Showing posts with label les grandes ecoles. Show all posts
Showing posts with label les grandes ecoles. Show all posts

Tuesday, September 15, 2020

Schrodinger's Cat and the Normaliens


Yesterday I had cause to look something up related to macroscopic superposition states ("Schrodinger cat states") in Serge Haroche's book Exploring the Quantum. Curiosity led me to Haroche's 2012 Nobel Lecture and autobiography, which I found fascinating. 

One wonders how long an elitist, highly meritocratic and undeniably productive system like the French Grandes Ecoles can continue to function in the current political climate. Quel dommage.
... I was fascinated by astronomy and by calculus, the notion of derivatives and simple differential equations which describe so directly and so well the laws of dynamics obeyed by moving bodies. This was the time of the first artificial satellites, the sputniks which orbited the earth and launched the American-Soviet race to the moon. 
I marveled at the fact that I was able, with the elementary calculus I knew, to compute the escape velocity of rockets, the periods of satellites on their orbits and the gravitational field at the surface of all the planets … I understood then that nature obeys mathematical laws, a fact that did not cease to astonish me. I knew, from that time on, that I wanted to be a scientist. For that, I embarked in the strenuous and demanding “classes préparatoires” of the famed Lycée Louis-Le-Grand, one of the preparatory schools which train the best French students for the contest examinations leading to the “Grandes Ecoles.” They are the engineering and academic schools, which since the French Revolution, have formed the scientific elite of France. These were two years of intensive study where I learned a lot of math and of classical physics. I eventually was admitted in 1963 to the Ecole Polytechnique (ranking first in the national examination, to the great pride of my parents) and at the Ecole Normale Supérieure (ENS). I chose to enter the latter because, at that time, it offered a much better opportunity to embark in a scientist career. 
The years as a student at ENS (1963–1967) have left me wonderful memories, contrasting sharply with the strenuous training of the preparatory school. Here, in the middle of the Latin Quarter, I was free to organize my time as I wished, to meet and discuss with students working in all kinds of fields in science or humanities and to enjoy all the distractions and cultural activities Paris has to offer. And I was paid for that, since the “Normaliens” as the ENS students are called, are considered civil servants and receive a generous stipend! These were my formative years as a scientist. Coming so to speak from the physics of the 19th century which was taught in the classes préparatoires, I was immediately thrown into modern physics and the quantum world by the classes of exceptional teachers. Alfred Kastler gave us a lyrical description of the dance of atomic kinetic moments, and gave atoms and photons a near poetic existence. Jean Brossel brought us back to Earth by describing the great experiments thanks to which quantum concepts were established, instilling in us the austere passion for precision. And Claude Cohen-Tannoudji revealed the theory’s formalism to us with extraordinary depth and clarity. I still remember three books I read avidly at the time: Quantum Mechanics by Albert Messiah, where I truly understood the depth and beauty of the quantum theory; Principlesof Nuclear Magnetism by Anatole Abragam, who introduced me to the subtle world of atomic magnetic moments; and Feynman’s Lectures on Physics, which was a revelation.
See also 

Saturday, July 27, 2019

Brainpower Matters: The French H-Bomb


Michel Carayol, father of the French H-Bomb.

The article below illuminates several mysteries concerning the French development of thermonuclear weapons. Why did it take so long? Did the French really need help from the British? Who had the crucial idea of radiation compression?

The original inventors were Ulam and Teller. In the USSR it was Sakharov. The PRC inventor was Yu Min (see Note Added at bottom).

Without men such as these, how long would it have taken to develop breakthrough technologies that defined the modern age?

See also Les Grandes Ecoles, One hundred thousand brains, and Quantum GDP.

THE REAL STORY BEHIND THE MAKING OF THE FRENCH HYDROGEN BOMB

Nonproliferation Review 15:2 353, DOI 10.1080/10736700802117361

Based on the first-person account of coauthor Pierre Billaud, a prominent French participant, this article describes for the first time in such detail the history of the development of the French hydrogen bomb in the 1960s and the organization of military nuclear research in France. ...
On November 1, 1952, the United States conducted its first thermonuclear test, ‘‘Ivy Mike,’’ seven years and three and a half months after its Trinity test. It took the Soviet Union four years (August 29, 1949 -- August 12, 1953) and the United Kingdom four years and seven months (October 3, 1952 -- May 15, 1957) to achieve thermonuclear capacity. And in the following decade, China did it, with its sixth test, in fewer than three years (October 16, 1964 -- June 17, 1967). Yet after Gerboise Bleue it took France eight and a half years to reach the same landmark, detonating its first thermonuclear device on August 24, 1968. Why such a long delay, especially since the French were pioneers in nuclear research?

1965: What We Knew About the Technical Aspects

From 1955 to 1960, as we prepared for the first French atomic test, we were also pondering thermonuclear weapons. But the prospect of hydrogen weapons seemed so far into the future that we did not work seriously on it. ... Li6D was commonly considered the best fuel for thermonuclear weapons, but we did not have any idea about how to burn it. All the problems with the thermonuclear bomb can be summarized by this question: how to discover the process that will allow the Li6D to undergo a fusion reaction?

... Compared to our American colleagues in 1948, French scientists had many advantages: we knew that hydrogen bombs existed and worked and that they used Li6D, and we understood the reactions at work. We also had powerful computers, of U.S. origin, which were not available in the late 1940s. And we knew, more or less, the dimensions and weights of the nuclear weapons deployed at NATO bases in Europe and their yields. ...

De Gaulle: It’s taking forever! ... I want the first experiment to take place before I leave! Do you hear me? It’s of capital importance. Of the five nuclear powers, are we going to be the only one which hasn’t made it to the thermonuclear level? Are we going to let the Chinese get ahead of us? If we do not succeed while I am still here, we shall never make it! My successors, from whatever side, will not dare to go against the protests of the Anglo-Saxons, the communists, the old spinsters and the Church. And we shall not open the gate. But if a first explosion happens, my successors will not dare to stop halfway into the development of these weapons.


... In January 1967, I published a voluminous report wherein I presented and developed my idea from late 1965, left idle since, explaining why the current studies were going in the wrong direction and producing a ridiculously low thermonuclear efficiency. I proposed a scheme with two consecutive steps: a cold Li6D compression increasing the density, from the normal value of 0.8 g/cm3, by a factor of at least 20, followed by a sufficient temperature increase (the ignition). In this report, I also gave orders of magnitude of the energies involved in each step... [[ One can make the (flawed) analogy of Billaud to Ulam (multi-stage insight, but no mechanism for compression), and Carayol to Teller (proposed the right mechanism for compression, although in Teller's case he may have learned of it from von Neumann and Fuchs!!!). ]] 
In early April 1967, Carayol had the idea that the x-rays emitted from the fission explosion could transport the fission energy to the thermonuclear fuel chamber to induce the necessary compression. He published a brief paper wherein he presented, and justified mathematically, his architectural idea. This was the key to the solution for an efficient thermonuclear explosive device, consistent with the current data about U.S. hydrogen weapons. Carayol had rediscovered the radiative coupling concept first introduced by Americans Stanislaw Ulam and Edward Teller in January 1951.

Michel Carayol, the Genuine Father of the French H-Bomb

Michel Carayol was born in 1934 and died in 2003. His father was an industrialist and his mother a teacher. He entered Ecole Polytechnique in 1954, graduated in 1956, and joined the Armament. In 1962, he was part of the DEFA assigned to CEA-DAM at Limeil. In 1967, Carayol was part of the advanced studies branch.

... Soon after, in April 1967, Carayol wrote a brief report describing his proposal for a cylindrico-spherical case in dense metal, containing a fission device on one side and a thermonuclear sphere on the other. The report showed that the photons radiated by the primary *still very hot* in the X-ray frequency range, swept into the chamber rapidly enough to surround completely the thermonuclear sphere before the metal case would be vaporized. Carayol had discovered independently a scheme equivalent to the concept developed by Ulam and Teller in the 50s.
But Carayol's insight was ignored! It was British assistance that alerted project leadership to the value of Carayol's ideas. It is not enough for some isolated genius to make a breakthrough -- the people in charge have to understand its value.
... During the first months of 1967, Viard had told me, ‘‘A British physicist is showing some interest in what we do.’’ At several embassy parties, a first-rate British atomic scientist, Sir William Cook, former director during the 1950s of thermonuclear research at Aldermaston, the British center for atomic military applications, had approached the military attache´ at the French Embassy in London, Andre´ Thoulouze, an Air Force colonel, and had hinted to our nuclear research program. Thoulouze had previously been in charge of an air force base and knew Rene´ David, who would later work at the DAM. For this reason, instead of contacting the French main intelligence services, Thoulouze directly contacted our information bureau at CEA, the BRIS, where David was working at the time. In analyzing the fallout from the French tests, the Americans, the British, and the Soviets knew that we had not made any real progress on the thermonuclear path. In 1966 and 1967 we had tested some combination of fission with light elements. Cook told Thoulouze that we had to look for something simpler.

Two weeks after the Valduc seminar, on September 19, and while the work resulting from the Valduc decisions had not yet concretely gotten under way, Thoulouze came from London bearing information from this qualified source. Jacques Robert immediately convened a meeting, in the DAM’s headquarters in Paris, to debrief this information. Only three other people attended the meeting: Viard, Bonnet (DAM’s deputy), and Henri Coleau (head of the BRIS). The information, very brief and of a purely technical nature, did not consist of outlines or precise calculations. Nevertheless, it allowed Bonnet to declare immediately that the Carayol design, proposed unsuccessfully as early as April 1967, could be labeled as correct.23 Had this outline not already been in existence, we would have had a difficult time understanding the information and might have suspected an attempt to mislead us. In fact, this was a reciprocal validation: Carayol’s sketch authenticated the seriousness of the source, while the latter confirmed the value of Carayol’s ideas. Without realizing it, as very few were aware of Carayol’s discovery (and surely not Cook), he had given us a big tip and unexpected assistance, as this information also freed us from the ministerial harassment to which we had been constantly subjected. From that moment, things moved briskly.
Encyclopedia Britannica:
Physicist Michel Carayol laid out what would be the fundamental idea of radiation implosion in an April 1967 paper, but neither he nor his colleagues were immediately convinced that it was the solution, and the search continued.

In late September 1967, Carayol’s ideas were validated by an unlikely source, William Cook, who had overseen the British thermonuclear program in the mid-1950s. Cook, no doubt at his government’s behest, verbally passed on the crucial information to the French embassy’s military attaché in London. Presumably, the British provided this information for political reasons. British Prime Minister Harold Wilson was lobbying for the entry of the United Kingdom into the Common Market (European Economic Community), which was being blocked by de Gaulle.

Sakharov sketch:


Note Added: Perhaps someone can translate part of this paper, which gives some details about the Chinese thermonuclear step, credit to Yu Min. Did they invent a mechanism different from Ulam-Teller? I can't tell from this paper, but I suspect the initial Chinese design used U-T. There are claims that Yu Min later developed, in the pursuit of miniaturization and improved safety, a qualitatively different design.

Yu Min was a student of Peng Huanwu (also a key figure in the bomb effort), who was a student of Max Born. Yu Min only recently passed, in early 2019!


Saturday, September 22, 2018

The French Way: Alain Connes interview


I came across this interview with Fields Medalist Alain Connes (excerpt below) via an essay by Dominic Cummings (see his blog here).

Dom's essay is also highly recommended. He has spent considerable effort to understand the history of highly effective scientific / research organizations. There is a good chance that his insights will someday be put to use in service of the UK. Dom helped create a UK variant of Kolmogorov's School for Physics and Mathematics.

On the referendum and on Expertise: the ARPA/PARC ‘Dream Machine’, science funding, high performance, and UK national strategy


Topics discussed by Connes: CNRS as a model for nurturing talent, materialism and hedonic treadmill as the enemy to intellectual development, string theory (pro and con!), US, French, and Soviet systems for science / mathematics, his entry into Ecole Normale and the '68 Paris convulsions.

France and Ecole Normale produce great mathematicians far in excess of their population size.
Connes: I believe that the most successful systems so far were these big institutes in the Soviet union, like the Landau institute, the Steklov institute, etc. Money did not play any role there, the job was just to talk about science. It is a dream to gather many young people in an institute and make sure that their basic activity is to talk about science without getting corrupted by thinking about buying a car, getting more money, having a plan for career etc. ... Of course in the former Soviet Union there were no such things as cars to buy etc. so the problem did not arise. In fact CNRS comes quite close to that dream too, provided one avoids all interference from our society which nowadays unfortunately tends to become more and more money oriented.


Q: You were criticizing the US way of doing research and approach to science but they have been very successful too, right? You have to work hard to get tenure, and research grants. Their system is very unified in the sense they have very few institutes like Institute for Advanced Studies but otherwise the system is modeled after universities. So you become first an assistant professor and so on. You are always worried about your raise but in spite of all these hazards the system is working.


Connes: I don’t really agree. The system does not function as a closed system. The US are successful mostly because they import very bright scientists from abroad. For instance they have imported all of the Russian mathematicians at some point.


Q: But the system is big enough to accommodate all these people this is also a good point.


Connes: If the Soviet Union had not collapsed there would still be a great school of mathematics there with no pressure for money, no grants and they would be more successful than the US. In some sense once they migrated in the US they survived and did very well but I believed they would have bloomed better if not transplanted. By doing well they give the appearance that the US system is very successful but it is not on its own by any means. The constant pressure for producing reduces the “time unit” of most young people there. Beginners have little choice but to find an adviser that is sociologically well implanted (so that at a later stage he or she will be able to write the relevant recommendation letters and get a position for the student) and then write a technical thesis showing that they have good muscles, and all this in a limited amount of time which prevents them from learning stuff that requires several years of hard work. We badly need good technicians, of course, but it is only a fraction of what generates progress in research. It reminds me of an anecdote about Andre Weil who at some point had some problems with elliptic operators so he invited a great expert in the field and he gave him the problem. The expert sat at the kitchen table and solved the problem after several hours. To thank him, Andre Weil said “when I have a problem with electricity I call an electrician, when I have a problem with ellipticity I use an elliptician”.

From my point of view the actual system in the US really discourages people who are truly original thinkers, which often goes with a slow maturation at the technical level. Also the way the young people get their position on the market creates “feudalities” namely a few fields well implanted in key universities which reproduce themselves leaving no room for new fields.

....

Q: So you were in Paris [ Ecole Normale ] in the best place and in the best time.

Connes: Yes it was a good time. I think it was ideal that we were a small group of people and our only motivation was pure thought and no talking about careers. We couldn’t care the less and our main occupation was just discussing mathematics and challenging each other with problems. I don’t mean ”puzzles” but problems which required a lot of thought, time or speed was not a factor, we just had all the time we needed. If you could give that to gifted young people it would be perfect.
See also Defining Merit:
... As a parting shot, Wilson could not resist accusing Ford of anti-intellectualism; citing Ford's desire to change Harvard's image, Wilson asked bluntly: "What's wrong with Harvard being regarded as an egghead college? Isn't it right that a country the size of the United States should be able to afford one university in which intellectual achievement is the most important consideration?"

E. Bright Wilson was Harvard professor of chemistry and member of the National Academy of Sciences, later a recipient of the National Medal of Science. The last quote from Wilson could easily have come from anyone who went to Caltech! Indeed, both E. Bright Wilson and his son, Nobel Laureate Ken Wilson (theoretical physics), earned their doctorates at Caltech (the father under Linus Pauling, the son under Murray Gell-Mann).
Where Nobel winners get their start (Nature):
Top Nobel-producing undergraduate institutions

Rank School                Country               Nobelists per capita (UG alumni)
1 École Normale Supérieure France       0.00135
2 Caltech                               US             0.00067
3 Harvard University            US             0.00032
4 Swarthmore College          US             0.00027
5 Cambridge University       UK             0.00025
6 École Polytechnique          France       0.00025
7 MIT                                   US              0.00025
8 Columbia University         US              0.00021
9 Amherst College               US              0.00019
10 University of Chicago     US              0.00017

Friday, October 07, 2016

Where Nobel winners get their start (Nature)

Nature covers some work by Jonathan Wai and myself. See here for a broader ranking of US schools, which includes Nobel, Turing, Fields awards and National Academies membership.
Where Nobel winners get their start (Nature)

Undergraduates from small, elite institutions have the best chance of winning a Nobel prize.

There are many ways to rank universities, but one that’s rarely considered is how many of their graduates make extraordinary contributions to society. A new analysis does just that, ranking institutions by the proportion of their undergraduates that go on to win a Nobel prize. [ Note: includes Literature, Economics, Peace, as well as science prizes. ]

Two schools dominate the rankings: École Normale Supérieure (ENS) in Paris and the California Institute of Technology (Caltech) in Pasadena. These small, elite institutions each admit fewer than 250 undergraduate students per year, yet their per capita production of Nobelists outstrips some larger world-class universities by factors of hundreds.

“This is a way to identify colleges that have a history of producing major impact,” says Jonathan Wai, a psychologist at Duke University in Durham, North Carolina, and a co-author of the unpublished study. “It gives us a new way of thinking about and evaluating what makes an undergraduate institution great.”

Wai and Stephen Hsu, a physicist at Michigan State University in East Lansing, examined the 81 institutions worldwide with at least three alumni who have received Nobel prizes in chemistry, physiology or medicine, physics and economics between 1901 and 2015. To meaningfully compare schools, which have widely varying alumni populations, the team divided the number of Nobel laureates at a school by its estimated number of undergraduate alumni.

Top Nobel-producing undergraduate institutions

Rank School                Country               Nobelists per capita (UG alumni)
1 École Normale Supérieure France       0.00135
2 Caltech                               US             0.00067
3 Harvard University            US             0.00032
4 Swarthmore College          US             0.00027
5 Cambridge University       UK             0.00025
6 École Polytechnique          France       0.00025
7 MIT                                   US              0.00025
8 Columbia University         US              0.00021
9 Amherst College               US              0.00019
10 University of Chicago     US              0.00017

Small but mighty

Many of the top Nobel-producing schools are private, and have significant financial resources. Among the more surprising high performers were several very small US liberal-arts colleges, such as Swarthmore College in Pennsylvania (ranked at number 4) and Amherst College in Massachusetts (number 9).

“What these smaller schools are doing might serve as important undergraduate models to follow in terms of selection and training,” says Wai, who adds that, although admission to one of the colleges on the list is no guarantee of important achievements later in life, the probability is much higher for these select matriculates.

To gauge trends over time, Wai cut the sample of 870 laureates into 20-year bands. US universities, which now make up almost half of the top 50 list, began to dominate after the Second World War. Whereas French representation in the Nobel ranks has declined over time, top-ranked ENS has remained steady in its output.

Hsu and Wai had previously performed two similar, but broader, analyses of the rate at which US universities produce winners of the Nobel prize, Fields Medal (in mathematics) or Turing Award (in computer science), as well as members of the US National Academies of Sciences, Engineering, and Medicine. These studies produced rankings of US institutions that are similar to the new, global Nobel rankings.

Lessons learned 
Santo Fortunato, a theoretical physicist at Indiana University Bloomington who has researched trends in Nobel prizewinners, deems the analyses “quite interesting”, but cautions that the methodology cannot produce a highly accurate or predictive ranking. “There is a high margin of error due to the low numbers of prominent scholars,” says Fortunato. [ See here for a broader ranking of US schools, which includes Nobel, Turing, Fields awards and National Academies membership. ]

Wai and Hsu agree that there are statistical uncertainties in their rankings, owing to the small number of prizes awarded each year. The two are confident that the ENS and Caltech lead the pack, but statistical fluctuations could change the order of schools placed from third to ninth, Hsu says.

The researchers say that their findings suggest that more attention should be paid to the role that undergraduate institutions have in their graduates’ outstanding accomplishments. They also argue that quantifiable achievements are a better gauge of the quality of universities than factors such as reputation, graduation rate, faculty and financial resources and alumni donations.

Says Wai, “Our findings identify colleges that excel at producing impact.”
Regarding statistical fluctuations, if one takes the data as an estimator of a school-related probability for each graduate to win a Nobel, then at 95 percent confidence level ENS and Caltech are the top two schools, but fluctuations could (for example) change the order among #3 (Harvard) through #9 (Amherst). In other words, we can't be >95 percent confident that Harvard grads have a higher probability than Amherst grads, although the central value of the estimated probability is higher for Harvard.


Regarding ENS and their elitist method of selecting students, see below. Two years of preparation for the entrance exam! Also: Les Grandes Ecoles Chinoises and The Normaliens.
Wikipedia: The school, like its sister grandes écoles the École Polytechnique and the École Nationale d'Administration, is very small in size: its core of students, who are called normaliens, are selected via either a highly competitive exam called a concours (Baccalauréat + 2 years) ... Preparation for the "concours" takes place in preparatory classes which last two years ... Most students come from the prépas at the Lycée Louis-le-Grand, the Lycée Henri-IV, and a few other elite establishments in France. Two hundred normaliens are thus recruited every year ...
Lycee Henri-IV is in the Latin Quarter on the left bank, one of my favorite parts of Paris. The book shops and cafes are filled with serious looking young students. Vive la France! :-)

Monday, September 22, 2014

Piketty on Capital


Piketty on EconTalk (podcast) -- a lively discussion between Russ Roberts and guest Thomas Piketty. See earlier post here.
Piketty: ... to summarize very quickly our conclusion, we feel that the theory of marginal productivity is a bit naive, I think for this top part of the labor market. That is to say when a manager manages to get a pay increase from $1 million a year to $10 million a year, according to the textbook based on marginal productivity, this should be due to the fact that his marginal contribution to the output of his company has risen from 1 to 10. Now it seems a bit naive. It could be that in practice individual marginal productivities are very hard to observe and monitor, especially in a large corporation. And there is clearly strong incentives for top managers to try to get as much as they can.

... Now, when the top tax rate is 82%, now of course you always want to be paid $1 million more, but on the margin when you get a pay increase of $1 million, 82% is going to go straight to the Treasury, so your incentive to bargain very aggressively and put the right people in the right compensation committee are going to be not so strong. And also your shareholders, your subordinates, maybe will tend to tell you, look, this is very costly. Whereas when the top tax rate goes down to 20, 30% or even 40%, so you keep 2/3rds or 60% of the extra $1 million for you, then the incentives are very, very different. Now, this model seems to explain part of what we observe in the data. In particular, it's very difficult to see any improvement in the performance of managers who are getting $10 million instead of $1 million. When we put together a data base with all the publicly traded companies in North America, Europe, Japan, trying to compare in the companies that are paying their managers $10 million instead of $1 million, it's very difficult to see in the data any extra performance.

... But let me make clear that I love capital accumulation and I certainly don't want to reduce capital accumulation. The problem is the concentration. So let me make very clear that inequality in itself is of course not a problem. Inequality can actually be useful for growth. Up to a point. The problem is when inequality of wealth and concentration of wealth gets too extreme, it is not useful any more for growth. And it can even become bad, because it leads to high perpetuation of inequality over time, so it can reduce social mobility. And it can also be bad for the working or for the democratic institutions. So where is the tipping point--when is it that inequality becomes excessive? Well, I'm sorry to tell you that I don't have a formula for that.

... In the United States right now, the bottom 50% of the population own about 2% of national wealth. And the next 40% own about 20, 22% of national wealth. And this group, the middle 40%, the people who are not in the bottom 50% and who are not in the top 10%, they used to own 25-30% of national wealth. And this has been going down in recent decades, as shown by a recent study by Saez and Zucman and now is closer to 20, 22%. Now, how much should it be? I don't know. I don't know. But the view that we need the middle class share to go down and down and down and that this is not a problem as long as you have positive growth, I think is excessive. You know, I think, of course we need entrepreneurs. I'm not saying, look, if it was perfect equality the bottom 50% should own 50% and the next 40% should own 40. I am not saying that we should have this at all. I'm just saying that when you have 2% for the bottom 50 and 22 for the next 40, you know, the view that we cannot do better than that [[ because ]] you won't have entrepreneurs any more, you won't have growth any more, is very ideological.

... I am actually a lot more optimistic than what some people seem to believe. I'm very sorry some people feel depressed after they read my book because after all this is not the way I wrote it. In fact, I think there are lots of reasons to be optimistic. For instance, one good news coming from the book is that we've never been as rich in terms of net wealth than we are today in developed countries. And we talk all the time about our public debt, but in fact our private wealth as a fraction of GDP has increased a lot more than our public debt as a fraction of GDP, so our national wealth, the sum of private and public wealth, is actually higher than it has ever been. So our countries are rich. It is our governments that are poor, which is a problem; but it raises issues of organization and institution but that can be addressed.

Sunday, September 14, 2014

Harvard admissions and meritocracy

Motivated by Steve Pinker's recent article The Trouble With Harvard (see my comments here), Ephblog drills down on Harvard admissions. The question is just how far Harvard deviates from Pinker's ideal of selecting the entire class based on intellectual ability. Others raised similar questions, as evidenced by, e.g., the very first comment that appeared on The New Republic's site:
JakeH 10 days ago

Great article. One quibble: Pinker says, based on "common knowledge," that only ten (or five) percent of Harvard students are selected based on academic merit, and that the rest are selected "holistically." His implication is that "holistic" consideration excludes academic merit as a major factor. But that's surely not the case. Even if Harvard only selects ten percent of its students based on academic factors alone, it seems likely that academic and test score standards are high for the remaining 90 percent. We don't have enough information on this point, because, I suppose, it's not available. (To solve that problem, I join Pinker's call for a more transparent admissions process.)
I don't know exactly how Harvard admissions works -- there are all sorts of mysteries. But let me offer the following observations.

1. Pinker claimed that only 5-10 percent of the class is admitted purely on the basis of academic merit (see more below). The 5-10 percent number was widely reported in the past, including by scholar Jerome Karabel. No one knows what Harvard is up to at the moment and it's possible that, given the high demand for elite education, they have increased their academic focus over the years.

2. IIRC, the current SAT ceiling of 1600 (M+CR) corresponds to about 1 in 1000 ability (someone please tell me if I am mistaken). So there are at least a couple thousand US kids per cohort at this ability level, and several times more who are near it ("within the noise"). A good admissions committee would look at other higher ceiling measures of ability (e.g., performance in math and science competitions) to rank order top applicants. The 800 ceiling on the math is not impressive at all -- a kid who is significantly below this level has almost no chance of mastering the Caltech required curriculum (hence even the 25th percentile math SAT score at Caltech is 770; in my day the attrition rate at Caltech was pretty high -- a lot of people "flamed out"). The reduced SAT ceiling makes it easier for Harvard to hide what it is up to.

4. My guess is that Harvard still has a category, in the past called S ("Scholar"; traditionally 5-10 percent of the class, but perhaps larger now), for the top rank-ordered candidates in academic ability alone. Most of the near-perfect scorers on the SAT will not qualify for S -- it is more impressive to have been a finalist in the Intel science competition, written some widely used/acclaimed code, made (or nearly made) the US IMO or IPhO teams, published some novel research or writing, etc. Harvard sometimes boasts about the number of perfect SAT scorers it rejects each year, so clearly one can't conclude that a 1600 on CR+M alone qualifies for the S category. Along these lines, one even reads occasional stories about Harvard rejecting IMO participants.

5. In remaining categories Harvard almost certainly uses a more holistic approach that also weights athletics, extracurriculars, etc. Some of the people who score high on this weighted measure might not have qualified in S, but nevertheless are near the ceiling in SAT score. It has been reported in the past that Harvard used a 1-5 scoring system in academics, sports, leadership, music, etc. and that to have serious consideration (outside the S category, which is for real superstars), one needed to have two or more "1" scores -- e.g., valedictorian/high SATs + state-level tennis player + ...

From the comments above, it should be clear that one can't simply use the percentage of near-perfect SAT scorers in the class to determine the size of the S category.

See here for discussion of meritocratic test-based systems in other countries. For instance, the Indian IIT, the French Ecole Normale Superieure, and the Taiwan university entrance exams, have in the past explicitly ranked the top scorers each year. (The tests are hard enough that typically no one gets near a perfect score; note things may have changed recently.) I know more than a few theoretical physicists who scored in the top 5 in their entire country on these exams. Mandlebrot writes in his autobiography about receiving the highest ENS score in France.

Wednesday, March 26, 2014

Piketty's Capital


One of the jarring figures in Piketty's book Capital in the Twenty-first Century shows the population fraction over time that inherited more money than the average laborer earns in a lifetime. This fraction is larger than I expected -- roughly 5-10 percent in France.

Piketty's grande idée is very simple: if returns to capital r exceed GDP growth g, and if ownership of capital is concentrated, then runaway inequality will result. He argues that throughout most of history, r > g. His solution: redistribution via a wealth tax. (Don't most countries already have inheritance taxes? Perhaps they just need to be tightened up.)

See also The Normaliens.
New Yorker: ... Piketty, who teaches at the Paris School of Economics, has spent nearly two decades studying inequality. In 1993, at the age of twenty-two, he moved to the United States to teach at M.I.T. A graduate of the élite École Normale Supérieure, he had recently completed his doctorate, a dense mathematical exploration of the theory behind tax policies. Plenty of bright young European scholars move across the Atlantic, of course, and many of them end up staying. Piketty was not to be one of them. “It was the first time I had set foot in the United States,” he recalls in the introduction, “and it felt good to have my work recognized so quickly. Here was a country that knew how to attract immigrants when it wanted to! Yet I also realized quite soon that I wanted to return to France and Europe, which I did when I was twenty-five. Since then, I have not left Paris, except for a few brief trips.”

... much of the economics that Piketty encountered at M.I.T. seemed arid and pointless. “I did not find the work of U.S. economists entirely convincing,” he writes. “To be sure, they were all very intelligent, and I still have many friends from that period of my life. But something strange happened: I was only too aware of the fact that I knew nothing at all about the world’s economic problems.”

... Eventually, Piketty says, we could see the reëmergence of a world familiar to nineteenth-century Europeans; he cites the novels of Austen and Balzac. In this “patrimonial society,” a small group of wealthy rentiers lives lavishly on the fruits of its inherited wealth, and the rest struggle to keep up. For the United States, in particular, this would be a cruel and ironic fate. “The egalitarian pioneer ideal has faded into oblivion,” Piketty writes, “and the New World may be on the verge of becoming the Old Europe of the twenty-first century’s globalized economy.”

... Some people claim that the takeoff at the very top reflects the emergence of a new class of “superstars”—entrepreneurs, entertainers, sports stars, authors, and the like—who have exploited new technologies, such as the Internet, to enlarge their earnings at the expense of others in their field. If this is true, high rates of inequality may reflect a harsh and unalterable reality: outsized spoils are going to go to Roger Federer, James Patterson, and the WhatsApp guys. Piketty rejects this account. The main factor, he insists, is that major companies are giving their top executives outlandish pay packages. His research shows that “supermanagers,” rather than “superstars,” account for up to seventy per cent of the top 0.1 per cent of the income distribution. ...

... Defenders of big pay packages like to claim that senior managers earn their vast salaries by boosting their firm’s profits and stock prices. But Piketty points out how hard it is to measure the contribution (the “marginal productivity”) of any one individual in a large corporation. The compensation of top managers is typically set by committees comprising other senior executives who earn comparable amounts. “It is only reasonable to assume that people in a position to set their own salaries have a natural incentive to treat themselves generously, or at the very least to be rather optimistic in gauging their marginal productivity,” Piketty writes.

... Income from capital has always played a key role in capitalism. Piketty claims that its role is growing even larger, and that this helps explain why inequality is rising so fast. Indeed, he argues that modern capitalism has an internal law of motion that leads, not inexorably but generally, toward less equal outcomes. The law is simple. When the rate of return on capital—the annual income it generates divided by its market value—is higher than the economy’s growth rate, capital income will tend to rise faster than wages and salaries, which rarely grow faster than G.D.P.

... Piketty takes some well-aimed shots at economists who seek to obfuscate this reality. “In studying the eighteenth and nineteenth centuries it is possible to think that the evolution of prices and wages, or incomes and wealth, obeys an autonomous economic logic having little or nothing to do with the logic of politics or culture,” he writes. “When one studies the twentieth century, however, such an illusion falls apart immediately. A quick glance at the curves describing income and wealth inequality or the capital/income ratio is enough to show that politics is ubiquitous and that economic and political changes are inextricably intertwined and must be studied together.” ...
See figures here and here.

Friday, October 12, 2012

The Normaliens


In an earlier post I mentioned that Serge Harouche (2012 Nobel Prize in physics) is a normalien: a graduate of France's Ecole Normale Superieure. Admission to ENS is strictly meritocratic, based on a competitive exam. The result: 12 Nobel Prize laureates and 10 Fields Medalists from a school with fewer than a thousand undergraduates. (The school is similar in size to Caltech; smaller than most high schools.)

See Defining Merit for the story of Harvard's internal debates of the 1950's, during which a realistic and shrewd admissions dean faced down idealistic faculty committees that wanted to make Harvard more meritocratic.
"Do we want an Ecole Normale Superieure, a 'cerebral school' ... ?"

"What's wrong with Harvard being regarded as an egghead college? Isn't it right that a country the size of the United States should be able to afford one university in which intellectual achievement is the most important consideration?"

Tuesday, October 12, 2010

Les Grandes Ecoles Chinoises

Note Added (2022): Wikipedia has a long entry on this topic.

The American intellectual elite are endlessly fascinated by the French Grandes Ecoles, which employ a rigorous examination system for admissions. See example below from today's NY Times.

In the past I'd read that the British and French based their civil service and educational examination systems on the much older Chinese model, but was not sure to what extent it is true. See here for an interesting discussion.
... Brunetiere believed that French education was really based on the Chinese system of competitive literary examinations, and that the idea of a civil service recruited by competitive examinations undoubtedly owed its origins to the Chinese system which was popularized in France by the philosophers, especially Voltaire. This definite conclusion that the French civil service examination system came from China is adopted by several authors ...
Summary of the case of Britain and colonial India can be found here. Amusingly, 19th century British writers opposed to the new system of exams referred to it as "... an adopted Chinese culture" (p. 304-305).

NYTimes: ... Born out of the French Enlightenment, the grandes écoles have long been the cradle of the governing class. “Normaliens” (graduates from École Normal Supérieure, whose 12 Nobel laureates include Henri Bergson and Jean-Paul Sartre), “Gadzarts” (from École Nationale Supérieure d’Arts et Métiers, like Jean-Lou Chameau, president of the California Institute of Technology), “X-iens” (from École Polytechnique, including the physicist Sadi Carnot, the philosopher Auguste Comte and the mathematician Benoît B. Mandelbrot), and “Enarques” (from École National d’Administration, including almost all recent prime ministers) occupy a place in French national life similar to Oxbridge graduates in England or the Ivy League in the United States.

Internationally, however, these institutions have far less clout than their Anglo-American counterparts.

... The grandes écoles run along very different lines. Admission is selective, with candidates generally required to complete a grueling two-year preparatory course. This “prépa” includes intensive study in mathematics, economics, philosophy and literature, plus at least two foreign languages. Of 1,079 candidates who took the entrance exam for the business school HEC in 2009, only 50 were offered places, and most of those already held master’s degrees from other institutions. The competition for science places is even tougher.

... Yet he, too, alluded to the new reality of global competition: “When I was a student we spoke of ‘le défi américain’ — the American challenge. Now we speak of ‘le défi asiatique’ — the challenge from Asia.”

How will France face this challenge? Dr. Tapie pointed out that while France “has only 1 percent of the world’s population, we make up 33 percent of Fields medalists,” the mathematics equivalent of Nobel laureates.

It was Cédric Villani, a 37-year-old professor at Lyon who won the 2010 Fields Medal, who gave the most spirited reply to France’s critics. Calling himself “a pure product of the French system,” Mr. Villani, a Normalien who has often taught in the United States, said that while American academic salaries were higher “and it’s easier to make big projects,” France also has particular strengths: “Our tradition, our quality of life, our social cohesion. My big problem in Princeton was finding a place to buy a decent cheese.”

Tuesday, January 19, 2010

Vive les Grandes Ecoles (AIG-Goldman edition)

Did negotiators from French banks save Goldman from a haircut on its AIG CDS contracts? Or did Goldman save the French banks with its, um, connections to Paulson and other high places?

WSJ: The Federal Reserve's decision to pay billions of dollars to Goldman Sachs Group Inc. and other big banks as part of its bailout of American International Group Inc. has spawned criticism and conspiracy theories. Treasury Secretary Timothy Geithner, who presided over the New York Fed at the time, was summoned to Congress to explain why AIG paid off the $62.1 billion in soured derivatives in full, far more than they were worth in the market.

One element of the decision hasn't been well explored—how the Fed agreed to the full-payment demands of France's bank regulator and two of AIG's largest creditors, Société Générale SA and Calyon Securities, a unit of Crédit Agricole SA. The French banks and their regulator, it now appears, masterfully outmaneuvered the Americans to avoid discounts, or "haircuts," on their securities.

The French won the day by using a legal argument that some leading French scholars and corporate attorneys variously described in interviews as highly dubious and lacking real legal ground.

The banks and the regulator, known as the Commission Bancaire, said bank executives could be criminally liable for accepting a discount on their contracts, according to a November report of the inspector general of the Troubled Asset Relief Program.

While true in the abstract, "their argument was very overstated," said Pierre-Henri Conac, a University of Luxembourg law professor and a director of France's oldest corporate-law review. "Banks give haircuts every day."

French banks aren't always the best negotiators, Mr. Conac added, but this time "the French were very good."

...

The Fed and AIG finally seized on a plan, according to the inspector general's report. Step one: Let the banks keep $35 billion of collateral already posted by AIG. Two: Purchase the banks' underlying securities, which were derivatives tied to low-grade mortgages. Three: Cancel the contracts. Over one frenzied weekend in early November, Fed and AIG officials struggled with the final step: What should they pay for those securities? By contract, the banks were guaranteed full payment.

There were some factors to suggest a lower, negotiated price was in order. The securities' market value had fallen significantly. And absent the extraordinary U.S. bailout, AIG would have been in bankruptcy, potentially leaving counterparties with zero.

...

"To say that these people would have gone to jail if they cut a deal and signed the same agreement as Goldman Sachs is really pushing beyond what goes on in France," said Christopher Mesnooh, a partner at Paris's Fields Fisher Waterhouse who has authored a book on French corporate law.

"There is no clear-cut provision that would have prevented SocGen or Calyon" from negotiating a discount, said one of Paris' top lawyers, who asked not to be named because he works for the banks.

More information may shake loose as Congress continues its study of AIG. At the upcoming hearings, one can only hope the French role is carefully examined. There may well have been compelling reasons for making good on the $20.8 billion owed the French banks. But —as is now clear—not for the legal reason that the Fed and the French banks claim.

Related links: AIG bailout , Societe Generale , Les Moines-Soldats , Les Grandes Ecoles

Saturday, November 14, 2009

Defining Merit

What should be the goals and responsibilities of a great university? Should it strive to maximize the future contributions of its graduates to humanity? Or should the university define its interests more narrowly, in terms of institutional prestige, social cachet and financial wealth?

Below are more excerpts from Jerome Karabel's The Chosen, an in-depth analysis of admissions at Harvard, Yale and Princeton in the 20th century. All of the excerpts are from Chapter 9: Wilbur Bender and his Legacy, which chronicles the late 1950's confrontation between elements of the Harvard faculty (often idealistic scientists), who wanted to place more emphasis on intellectual merit, and then Dean of Admissions Wilbur Bender, who was more narrowly focused on Harvard's institutional priorities. (If you find this post interesting, I highly recommend a look at the book. At the Google link above all of Chapter 9 is available.)

Although Karabel does an excellent job (see below) of characterizing the two sides of the argument, he does not examine the conflict in fundamental values between the scholar-scientists and Bender: the best and brightest for their future contributions to mankind, or the best for Harvard's future as an institution? To prepare "leaders" who will pursue power (some of which shall accrue, indirectly, to Harvard) or to prepare scientists and scholars who will create knowledge to be shared by all?

See also this earlier post: Creators vs Rulers.

... Brinton, a former Rhodes Scholar with a broad historic and comparative perspective on higher education, posed a sharp question to clarify the issue at hand: "Do we want an Ecole Normale Superieure, a 'cerebral school' aimed solely at preparing students for the academic professions?" Bender's answer was a resounding no. But to Wilson the matter was not so clear: the basic issue was which students "could take advantage of the unique intellectual opportunity which Harvard has to offer." In a barb clearly aimed at Bender, Wilson proclaimed that "he just did not accept potential financial return ... as the basis for showing favoritism to Harvard sons who were less well qualified academically than other admission candidates."

Having been under assault by segments of the faculty for almost two years, at first by Holton, then by Kistiakowsky, and now by Wilson, Bender apparently decided that he had had enough. In a meeting of the committee a month after this testy exchange, he announced his resignation as dean of Admissions and Financial Aids, and stated that he would prefer neither to affix his signature to the final report of the subcommittee nor to withhold his vote of approval. His departure was set for July 1, 1960, and he agreed to continue to meet with the subcommittee until it completed its mission.

It is interesting that Ecole Normale Superieure (ENS) features so prominently in Harvard's internal discussions. Along with Ecole Polytechnique, ENS is at the pinnacle of the strictly meritocratic French system of higher education. (See earlier post: Les Grandes Ecoles.)

The University of Chicago is an example of a school that followed the rigorous, meritocratic path, and suffered a consequential decline in social cachet and financial standing. Idealism damaged Chicago's position in the competition against Harvard and others. As one realistic Harvard commenter noted, one needs to "admit the bottom 10 percent to continue to attract the top 10 percent" -- even the intelligentsia value the social cachet of their alma mater.

... In a pair of letters that constituted something of a manifesto for the wing of the faculty favoring strict academic meritocracy, Wilson explicitly advocated admitting fewer private school students and commuters, eliminating all preferences for athletes, and (if funds permitted) selecting "the entering class regardless of financial need on the basis of pure merit." The issue of athletes particularly vexed Wilson, who stated flatly: "I would certainly rule out athletic ability as a criterion for admission of any sort," adding that "it bears a zero relationship to the performance later in life that we are trying to predict." He also argued that "it may well be that objective test scores are our only safeguards against an excessive number of athletes only, rich playboys, smooth characters who make a good impression in interviews, etc." As a parting shot, Wilson could not resist accusing Ford of anti-intellectualism; citing Ford's desire to change Harvard's image, Wilson asked bluntly: "What's wrong with Harvard being regarded as an egghead college? Isn't it right that a country the size of the United States should be able to afford one university in which intellectual achievement is the most important consideration?"

E. Bright Wilson was professor of chemistry and member of the National Academy of Sciences, later a recipient of the National Medal of Science. The last quote from Wilson could easily have come from anyone who went to Caltech! Indeed, both E. Bright Wilson and his son, Nobel Laureate Ken Wilson (theoretical physics), earned their doctorates at Caltech (the father under Linus Pauling, the son under Murray Gell-Mann).

For Bender, who loved Harvard, and had devoted much of his life to it ... "whether our eventual goal for Harvard is an American Ecole Normale, or the nearest approach to it we can get." In Bender's reading, "it is implied, but not directly stated" that Harvard should emulate this model, which admits students purely on the basis of their performance on an exam and serves as a training ground for many of France's leading academics and intellectuals. Professors, in particular, were especially prone to take this view: "My guess is that many, perhaps most, of the faculty would support such a policy, and many would assume that the case for it was obvious and irrefutable."

To Bender, however, the vision of a freshman class selected solely on the basis of academic criteria was nightmarish. "Would we have a dangerously high incidence of emotional problems, of breakdowns and suicides? Would we get a high proportion of rather precious, brittle types, intellectuals in quotes, beatniks, etc.?" "Do we really want," he continued, "a college in which practically everyone was headed for a career as a scholar, scientist, college teacher or research doctor?"

For his purposes -- the narrow institutional interests of Harvard -- Bender was absolutely right. Filtering purely by intellectual merit (as opposed to using a broader set of criteria, and several categories under which students are admitted) would not maximize Harvard's influence in government or business, or its financial wealth. Again see earlier post: Creators vs Rulers.

Bender also had a startlingly accurate sense of how many truly intellectually outstanding students were available in the national pool. He doubted whether more than 100-200 candidates of truly exceptional promise would be available for each year's class. This number corresponds to (roughly) +4 SD in mental ability. Long after Bender resigned, Harvard still reserved only 10 percent of its places (roughly 150 spots) for "top brains". (See category "S" listed at bottom.)

... To test his hypothesis that Harvard's most brilliant students were not its most "distinguished graduates," he [Bender] carried out his own study of exceptionally successful alumni.

The twenty-six men studied were a veritable Who's Who of the American elite: among them was a former secretary of defense, the president of Commonwealth Edison and Electric Bond and Share, the publisher of the Minneapolis Star and Tribune, the senior partner of Davis Polk, and (not least) the general chairman of the Program for Harvard College. Twenty-two were private school graduates, with St. Paul's (four) and Groton (three) leading a list of the nation's most elite boarding schools. These men had not compiled particularly distinguished academic records at Harvard; the majority of them had relatively poor grades. A casual inspection suggested "a much higher than average participation by the above in athletic and other extracurricular activities" precisely the kinds of students likely to be excluded by the Ecole Normale model.

Harvard much prefers that its graduates ascend to positions of power, in place of graduates of Stanford or Berkeley. But do the differences between these schools have any effect on the actual quality of leadership? Does it matter to the Nation? Whose interests are at stake?

Bender, above all, loved Harvard. Professors like E. Bright Wilson were, for better or worse, much more idealistic: looking far beyond their home institution, they held knowledge itself preeminent.


Typology used for all applicants, at least as late as 1988:

1. S First-rate scholar in Harvard departmental terms.

2. D Candidate's primary strength is his academic strength, but it doesn't look strong enough to quality as an S (above).

3. A All-Amercan‚ healthy, uncomplicated athletic strengths and style, perhaps some extracurricular participation, but not combined with top academic credentials.

4. W Mr. School‚ significant extracurricular and perhaps (but not necessarily) athletic participation plus excellent academic record.

5. X Cross-country style‚ steady man who plugs and plugs and plugs, won't quit when most others would. Gets results largely through stamina and consistent effort.

6. P PBH [Phillips Brooks House] style: in activities and personal concerns.

7. C Creative in music, art, writing.

8. B Boondocker‚ unsophisticated rural background.

9. T Taconic, culturally depressed background, low income.

10. K Krunch‚ main strength is athletic, prospective varsity athlete. [ Sometimes also "H Horse" :-) ]

11. L Lineage‚ candidate probably couldn't be admitted without the extra plus of being a Harvard son, a faculty son, or a local boy with ties to the university community.

12. O Other‚ use when none of the above are applicable.

Sunday, February 17, 2008

Les Grandes Ecoles

This Times article on the elite world of French business has some interesting facts about Ecole Polytechnique and Ecole Nationale d'Administration (ENA). In physics, we typically encounter graduates of Ecole Normale Superieure ("normaliens"), which boasts 9 Fields Medalists and at least 8 Nobel Laureates in physics. 15 years ago a normalien friend complained to me that the ENArques were getting the upper hand, but it appears from the article the polytechniciens are hanging tough! The greatest polytechnicien of all time might be Poincare, but then again there are also Cauchy and Ampere and Poisson and Navier...

An earlier post on Les Grandes Ecoles. I must say, these schools, with their strictly meritocratic admissions policies, sound a lot more like Caltech than like Harvard.

NYTimes: ...AT least half of France’s 40 largest companies are run by graduates of just two schools, the École Polytechnique, which trains the country’s top engineers, and ENA, the national school of administration. That’s especially remarkable given that the two schools together produce only about 600 graduates a year, compared with a graduating class of 1,700 at Harvard.

...Rather than a rigid class system, it was Mr. Fourtou’s and Mr. Bébéar’s admission into the École Polytechnique that assured their place in the elite. And that is one of the great ironies of the French establishment: while it enjoys the privileges associated with the elites of the United States, entry is, if anything, much more rigorously meritocratic, based on exams and ever-narrowing selection from an early age.

Indeed, getting into Harvard, which accepted 9 percent of its applicants last year, is a breeze compared with getting into the École Polytechnique.

Out of 130,000 students who focus on math and science in French high schools each year, roughly 15 percent do well enough on their exams to qualify for the two- to three-year preparation course required by the elite universities. Of those who make it through that, 5,000 apply to École Polytechnique, which is commonly called simply “X,” and just 400 are admitted from France.

Admission is based strictly on exam grades; there isn’t even an essay requirement or interview. And there are no legacy admissions, sports scholarships or other American-style shortcuts for getting into X.

“You can be the president’s nephew and it won’t help you get in,” says Bernard Oppetit, a 1978 graduate of X who later worked for BNP Paribas before starting Centaurus Capital, a London investment fund with $4 billion under management.

The École Polytechnique was founded in 1794, during the French Revolution, to train the country’s military engineers, and it officially remains under the umbrella of the French ministry of defense. Not only is the school free, but students also receive a stipend from the government to cover their expenses.

“We call it l’élitisme démocratique,” says Pierre Tapie, dean of Essec, a leading French business school. “These are places where you meet extraordinary people who are there because they worked hard and are among the most brilliant of a generation.”

Although the school teaches high-end fare like physics, engineering, and computer sciences, its broader goal is to create a leadership cadre that shares an ordered, prioritized view of the world, says Xavier Michel, the president of the École Polytechnique and an active-duty general in the French armed forces.

In France, this is known as the Cartesian system, after the mathematician and philosopher René Descartes, and Mr. Michel says the school encourages its students “to modelize” the world. And when they eventually become chief executives, he says, “they understand what are the capabilities of their companies. They understand what they can do and what they can’t do.”

Until, of course, models run off the rails — as they so often do in the business and financial worlds, regardless of what country devises them.

Monday, February 04, 2008

The soldier-monks of Societe Generale

Vive les moines-soldats!
NYTimes: ...The derivatives group started in the 1980s as a small team of highly trained and highly regarded engineers and mathematicians from the best schools. They quickly became known as “les moines-soldats,” the soldier-monks. And as their importance inside the bank grew, their confidence, even arrogance, grew with it.

Like the devout and disciplined fighters they were named for — the monks who fought in the Crusades — the soldier-monks of Société Générale prided themselves on rising above the passions that moved the masses.

Similarly, Société Générale’s soldier-monks believed that they could manage both the risk inherent in betting on the markets — through complex computer models — and the ardor of their regular traders, through controls.

Their hubris was having too much faith in their power to do either.

But they were dedicated to making Société Générale a world-class power in derivatives and, like the knights of old, they were fiercely competitive, both on and off the trading floor.

“We considered it a mission,” recalled Antoine Paille, who recruited Jean-Pierre Mustier, now the head of Société Générale’s corporate and investment bank. It was Mr. Mustier who ultimately confronted Mr. Kerviel after his fraud was discovered on Jan. 18. ...


A Red Flag Cited

Mr. Kerviel was never viewed as soldier-monk material. He was a provincial from decidedly middle-class stock — the son of a hairdresser and a metal- shop teacher — but he possessed an advantage that his better-bred superiors did not.

In his five years toiling in the back office before being promoted to Delta One in 2005, he had become expertly familiar with the proprietary system Société Générale used to book trades, known as Eliot inside the bank. While the risk-control department did monitor the bank’s overall positions very closely, it did not verify the data Mr. Kerviel entered into Eliot. And Mr. Kerviel knew the timing of the nightly reconciliation of the day’s trades by Eliot, so he was able to expertly delete and then re-enter his unauthorized transactions without being caught.

Mr. Kerviel’s method of entering trades was one red flag cited by Eurex in its initial warning, along with questions about two “large” positions — one net short position in DAX futures and one net long position in Euro Stoxx 50 futures. In the same letter, they asked what his investment strategy was and why these transactions were often entered through a London-based Société Générale subsidiary called FIMAT Futures Limited. Eurex even inquired whether Mr. Kerviel had entered the transaction automatically or manually.

“Please explain the background for this procedure,” two Eurex officials wrote to Xavier de la Maisonneuve, a compliance officer at Société Générale who has been questioned by investigators.

Vincent Duclos, another compliance officer in the equity derivatives division, not yet questioned by the police, provided the Nov. 20 and Dec. 10 responses to Eurex. His replies in part were based on accounts provided by Mr. Kerviel and his supervisor, as well as a compliance officer at FIMAT, said Jean Veil, a lawyer for Société Générale. Mr. Kerviel’s “supervisor had signaled that there was no anomaly whatsoever,” Mr. Veil said.

Mr. De la Maisonneuve, who received the initial query on Nov. 7, said the bank gets 15 to 20 queries from different exchanges each year, many of them from Eurex.

In a telephone interview Monday night, he insisted his team had been in telephone contact with Eurex after their two letters in November to ensure it would fully answer their queries.

“Their questions were based purely on strategy and procedure,” he said. “At no moment of these conversations was there any mention of abnormal volumes. They considered our second written response adequate and satisfying.”

He added that Eurex did not take up Société Générale’s offer of a conference call to further discuss the matter after the Dec. 10 letter.

A top official at Société Générale, who insisted on anonymity because of the sensitivity of the matter, said that in the weeks after the Eurex warning, Mr. Kerviel was shaken, and took additional steps to cover his tracks. He tried to manipulate areas of the internal risk-control system he was unfamiliar with, which ultimately led to the discovery of his suspected fraud in mid-January.

In his testimony to the police, however, Mr. Kerviel identified two members of the Delta One team he said were familiar with his activities going back to last April. These colleagues, according to lawyers familiar with the case, were Martial Rouyère, head of the Delta One trading desk, and his deputy, Eric Cordelle. Mr. Rouyère has since been questioned by the French authorities. Mr. Veil said he expected Mr. Kerviel’s “entire hierarchy,” including Mr. Mustier, to eventually be questioned by the police. ...

Tuesday, April 04, 2006

Vive les grandes ecoles

I guess the US is not the only country with an increasingly elitist economy and education system.

Economist: One of the arresting features of the current student movement is how little it has touched France's grandes écoles. Sciences Po, a feeder college for these elite schools, has seen nothing of the violence or forced blockades of nearby Paris universities, such as the Sorbonne. Nor have most of the country's top undergraduate business or engineering schools, such as Polytechnique, HEC or ESSEC. Students at such places, taught the latest in finance and economics, understand the price France will pay if it refuses to change. These are the well-trained graduates snapped up by banks in London and New York which are only too happy to benefit from what France does best, and by those French companies now busy exploiting globalisation with such aplomb.

These two faces of France are separated early in the country's two-tier higher education system. At the top, the grandes écoles cater to a small minority and are highly selective: would-be pupils spend at least a year in a preparatory class just to take the entrance exam. While the Ecole Nationale d'Administration (ENA) is the best-known (and arguably the least well-adapted to the global economy), it recruits only a tiny share of the total. The rest are autonomous, and highly specialised in areas such as engineering or business. And employers pay a premium to hire their graduates. A recent study by Le Nouvel Observateur magazine showed that 96% of graduates from top engineering schools were placed two years later in permanent jobs, earning an average of €30,400 ($36,600). By contrast. only 45% of university psychology graduates had found permanent jobs by the same stage, and their average income was €19,000.

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