Friday, September 4, 2020

A very sophisticated form of corruption

 I am going to briefly wander off the reservation for a moment and make a comment on current policies and events. Here is the article that sparked it: These students figured out their tests were graded by AI — and the easy way to cheat.

Simmons, for her part, is happy that Lazare has learned how to game an educational algorithm — it’s certainly a useful skill. But she also admits that his better grades don’t reflect a better understanding of his course material, and she worries that exploits like this could exacerbate inequalities between students. “He’s getting an A+ because his parents have graduate degrees and have an interest in tech,” she said. “Otherwise he would still be getting Fs. What does that tell you about... the digital divide in this online learning environment?”

The problem is that there are always those who are better aware of procedures like this and know to look for them and those who are not. Those who are not, though no fault of their own, receive low grades. Read the whole article for the context.

Let me add another anecdote and then move to a generalization. My mother was an honest woman, but had a poor education that ended at Grade 8. In rural Canada. In the 1930s. She was a tireless saver and at the end of her life, had a tidy sum tucked away. All of it in low-interest savings bonds. She had no concept of estate planning so when she passed away there was a hefty tax bill due which could have been easily avoided with a bit of financial engineering.

Now let me generalize: there are many policies and procedures in the modern world that are, in a word, corrupt. They are corrupt because the result of them is to favor people with inside information or specialized knowledge that most people wouldn't even know to look for. You can teach yourself about these things, but first you have to be able to see the problem to know where to look for a solution. All complex tax systems favor people with lots of money to hire accountants and lawyers, or simply with some financial education. Poor and uneducated people bear the brunt and usually pay more than they have to while enormous tech companies manage to pay almost nothing in tax. The solution? A very simple tax system that everyone can understand. Unfortunately, as this does not provide for sufficient graft and corruption, almost no politician would ever vote for it. If you are living somewhere with an excessively complex tax system you can be absolutely sure that someone is benefitting from it.

The same goes for most policies and systems, such as the online learning system that the article was about. The Antifa people hate all systems which they regard as being hopelessly oppressive, biased and racist. The truth is that while they are, in certain specific ways, oppressive, biased and sometimes racist (as in Ivy League universities' limiting of Asian students), the solution is not to trash the system, burn it down and replace it with a socialist utopia (which always turns into a socialist hellhole), the solution is simply to simplify the system so it does not excessively favor some elements in society over others. If all corporations, for example, had to pay a simple 5% corporate tax, no provisions, no deductions, no complex rules, then there would likely be more taxes collected than there are now--for example, Apple alone would be paying a whopper tax bill.

Similarly, excessively complex admissions requirements for universities privilege just those people who are good at gaming the system. When I first entered university, my grades were so appalling that I was surprised I got in. But I did and turned out to be an A student. Under current policies I'm sure I would be turned away.

The problem can be seen as one of transparency. The poor, the uneducated and the unconnected do not understand how these systems work, so are typically victims of them. This problem gets worse and worse as all modern societies become more and more complex with ever more sophisticated ways of taking advantage of the less sophisticated.

The only thing is, I'm not sure what the solution is. I think Milton Friedman came the closest when he said that in politics you don't get good results by trying to elect the best person, you get good results by designing a system where the incentives push anyone elected to do the right thing.

I think something went wrong somewhere along the line!

For our envoi, of course, "Taxman" by George Harrison from the Beatles album Revolver:

https://www.youtube.com/watch?v=l0zaebtU-CA

UPDATE: Incidentally, a little sidebar to this is the recent story of the college admissions scandal where quite a number (forty, at last count) of parents were charged with bribing officials to admit their children to colleges in the US: The Varsity Blues College Admissions Scandal Continues.

Prosecutors allege that Khoury agreed to pay $200,000 through a third party to bribe Georgetown University tennis coach, Gordon Ernst, so he would designate Khoury’s daughter as a tennis recruit, in hopes of improving her chances at admission to the university. Research has shown that athletes who are recruited by colleges are more likely to get accepted.

Khoury is the 57th person who has been charged in the scandal, including celebrities Felicity Huffman and Lori Loughlin. The news around the scandal made many ask questions about the fairness of college admissions.

This is the rare exception to the rule that usually these things happen behind closed doors and the general public are none the wiser.

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