provided a way to reach better insights than were possible through abstract reasoning alone. The creation of the telescope meant that mythology no longer provided the basis for astronomy--physical observation provided the insight. Thus, astronomy emerged as a field unto itself, and philosophy lost another bit of real estate.

Now, remember that insight is not all there is to philosophy. Each and every field is still fundamentally rooted in the methods of analysis endowed to them by philosophy. That is to say, if any field (whether physics, education, or medicine) is to function properly, its practitioners must be masterfully skilled in analysis--in philosophy. 

It's hard to overstate the serious implications of this. If you don't deeply understand the methods of thinking and analysis of your field, your work should not be taken seriously. That is even, perhaps, a wild understatement.

One of the great blunders of the education world is the idea that advancement doesn't require exceptionally masterful thinking. Educators tend to believe that if someone has a great idea, that's good enough. This is dead wrong, and this inherited "wisdom" has severely disabled our field. In chemistry, it doesn't matter how many years of experience you have working with chemical compounds; if you're not a master of scientific method and analysis, you will produce mediocre results at best. Same in education.

Of course, extensive experience is necessary, but experience without philosophy (the science of thinking) means, by definition, that we can't use our experience in any excellent way. (An understanding of this distinction between "necessary conditions" and "sufficient conditions" is a very small part of knowing how to think well.)

The Problem With Philosophy

If people don't think about potheads and professors when they hear "philosophy," they think of Plato or Nietzsche. The idea that Plato represents contemporary philosophy is just as absurd as the idea that Thales represents contemporary physics (Thales believed that everything is made of water). Likewise, there's as big a gap between Nietzsche and contemporary philosophy as there is between Newton and quantum physics.

I mention this because philosophy students and so-called philosophers, ironically, do the most to prevent the general public from realizing how important philosophy is to our progress as a society. In short, they confusing talking about philosophy with doing philosophy.

If you're discussing the importance of Locke's empiricism to modernity as a response to Descartes' rationalism, you're not doing philosophy, you're just talking about philosophy. This is worth pointing out, because the vast majority of philosophy students and philosophers think that this is what it means to do philosophy.

If that's what philosophy is, then the general public can't do philosophy without spending years slogging through old, poorly written texts. So thank God that's not philosophy. It's an exercise in intellectual history, but it's not philosophy. It would be absurd to think that discussing Newton's laws or Thales' wild theories actually counts as doing physics. Same with philosophy.

Side note for the geeks:

Philosophy as an academic discipline is organized on three axes: traditions, time periods, and branches. Philosophical traditions include Existentialism, Analytic, Pragmatist, Structuralist, Post-Structuralist, etc. Time periods include ancient, medieval, modern, etc. Branches include epistemology, ontology, metaphilosophy, aesthetics, logic, metaphysics, etc.

These three axes are ways of retrospectively categorizing certain types of thinking. These distinctions are not particularly relevant or interesting unless you're studying history. Don't confuse any of these things with what philosophy actually is: the science of thinking.

Why Philosophy Matters, and How

I am very deeply involved in many facets of the education world here in Denver, I often ask people the following question: "What do you mean by the word 'education'?" Unfortunately, I have yet to hear an answer that even approaches philosophical coherence.

In other words, I have yet to hear an answer that shows a deep understanding of the science of thinking. When I ask this question, 99% of the time, I get an operational definition when I really should be getting a conceptual definition. You can't do much with an operational definition because the terms of the definition are constrained by the context that the problem-solver is trying to escape in the first place. So, by definition, any work in education based on an operational definition cannot be especially innovative or inventive because that work is constrained by the problematic circumstances with which the definition is constructed.

To illustrate:


Operational definition: heat is when I touch my hand to a stove and I feel a burning sensation, or when I hold ice up to a fire and the ice melts.

Conceptual definition: heat is energy in transfer between a system and its surroundings other than by work or transfer of matter.

The first definition isn't going to get scientists very far--it is constrained by very limiting context. The second definition gets us quite a long ways.

These two different types of definitions are considered some of the "basic laws" of the science of thinking--but the terminology itself isn't important. The important part is the meaning behind the terms, but I've found that the education world doesn't even know where to start when asked to give such a definition for "education." This would be the equivalent of asking a chemist to conduct an experiment using the scientific method, and the chemist replying, "Sure, I'll do an experiment, but I don't know what the scientific method is."

There are people in all fields who do this well; who are masters of thinking; of philosophy as I mean it--examples include Elon Musk, Kwame Anthony Appiah, Richard Branson, Charlie Parker, Albert Einstein, and so on. Many of them wouldn't call it by the name "philosophy," but again, terms don't really matter. They understand how to use the science of thinking--this much is unmistakable if you study their work or hear them talk about how they do what they do.

An unfortunate byproduct of pointing all of this out is that it immediately implicates the vast majority of people in the education world as unqualified to do the work that they do. It's very painful, and it's very true. We have ignored this fact for far too long, and our field is not going to heal itself until we own it.

So...what does it look like to approach education with an understanding of the science of thinking? It's an unending process, and here is an example of a small piece of that process.


A message to philosophers and other stickler friends:

My use of language is intentionally lose throughout this post. I am not using any formal philosophical terms in this post (the only exceptions are the following: operational definition, conceptual definition, necessary condition, sufficient condition). When I compare philosophy to language, I actually mean semiotics. It's less precise, but makes the metaphor more clear.

[Click here and I'll let you know when I publish future posts.]

Huge Announcement: HackSchool is Launching!


It's been a while since I've posted because I've been working on something that I'm very happy to announce to all of you!

Over the past several years, I've been teaching in an underserved neighborhood in Denver, CO, and I've often been quite frustrated at the lack of opportunities for my students. As an adult, I'm in a position to fix this problem. In the past, this has been through professional art, social justice, and outdoor survival and environmentalism programs.

I've learned a lot about how to inspire young people to accomplish great things, and how to guide their inspiration towards achieving real and impressive goals. Now it's time to do something bigger.

Three weeks ago, I launched a new non-profit called HackSchool along with a Kickstarter crowdfunding campaign to get it off the ground.


  • Vision: to create a world in which social misery is replaced with social agency.
  • Mission: to empower young people to solve humanity's grand challenges.

The community support for HackSchool has been overwhelming, and we've already raised 80% of our $17,500 goal! We have only 6 days left and we need to hit the full goal to get any of the we're working overtime, as you can imagine.

Check out our awesome video, read about the details below the video, and if you like it, please suppor tus and share with everyone you know!


If you like what we're doing click the "Back This Project" button after you watch the video!


Denver's Newest (and Youngest) Professional Artists


A short time-lapse video of the beginning of the night--my camera died before things really got going.

Art With Purpose

"Danny, we only need to sell one painting each tonight and we'll be professional artists."

And at the ripe old ages of thirteen and fourteen, no less.

The drive from the West Colfax neighborhood to Denver's Art District on Santa Fe was a mix of nervous excitement, feigned calm, and dubstep-by-request. Chelby's comment spoke for her and Danny as we parked near the gallery they would soon be showing at.

Danny and Chelby are two students who led my Urban Art class for the first six months of 2013--they were instrumental throughout the ~3000 square foot mural project from concept design through completion. Both have dreams to be professional artists. Last night--February 7, 2014--was their first art show, and where better than the premier art event in the heart of Denver's art district: First Friday Art Walk on Santa Fe.

Danny and Chelby in front of their section of the gallery at First Friday on Santa Fe. Their first art show.

My first real mentor and serious inspiration gave me endless freedom to learn about and develop myself through the arts--jazz, specifically--opened up many doors for me, and gave me opportunities that are all too rare for young people. This was easy to take for granted until I became a teacher in a world of education that sees the arts as "enriching" at best, but not necessary. When we approach the arts in this way, we negate the identities and futures of countless children...but that's a conversation for another time.

I can, and have, traced all of my successes back to what I learned from the arts starting back in 7th grade. Especially the successes that are seemingly unrelated to the arts. So I feel a strong need to give this opportunity to younger people as it was given to me.

An Exciting Evening


The crowd at the gallery; Chelby and Danny are on the left, talking with viewers and potential buyers.

After some minimal coaching from me, Danny and Chelby got to work setting up their section of the gallery next to artists who were all three or four times their age.

After a certain number of life-changing experiences, you begin to recognize them in others as they happen; this was one of those evenings. The two young artists started the evening shy and apprehensive. But by the end of the evening they were stepping far out of their comfort zones and into new life experiences: both sold their first piece of art, they were commissioned for two unrelated mural projects, and they made some very impressive connections and deals with adult professionals.

On top of all this, the gallery owner asked them back for the next show. Speaking of which, I should mention that the gallery (858 Santa Fe) was packed with the most amazing people and vibed the hardest out of any gallery on Santa Fe--as reported by several people who walked the entire strip.

But that's not the life-changing part. Through my observations and conversations I had with the two of them, it became clear that they had learned something that only experience can teach:

"There are people who value what I'm good at and want to invest their time, energy, and money in me, as a person, and my work."

We discussed the fact that when someone commissions a piece of art, that person is investing in the artist as a person--the piece of art they are buying doesn't exist until later, when the artist makes it.

There is a pervasive belief among young street artists that if you tag your name with markers or stickers around the city, in the right places, you will "get noticed." In Colorado, sentences for graffiti range from $250-$750,000 and 3 months to 12 years in prison. But the myth of "getting noticed" persists because young street artists generally don't see a real avenue to become professional. This myth was broken for the kids last night.

There's little that is more gratifying than being validated through your own work, that most expresses who you are, and by strangers who have no obligation to do so. Having experienced this myself at a young age, I can say that watching two young people experience the same is an incredible thing to watch.

The future is very bright for Danny and Chelby, and I'm excited for them.


Regarding this approach to education: this art education project was the first real pilot of a model of education as experience that I and others have been developing. I am currently working on the next iteration of this approach with a computer engineering class I designed and am teaching now. Look for exciting posts about this in months to come...or let's get drinks and talk about it.

Click here and I'll let you know when I publish future posts.

 Chelby and Danny posing with artists Patrick "GIRR" McGirr and Joshua Finley. Patrick and Josh are amazing professional artists who have served as mentors for the kids for the past year and worked on the Urban Art mural project with my students.