Game Theory #2: Why Schools Suck

We can use game theory to analyze global events, understand why they're happening, and make predictions about how they should develop. To do that, I first need to train your mind on how to see the world using game theory. We previously discussed the dating game and why men and women are motivated to behave the way they do when they look for a mate. Today, I want to discuss the issue of school.

School is something you should know very well. Its purpose is to train you in a way that allows you to be functional and creative in society. The goals are basically:

1. Literacy: This means reading and writing. This is the primary purpose of school because to function in our society, you need to be able to absorb and convey information.
2. Core Competencies: These are skills you need to be successful in life, including the ability to think critically, cooperate with others, collaborate, and communicate.
3. Lifelong Learning: In an age of AI and globalization, school is just the start of the learning process. The world changes every five years, so you need to be in a constant state of learning. You have to love learning and know how to learn for yourself.

These are the three basic purposes of school, and that's why you're here.

The Reality: Why Most Schools Fail

Unfortunately, most schools—not all schools, but most—are pretty bad at these three things. You can make the argument that most schools not only fail to teach you these skills but have the opposite effect. In fact, they make you hate learning.

Let's look at literacy. Today, in most schools, you're not required to read books. When you go to university, the professors are so shocked that you don't read books that they make you read paragraphs or watch videos instead. Around the world, people are losing the capacity to read and write. Not only that, but people's attention spans have decreased. It's very hard for a professor to give an hour-long lecture; people lose focus after about five minutes.

Another problem is that school is supposed to teach you creativity, critical thinking, and collaboration, but it doesn't. Look at collaboration. In school, it's a competition where you believe it's a zero-sum game. For you to get ahead, you need to screw over your classmate. Class ranking is very important, which is odd.

The last thing, of course, is lifelong learning. School teaches you to hate school and, therefore, teaches you to hate learning, especially in China. You work hard until the national entrance examination at age 18. After the examination ends, what do you do? You burn your books. That's the great ceremony here in China. Right after the examination, you take your books, rip out the pages, and throw them in the sky to signal your liberation. You're like, "I never ever want to read a book again. I never ever want to take a test again. I never want to learn again."

Around the world, most schools are failing in their mission. School sucks. The question for us today is: why is this the case? We're going to use game theory to analyze why.

A Case Study: Reforming a School in China

I'm going to tell you a story about myself. The year is 2008. I went to Yale College in the United States and was an English major. I did very well in school, so I was hired in 2008 to go to Shenzhen in South China and help Shenzhen Middle School build an international program to send kids abroad. This was a long time ago, and back then, not that many students wanted to go abroad. There were very few international schools.

The first thing I did was look at the situation at the school, and this is what I found.

The Old System

I found that even though about 10% of the students were planning to go abroad—about 80 students each year—the way they were going about the process was problematic.

• First, all they were doing was taking regular Chinese classes, where you sit in a room of 50 kids, take notes, and take tests. You don't communicate, ask questions, or debate.
• Second, students were spending all their time memorizing SAT word lists. They were not reading or writing; they were just memorizing words.
• Third, to make their applications look good, they did Model United Nations. That's a great activity, but everyone was doing it. There was absolutely no differentiation.

I looked at the situation and said no. You might be able to get into a good American university because these kids are very smart, but I wanted them to do well at the university and in life.

The New System

So, I made certain changes to the curriculum and the school.

• Seminar System: Instead of Chinese-style classes, I invited American teachers to come and teach seminars, like we have at this school, where 10-20 kids are in a room discussing books they read together.
• Reading Books: Rather than SAT word memorization, I had them read books. Students were required to read a lot. I established a 5,000-book English library where students could just go and borrow books. I wanted to teach students the joy of reading.
• Real-World Activities: In terms of activities, I didn't want students doing Model United Nations anymore. I didn't want kids sitting around just talking; I wanted them to do things. I set up two new activities.
  • The first was the Coffee House, the first coffee house in a Chinese high school. There are lots of them today, but I was the first. Students had to run a business, work as waiters, and provide good service. It was a collaborative effort, great for learning collaboration, finance, and entrepreneurship. It was a very successful activity.
  • The other thing I did was a Daily Newspaper. This was the first daily newspaper in a Chinese high school, and maybe even around the world. Every day, students had to report, collect information, write articles, edit, and publish. They worked until midnight, sometimes until 2 a.m., and then at 7 a.m., they had to get up and deliver the newspaper to all the students.

To make this transition from the old system to the new, you also have to establish a new culture to allow these activities to flourish. My three major principles were transparency, innovation, and openness.

My idea was this: rather than a curriculum that was perfect, it would be a curriculum that would evolve over time. We would learn from mistakes together, admit these mistakes, and then correct them together. That's what learning is. I made changes all the time, which created some chaos, but it was a time for us to reflect and be resilient. I was very open and honest about everything I was doing.

In a very short amount of time, even with a lot of problems in the beginning, it became a very effective system. The students who went through this program did very well in life. They went to Yale, Wharton, and Cornell. This program became the most famous in South China, and our students had the best record of college admissions in the region.

The Result: Fired and Labeled a Dictator

This sounds great, right? The problem is what happened after I established the program.

1. I was fired. They said, "Get out of here."
2. The teachers, parents, and students were all happy to see me go. They were like, "Get out of here. We never want to see you again."
3. I did create a new program that was very similar, but after four years of doing this and being very successful, I was never allowed to set up another program again. No one wanted me to work in management again.

Even though I was successful, worked really hard, was innovative, and set up the best study abroad program in all of China—I was the first, and everyone else copied me—I was fired. No one wanted me to stay, and I was not allowed to do this ever again. Why?

The reason is this: when I was doing this, the word everyone used to describe me was not reformer, visionary, idealist, or dreamer, but dictator. Another common word they used was that I was an asshole. Why? Because I insisted on fairness. I didn't care who you were or who your parents were. I wanted you to work hard and learn. As you can imagine, that pissed off a lot of powerful people because that's not how the game is played in China. It's not how the game is played anywhere in the world.

The game is not fair. The game is established by stakeholders, and they play the game according to their interests.

A Game Theory Analysis of School Stakeholders

I understand that there are stakeholders, and in game theory, stakeholders are just the players. Who are the players?

• Students
• Parents
• Teachers
• Administrators (school leaders)
• The Government
• Colleges (the U.S. colleges I was trying to send my students to)

These are the players in the game. If you want to understand game theory, you need to understand the motivations and interests of all the different players, which tells you how they will behave.

My Initial (Wrong) Assumptions

Here was my original understanding of the players, which was clearly wrong because I got fired.

This was my assumption in 2008 about who the players were and what motivated them. Clearly, I was wrong.

The Reality: What Players Really Want

Let's do an analysis of what they really want. The easy answer is that in game theory, all players are motivated by achieving the best possible results by doing the least amount of work possible.

Everyone wants to achieve the best results by doing the least amount of work possible. People are lazy and people are greedy. It's that simple.

• Students want to get into the Ivy League, but they don't want to work hard to get there. They want to do as little work as possible. If it means they have to work hard, they'd rather just get into another school because who cares?
• Parents might want their kid to work hard, but what's more important is for them to control their kid, because only they know how to ensure their kid succeeds. They don't want their kids to think critically or be independent; they want their kids to obey them.
• Teachers think, "Listen, this is a job, man. I have kids. I don't want to work hard. I just want to come to school, do what is minimally required to collect my salary, and then go home. I don't want to teach my passion because I don't have any passion."
• Administrators think, "What's important is for me to make sure the powerful parents are happy. I don't care about everyone else—poor parents, middle-class parents. As long as the powerful parents are happy, I can keep my job."
• The Government says it wants innovation, but it doesn't want problems. It just wants things to stay the way they are so everyone's happy.

Now we understand what happened. A game is constructed when all the different players agree on the rules and incentives. I was an outsider. I was not a player. I came in to construct a game in which I felt students would thrive, and they did. But that's not what they wanted. They wanted to have control over the game, and if they lose control, they call the outsider an asshole.

The Superstructure: Why Education Systems Decline

Let's objectively think about the interests and motivations of each player. When their interests converge, that's the game they play.

Another thing you have to do in game theory is rank the power of each player. Not all players are equal. In this game, even though students are the majority, they don't actually matter. What students think and want doesn't matter. What matters are the parents because they pay to play and can cause a lot of problems. So, the parents are most important. Then you have the teachers, because they are the ones implementing the rules of the game. The way teachers behave determines how the game is played. Administrators are also important, but not as much as parents and teachers.

The government doesn't really care; it's one school among thousands. The colleges don't care either. They say they want passionate, curious students from China, but they don't care. For them, it's a business. They just want students who are willing to pay money for a crappy education in America. They'll take anyone who's willing to pay. And the Ivy League? They want people who will be successful in life. Who are these people? Not the best students. These are people from powerful families. This game is rigged.

So, the three major players are the parents, the teachers, and the administrators.

What caused the transformation?

The superstructure is the macro picture of a society: its demographics, economy, politics, and religion. Societies are born, they mature, and then they die. You can use three metrics to understand how societies develop: cohesion, openness, and energy.

• Energy means you want to work hard. You're motivated, driven, and focused. If you're a cook, you want to make a really good meal.
• Openness means you want to learn and grow. You're willing to admit you made a mistake and improve.
• Cohesion means you see yourself as part of a community and you want your community to grow as well.

When you have all three things together, schools are great. For example, go to Finland. It's a small country, but the schools are amazing because Finland is an energetic, open, and cohesive society. When you have that, you want to invest in the future, which means ensuring every child—not just your child—has a good education. You have your best and brightest become teachers, you pay them well, give them high status, and grant them a lot of autonomy.

In China in the 1980s, the schools were amazing. Teachers felt respected and believed it was their responsibility to train the young. They took pride and joy in their work, and students enjoyed learning. Back then, kids did less work, there were fewer tests, and less pressure, but they learned a lot more.

When a society begins, you have these three aspects. But over time, all three decline because of corruption, inequality, and wealth. Instead of cohesion, you have individualization. Everyone thinks, "I don't care if other kids are doing well. What's important is that my kid does well because it's a zero-sum game." Now, school is a competition.

What about openness? Are you willing to learn from your mistakes? The answer is no. If I'm an administrator and I say to parents, "I'm sorry, I made a mistake," the parents will say, "You're fired. You're incompetent." So, school administrators are now afraid to admit they're wrong, which means a school can never improve.

Then you have energy. Teachers think, "If I do a good job, parents will want me to do a better job. I can't please all the parents, so I'll just hide in my office and do as little work as possible." This is happening because of wealth generation. In the 1980s, China was poor, and the only way to lead a better life was through education. That's why students worked hard. Now, parents have money. It doesn't matter if you don't do well in school because your parents can just give you an apartment or buy you a car. You're not motivated. If you're not motivated, then as a teacher, why would I want to teach well?

The Convergence Point: What Today's Schools Look Like

The superstructure determines the motivations of the players, and where their interests converge is the game you have.

• Parents just want white faces (as a luxury product) and successful kids, which means good grades.
• Teachers just want to get by and do as little work as possible.
• Administrators just want to protect their relationship with parents.

When you bring this convergence together, this is what international schools in China look like now (the majority, not every school):

• White faces
• Easy grades (it's really easy to get a good grade)
• Some top students (who are given scholarships and sent to top universities so the school can brag)
• Lots of cheating
• High turnover (students leave, teachers leave, but new ones come in, so who cares?)

This is what happens when you take the interests of these different players and converge them. You get lots of white faces, nice buildings, fancy activities, great marketing, and beautiful websites. Then you have easy grades where everyone gets an A. If you don't get a good grade, just complain, and you'll get one. If you don't like a teacher, just complain, and the teacher has to change. So now you have high turnover where teachers feel stressed out, parents are never happy, and students don't care.

This is why schools suck, not just in China, but in most places around the world. It has to do with the superstructure of society.

The Nature of the Game

The point is to analyze why schools are the way they are. One way is by figuring out at what point the different players converge. Think of it as a Venn diagram where the convergence point of parents, teachers, students, government, and colleges is the game they play.

It's possible to do reform, but only within a subset of this convergence point. My problem in 2008 was that I tried to set up a new universe with my own rules. That's why everyone called me an asshole. Whatever you do, whatever game you set up, has to be within this convergence point for players to accept it. This is true for everything. If you want to implement political reform, you have to figure out where the different stakeholders converge and how to move them from one part of the convergence point to another. This is slow, incremental reform.

Where do the interests of these different players come from?

The easy answer is the superstructure of society; people are responding to their culture. But in game theory, it's because they themselves are playing different games.

Let's look at parents. They have different identities: they are family members, and they are colleagues. As family members, they might have brothers they compete against. You want to prove you're better than your brother by having more money, better kids, or a more beautiful wife. That's one game they're playing.

But then you have colleagues. The game you're playing there is to get along with your colleagues because that ensures your success. You need to make sure your child, no matter how they are educated, is able to become friends with the sons and daughters of your colleagues because this is what ensures success.

A parent's calculation isn't just "I want my kid to be successful." They are thinking about how to play different games and be successful in those other games. If your kid becomes very successful but not in a way that pleases your colleagues, you can be thrown out of the game. The thing people fear the most is ostracization, or exile, where you are no longer part of the group. That's what people are afraid of, and that's why they are motivated to do what they do. They're trying as hard as possible to play the game and get along with other players while at the same time competing against them. It's a weird psychology. You're trying to beat them, but at the same time, you don't want to piss them off and get thrown out.

A lot of the rebellion against what I was doing as a reformer was because I was subverting traditional Chinese values, norms, and conventions. If people believed in me, they risked being ostracized by the larger community.

The Games Within the Game

Students are also trying to play multiple games. They're trying to do well in school because that ensures a good outcome. But at the same time, students play other games:

• A friendship game, where you're trying to have as many friends as possible and be popular.
• A pleasing-your-parents game, because that ensures you have an easy, comfortable life.

You could argue that of these three games, pleasing your parents is the most important. Then comes having good friends, because that will also ensure your success in life. The game you care the least about is actually learning in school.

Conclusion: We Are Shaped by the Games We Play

Game theory sounds easy, but it's very complicated because we are complicated individuals. Each of us has different identities, motivations, and outlooks. We are also always changing. The way you behaved in kindergarten is not how you behave today, and it will not be how you behave when you enter society. You're always changing because the game is always changing. You must adapt to new games that have different players and new requirements.

We are adaptable and resilient, but who we are is often determined by the nature of the game. You could have come into school wanting to learn and be creative, but eventually, you recognize that's not really rewarded. Getting along, having lots of friends, and helping other students cheat—that's rewarded. So you adapt to the game, and that's why you behave the way you do. If you think about everything you did in school, the answer is you were responding to a certain incentive or rule of the game.

That's what we need to understand about game theory. It's not about ideas or ideals. It's not the way things should be; it's the way things are. And the way things are is determined by who the players are and how they behave in response to the game they believe they're playing.