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  • November 14, 2019
  • Chuck Osborne


Earlier this week I read an interesting article in The Wall Street Journal, “Higher Education’s Enemy Within,” written by Jose Cabranes. Judge Cabranes serves on the Second U.S. Circuit Court of Appeals. He was the first general counsel at Yale and later served as a trustee of Yale. He was writing about the current state of higher education and referred to Yale’s mission statement, which was altered in 2016.

The previous mission was, according to Judge Cabranes, “To create, preserve, and disseminate knowledge.” The new mission says nothing of knowledge. Instead, Yale is now “committed to improving the world.” It goes on to say that Yale educates “aspiring leaders” through research but also through “practice.” The quotes belong to Judge Cabranes, not to me. He goes on to make some great points about how administrators throughout higher education have usurped the power once given to professors and, as a result, we have fewer scholars and far more protesters. It is an interesting article and I would recommend it.

The current condition of our educational system is a pet subject of mine, which is why I read the article in the first place, but it was the reference to knowledge – once foundational and now completely missing – which got me. At Iron Capital, one of our guiding principals is that all employees are to strive for wisdom. We define wisdom as “the combination of knowledge and experience,” and we use the phrase “strive for” because enough wisdom can never really be attained. Of course, we are speaking of a particular type of wisdom – wisdom in investment decisions – but knowledge is the key here. Knowledge is the first step; one must actually know what one is talking about.

The good Judge is pointing out that we have lost this understanding at our most prestigious of universities. If it has happened there, one can only imagine what has happened elsewhere.

Senator Elizabeth Warren has made a name for herself recently by proposing a wealth tax. She has found a few young left-leaning economics professors to give it some credence. Forget the knowledge that of the 12 countries that have already tried it, nine have dropped it…given that the idea has been around for only a handful of years, that is a pretty miserable track record. No worries, Warren’s scheme is polling well, so what other knowledge would she need?

Americans are rightly concerned with inequality. The strange omission in all of this is the lack of curiosity about what causes inequality. We all know that treating a symptom will never cure a disease, and in many ways only makes things worse over time. Yet no one seems interested in the root cause of inequality; all they talk about is taking from one group and giving to another. This would help with the symptoms of inequality, and actually already does, as the rich do pay most of the taxes while approximately half of Americans gain from government programs. There have been several articles written about how both taxes and government benefits are not included in most inequality measures. I suppose that is helpful to politicians who are more interested in having something to run on than actually fixing anything.

In the history of the world no one has ever been lifted up by tearing someone else down, yet all anyone seems to talk about is how we can tax the wealthy more. There really isn’t even any talk about what the extra tax revenue will do to help the poor and lift inequality. There is talk of Medicare for all, but that is for “all,” not for the poor or those who cannot afford their own coverage. That doesn’t move the needle on inequality.

I’m picking on Senator Warren and her plan, but I could just as easily talk about tariffs or several other current issues. It seems today that everyone cares deeply, but not so deeply that we want to actually know anything. We no longer even ask the questions.

Inequality is a serious issue and it deserves a much more serious discussion. Not about how we can tear down the rich, but how can we actually solve the problem? The first step on the road to knowledge is admitting that you don’t know. That may be the problem in this social media age where everyone feels pressure to put forward a good image.

At least that is my perspective.

Chuck Osborne