His only hope is to get them to confess, but they refuse to talk. So he separates the prisoners and makes each the following offer: If you and your partner both refuse to talk, you will each receive a six-month prison sentence. If you inform on your partner, you will go free, but your partner will get 10 years. If you both talk, you will each get six years.

Obviously, the prisoners will minimise the time they collectively spend in prison by refusing to talk. But the inspector knows that the temptation to get away with no sentence at all is very great. He is betting that each prisoner will inform on the other and that each will wind up serving six years.

Economists call the choice facing the prisoners the prisoner’s dilemma. In trial runs, economists find that people rarely choose the cooperative course and keep silent; they routinely turn one another in. This seemingly self-destructive behaviour fits a pattern that is all too common in everyday life.

Commuting is an example. Suppose that workers can take an hour-long drive along city streets or they can use the freeway, which normally takes 30 minutes. What happens? Everyone piles on to the freeway and the resulting congestion lengthens their commute to an hour while the streets remain empty.

If traffic were divided equally between the streets and the freeway, half the commuters would get home in 30 minutes and half in one-hour. The average would be 45 minutes. The extra 15 minutes added to the daily commute is the price of anarchy; it is the penalty we pay for allowing people to make self-serving choices while disregarding the effect of their choice on everyone else.

To achieve the optimal travel time for commuters as a whole, we would have to force them to travel along routes that they would not choose for themselves. This seems to contradict one of the major intellectual beliefs of our age - the thesis underlying free-market capitalism - that a community of free people, motivated by self-interest, all competing for goods and resources, will distribute resources more efficiently than any socialist central planner could ever hope to achieve. When it comes to commuting, at least, it does not always work.

Doubts are also arising about how well unfettered choice works in the general economy. For example, Prime Minister Rudd blames the present madness in the financial markets on “extreme capitalism”, which he believes can be tempered by giving government a large role in the economy.

But this “solution” rarely works. The problem is that selfishness is part of human nature. As John Kenneth Galbraith said: “Under capitalism, man exploits man. Under communism, it’s just the opposite.”

So what do we do? We could try to replace individualistic and often anarchic free markets with central planning and government-run enterprises, but this presupposes that the problem we face is technical and that it can be fixed by finding the right set of technical improvements.

Fortunately, there is some hope. The traditional prisoner’s dilemma assumes a one-off encounter. What happens if opponents know that they will face each other more than once? Will they be less likely to renege if they know that their opponents can retaliate the next time around? Will they hold a grudge against those who reneged against them in the past?

According to researchers, in a repeated prisoner’s dilemma, the most successful strategy is to always begin by cooperating (that is, stay silent and serve your six months). If your opponent reneges and turns you in then retaliate on the next round but don’t bare a grudge and try cooperating again on your next encounter. It is important to note that this strategy produced the best outcome for every individual that adopts it, even when other players continue to renege.

Generalising to the present financial woes, the best strategy is to punish those whose behaviours have contributed to the problem (deceitful lenders, ridiculously paid bankers) and then go back to the free market system.

But technical fixes will not solve all our problems. The prisoner’s dilemma transcends the technicalities of politics or economics; it is a moral issue and an educational one.

Until the 20th century, it was taken for granted that the purpose of education was to build character.

Today, the ancient aim of a moral education has been replaced with job preparation. We have produced brilliant bankers and financiers but we have neglected to make them wise. It is time to return education to its roots: to ethics, morality and character. This applies not just to financiers but also to philosophers and lawyers, doctors and economists, dentists and even accountants.

- Steven Schwartz

In all the discussion leading up to the US Presidential elections some of you may have missed a thoughtful and confronting article that appeared in The Australian’s Higher Education section this week.

It was by Associate Professor John Armstrong, a senior adviser in the office of the University of Melbourne’s vice-chancellor and philosopher in residence at the Melbourne Business School, and it concerned the state of the humanities.

Armstrong argues that the long-term health of the economy depends on the flourishing of the humanities.

He says that while capitalism is the economic expression of individual liberty, the humanities are the roots of social and personal maturity.

“The deep sources of wisdom and maturity lie in the humanities. These sources have all but dried up. Wisdom and maturity have not been flowing from the humanities into the wider fields of society; that is why economic freedom has turned toxic. It is of the greatest significance for our cultural and economic future - for the future of our civilisation - that we understand what has gone wrong and put in place the conditions of our renaissance.”

Armstrong’s article is one of the best I’ve read on the state of the humanities. It certainly got me thinking.

However, I wonder if those who proselytize for the humanities fall into a trap: that is, overstating their value while concurrently and consistently underrating their impact.

Let me explain:

US President-elect Barack Obama faces a mountain of challenges when he moves into the White House in January: massive economic problems, a couple of wars, over-dependence on oil, global warming, the declining status of America in the world, and terrorism. And just like us, Obama has no idea what nasty little unknown unknowns may crop up.

He will have to attempt to solve political, economic, scientific, environmental and military issues. It’s unlikely that a Harold Bloom-like Shakespeare expert will be summoned to the Oval Office to dispense wisdom alongside the generals and the economists.

And in speaking about education in the lead up to the election, Obama emphasized the practical over the poetic:

Without a workforce trained in math, science, and technology and the other skills of the 21st century, our companies will innovate less, our economy will grow less, and our nation will be less competitive.

So don’t expect the humanities to be the headline act in the Obama camp.

But … the humanities will be there anyway, subtly influencing important decisions.

Wisdom comes from absorbing and processing the lessons of experience, and as we have only one lifetime we have to go to history to explore and understand what the past teaches us about the present.

So, any decision to go to war, for example, will not only have to be based on current tactical and strategic considerations, but also on what has happened previously in the particular theatre.

In considering, let’s say, a future intervention in Afghanistan Obama would have to clearly understand what happened there to the British and the Soviets in the past.

That the Soviet Union, for example, committed many thousands of troops, equipped with the best weaponry and supported by superb air cover, and unencumbered by scruples, and yet was still defeated – well, that must have a bearing on any decision.

History would also have to influence current decisions affecting the economy, welfare, education and innovation as indeed would aspects of philosophy.

Obama himself relies much upon the humanities. His speeches are brilliantly crafted, refer constantly to American history and tap into his nation’s traditions and hopes. You don’t get to write like Obama by reading instruction manuals.

Clearly he is well read: I imagine (though don’t know for sure) that he would know Eugene Genovese’s Roll, Jordan, Roll, the writings of Dr Martin Luther King Jr, the works of Abraham Lincoln, the history of the Civil War, and much more.

What applies to Obama should apply to any other serious politician.

The humanities may not make the headlines, but they are there in the small print.

- David Myton

Eleven prizes worth around $15,000 in total were presented by our various sponsors.

Competition judge Dr Willa McDonald told the audience how challenging the judging had been, and described how the judging panel had made its decisions.

Willa said the topic – What mattered then, what matters now – attracted an assortment of essays “demonstrating that staff and students at Macquarie think deeply about a wide variety of subjects”.

See Willa’s comments in full here.

You can read the winning essays here.

- Steven Schwartz

According to German publisher Jörn Schütrumpf these new readers are “those of a young academic generation, who have come to recognise that the neoliberal promises of happiness have not proved to be true”.

I do not want to downplay the severity of the financial crisis. It’s about as bad as it gets - the most serious to hit the world system since 1929-33.

So was Marx right? Is capitalism in its death throes and been “exposed as a dangerous mirage”, as one Guardian writer put it?

There’s a certain irony in the fact that those people rushing to buy Das Kapital are themselves the beneficiaries of liberal capitalism – as are all those well educated jeremiahs pontificating about the evils of a system that helped to put them where they are in the first place.

In their eagerness to consult the gospel according to Marx, they may have forgotten that centralized command and control systems have not only been massive economic failures, they have also failed their people in the extreme. Invariably such systems degenerate into tyrannies in which the power of the state is unlimited.

If free market capitalism does not work, as its critics contend, how do they explain the western world’s extraordinary growth in wealth and prosperity in modern times?

Free trade and open markets have made rich countries richer and many poor countries richer too. As the French author and intellectual Guy Sorman puts it, the market economy is the most efficient of all economic systems and free trade helps economic development.

To be sure, capitalism is not and can never be perfect, but as that talented entrepreneur Richard Branson said recently:

“Capitalism may be in some sort of a crisis … but I still know of no better way of increasing human wealth and happiness”.

France’s President Nicolas Sarkozy says that “laissez-faire is finished”.

It certainly is going through a troubled period, but I doubt we have seen the end of it. The Economist points out that in fact, far from failing, over the past 25 years free trade has

“delivered wealth and freedom on a dramatic scale. Hundreds of millions of people have been dragged out of absolute poverty. Even allowing for the credit crunch, this decade may well see the fastest growth in global income per person in history”.

I am not arguing that free market capitalism is perfect; far from it. Because it is the work of real people running real enterprises, it is by its nature flawed. Greed, cupidity and stupidity are part of human nature and always will be. And economics is not a sound science – “the only function of economic forecasting is to make astrology look respectable” said renowned American economist John Kenneth Galbraith.

But history shows that liberal capitalism is the best we can do when it comes to running an economy.

Fortunately, capitalism is not a system of government. Rather, it sits side by side with, and is answerable to, democracy – described by Sir Winston Churchill in his great 1946 “Iron Curtain” speech as meaning:

“that the people … have the right, and should have the power by constitutional action, by free unfettered elections, with secret ballot, to choose or change the character or form of government under which they dwell … that courts of justice, independent of the executive, unbiased by any party, should administer laws which have received the broad assent of large majorities or are consecrated by time and custom”.

In other words, we can vote out governments we disapprove of and our courts can punish those who transgress the law – including even the most powerful capitalists.

I agree with this observation, again from The Economist:

“Over the past century and a half capitalism has proved its worth for billions of people. The parts of the world where it has flourished have prospered; the parts where it has shrivelled have suffered. Capitalism has always engendered crises, and always will. The world should use the latest one, devastating though it is, to learn how to manage it better.”

- Steven Schwartz

Thompson was right; all other areas of study come together in history – English, politics, economics, sociology, even mathematics and science. Because history is the story of humanity (although I’m told one Macquarie history course once included a study of the Bonobo chimpanzee), it encompasses every aspect of our existence. The study of history also teaches students many skills, including writing, analysis and research.

This week the National Curriculum Board came up with a set of proposals for teaching history in a systematic way in Australia’s primary and secondary schools.

The board’s History Advisory Group, led by Professor Stuart Macintyre (and which includes Macquarie University’s Associate Professor Marnie Hughes-Warrington) has proposed a national history curriculum.

Australian history would maintain an important place in the curriculum, but it would be set in the context of world history. A national curriculum restricted to just Australian history would be inappropriate, the group says.

“If only to equip students to operate in the world in which they will live, they need to understand world history. That history should have a broad and comprehensive foundation from which its implications for Australia can be grasped.”

At first glance this seems sensible, but history teaching is not without controversy as the prolonged “history wars” that raged in recent years go to show.

At the heart of historical controversy stands interpretation. Sometimes we know what happened, but often we don’t know the motivation of the actors. If history teachers are not careful they may fall into the trap of presentism – projecting current concerns back into a time when those concerns had no meaning.

So any history curriculum for young students has to tread very carefully. It must prioritise facts over opinion and fair evaluation of evidence over moralising.

The recommendations have been attacked by Greg Melleuish as “clearly the work of a committee” because “they appear to be a jumble of components rather than a coherent whole”.

Sydney Institute director Gerard Henderson criticised the direction of the draft curriculum, reportedly telling the ABC: “This idea that facts should be downplayed and concepts of historical enquiry and historical thinking should be stressed, in my view, is not the correct way to go.”

As I made clear in a post earlier this week, history gives us important perspectives on both the past and the present. It’s important young people in particular have a sound knowledge of where we came from so they can understand where we might be heading.

Stuart Macintyre says it’s important the curriculum is accessible to all people, and should not be about axe grinding.

He’s right, but of course axe grinding is inevitable.

British writer Leslie Hartley famously said that the past is a foreign country “and they do things differently there”.

Young students need a factual guide book to navigate through that territory, not a politically correct charter of contemporary mores.

The draft curriculum is now up for discussion.

Today in an article in The Australian Higher Education section I examine the “ancient collision” referred to above by Harlan Cleveland.

At the heart of this is the question – what is a university for?

Many people see universities as essentially utilitarian: in this view they are “huge generators of wealth creation” and exist to provide employers with work-ready graduates.

I agree that universities ought to deliver the education that society needs.

However, the problem is that disciplines advance so quickly.

In medicine, for example, new drugs, instruments and techniques are constantly being invented. Some revolutionise treatment and many challenge the conventional wisdom. Medical schools teach skills, but many of these turn out to be obsolete a few years after graduation.

No one can predict how knowledge will evolve, so graduates in medicine, or any other field, need to know how to keep learning long after they leave university.

I argue that students learn how to learn from university lecturers who are themselves learning; that is, from lecturers who do research.

Graduates also need to be given a chance to follow the Delphic oracle’s command to “know thyself“, especially to know the limits of their own competence.

A university education ought to produce educated men and women who understand the world and their place in it. Students need to be given the opportunity to nourish their souls: to listen to music, read literature and to understand the culture in which they will live.

All this may be difficult to achieve for every student in every course in every university, but it should nonetheless be our aim. Our job is not to fill students with facts or teach them a set of employment skills; it is to try our best to make them wise.

Read the article ‘Students wise beyond their peers’ in full here.

- Steven Schwartz

The media have turned the volume up to screaming point - talking about “meltdown” and the “unravelling” of our economic system.

It’s getting close to the end of the school year and new graduates are rightfully concerned about their future. Things certainly look bleak and the economic future is uncertain, but it’s time to gain a little perspective.

These are tough times, but Australia has been through worse, much worse.

Consider, for example, the world our grandparents faced when they left school.

On a warm November night in 1941, the German navy sank the Australian warship HMAS Sydney off the coast of Western Australia. Six hundred and forty-five crew members lost their lives.

The sinking of the Sydney shocked the nation; it was one of our most modern ships and a vital part of our defence. Until that point, what we now call World War II was being waged far away - in Europe mainly. That spring, the war came to our doorstep.

A mere 18 days after the Sydney was sunk, the Japanese air force bombed the United States naval base at Pearl Harbour in Hawaii inflicting terrible casualties. Three days later, the Japanese invaded the Philippines and little more than two weeks after that, the British, who were meant to provide a bulwark against the invasion of Southeast Asia, were forced to surrender Hong Kong to the Japanese.

In less than five weeks, Australia went from participants in a distant war, secure in the knowledge that British military might in Hong Kong would protect us, to finding a strong and aggressive enemy in the neighbourhood.

But at least there was still Singapore, the mighty fortress that would protect Australia. Well, things did not quite work out that way. The British surrendered Singapore to the Japanese on February 1942 and four days later, the war reached Australia.

The Japanese bombed Darwin with a ferocious force of 260 aircraft. The air raid on Darwin was the largest since Pearl Harbour and it was led by the same commander. Hundreds died (although the government hid this for some time). Broome, Port Hedland, Derby, Townsville and other places were bombed as well.

There were a total of 97 air attacks on Australia, coupled with submarine attacks including Japanese submarines in Sydney Harbour. For the first, and probably, only time in history, Sydney’s eastern suburb real estate prices dived while those in the west soared - everyone wanted to live as far away as possible from potential attackers.

The government made plans to defend the bottom half of the country but considered the north too unpopulated to defend against a potential invasion. Luckily for Queenslanders, the plan never had to be tested.

In addition to physical danger, the war took a daily toll on life’s quality. Bread, milk, eggs and even clothing were rationed. Today, we complain about how much it costs to fill our SUVs with petrol. In those days, petrol was practically impossible to get at any price. Cities were dark at night.

Messages from Australian forces in Europe, Africa and Asia were few and far between. There were no mobile or satellite phones and no email so families often did not know if their loved ones were dead or alive.

This situation went on for months - fear, privation, loneliness. It was not until the American-led navy battles of the Coral Sea drove the Japanese away that Australia could let out its collective breath. Still, the war had years to go before it was finally over.

Australia grew stronger and wiser from its war experience and went on to build a tolerant, wealthy and free society that has been a magnet for freedom loving immigrants from around the world.

We will emerge from this crisis as well - wiser, stronger and with a bright future.

- Steven Schwartz

Greed is right.
Greed works.
Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.
Greed, in all of its forms - greed for life, for money, for love, knowledge - has marked the upward surge of mankind.

Mr Rudd says the “greed is good” era of the 1980s brought on the stock market crash of 1987 and played a part in the global recession of the early 1990s.

According to Mr Rudd: “It is perhaps time now to admit that we did not learn the full lessons of the greed is good ideology. And today we are still cleaning up the mess of the 21st Century children of Gordon Gekko.”

Mr Rudd is not the first person to condemn greed. It is, after all, one of the seven deadly sins. But Gekko uses the word “greed” to mean more than mere avarice. For him, greed is a synonym for wanting more, not just more money, but more life, more love and more knowledge.

The repulsive Gekko sees everything in material terms. In the film, he is shown to be an acquirer not just of money, but also of art and even people.

Ironically, Gekko’s materialistic world view is also reflected in many government documents.

For example, in its 2007 manifesto, The Australian economy needs an education revolution, the Labor Party has this to say about the value of education: “… evidence suggests that more educated economies are wealthier economies. Countries that invest in education do better in achieving their potential economic growth rate”.

In other words, education is a way of making the country richer by preparing graduates for better paying jobs.

Contrast this with John Ruskin’s idea that “the highest reward for people’s toil is not what they get for it, but what they become by it”. For Ruskin what people do is not nearly as important as what people are.

Don’t get me wrong - I am not against people getting rich.

As screen siren Mae West said: “I’ve been rich and I’ve been poor. Believe me, rich is better.”

Clearly, Australia needs a sound economy if we are going to achieve our social goals. But first, we actually need to have some social goals. Otherwise, we are a country of means without ends.

It is only in relatively recent years that governments have adopted an economic rationale for education and the sad result is that we are all financially poorer - the world economy is falling into recession - and we are morally poorer as well.

What value is an education that ignores character? What can we expect from an education that fills students with facts but does not help them to be wise?

We who work in education need to revive our moral purpose. We could start with the seven deadly sins, but I prefer the updated version produced by Mahatma Gandhi:

• Wealth without Work
• Pleasure without Conscience
• Science without Humanity
• Knowledge without Character
• Politics without Principle
• Commerce without Morality
• Worship without Sacrifice

A curriculum based on these would be the basis of a real education revolution.

- Steven Schwartz

Speaking at a meeting of the UK’s Headmasters’ and Headmistresses’ (school principals as we’d call them in Australian) conference, Lord Patten, who is now Oxford’s Chancellor, ruminated on the notion of widening participation in higher education – that is, encouraging more people from non-traditional backgrounds to go to university.

“Widening participation in higher education can be justified in terms of first, the obligation to give all young people the right to as full an education as they can achieve, second, the redress of disadvantage, and third, the utility for the future of tapping the potential of the whole community.”

All that sounds good, and he goes on to say that universities are a crucial part of civil society.

However, he then takes a different tack: Universities have to account for their use of taxpayers’ money:

“But they should not be treated – or behave themselves – like local social security offices.”

Many universities, says Lord Patten, sense that they are being asked to make up for the deficiencies of secondary education.

“If this were the aim, it would be a fool’s mission.”

Now Lord Patten probably has the role of Oxford University in mind in framing this talk. Oxford is one of the very best universities in the world, and it has become that by focusing on high level research and excellence in teaching and learning.

Although Oxford does engage in outreach and will continue with that work, he says, “we are never going to tell those who would like to study at the university that we are content to take the second best. That would be bad for them and suicidal for us.”

Oxford has carved out a distinctive mission for itself, and I believe universities should have the freedom to do that. However, I think in principle Lord Patten is wrong.

It is not about universities taking “the second best”, but making sure that we don’t miss hidden talent.

In Australia, and indeed in the UK, one persistent unresolved problem in higher education concerns the continued under-representation of students from low-income backgrounds.

Unless we believe that students from low-income families lack the ability or motivation for university-level study, the absence of talented students from our campuses represents not only a loss to them but also to society, which will not benefit from their full contribution.

I do believe it is not fair to expect universities to make up for poor schooling, but there are some things that universities can do to make the system fairer.

In my submission to the Bradley Review of Higher Education I detail how we can increase opportunities for participation in higher education.

To read my “Six Steps” for improving the system go here.

There’s a lot of cognitive dissonance of both brands around the world right now as we apparently shift inexorably into a new era, one whose defining features are as yet unclear.

And whoever is elected US President on November 4 - Barack Obama or John McCain – faces an incredibly complex situation destined to challenge the most cherished of beliefs.

There’s the war on terror (or the long war, as some prefer to call it); the military-political situation in Iraq and Afghanistan; instability in Pakistan; a resurgent Russia now intent on re-equipping its armed forces; the rise of China and India; nuclear issues emanating from Iran and North Korea; and global warming.

If all this wasn’t enough, there’s the financial calamity that could precipitate a world-wide recession. Overnight, the Dow shares index plunged on news that the US House of Representatives had rejected the proposed $700 billion package that it was hoped would help restore calm to the battered US markets.

The US financial crisis has set off a domino effect through Britain, France, Germany, Luxemburg, the Netherlands and Iceland. The Australian share market has also been rocked in the wake of the Wall Street meltdown.

Commentator Max Hastings said today:

“Complacency persists only among those too stupid to realize how serious the mess is, or too young to imagine a society in which instant gratification is no longer available”.

In 1937, the US President, Franklin Roosevelt, appointed a commission to identify promising new areas in which the government could invest resources. The commission failed to predict the development of radar, lasers, antibiotics or jets.

In the same way, we cannot predict the geo-political future. When confronted with new problems, the best way to deal with them is not by cuddling up close to our cherished beliefs, but by facing reality.

One reality is that the US had a population of 303,824,640 as at July this year. That’s a lot of people, representing not just a huge market but also a proven resource of ingenuity, innovation and courage. It may be that the American people can think and work their way out of their present crisis.

Britain’s wartime leader Winston Churchill said that democracy is the worst form of government except all those other forms that have been tried. This is another reality – democracy may not be perfect, but it usually finds a way of solving its problems.

As Max Hastings also said today:

“Western capitalism is suffering a richly deserved shock to its hubris. But it almost certainly possesses sufficient resilience, energy and imagination to come out the other side.”