Mark Shuttleworth is in favour of regulated capitalism. But he argues that regulation has to be done properly. Here are his guidelines.

Good regulation is very hard. Over the years I’ve interacted with a few different regulatory authorities, and I sympathise with the problems they encounter.

First, to be an effective regulator, you need superb talent. And for that you need to pay – talent follows the money and the lights, whether we like it or not, so to design a system on other assumptions is to design it for failure. My ideal regulator is an insightful genius working for the common good, but since I’m never likely to meet that person, a practical goal is to encourage regulators to be small but very well funded, with key salaries and performance measures that are just behind the industries they are supposed to regulate. Regulators must be able to be fired – no sense in offering someone a private sector salary and public sector accountability. Unfortunately, most regulators end up going the other way, hiring more and more people of average competence, that they become both expensive and ineffective.

Second, a great regulator needs to be independent. You’re the guy who tells people to stop doing what will hurt society; it’s very hard to do that to your friends. A regulatory job is a lonely job, which is why you hear so many stories of regulators being wined and dined by the industries they regulate only to make sure they don’t look too hard in the back room. A great regulator needs to know a lot about an industry, but be independent of that industry. Again, my ideal is someone who has made a good living in a sector, knows it backwards, can justify their high price, but wants to make a contribution to society.

Third, a great regulator needs to have teeth and muscle. It has been very frustrating for me to watch the South African telecomms regulator get tied up in court by Telkom, and stymied by government department inadequacy. Regulators need to be able to drive things forward, they need to be able to change the way companies behave, and they cannot rely on moral suasion to do so.

And fourth, a regulator has to make very tough decisions about innovation, which amount to venture capital decisions – to make them well, you have to be able to tell the future. For example, when an industry changes, as all industries change, how should the rules evolve? When a new need for society is identified, like the need to address climate change early and systemically, how should the rules evolve? Regulators need to move forward as fast as the industries they regulate, and they need to make decisions about things we don’t yet understand. And even when you regulate, you may not be able to stop an impending crisis. It’s very easy to criticize Greenspan for his light touch regulation on hedge funds and derivatives today, but it’s not at all clear to me that regulation would have made a difference, I think it would simply have moved the shadow global financial system offshore.

So regulation is extremely difficult, but also very much worth investing in if you are trying to run a healthy, vibrant, capitalist society.

Spot on.

Tony Hirst pointed me at this sombre piece by an academic (with tenure) who’s leaving HE because he’s pissed off with the way things are going. Excerpt;

After too many years at this job (I am in my mid-40s), I have grown to question higher education in ways that cannot be rectified by a new syllabus, or a sabbatical, or, heaven forbid, a conference roundtable. No, my troubles with this treasured profession are both broad and deep, and they begin with a fervent belief that most of today’s college students, especially those that come to college straight from high school, are unnecessarily coddled. Professors and administrators seek to “nurture” and “engage” and they are doing so at the expense of teaching. The result: a discernable and precipitous decline in the quality of college students. More of them come to campus with dreadful study habits. Too few of them read for pleasure. Too many drink and smoke excessively. They are terribly ill-prepared for four years of hard work, and most dangerously, they do not think that college should be arduous. Instead they perceive college as an overnight recreation center in which they exercise, eat, and in between playing extracurricular sports, they carry books around. If a professor is lucky, the books are being skimmed hours before class.

How do I know that my concerns are not unique to my employer, or my classroom? My students are brutally honest – they tell me with candor and without shame that their peers think of college as a four year cruise without a destination.

No doubt these students deserve some blame for their lethargy, but some culpability lies with their professors, and the administrators who ostensibly but unsuccessfully provide vision and direction. Today’s faculty and administrators capitulate to students’ demands in innumerable ways. They hold classes outside on sunny days, not really caring if there is no blackboard, or if the students are admiring each other instead of the texts to be dissected. They encourage students to think of college as a “comfortable” and “supportive” community, not as a means to acquire necessary skills. Far too many of my colleagues are dialing in – showing up late, popping in videos during class, assigning group projects, or sitting in a circle and asking students how they feel. Why they have abandoned classroom rigor is something that only they can answer. But one answer is simple – students flock to these popular classes, probably because they cater to the students’ worst sensibilities. Homework is minimal, or sometimes optional. Surprise quizzes are considered unfair. Late assignments are not failed. Some grades are even negotiable…

I know lots of academics in various institutions who feel like this. But I guess most of them won’t quit: “better to hold on to nurse”, as Harold Macmillan used to say, “for fear of something worse”.

LATER: Nice email from Roger Whittaker who says: “I think Macmillan was quoting Belloc – one of the Cautionary Tales“.

Nice column by Dick Cavett …

What on earth are our underpaid teachers, laboring in the vineyards of education, supposed to tell students about the following sentence, committed by the syntax-serial-killer from Wasilla High and gleaned by my colleague Maureen Dowd for preservation for those who ask, “How was it she talked?”

“My concern has been the atrocities there in Darfur and the relevance to me with that issue as we spoke about Africa and some of the countries there that were kind of the people succumbing to the dictators and the corruption of some collapsed governments on the continent, the relevance was Alaska’s investment in Darfur with some of our permanent fund dollars.”

And, she concluded, “never, ever did I talk about, well, gee, is it a country or a continent, I just don’t know about this issue.”

It’s admittedly a rare gift to produce a paragraph in which whole clumps of words could be removed without noticeably affecting the sense, if any.

(A cynic might wonder if Wasilla High School’s English and geography departments are draped in black.)