Queen Elizabeth I Formed World's First Franchise 350 Years Before Ray Kroc

Fascinating history lesson in last week's Economist on The East India Company. Queen Elizabeth I chartered the company in 1600 as a way to facilitate British trade around the Cape of Good Hope to Asia. The Economist says this event marked the beginning of the modern world:

The East India Company foreshadowed the modern world in all sorts of striking ways. It was one of the first companies to offer limited liability to its shareholders. It laid the foundations of the British empire. It spawned Company Man. And—particularly relevant at the moment—it was the first state-backed company to make its mark on the world.

I found this passage particularly interesting. It sounds like QE1 invented the modern franchise.

The Company improvised a version of what Tom Peters, a management guru, has dubbed “tight-loose management”. It forced its employees to post a large bond in case they went off the rails, and bombarded them with detailed instructions about things like the precise stiffness of packaging. But it also leavened control with freedom. Employees were allowed not only to choose how to fulfil their orders, but also to trade on their own account. This ensured that the Company was not one but two organisations: a hierarchy with its centre of gravity in London and a franchise of independent entrepreneurs with innumerable centres of gravity scattered across the east. Many Company men did extremely well out of this “tight-loose” arrangement, turning themselves into nabobs, as the new rich of the era were called, and scattering McMansions across rural England.

How is this arrangement different than owning a McDonalds restaurant? You own the property, but  the french fries and Big Macs must be made precisely as the company says. And, if you work hard and keep the place clean, you're almost guaranteed to get rich. 
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Why the Republicans are Right on Payroll Taxes

News flash: the rich are getting richer, the rest of us are sucking wind. What should Washington D.C. do about it?

The Democrats want to raise taxes on the wealthiest 1%, the Republicans cry "class warfare" and decry any tax on "job creators". Meanwhile, our deficit is enormous and growing nearly $4b per day. How can we square these differing views?

How about a surtax on the rich, as the Dems have proposed. But, these lucky folks could recoup their tax dollars if they really do create jobs...anybody who employs Americans should be able to claim a tax credit of 1% of U.S. payroll against their personal income tax. This credit should be distributed to shareholders for publicly traded companies.

The net effect would be similar to a Republican proposal to reduce employers' share of payroll taxes, but doing it my way would make it more palatable for Democratic constituencies. It would also provide more of a boost to the economy than the Democrats current proposal to extend the payroll tax cut for employees into next year. That tax cut doesn't help the unemployed one whit, while giving the cut to employers encourages them to hire jobless Americans. While folks with jobs would certainly appreciate a tax cut, our biggest problem is folks without jobs! If we could fix that, the rest would take care of itself. Tweet

Our Schools Should Teach Less Math

When did schools remove weaving from the curriculum? How about abacus training? Does anybody still teach basic slide rule skills?

All of these used to be incredibly useful, until they were made obsolete by machines. We (as a society) eventually decided that these skills were no longer needed, and our schools stopped teaching them. Instead, we started teaching more relevant skills like computer programming and auto repair.

Yet, in the year 2011, we still spend countless hours teaching poor frazzled seventh graders how to do long division! Granted, being able to quickly do basic addition and subtraction without the aid of a calculator is a useful skill. But when was the last time you used a paper and pencil to divide a 4 digit number into a 5 digit number? I'll bet it was seventh grade!

Schools are slowly getting with the program, and have started teaching useful twenty-first century skills like spreadsheets, power-point presentations, Spanish, and Chinese. But there are only so many hours in the school day, and so many days in the year, and only a short 12 years to pack all this info into our children's pliable little minds. And we can't afford to waste time teaching obsolete skills like long division. In another generation, all mechanical math skills (fractions, even multi-digit multiplication, addition and subtraction) will be obsolete.

What should we teach instead? Here's an interesting article from Wired Magazine. It turns out that kids are great at using computers, but are lousy searchers:

High school and college students may be “digital natives,” but they’re wretched at searching. In a recent experiment at Northwestern, when 102 undergraduates were asked to do some research online, none went to the trouble of checking the authors’ credentials. In 1955, we wondered why Johnny can’t read. Today the question is, why can’t Johnny search?

Who’s to blame? Not the students. If they’re naive at Googling, it’s because the ability to judge information is almost never taught in school. Under 2001’s No Child Left Behind Act, elementary and high schools focus on prepping their pupils for reading and math exams. And by the time kids get to college, professors assume they already have this skill. The buck stops nowhere. This situation is surpassingly ironic, because not only is intelligent search a key to everyday problem-solving, it also offers a golden opportunity to train kids in critical thinking.

New skills are needed to navigate today's information-rich world. Critical thinking is at a premium. How can one tell if an email is presenting a legitimate opportunity, or worthless spam? How do we know if the Obama's dog really flew in a private jet to join the family on vacation? Believe it or not, a person with a professional degree actually sent me an outraged email with that urban legend. So maybe a high-school class on "Critical Thinking and the Internet" would be useful. Tweet