1) Imagine you have the choice of living in two worlds. In World A you have a five-bedroom house and everyone you know has a six-bedroom house. In World B you have a four-bedroom house and all your friends have three-bedroom houses. Which world would you prefer?
2) You can live in World C, where you get five weeks’ holiday a year and your friends get six. Or you can choose World D where you get four weeks’ holiday a year and everyone else gets three. Which do you choose?
Most people, when asked these questions, chose worlds B and C. In other words, with property (at least above a certain size), it is the relative size of a house that matters more: with holiday time, it is the absolute amount that appeals. In economic vocabulary, this suggests leisure is an absolute good whereas larger homes are a positional good — whose value comes more from the relative status they confer than from an intrinsic improvement in quality of life.
This thought experiment appears in Robert H. Frank’s book The Darwin Economy, one of the most interesting books published last year. Professor Frank is an economist who believes that it is impossible to understand human economic behaviour through Adam Smith alone: you also need Darwin, and his understanding of how the individual competitive instinct in all living things can sometimes be to the detriment of the wider group — or even of the individual competing.
In nature, to compete for mates, bull elks have evolved insanely cumbersome antlers. Male peacocks have evolved unwieldy tails. And female humans have evolved the £4,000 bag.
Now here’s a question. Is education an absolute good or a positional good? I only ask because if education is an absolute good, to be prized for its own sake, shouldn’t we be celebrating an educational revolution by now?
The possibilities for lifelong, voluntary self-improvement are many hundreds of times greater today than 20 years ago. Academic bloggers who once lectured to 40 bored youths now reach a readership of hundreds of thousands. The world’s great books are available as free or nearly-free downloads (although the Kindle Complete Thomas Hardy is an eye-watering 72p). Facts that once took months to find are accessible in seconds.
In the real world, Spectator debates routinely sell out and astronomers fill theatres. Most television is rubbish, but the good stuff is easy to find. There is even a Sky channel, Cinémoi, dedicated to French-language cinema. Today a competent internet user in Wigan who wants to find out about Thermopylae has better tools to do so than a Harvard undergraduate in 1994.
So why are we pessimistic about education? Because, when people now refer to education, they are not always interested in the intrinsic advantages of a well-furnished, inquiring mind. What they want is a system that will give their children an advantage in securing a place at that small number of universities from which a 2:1 might get their CV to one of the seven law firms or banks for whom it has been their dream to work since age 13.
I suppose many employers want determined, ambitious, intelligent recruits, but the British education system seems an inefficient way of identifying them. Wouldn’t it be easier if JP Morgan just administered an IQ test to all applicants, then attached electrodes to their genitals, awarding jobs to the last people to scream?
For all the statistics published about school performance, there is only one figure I really want to know. Among past graduates of your school or university, how many are still reading widely for pleasure five, ten and 25 years after leaving?
Rory Sutherland is vice-chairman of Ogilvy Group UK.