Rostra 294

rostra ECONOMICA MOOCs. studying

at harvard from your own living room

no degree but still succesful. The story

of college dropouts

education in the neW decade

Brain Doping:

pills to enhance your studying?

issue 294 march 2013 respond? rostra@sefa.nl

-------------------------------------------------------------------------------------------------------------------------------editorial rostraeconomica 3 -------------------------------------------------------------------------------------------------------------------------------text Bart hoffmann editor-in-chief -------------------------image adrian enache

Bart hoffmann is 22 years old and a master student of economics.

What’s your degree Worth?

W

e hear it all the time around us (or at least, I do): ‘Employers are no longer searching for students that only have good grades’.

Extracurricular activities are becoming more and more important. A CV that shows that you have studied hard but haven’t had much experience working in committees or such apparently says you are suffering from a borderline case of autism: you also need to be able to prove that you work well in teams.

And to be honest, firms nowadays can actually be much more demanding than before. Not that long ago I was at an information meeting for a traineeship at the Dutch government. As always with these meetings, the person in front of the group was very enthusiastic. We were thé future, the public sector was the best place to work ever and they were especially looking for economics or business students to apply. So far so good. But when asked how many people apply in general the answer was not that satisfactorily: last year over 2600 students applied for no more than 105 positions. But, according to him, we ‘shouldn’t let that stand in the way of applying’.

And so many students apply for committees (the Rostra is recruiting as well!), try and find a relevant job during their studies and most importantly: do their best to get noticed by the major companies as soon as possible.

All of this to stand out in the group of 2600 applicants.

All of this makes you wonder if simply studying really isn’t worth that much anymore. Is it really the case that

headhunters will look at your work and experience besides your studies, and are not that impressed anymore by good grades? Unfortunately, it is hard for me to give a definitive answer, but it does seem that the traditional role of our degree, and education itself, is shifting.

Especially in the current economic circumstances, many people are graduating and applying for jobs, and other activities during your studies might become important in the decision to hire you. In this sense, the value of a degree has seemed to drop.

Like any ordinary market, it can be expected that these changes will have an effect on the ‘market’ of education.

This Rostra takes a look at current and past changes in the field of education. The first article you will find concerns the concept of MOOCs: massive open online courses. The University of Amsterdam has recently started its first free online course, but this concept has been implemented at lots of big universities around the world already. We also look at the trend of brain doping.

Especially in the United States this seems to be a problem, where students take medication for illnesses they don’t have in the hope to boost their brain. You will also find an interview with two UvA-students that have started their own online-business while still studying, perhaps one of the best ways of gaining valuable experience while studying. Not only does it show future employers that you are a hard worker with a creative mind, unlike other activities you actually get paid. If all goes well that is…

-------------------------------------------------------------------------------------------------------------------------------4 rostraeconomica --------------------------------------------------------------------------------------------------------------------------------

the rostra chart

the legend of the freshman 15 so it’s your first year at university and you’re on your own now. mum’s not cooking and your main food staples are probably beer, cereal and frozen pizza. due to these changes you might experience, what in popular culture is called “the freshman 15”: phenomena of students putting on 15 pounds of weight, during their first year at university. Fortunately, it’s a myth… kind of. research done on 240 freshmen showed that they do gain weight, but far less than 15 pounds. its 2.6 pounds on average and out of the 66% who do gain weight, it’s 6 pounds. so you don’t have to miss happy hour, but maybe have a salad for dinner.

the freshman 15 all freshmen average weight gain males: 3.6 pounds all freshmen average weight gain overall: 2.6 pounds all freshmen average weight gain females: 2.1 pounds

all freshmen that gained weight average weight gain females: 5.7 pounds

all freshmen that gained weight average weight gain males: 6.4 pounds

all freshmen that gained weight average weight gain overall: 6 pounds

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 5 --------------------------------------------------------------------------------------------------------------------------------

CoLoPHoN Editor in chief Bart hoffmann Copy Editors Jules Vos ruben slot Editors Floris dekter corneel den hartogh Klara Keutel tim martens ruben slot dovile Venskutonyte Pierre Borst Photographer nicole Koedooder supervisory Board Wouter smeets hanne van Voorden Lennart Verhoef reactions, letters and applications can be sent to: room e0.02 roetersstraat 11 1018 WB amsterdam 020 5254024 rostra@sefa.nl www.rostraeconomica.nl Columnists roger Pruppers Joop hartog Design def., amsterdam (yvonne roos) Print run 5000 address Changes can only be made through studielink, www.studielink.nl advertisements akzonobel dsF dutch inhouse tours Ernst & Young KPmg niBc Pwc advertisement Costs contact sefa and ask for aniel ganga 020 525 40 24 commercial@sefa.nl Printing dr&dV media services, amsterdam Copyright Notice any redistribution of part or all of the contents in any form is prohibited. you may not, except with express written permission by the editor in chief, distribute or commercially exploit the contents. nor may you transmit it or store it in any other website or other form of electronic retrieval system.

12 32 35 3640

Interview. two uva students start their own penny auction

What history tells us. student protests in Paris

open letter from the Fsr

FEB abroad. stories from ice-cold canada

the struggles between capital, labor and talent

Book review. deutschland schafft sich ab

aND morE 8 moocs. Big Business or gateWay to educationaL change?

29 do you Want to maKe the next rostra economica?

41 the dutch inhouse tours

8 coLumn roger PruPPers 42 economics From the outside 22 successFuL droPout Kids 44 coLumn dr JooP hartog 24 seFa Front 46 FeB FLash 26 PiLLs For Better grades?

-------------------------------------------------------------------------------------------------------------------------------6 rostraeconomica --------------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 7 -------------------------------------------------------------------------------------------------------------------------------image danishkhan

at first sight this might seem like a regular class in Karachi, Pakistan. if you look closely however, you notice that this classroom is actually outside. this concept of so-called street schools was introduced over 25 years ago in one of the oldest slums of Karachi, Lyari. all of the ‘classrooms’ are located in the narrow lanes of this slum, using the walls as a blackboard. most teachers work free of charge, thereby letting local children that are normally unable to go to school attend these classes.

-------------------------------------------------------------------------------------------------------------------------------8 rostraeconomica education in the new decade -------------------------------------------------------------------------------------------------------------------------------text corneel den hartogh, tim martens -------------------------image yvonne roos

corneel den hartogh is 22 years old and master student in Philosophy of social sciences.

--------------------------tim martens is 23 years old and a master student in economics.

mooc Big Business or gateWay to educationaL change?

in the world of education, 2012 was the year of the mooc. mooc stands for massive, online open course.

While not many people have heard of them before, last year coursera, udacity and edx were formed. these three companies acquired millions of euros to provide university courses online to anyone for free. our own university has launched its first mooc on the 20th of February.

All around the world, millions of learners are already watching online lectures. Projects like Academic Earth, Khan Academy or the Open University provide free lectures held at Yale, Berkeley, Stanford and MIT. The topics range from general philosophy and biomedical engineering to game theory.

Besides the effort in providing these online lectures, large investments are necessary. For instance, EdX has gained funding of 60 million dollar to develop online education.

This money is needed since MOOCs are expensive. Not only the lectures have to be videotaped, but online working spaces need to be designed as well. Since popular courses can attract up to 160.000 students, a string of technical issues needs to be tackled.

Business Models However, not all universities are enthusiastic. The main reason for this is uncertainty about the business model.

How will MOOCs repay their investments? Udacity thinks its potential income lies in head-hunting. Companies that look for certain capabilities can be matched to students who have excelled online. However, only a small percentage of the online learners are actually open for jobs. Not to mention geography-issues: students can follow a MOOC from anywhere in the world, but are not as likely to move to another place for a possible job.

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 9 --------------------------------------------------------------------------------------------------------------------------------

------------------------------------------the toPics range From generaL PhiLosoPhy oVer BiomedicaL engineering to game theory Another possibility to make money is to charge students for proctored exams. Coursera has clinched a deal with Pearson in order to be able to offer controlled, offline exams. The American Council for Education has supported this step by allowing universities to give credit for these courses.

However, Coursera CEO Andrew Ng has already noticed that companies do not care that much about a more official certificate. Many people within business have very different degrees from their current field of work, but they have proven to be capable. New employees are recruited first and foremost on capability, usually not on precise skills or courses taken.

An alternative option to get revenue from students would be the ‘iTunes-model’. Before being allowed to participate in a course you would have to pay a small fee of around a dollar. When this is paid you could access the course whenever you want, just like you can listen at any time to music you bought in the iTunes store. However, which

MOOC-platform will start charging money? With a still increasing amount of providers this platform will lose learners very easily.

Integration in the System Why not look at how to integrate MOOCs in the current educational system? It is a big problem that prospective students do not have a clue of what university courses look like. In addition, the first exam is a quite strong indicator whether the student will succeed in his/her studies. Why not offer introductory courses as MOOCs aimed at high school students? If they succeed in all the assignments, they can do an exam at the university. If they pass and sign up for the study program, they get the credits for the course.

In this way the shock between high school and university can be damped.

An application of MOOCs for current students is already visible in the US. As mentioned above, credits gained in certain MOOCs are accepted by universities.

One could offer students the possibility to follow MOOCs in their minor as well. Previously selected MOOCs can be suggested to students. When this is offered to groups of students, they can work together on the course and help each other to finish it. This saves the university lots of money, since they do not have to offer the whole course.

-------------------------------------------------------------------------------------------------------------------------------10 rostraeconomica education in the new decade --------------------------------------------------------------------------------------------------------------------------------

Besides prospective and current students, MOOCs could help alumni. In the current knowledge economy employees have to update and specialize their knowledge continuously.

However, due to their jobs they are not as flexible as students. A solution might be to offer MOOCs to alumni.

This might be stepping stones for MBAs or just to keep alumni involved with their university. The latter is important since universities like the UvA hope that alumni will give back to their alma mater in the form of donations and guest lectures.

There are of course problems to consider with regard to this systemic change. Take for instance the use of real world cases in class. A management professor who comments on recent developments in a particular firm could be confronted with legal issues. No firm wants to be set as a bad example in a lecture. The alternatives are to omit these examples or to cut them out for the online lectures.

However, we do not to deprive (online) education from such examples. Hence, both ways are not very satisfactory.

Revision of Education In addition to changing the system, MOOCs could change the education process itself. The rationale of the university was to transfer and create knowledge. The lecture was the best tool to reach this aim. Nowadays the concept of lectures is outdated. It is a mistake to believe that a PhD-degree provides a person with the ability to give a good lecture. Some researchers provide lectures only because they have to, without the ability and enthusiasm to inspire students.

The internet could connect scholars and students from all over the world. The contact with world class scholars provide an even more fertile ground for academic and personal development. Online working spaces provide excellent tools for collaboration and are in continuous development. Due to the movement of lectures to the

internet, teachers can provide different forms of education on campus.

Jörn Loviscach, Professor at the University of Applied Sciences Bielefeld received recently some attention for his teaching methods. Loviscach uses technology to leverage the learning during class. He believes that complex topics need different ways of teaching. Therefore he provides his lectures as videos before class. “When I lose my students after 10 minutes shortly to Facebook or WhatsApp, they are effectively left behind for the rest of the lecture” he said.

“It is my target to work together with my students. My students watch the lecture before class and instead of lectures we discuss exercises.” This learning method is called ‘Flipping the Classroom’.

Loviscach is not alone with this opinion. The MIT. physics department has abolished the introductory lecture in Physics in favour of small learning groups supported by teaching staff. The failure rate dropped by more than 50 percent.

These results are backed up by educational researchers. They claim that complex, one hour physics lectures overburden most students. At some point in time the brain cannot process information anymore and turns off.

Conclusion The real value of innovations is only understood after their deployment. This will be the case with MOOCs as well. It is doubtful that they will directly deliver large sums of money, but they can do something more important.

They can improve our educational system, reduce drop-out rates and support lifelong learning initiatives. Moreover, they could change the way universities provide education.

Classes could be used for discussion and exercises. The story of the MOOCs could provide an interesting lesson for Economics & Business students: While just trying to make money, we can accidently improve the world in ways we had not foreseen.

-------------------------------------------------------------------------------------------------------------------------------column < education in the new decade rostraeconomica 11 --------------------------------------------------------------------------------------------------------------------------------

Roger Pruppers

education is aBout insPiring one’s mind, not Just FiLLing their head

W

hen I was informed that this issue’s theme was “education”, it reminded me of an open letter in the Volkskrant newspaper (December 29, 2012) by Professor Derksen from Radboud University Nijmegen. He describes his difficulty getting the attention of a bunch of yawning, eating and talking students who seem primarily interested in operating their smartphones and iPads. He compares a classroom to a cage, and suggests the abandonment of the old-fashioned lecture-based education system. After all, any information that could be provided by a lecturer is available online as well. I understand the sentiment. It can certainly be frustrating to see some students taking their multimedia consumption into a classroom. At home they watch The Big Bang Theory on TV, while updating their Facebook status on a laptop and simultaneously chatting to friends on their mobile phone. It’s really not that surprising their media multitasking would continue in class.

So I’m staring at a glowing wall of Apple logos and shiny smartphones, and the content of a lecture is one of many possible “media inputs”.

Students divide their attention during a lecture, zoning in on the input that seems most interesting at any specific point in time. So yes, it’s easy to succumb to cynicism, throw in the towel, and just dump all our teaching materials on the web for students to

text roger Pruppers -------------------------roger Pruppers is an assistant Professor of marketing at the amsterdam Business school (university of amsterdam). his teaching activities focus on consumer behavior, marketing communication, and brand management.

consume in a way that suits their own habits and preferences.

I’d like my job very much if I wouldn’t be in the same room as my students.

But doing so would ignore my essential disagreement with Prof.

Derksen´s letter. As a teacher, I’m not in front of a class to simply transfer information. I’m hoping the real-life interaction between lecturers and students manages to add some value.

The title of this column comes from a spoken word performance, which can be found on YouTube under the label “Why I hate school but love education”. It’s interesting and confrontational footage, addressing the idea that classes (too) often add insufficient value in the eyes of students. And that’s essentially where the challenge lies for a teacher, doesn’t it? I wouldn’t be arrogant enough to compare a web-based lecture (or any other form of online information) to the experience of “listening to a CD (or these days: mp3)” and actually attending a lecture to “visiting a live concert”. I don’t think I’ve ever received a standing ovation at the end of a lecture, let alone unanimous roars of “we want more”, so modesty seems warranted here. Still, I like to think that the “live show” adds something that cannot be replaced by online information or even a web-based lecture. The opportunity for students to ask questions, discuss matters with their peers and teachers, actually be there to get inspired and learn: it all seems essential to me, and I don’t think

Prof. Derksen’s reference to the lecture hall as a cage implies students’ imprisonment in a place they’d rather not be. That’s about the last association I’d like them to have with a classroom.

I hope at least some of them see it as an intellectual playground instead: here you can run freely inside your own brain, challenge yourself and your playmates, think of things you hadn’t thought of before. And as a lecturer, I’m there to push the swing hard enough to make it exciting and challenging, but not so hard that you might fall off.

Perhaps that sounds pretentious, but I need to counter my impending cynicism with a dose of idealism every once in a while. Recently I was finishing a lecture with a spirited (or so I thought) explanation of classical conditioning’s application to advertising, when one of the front row students turned to her laptop and frantically started typing.

A theater actor once told me that “once you lose the front row, the show is over”, so I wasn’t feeling particularly good about myself. That is, until I got back to my office and opened an email from this student with content along the lines of “I liked the lecture and wanted to send you this right away to make sure I wouldn’t forget”. It contained a link to a YouTube clip providing a perfect illustration of the points I had been trying to explain in class. I’d say there’s still hope.

-------------------------------------------------------------------------------------------------------------------------------12 rostraeconomica education in the new decade > young entrepreneurs --------------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 13 --------------------------------------------------------------------------------------------------------------------------------

nick Jacobs

tim van rooijen

text tim martens, Klara Keutel -------------------------images Jordi van den Berg. connie shu and scott Lewis from the noun Project

tim martens is 23 years old and a master student in economics.

--------------------------Klara Keutel is 18 years old and a Bachelor student in economics.

‘the First strategy is: Being aggressiVe’ the concept of so-called penny auctions are rather frowned upon by the nederlandse Kansspelautoriteit (dutch gambling authority). in these auctions, participants have to pay for every bid – a feature that people often use to relate it to gambling. But according to nick Jacobs and tim van rooijen, penny auctions are far from being games of chance.

As long as the auctions meet certain conditions, a good strategy is essential for being successful rather than pure luck. Thus, the two master students at the UvA decided to start up their own and officially licensed penny auction website for the Dutch market: Megabid.

Nick, Tim, welcome! How did you get the idea to found your own company as a student?

Nick: The idea came up by accident. I was writing my Bachelor thesis on penny auctions. It seemed like this concept could be profitable, so we made a sketch of a rough business scenario and a cost-benefit analysis – and it looked good. We were convinced that this could really work.

Moreover, a successful start-up is a CV-booster and you can learn a lot from it. So we said, why not?

Megabid organizes online auctions. Everyone knows regular auction sites like ebay, but penny auctions have a different underlying concept. How does it work?

Tim: There are two main differences to ebay. Firstly, bidders have to pay a small sum for every bid they place.

-------------------------------------------------------------------------------------------------------------------------------14 rostraeconomica education in the new decade > young entrepreneurs -------------------------------------------------------------------------------------------------------------------------------amos tversky and daniel Kahneman applied behavioral economics to penny auctions and stated that the placed (and already paid) bids are perceived as losses – due to loss aversion, people continue bidding to keep the chance of eventually winning the product. this leads to people not stopping on time and spending more than originally intended.

-------------------------------------------Penny auction ProViders are aLWays under strict suPerVision and haVe to Bear many requirements. many sites in the netherLands, germany and sWitzerLand got shut doWn And secondly, only new products are available for purchase and we place them online ourselves.

Nick: To make it concrete, the first step is creating an account at Megabid and buying a bid-package with a perbid price of 40ct. Then you can participate in an auction: the starting price is € 0 or another really low price and every bid increases the price by € 1 (up to a product price of € 20) or by 1 cent (product price of € 20 or higher) and adds 10 seconds to the timer. That ensures that the price will always stay very low. There also is a timer, and at the end of the time limit, the person placing the last bid gets the product for the final price.

the product for a low price. Those who lost receive the product for the retail price.

Nick: This is the reason why the authority allowed this kind of auctions.

That means I first buy the bids, use the bids to participate in the auctions and if I win then I pay the final product price?

Nick: Exactly, plus shipping costs.

That sounds like you had some problems with the authorities? The Dutch Gambling Authority didn’t like penny auctions?

Tim: No. The problem was that his kind of auction was illegal in the Netherlands. We presented the Bachelor thesis to the Gambling Authority to show them that, in our opinion, this has nothing to do with gambling. The answer was a standard response letter that stated we could not start Megabid.

Nick: However, after a couple of talks with the authority we received a positive answer. We had to change some details and then could finally start our project in the summer of 2012.

But there is only person who wins. What is with all the others? They lose money…

Tim: Yes, and that is frustrating, of course. Thus, in this case we offer the bidders that did not win to buy the product for the retail price and to refund their bids. Due to this everybody is better off. Those who won the auction got

What kind of details were these?

Tim: We provide the users a bid history, so everyone can see who placed a bid when and whether bid robots are used. This increases the amount of strategies the participants have. The “Buy it now”-button was another adjustment we made.

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 15 -------------------------------------------------------------------------------------------------------------------------------all students from the university of amsterdam receive a 10% discount when buying a bid package. Just fill in this coupon code: uVad10P2

Penny auctions are not without controversy. It is indeed often argued that it is gambling and should therefore be illegal. What is your take on this?

Nick: One of the characteristics of a game of chance is that “the winner has no predominant influence on the outcome”. If you play Roulette, for instance, this is the case. But we think penny auctions are not a game of chance. There is a lot of strategy to it. Statistics show that more than 90% of all penny auctions are won by around 1% of the total participants. If it were a game of chance the won games would be much more widely distributed between the participants.

Tim: We provide a lot of information – people can see, for instance, who is bidding and when. This is crucial to be able to prepare a good strategy because you play against each other. It is more comparable to Poker. If you have a good strategy you have great chances of succeeding in a penny auction.

So what kind of strategy would that be?

We suggest to our users three kind of bidding strategies.

1

The first is being aggressive. Overbid other participants directly after they placed their bid to show how serious you take this auction and that you want to win.

2

The second one is using a Bid-Robot. Other participants can see that you make use of a bid-robot so that is a statement as well.

3

The last advisable strategy is being patient with bidding and getting active only in the last minutes/seconds of the auction. Even though that can result in a bid war, placing bids from the very beginning on is simply a waste of bids.

Besides the problems with the authorities – did everything work out well from the beginning on?

Nick: No, in the beginning we had a lot of problems with the software due to the fact that the code we used is very advanced and we did not have that much programming experience.

Tim: In one of the first try-out auctions the timer did not work; at another time the users could not pay.

Did you get support from the university?

Nick: No. We tried to establish some kind of cooperation with the university since the data on consumer behavior that we would gather with this penny auction site is very interesting for the university. Since penny auctions have been forbidden until now, there are almost no statistics for the Dutch market. We got support from friends at the technical universities instead.

What was your motivation to actually start the project?

Tim: First of all it a lot of fun to develop all these ideas.

I think every student knows someone who has a good idea for a start-up but rarely anyone realizes their ideas.

We did not want to leave our idea in the drawer.

-------------------------------------------------------------------------------------------------------------------------------16 rostraeconomica education in the new decade > young entrepreneurs -------------------------------------------------------------------------------------------------------------------------------Penny auctions are a profitable business. stiftung Warentest, a german consumer protection and product investigation organization, tested the swiss provider Bidfun and evaluated a great amount of auctions. the results are insightful: Bidfun earns an average margin of 70% on the auction. that is because consumers pay between 60and 75ct for a bid and every bid increases the product price by only 1ct – if a product with official retail price of € 600 gets sold for € 30, 3000 bids got placed of which each is worth, say, 60ct. that leaves Bidfun with € 1200 profit on this product. this also means that in these big auctions the person who eventually wins the product has much higher costs than one would assume by just looking at the final price – if 500 bids were necessary to win, then that sums up to € 300 only spent on bids.

-----------------------------------------the marKet Leader quiBids.com runs around 10000 auctions Per day and has 1.5 miLLion users Per month. in the uK, the Biggest ProVider counts 324000 users Per month

Nick: In addition, it is an unique experience. We have learned so much since the start of Megabid and we are still learning. The little things that come with a business that you have never thought about in the concept phase: filling out a tax form and getting familiar with all the regulations, for instance.

You started Megabid last summer – how is it going so far?

Tim: It is going well. We are around break-even, we have around 40 paying users and 3000 to 4000 page visitors per month.

What are your plans for the future?

Nick: We want to grow further, attract more users, and offer more auctions and also more expensive products.

Have you ever thought about selling your concept if it is going well?

Tim: Not really. But if a very good offer comes across that would be worth considering, of course.

Anything you want to give future student entrepreneurs on the way?

Tim: Yes. three things:

1

Do not underestimate both the costs and the many aspects to be considered when starting your own business. We did not at all expect so many issues to come up when we started Megabid. Especially the discussions with the authorities and the difficulties with setting up and maintaining the auction-site took a lot of effort and time.

2

Do it yourself! We did almost everything ourselves.

Of course, we had support from friends studying at the technical universities and the general web-design was done by Indian programmers, but we created the logo, we are improving and adjusting the website-code, we worked through all the legal, tax and corporate regulations and requirements, etc. That can save you a lot of money!

3

It is a great opportunity to gain experiences and a lot of fun.

漏 2012: Ernst & Young Nederland LLP. All Rights Reserved.

Kom kijken wat we In House hebben Wil je weten of accountancy iets voor jou is? Schrijf je in v贸贸r 26 maart via ey.nl/accountancyinhousedag

Kom naar de Inhousedag Accountancy op 4 april 2013.

At NIBC, entrepreneurial bankers start at the deep end As a trainee banker at NIBC, you also have a daily job. Your assignments and responsibilities start from day one. And youâ&#x20AC;&#x2122;ll have the chance to specialise, in for example mergers and acquisitions. You and your fellow analysts will follow our incompany training programme at the Amsterdam Institute of Finance, led by professors from international business schools.

A flying start at the bank that thinks and acts like entrepreneurs. For more information, visit www.careeratnibc.com.

NIBC BANK Interview with: Thijs Poorthuis Analyst Oil & Gas services, Corporate Banking

NIBC is a Dutch bank, headquartered in the Hague, with approximately 700 employees worldwide. It is focused on Corporate Banking and Consumer Banking activities. The Corporate Banking activities consist of advising, financing and co-investing, in several sectors NIBC has its expertise in.

What is your background?

I was born in Enschede, I have a master’s degree in Aerospace Engineering from Delft Technical University. During my time in Delft I participated in several committees in the student organization for aerospace engineers, and I did an internship at an engineering company in Phoenix, USA. What is your current position?

I started as an analyst within the portfolio management team of Retail Markets, currently called Consumer Banking. After two years I felt it was a good idea to see a different part of the bank and in March 2012 I got the opportunity to switch to the corporate side of NIBC, to the Oil & Gas Services team.

What does your daily work look like?

Being the junior in my team, it makes sense that I am not the one bringing in new deals.

However, when a senior colleague does have a lead (potential new client), I am working with him/her on the deal directly. This means having conversations and negotiations with the client and/or other banks, constructing a financial model tailored to the deal and writing a proposal to show the

rest of the bank the merits and risks of the deal before it can be closed. This is done through a proposal to the Transaction Committee. All in all, it’s a very diverse set of tasks and combined with the responsibility you get, you feel your importance to the team from day one.

What has been your most interesting deal or event at NIBC? I have only been with Oil & Gas Services for three months now, so my experience with deals is limited. However, in these three months I have already worked on financing vessels in the US, Australia, Norway and Angola. I have worked on financing one of the most advanced support vessels in Norway, which will definitely be on top of the list of impressive assets I have worked with.

What is the Analyst Program?

Every year, all new analysts team up in an analyst class. In my year, we were with 18 analysts from The Hague, Frankfurt and London. Everybody came over to Amsterdam for four weeks, spread out over the year. In these weeks we got outstanding international professors and NIBC professionals coming over to teach us about project finance, mergers and acquisitions, risk man-

agement, venture capital and much more. Moreover, 2 days of the week were dedicated to improving your personal skills doing numerous case studies.

And after class, there were a lot of dinners, team events, and of course drinks in the bars in Amsterdam. After these four weeks, not only do you feel you have learned a lot, but you’ve also built a good network with young professionals all over the bank. That has also improved because I’ve been part of the board of Young NIBC, and we’ve organized different events for the whole bank, and specifically for the younger workforce.

What has been your impression of NIBC so far?

My impression of NIBC so far has been really good. NIBC is a relatively small bank, which in practice means that you get responsibility from the start.

Also, the ‘lines are short’ and management is very approachable. Combined with an entrepreneurial atmosphere, where there is a lot of room for personal development, I can easily say I made the right choice to start my career with NIBC.

design: Jordi van den Berg

-------------------------------------------------------------------------------------------------------------------------------20 rostraeconomica education in the new decade > What history tells us -------------------------------------------------------------------------------------------------------------------------------text dovile Venskutonyte -------------------------image Jacques marie

dovile is a Bachelors student in economics.

IF IT WEREN’T FOR THOSE MEDDLING KIDS

HOW STUDENTS TOOK OVER PARIS u

niversity education the way it is today has been shaped by numerous factors in history: governments, churches, public intellectuals and various events in history all have their mark on the daily life of a modern university student.

However, this is not a one-way relationship. Student activism has been a powerful force in shaping world history. From Tiananmen Square to Iran to Chile, there have been many memorable, noble and too often bloody rebellions against poor education systems, oppressive regimes, racism, war and economic exploitation. All of them were worthy and important, but would take several Rostra issues to describe. However, one of the best examples of student activism was the 1968 protest in Paris.

Price of stability In the 1950s France went through a crisis due to the Algerian war for independence lasting from 1954 to 1962. During the 1960s World War II veteran and prominent politician Charles de Gaulle was the president of the French Republic. He brought economic prosperity and stability to the country and was seemingly a popular president. He made drastic right-wing economic reforms, which

helped restore and develop the French economy. De Gaulle strongly encouraged cooperation in Europe, thinking that it would bring back glory to past empires. However, he pushed for an independent French foreign policy and wanted to be a mediator between the United States and the Soviet Union. In 1960 this lead to France becoming the fourth nuclear power in the world. Unfortunately, his rule was not without major flaws.

The de Gaulle presidency was extremely conservative. Homosexuality was a crime, women were viewed as inferior to men and even forbidden to wear trousers at work or open a bank account without their husbands’ permission. Censorship was widespread, with news broadcasted on France’s only TV channel having to be approved by government authorities before going on air. The employment situation was precarious: factory workers could be fired at any time without a reason, and there were few job opportunities for university graduates. Lastly, the education system was outdated, overcrowded and authoritarian. The baby-boomer generation, many of whom were students at that time, were strongly unsatisfied with the cultural and economic stage France was in.

Started with student solidarity Discontent with de Gaulle’s administration was widespread at universities, but it took one last outrage for action to start. In 1968 the University of Paris at Nanterre was being closed and all of its students were about to be kicked out of university. On May 3rd the students of one of the most respected universities in France – the Sorbonne in Paris - took to the streets in great numbers to protest the closure of its neighbor school. However, the protest was not only about that single incident: it let loose all the bottled up dissatisfaction and anger at the government. Soon the police broke up the marching students. A few hundred activists were arrested and many were injured. After the incident Sorbonne was temporarily closed and students suspended, but it did not come close to stopping the protests. In the following weeks the Left Bank of Paris became “Debate land”, where students, local residents, factory workers and public intellectuals would discuss the issues France was facing and the actions that should be taken to achieve true democracy. In that period of time the Left Bank turned into a mini-utopia with people who believed in social justice, the

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 21 -------------------------------------------------------------------------------------------------------------------------------massive student and worker protest in the center of Paris, in may 1968. the poster reads: “Workers, students: united we will win”.

anti-colonial movement, technological revolution, comradely pleasure without restraint and living life to the fullest. However, there were many battles with the police. On May 6th, battles in the Latin Quarter lead to hundreds being injured and on the night of the 10th about 400 were hospitalized; therefore the government had to take serious action. On the 13th the Sorbonne was opened again in the hopes that students would go back to studying and the protests would end. Instead, on the same day, protesters built barricades and occupied the university. Soon protests started in other French universities and workers all over the country joined the cause. The worst battle happened on the 24th of May, when students managed to occupy the Paris stock exchange and tried to set it on fire. With violent protests happening all over the country and about a quarter of workers on strike, France was left paralyzed. The government realized that the protesters were not going to stop and therefore started negotiating with the unions and made major concessions. On the 30th of May, Charles de Gaulle dissolved the National Assembly and called for new elections. He also threatened to use the military to stop the activists. These actions made the union workers back down, but the students carried on until June 12th, when their protest were banned and they were removed

---------------------------charLes de gauLLe: in PoLitics it is necessary either to Betray one’s country or the eLectorate. i PreFer to Betray the eLectorate

lead to the removal of archaic sexist laws, equal rights for men and women and the legalization of abortion. After 11 years in office de Gaulle stepped down and retired. Furthermore, the protest spread around the world to Prague, Berlin, London, Chicago and Mexico. They were not only about education reform, but also about reforming the nature and culture of society. 1968 was one of the greatest years for student activism.

from the Sorbonne building. It took a straight out ban to finally end the student protest.

Lessons learned 1968 is proof of the power and influence a group of open minded, educated and passionate young people could achieve. However, there have been many student protests in the past and at present day than pass by without resulting in any real change. Some of them had impossible goals, but one of the most important factors that separate a successful student protest from a bunch of people with posters, is that the effective ones know exactly what they want. The Paris protesters had demands that were clear, apparent for everyone and hardly disputable.

Sometimes protesters simply state that they do not like the world their living in, but they have to propose a change, not simply criticize the present. If activism is well organized and demands are clear and consistent, simple people initiate and help support major changes in their Universities, communities, countries or even the World.

Aftermath At the end of June new elections took place and the Gaullists gained a significant majority: after all, many people who weren’t workers or students were very upset with the turmoil and damage the activists had caused.

However, the country was never the same again, France changed radically in only four weeks. The government enacted many reforms after the protests took place. Wages were raised, working conditions improved and labor laws became much more beneficial to the workers. In addition, the students got their education reform: a major bill was passed to modernize higher education, creating more opportunities for graduates. Female protesters, inspired by the events, started the French Women’s liberation movement, which

-------------------------------------------------------------------------------------------------------------------------------22 rostraeconomica education in the new decade -------------------------------------------------------------------------------------------------------------------------------text Pierre Borst

Pierre Borst is 21 years old and a Bachelor student in economics.

successFuL droPout Kids What do Bill gates, henry Ford and steve Jobs have in common, except for being really successful entrepreneurs? none of them finished their education, but instead decided to pursue their dreams that created today’s technology and influenced today’s society. there are many similar cases of entrepreneurs who did not need a degree to succeed in whatever they were doing. how did these entrepreneurs manage to make it big in a world that demands academic degrees?

As you are reading this, you are probably a student yourself and having short break from studying all day.

You will most likely go back to your books after reading this edition of Rostra Economica. After all, you’re trying to obtain your degree within a respectable amount of time, which will help you in your future career and your standard of living. But nothing is impossible, even if you don’t have a degree.

---------------------------gates and his Friend PauL aLLen droPPed out to start a soFtWare comPany named microsoFt Geniuses dropping out Not having a degree does not have to say anything about your intelligence, talent or competence.

On the contrary; a lot of successful entrepreneurs studied at university when they started their own company.

Bill Gates was a student at Harvard,

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 23 --------------------------------------------------------------------------------------------------------------------------------

999.999 dropouts live a less successful life than they would if they had finished their education.

but lacked a clear study plan.

Instead of studying, he rather spent most of his time on programming and computers. He and his friend Paul Allen eventually dropped out to start a software company named Microsoft. Mark Zuckerberg, another well-known computer programmer, also studied at Harvard. He started Facebook as a social network for Harvard students, but the network spread to other universities within notime. Because business were booming, Zuckerberg also decided to drop out of Harvard and focus on Facebook.

Underperformers at school Though, not all dropout entrepreneurs were brilliant at school. Business magnate Richard Branson has dyslexia and performed poorly at high school, before dropping out at the age of 16.

Branson is a clear case of not fitting in the school system, but with enough talent to make it big with other skills.

Because of his talent in trade and connecting with other people, he managed to build Virgin Group, running more than 300 companies.

Ironically, his first project was a magazine called “The Student Magazine”, advertising records. He started out by selling records under the name Virgin. Apart from Virgin Group, Branson is known for breaking time world records in sailing, flying an air balloon across the world, being

---------------------------eVery droP out story is a unique story, But aLL successFuL droPouts share some simiLarities knighted and setting up the first ever space tourism company, which is projected to start in 2016. One might say this underperformer during school used his talents optimally to do and become whatever he wants.

Other reasons for dropping out of school could be personal circumstances. Henry Ford for example, the inventor of the production line, only went to grade school until the age of 15 before he dropped out to help out on the family farm. This was pretty common back then, and did not say much about Ford’s talent and abilities. Though, Ford did not like working on the farm that much and started working as an apprentice machinist. He became an engineer later on and started to build his own cars. Ford’s model T was the first ever row assembled car, what gave Ford the advantage to build cars in mass production which were considerable less expensive than those of the competitors. The only

implication of these mass production cars was that “customers could have them in any color, as long as it is black”, leading to a rather monotone streetscape since more than half of the American cars in 1918 were Model T’s.

One in a million These were just a few names of successful dropouts. Others are Ralph Lauren, Michael Dell, Oprah and a lot of actors, musicians and athletes.

Every one of these drop out stories is a unique story, but all successful dropouts share some similarities.

The only reason they got so successful is because they had talent, passion, drive and a clear idea of what they wanted and how to succeed. That, and of course that little bit of luck that everyone needs in the right place at the right time, is what distinguishes these lucky few of the dropouts that don’t make it. Every successful dropout is just a one in a million case, while 999.999 other dropouts live a less successful life than they would if they had finished their education.

Success stories like these should only be considered as an inspiration, because of the fact that every success is based on passion and hard work.

Especially if you’re still doing well in school, never consider them as a guideline to success because you’ll be most likely to end up like the other 999.999 less successful stories.

-------------------------------------------------------------------------------------------------------------------------------24 rostraeconomica sefa front --------------------------------------------------------------------------------------------------------------------------------

seFa FRONT

dear rostra reader the academic year rushes by very fast, and it is time to strike a balance. in the past two months, we had some very interesting events. From the 4th till the 7th of march, more then 1,000 students visited the amsterdamse carrière dagen. With room for discussion, we can look back on a very interesting session with the dutch Finance minister and chairman of the eurogroup Jeroen dijsselbloem. the weekly sessions in the e-hall are very interesting for you as a student since they are bridging the gap between your lectures and the daily news.

Further, the search for a new board is in full swing. although the start of our board year feels like one month ago, we are already halfway our board year. the application deadline for the sefa Board 2013-2014 is the 7th of april. doing a board year has been a very special experience for me so far, and it is something i can look back on for the rest of my life. if you want to gain this experience as well, you can apply by sending your motivation letter and cV to board@sefa.nl.

When looking ahead, there are some interesting activities coming up soon. the dutch inhouse tours, organized in cooperation with study associations aureus (Vrije universiteit) and eBF (rijksuniversiteit groningen), will take

place throughout april and may. the application deadline for this series of inhouse days is the 5th of april. the international Week is also coming. From the 25th of april till the 1st of may, this event will take place in the netherlands. students from all over the world will visit our university and companies in both amsterdam and rotterdam. We organize this event in cooperation with study association rsm star from the erasmus university.

Finally, from the 13th till the 17th of may, elections are held for the student council. and of course, sefa will participate. our ties with this faculty go back to 1922, and over the years we have gained quite some expertise as to where things on the faculty can become even better. so if you are in doubt about parties, choose for a trusted name and vote List sefa.

For now, make sure you donâ&#x20AC;&#x2122;t miss the opportunities sefa offers to you.

We hope to see you at one of our events!

With kind regards, on behalf of the 91th sefa board, sebastiaan Klein chairman sefa board 2012-2013

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 25 --------------------------------------------------------------------------------------------------------------------------------

Become a committee memBer and go aBroad! sefa offers you a chance to develop your competences and improve your cV. during the organization of a large and exciting project you broaden your international horizon. Join the committees of sefa study trip 2014 (8h/week) or sefa research Project 2014 (16h/ week) and get ahead from other students. you can make these projects happen by choosing a destination, by selecting and interviewing participants and by managing all the company relations! head for a european study trip or a four-week field research in a developing country such as Vietnam or Brazil. Be aware of our recruitment campaign coming april and apply in may for one of these committees.

For more information go to www.sefa.nl.

-------------------------------------------------------------------------------------------------------------------------------26 rostraeconomica education in the new decade > Brain doping -------------------------------------------------------------------------------------------------------------------------------text Klara Keutel -------------------------images sebastian Langer and nestor arellano from the noun Project

Klara Keutel (18) is a 2nd year economics student.

PiLLs For Better grades? t

oo much to study in too little time? Confronted with the threat of not passing a course on time or with the high grades you would like to have? Too much time wasted on studying and too little left for a social life? Don’t worry, there is a solution: Brain doping! Just think of Eddie Morra in the movie “Limitless” – taking a small, unspectacular looking pill can push your brain to a new performance maximum. A perfect dream, isn’t it?

The idea of brain doping or neuro-enhancement is not new – the coffee in the morning, energy drinks and caffeinepills, gingko-extracts and dextrose are common studycompanions. But throughout the last decades, medical substances have become more and more popular as a last resort in the fight with approaching exams: The amount of consumed Ritalin and Provigil, for instance, increased substantially the last ten years. Some sources claim a market penetration among students in the USA of up to 25% and also in other countries it is gaining ground. But what is the fact to these stories of improved performance by taking medicines? How do these “smart-pills” work, are there risks coming along with a regular consumption and should neuro-enhancement be considered socially favorable?

What are the options and how do they work?

Let us assume that the main purposes of consuming medicines for performance enhancement are better concentration, more motivation, suppression of tiredness, a better memory and a more positive attitude towards oneself, others and work. Then there are four main categories of drugs that can be used for brain doping:

Neuro-stimulants like amphetamines and the related methylphenidate, medicines for the sleeping disease Narcolepsy, anti-depressants and anti-dementia.

They influence the neuro-system, in particular the neurotransmitters Dopamine, Noradrenaline and Serotonin which are involved in the processes of motivation, attention and concentration, they control the sleep-wake cycle, affect the mood and might even be crucial for the memory.

A too low level of these transmitters is often associated with a lack of drive and motivation, listlessness and a loss of focus and concentration. That most of the brain pills increase the Dopamine- and Serotonin-level make them an auspicious option for performance enhancement.

But can they measure up to these expectations?

For anti-depressants and anti-dementia, no significant effect on healthy people could be proved. The test results for Methylphenidate and Modafinil are more promising but still ambiguous. Knowing that this is not a satisfying reply, to the question of effectiveness of Ritalin and Provigil the only answer can be: It depends.

It is misleading to assume that “the more Dopamine the better”. There is an insightful graphic describing the relation of physical activity (substitutable by Dopamine level) and cognitive performance as an inverse U-curve.

Lethargy is obviously not favorable for a good cognitive performance but neither is hyperactivity. The happy medium needs to be stricken. Consequently, brain doping can indeed improve performance and alertness, if there currently is a clear deficit – to be observed by very tired and unfocused people, for instance. It can normally be

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 27 --------------------------------------------------------------------------------------------------------------------------------

Brain doPing has WideLy Been used in the army. it is unProVen Whether Brain doPing actuaLLy WorKs

assumed, however, that in most of the time we perform somewhere around the â&#x20AC;&#x153;happy mediumâ&#x20AC;?.

Another problem is that everyone will react differently to these stimulating drugs. We know that from coffee, for example. Some people experience a better concentration ability, alertness and attention. Others end up with a headache and heart racing. Some people stay awake the whole night after an espresso in the evening; others do not feel any effect. It is the same with the mentioned drugs.

The reaction can barely be predicted.

Lastly, there is assumed to be a natural limit of cognitive performance: Savants, super-brains with an amazing capacity for remembering, are normally lacking other crucial abilities and are often autistic. High focus and concentration mostly goes along with less creativity. And a sleeping deficit leads to physical, mental and psychic discomfort. Moreover, sleep has a crucial function for the memory and the processing of gathered information. After high cognitive performance, the body and the brain need rest.

It can therefore be said that drugs that are currently used for brain doping purposes can, in some situations, lead to an improvement of concentration and motivation and suppress tiredness. It cannot be predicted with certainty, however, for who and under which circumstances this will be the case.

ritalin prescription increased from 5 million to

50

million daily doses between 1998 and 2008.

who suffers from ADHS, narcolepsy or anything related who has a prescription or to purchase the medicine on the internet. The last option does not only lead to legal trouble but can also be dangerous as the medicines might be fake or of bad quality.

Not to be underestimated are, moreover, possible adverse effects. Most alarming is that it is barely possible to specify the harming potential since test data on these medicines is only available for actual patients, people that suffer from one of the diseases mentioned above. There is not much evidence about the short- and long-term effects they might have on healthy consumers. Most of the drugs affect the neuro- and in particular the neurotransmitter-system, a highly sensitive and not entirely understood system. A too high Dopamine or Serotonin level can lead to compulsion and unrest and according physical reactions such as a racing heart, attack of sweating and labored breathing.

Furthermore, sleeping problems can be a consequence and headaches, nausea, dizziness and even hallucinations can occur, as well. In some cases, severe mental-health problems such as psychoses and manias are caused.

Is it safe and easy to take these pills?

There are indeed problems and side effects that come along with the consumption of brain doping such as Methylphenidate and Modafinil.

Moreover, as Dopamine has a stimulating effect, the addictive potential of medicines affecting the Dopamine system need to be considered. The risk of addiction is highest for Amphetamines and Methylphenidate. Studies have shown that the tendency of getting addicted depends to a high degree on genetic factors that are not very well investigated, yet. It is therefore barely possible to predict whether the consumption of these medicines will result in an addiction.

First of all, as these medicines are only available on prescription, healthy people who want to use them as study supporters have three options, all of which are legally problematic. Either they need a doctor who prescribes them without medical need, get it from another person

What are the potential and future prospects?

There is, according to the available information, no drug that can be considered effective brain doping and it also does not seem likely that there will be one in the near future. It is, however, a tempting field of research, both

-------------------------------------------------------------------------------------------------------------------------------28 rostraeconomica -------------------------------------------------------------------------------------------------------------------------------Finnish people have the highest coffee per capita consumption:

3.6

cups per day and per person. there is not statistical evidence, however, for a cognitive superiority of Finnish people.

because people are generally fascinated by the idea of performance enhancement and the high potential profits for the drug industry. Moreover, we get in the direction of having an actual demand for performance enhancement and maintenance in certain jobs. Brain doping in the army is not an uncommon issue: Pilots sometimes need to fly long-distances without breaks and could benefit from a constantly high concentration. Precision and alertness in precautious situations might be crucial for survival and military success. Doctors, especially surgeons need to be highly concentrated and precise, sometimes for hours if they need to do a complicated surgery. Complications could be reduced by an improvement of cognitive performance of surgeons. It can therefore be expected that there will be various attempts of developing an effective brain doping medicine.

What helps best to study effectively without manipulating the brain?

Before we get there, we need to be satisfied by the options that already exist. There are, of course, all kind of brain doping already on the market. Starting with chocolate, coffee and energy drinks up to caffeine pills, gingko extracts and specific vitamin-shakes. One cup of coffee contains about 80-150mg caffeine. Studies have been shown that a daily dose of 100-600mg improves alertness and attention.

This effect is significantly stronger when the consumption takes place in a very tired condition. Also energy drinks show effectiveness. These products can be complemented by doing sports, getting enough fresh air, sleeping enough and good planning and time-management.

Doing this already helps doing a good performance – and does not include all these uncertainties and risks of drugs and medicines. It is still not totally understood what Ritalin & Co. are doing with our brain and it is questionable whether a performance enhancement with these means is actually necessary. Or even desirable.

ritalin – the brain doping best-seller Between 1998 and 2008 the amount of prescribed daily doses increased from around 5 to 50 million, even though it cannot be said with certainty where this rapid raise is coming from but it is assumed that it is at least partly caused by ritalin’s upcoming popularity as brain doping. it works as an reuptake-inhibitor and increases the level of dopamine in the brain. the active ingredient methylphenidate is closely related to amphetamines. the medical all-rounder from the 60s and 70s suffered a severe setback in its medical use due to often occurring adverse effects and their high addictive potential. nevertheless, amphetamine-drugs like adderall, dexedrine and Benzedrine are also used as brain doping.

Provigil – ranked 2nd according to a nature-survey anti-dementia medicines for people suffering from dementia like aricept, exelon or reminyl have the purpose of counteracting oblivion and enforcing the memory. one approach is the inhibition of the decomposition of acetylcholine, a neurotransmitter being involved in concentration, alertness and attention processes. anti-depressant most of the available options like Prozak (with Fluoxetin) or Paxil/serotax (with Paroxetin) influence neurotransmitter serotonin as reuptake inhibitor. serotonin is also called “happiness hormone” and responsible for drive and motivation, mood and the sleep-wake cycle.

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 29 -------------------------------------------------------------------------------------------------------------------------------rostra economica Interview:

Pim van der Feltz

CEo Google Benelux

Behavioral Economist Uri Gneezy on business experiments

nummer 290 juni 2012 reageren? rostra@sefa.nl

Prof. dr. van Winden

Neuroeconomics Economics & the Brain

rostra economica Facebook's IPO.

High expectations, mixed results

News.com

New strategies for newspapers

nummer 291 september 2012 reageren? rostra@sefa.nl

RoSTRa ECONOMICA Charter Cities

Internet in India.

Google lends a hand

creating new cities to combat poverty

Voluntourism:

personal gain vs. development aid

nummer 292 november 2012 reageren? rostra@sefa.nl

Entrepreneurship,

capital creation and property rights in slums

ROSTRA ECONOMICA Knab:

de vernieuwing van de bankenwereld

The payments of CEOs. Are

they worth it?

nummer 293 F ebruary 2013 reageren? rostra@sefa.nl

Price bubbles.

ROSTRA ECONOMICA MOOCs. Studying

How they rise and burst even faster

at Harvard from your own living room

No degree but still succesful. The story

of college dropouts

Issue 294 March 2013 respond? rostra@sefa.nl

Brain Doping:

pills to enhance your studying?

THE VALUE OF VALUE

INterNet LIfe NecessIty?

DeVeLoPmenT aiD 2.0 conSTRucTinG neW PaTHS ToWaRDS GRoWTH

EDUCATION IN THE NEW DECADE

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do you Want to maKe the next rostra economica? a

re you good with words, do you have a creative mind or do you want to meet interesting people from all economic fields and interview them for one of the biggest faculty magazines of the Netherlands?

Then we are looking for you! By joining the Rostra Economica you can develop your writing skills and gain valuable experience working in a professional environment.

The Rostra Economica is the faculty magazine of the Faculty of Economics and Business (FEB) of the University of Amsterdam. The first Rostra Economica was published in 1953, making us the oldest faculty magazine in the Netherlands. The editorial staff

is independent and completely formed by students. Five times a year we publish the magazine in a printing run of 5000 copies. This is your chance to become a part of this committee!

We are currently looking for: • editors • copy-editors • interviewers • creative minds to help us with the design

interested in any of these positions? email your cV to hr@sefa.nl and you may be a part of the rostra soon!

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issue s/yea r

---------------------------Being an editor has giVen me great PracticaL exPerience Besides my studies!

Duisenberg school of finance New thinking in finance The Duisenberg school of finance (DSF) is an academic institution located in the financial center of Amsterdam.

It offers Masters programs in several fields: Corporate Finance and Banking, Risk Management, Financial Markets and Regulation as well as Finance and Law. Recently I sat down for an interview with two DSF students and Sefa members, Ilja and Lionel, to learn more about the school.

What was your undergraduate education and Sefa experience?

Lionel: I studied Economics and Business at the UvA and was quite active at Sefa all through out my undergraduate years; I even took a year off my studies to serve in the board. I’ve been involved in many parts of Sefa, like the several social committees, the Masters of Finance committee, as well as general board, where I was the Marketing Officer and Vice Chairman.

Ilja: I was also a member of Sefa, while I was studying International Economics and Finance at the UvA. I was in the committee of external events and dealt mostly with organizing various socials.

Why did you choose to study Finance and how did it lead you to DSF? Lionel: Finance interests me, because it is a very fluid part of the economy: there are always new innovations and things to be improved. I also think that it is a good balance of economic

theory and quantitative skills, which can be clearly applied in practice. I heard that DSF is a really good place to study and last year I was conducting this interview for Rostra. After gaining more insight into the school, I’ve decided to apply.

group of ambitious and hard working people, is very stimulating and really motivates me to study. I didn’t have this experience, while doing my Bachelors degree and I can feel a great difference.

Ilja: I’ve always really wanted to wear a suit! Besides that, I like that the practical application of what I’m studying is clear and we learn how things work in the real world. I learnt about DSF from a friend, who recommended it to me.

Could you tell me more about the study process and environment at DSF?

Why did you choose DSF instead of another Masters programe in the Netherlands?

Ilja: Firstly, I think that the quality of education here is very high, but also DSF provides better skills for working in the real world and employers see it as a big plus on your resume.

Lionel: What sets DSF apart is that it is a small school with extremely highly motivated students and professors. The environment of working in a

Lionel: It’s a 70 ECTS Masters and some courses do not have credits, so it is definitely a lot of work, but if you stay on track and organize your work well it is doable. I try to study everyday for two hours on average but some days I spend all of the time in different libraries.

Ilja: The environment for studying is great in every aspect.

Professors are easily accessible and really try to inspire interest in students. We have many discussions and debates in class. Also, the lectures and discussions are very up to date, so we always learn about the latest issues and innovations and discuss the future of the global economy.

Tell me about your track: Corporate Finance and Banking.

Lionel: It’s developed to prepare students to work in the field of corporate finance. It has courses in corporate governance, risk management, investment, several aspects of finance, but before you start, there is an introduction to accounting and econometrics.

Also, there is a compulsory internship at the end of the year.

Ilja: The track concentrates on preparing you for the real world. Besides learning theory we have many case assignments. Studying real problems that organizations face provides insight into how theory is applied and gives you good practical knowledge. We also have a compulsory leadership program that teaches ethics, sustainability and communication skills.

What is the student body like?

Lionel: I think that students differ from track to track, but all of them are definitely very highly motivated and ambitious. People are really active in class, which makes them even more interesting and the atmosphere it creates is very motivating.

There is competition between students, but everybody helps each other out, if needed.

Ilja: Students come from different backgrounds, like Finance, Economics, Law, and Political Science. Some come to study at DSF right after finishing their Bachelors degrees and some were working prior to their Masters. Also, about 75% of

them are international students that come from all around the world. So the student body is very diverse, which makes discussions in class all the more interesting.

What are the career perspectives for DSF students? Are they different from graduates of other universities?

Lionel: Of course it depends on the track your taking, but career opportunities are vast for all students. We have a Career Resource Center, which helps to find an internship or a job.

They teach you, how to write a good CV and cover letter as well as how to perform well in interviews. Personally, I want to work in investment banking and am going to intern at Leonardo and Co. that is a financial advisory firm. Employers see graduating from DSF as a big plus on your resume, so it is easier to find a job after graduating.

Ilja: I want to work for a venture capital firm and help build businesses. Some professors work in various companies besides teaching at DSF, so you can find out, if companies are looking for interns and submit a CV through them. Just recently one of my professors, who works at Philips offered me to send in an application, since they are hiring interns. Also, representatives from banks and companies come in all the time to give a presentation on the career perspectives at their organizations or to just give a lecture on some issue they are working on.

What would you advise Sefa students, who would like to study at DSF? Lionel: If you’re motivated and hard working, definitely apply.

It has been an amazing experience studying here. Make a good effort in your application; try to explain what is special about you as an individual and what you would contribute to the school that is quit important.

Ilja: I would recommend DSF to anyone. You can just come to the school and ask questions yourself, we have many open days all though out the year, but you could also just stop by on a regular day, and people will tell you about the school.

Or write an email to a student, you can find the addresses on our homepage If you want more information from one of us, you can send an email to: lioneluijttenhove@hotmail.com

Interested in joining DSF? Subscribe now for a DSF Open Day. The next Open Day is scheduled for April 4th (18:00 - 21:00), with a Master’s class on “Supervision; does Basel III works?”

text: Dovile Venskutonyte design: Jordi van den Berg

-------------------------------------------------------------------------------------------------------------------------------32 rostraeconomica Fsr page --------------------------------------------------------------------------------------------------------------------------------

oPen Letter

image Keely huis in ’t veld

Fsr What is going on at our faculty? Why does the system change every year and how did an agreement between the government cause the faculty to put more and more pressure on us students? and these actions happen while the fundamental problems with education are being ignored.

A Binding Study advice, five times higher tuition fees for a second study, and only four years of study grants, your parents probably had a different student time than you have. Whereas in 2003 only 40% of all students graduated within four years, the goal for 2014 is now 70%. And the university has made it a top priority to increase the study success, because it will lose millions of financing if it cannot fulfill the goals. Unfortunately, we students have felt the effects at our faculty: Not by better quality, but by stricter rules and a tighter schedule. The changes you might have experienced in the faculty are a result of government policies, translated to university policies, translated to faculty policies, translated to curriculum policies.

The pressure comes from the ministry The university of Amsterdam, just like every other university in the Netherlands, has made an agreement with the Ministry of Education, Culture and Science in the form of the so called meerjaren plan, the strategy for the coming years. In this policy document, the university sets concrete goals to increase the number of students that graduate, also known as study success: • 70% of all students that started in 2010 must graduate within 4 years.

• The dropout rate in the second and third year must be reduced from 15% (2007) to 6% (2011).

• The referring and binding function of the first year is strengthened.

Only upon success the university will receive more financing in the future, which sets a powerful financial incentive.

These goals are assigned to the faculties to be translated to faculty policies. And we students feel these policies.

Passive measures only increase pressure through regulations The university has taken passive and active measures to stimulate study success. Active measures mean that the quality of the faculty is improved, while passive measures are regulations that put more pressure on students to finish in time. The measures we have felt over time were mostly of a passive nature, they increase pressure by punishing students that do not bring good enough results, and by imposing new rules that increase pressure on the students.

We are talking about: • The lecture free week in week 4 instead of a study week in week 7.

The Binding Study Advice, where you get kicked out • with less than 42 ECs in your first year, or if you fail mathematics 1.

• The midterms that lead to exams after every three weeks.

• The elimination of a second resit, students have only one resit opportunity left.

There are a few improvements The only measures the faculty has taken to boost study success by improving quality instead of pressuring students are: • The promise of taped lectures (which, two years later, is still not successfully implemented).

• Assigning a mentor to first-year students.

• Informing high-school students about the programme’s content, for example by making a so-called immersion week compulsory with realistic lectures.

The faculty chooses the wrong approach We feel that the approach chosen by the faculty is to tighten regulations and change rules instead of taking

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 33 --------------------------------------------------------------------------------------------------------------------------------

We FeeL that the aPProach chosen By the FacuLty is to tighten reguLations and change ruLes instead oF taKing measures to imProVe the quaLity oF education

measures to improve the quality of education. But this seems to set the wrong incentives. Students should want to come to lectures because they benefit from it, and not because it is made compulsory. Students should want to read their books because their teacher inspired them, and not because there is an exam every three weeks. And students should get useful feedback on case assignments instead of studying for a multiple-choice midterm. But not here. Instead, the faculty raises the whip to get students to work, and the important educational incentives stay poor.

Too busy raising the whip to care about the quality For example, the Ministry recommends reducing the size of tutorial groups and increasing the contact hours with teachers to at least 12h per week. The student council also recommends this kind of measures that actually improve the quality of education, but little has been done. Some tutorial groups still have little personal contact, for example mathematical economics in a 100-person auditorium. Also, the teachers sometimes have no experience in standing in front of a class. But the real problem goes much deeper.

“The problem is that as faculty staff, each hour you spend on teaching is one hour too much. You do get compensated for the hours you are in class, multiplied by a factor 4 for preparation etc. In practice however, the time actually spent on preparation is much less and everybody knows this.

There is just too much pressure from the management to deliver a greater number of research papers”, a senior lecturer told us during our campaign for the student council. “The quality control is there on paper, but practically powerless. But still, the worst teachers are easy to distinguish”.

A matter of expectations The faculty board can expect an active and ambitious student, but then the student can also expect certain standards of quality and mechanisms that ensure this

quality of education. Who has ever heard of anything that was implemented because of the results of the course evaluations we all fill in after another multiple-choice exam? Can’t teachers start their course by saying what went good and what went well last year and what action was taken because of the feedback?

Raising standards instead of only expectations We hope as the student council to guide the faculty towards steps that stimulate and inspire students to study, and change the real fundamentals that lead towards a good education: let compensation depend on teaching performance, make tutorial groups smaller, and give students personal guidance through mentors and our study advisors. Maybe the faculty would score better in the National Student Survey if it also raises standards instead of only the expectations.

Fsr CoNtaCt DEtaILs open office hours e2.09: tuesday, Wednesday and thursday 11:30 – 12:30 tel. 020 - 525 4384 For questions, complaints and feedback you can reach us by sending an email to: fsr.feb@studentenraad.com For regular updates and information join our Facebook-group: facebook. com/groups/fsrfeb www.studentenraad.nl/feb

-------------------------------------------------------------------------------------------------------------------------------FeB student abroad rostraeconomica 35 --------------------------------------------------------------------------------------------------------------------------------

text and image nicole Koedooder

nicole Koedooder is 23 years old and a third year Finance student, who is currently on exchange at the university of calgary in canada.

neW exPeriences, minus 37 degrees and huge raBBits

i

am writing this column, realizing it is already my seventh week here.

I cannot believe how fast the time has gone. It has taken me a while to adjust to living here. There is the jet lag from traveling to a different time zone, the altitude (Calgary is located at about one kilometer above sea level), getting tested on five different courses every week and living on a campus where there are more than three house parties every week.

Oh, and then there is the fact that I managed to fall in love with someone about a month before I left.

The weather here is literally incredible; the sun is shining and the sky is blue, yet the snow doesn’t seem to ever melt.

We have had days where the wind chill made it feel like it was -37˚C outside.

Have you ever been so cold that you actually thought your eyeballs were going to freeze? We have also had plenty of days where we could go outside with sunglasses instead of a coat. And the best part: it never rains here!

The university organizes loads of things for international students, and everyone has been so welcoming, friendly and helpful. There’s Canada for you! So far I’ve been on a few small trips to Lake Louise (see picture) and Revelstoke, where I learned to ski

for the first time in my life. It was so much fun! Until, of course, I fell and twisted my knee. The Rocky Mountains are basically in Calgary’s backyard and they are just beautifully unreal. Seriously, driving for five hours is nothing in Canada. I can’t wait until the semester is finished so I can do more traveling. I like that huge rabbits live on campus, but I’d love to see some bears or moose too!

---------------------------i Went on a triP Where i tried sKiing For the First time in my LiVe I know going on exchange is something you always see other people doing. It is this elusive, magical thing where you get to travel while you are in school and they make it sound like it’s the only good thing you will ever be able to do in your entire life. They throw in a few comments like “it is what all the employers are looking for” and “without it, your resume goes to the bottom of the pile” to make it seem more important.

Well, just forget about all of that.

Forget about how scary it is to have to decide whether or not you want to

give it a shot and where you would want to go, a year in advance. Forget about the paperwork. Forget the fact that you might not see your loved ones in quite a while. None of that really matters; all you have to do is try.

I promise it will feel so good when you get the “Congratulations!” email.

It will feel incredible when you set foot in a different part of the world and you know that YOU made this happen, because you are smart and amazing, and you deserve it. It will feel empowering every time you make a new friend, learn a new word or passed an exam. Going on exchange will remind you of how incredible life can be. That is what makes it absolutely worth it.

Don’t worry if you missed the application deadline, you can still apply! the remaining places for an exchange abroad in the 2nd semester of 2013-2014 will be posted online around may 1. the application deadline is June 15, 2013. more information at: www.student.uva.nl/ fee_studyabroad

-------------------------------------------------------------------------------------------------------------------------------36 rostraeconomica education in the new decade > economic Battles and the Benefit of a Balance --------------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 37 -------------------------------------------------------------------------------------------------------------------------------text Floris dekter -------------------------images tony Fischer. ofer Lehr and Jan sebastian Bach from the noun Project

Floris dekter is 25 years old and currently pursuing a msc in international management.

caPitaL, taLent and LaB r F

or much of the 20th century, capital, talent and labor have been fighting for the output of their joint economic production. Roger Martin calls it a war beneath the surface of the modern economy and recently illustrated in the New York Times that tensions between these economic actors still exist today. While it were initially capital - investors and the owners of the means of production - and labor - the workforce which in return for wages turn capital into profit - who tussled over the output of their joint production, it became a three-way battle when talent joined the fight in the 1980s. Although the struggling continues, it seems that in todayâ&#x20AC;&#x2122;s knowledge economy, labor is becoming the biggest loser of this three-way fight. One could argue that the present balance has shifted too much in favor of talent, in such a way that it is not only disadvantageous for labor but also detrimental to society as a whole. Ricardo Semler, a Brazilian entrepreneur, shows that it is possible to achieve a better balance between the groups. Furthermore it seems that education plays an important role.

Dividing the pie In various articles Martin describes how for over a century the various groups vied for pieces of the economic pie.

Since the Industrial Revolution, capital and labor fought for the largest share of the profits of industrialization, a struggle that was characterized by an enormous power and dominance of capital over labor. This position of power hinged on the fact that while there was no shortage of unskilled labor, capital was relatively scarce. It was only through the forming of unions and the use of collective bargaining that labor was able to fight back and achieve an increase in wages. It did not take long, however, for capital to retaliate through the outsourcing and automation of production, processes which severely undermined laborâ&#x20AC;&#x2122;s leverage. By the time Ronald Reagan and Margaret Thatcher were elected as leaders of the United States and England, the power of business over labor was completed.

The firing of 11,000 members of the Professional Air Traffic Controllers Organization by Reagan in 1981 is a striking example of this.

From the 1980s onwards, a new and more challenging adversary arrived, one that would fight both capital and labor with huge success. Talent enjoyed significant leverage over capital and labor for a number of reasons. The logic of supply and demand provides a first explanation. The moment talent realized that rather than capital, they

-------------------------------------------------------------------------------------------------------------------------------38 rostraeconomica education in the new decade > economic Battles and the Benefit of a Balance -------------------------------------------------------------------------------------------------------------------------------on average in 2012 ceo’s in the us earned

380 times more than a typical american worker.

-------------------------------------------emPLoyees at semco are entitLed to choose their direct suPerVisor as WeLL as the height oF their saLaries became the scarce resource in the economy, people at the top of their profession started to make serious money and capital found itself to be merely a generic factor of production for it was not as scarce as it used to be. Second, the changed nature of the modern economy further allowed talent to capture a larger share of the economic output. In the Information Age – as Martin calls it – knowledge assets became more valuable than capital for rather than factories and capital, skills and knowledge are responsible for generating profits. Since these skills often require continuous learning, and because valuable knowledge is often tacit knowledge which is not easily codified or shared, talent is besides scarce and valuable also difficult to replace.

It is for the reasons mentioned above that talent enjoys significant leverage over the other economic actors, why capital is unable to retaliate and oppress talent and why CEOs, pop stars and top athletes make millions of dollars.

The biggest loser of this three-way battle is labor. Since capital is forced to share a significant amount of the profits with talent, sharing’s with labor are kept to a minimum.

A striking example of this unequal balance is fact that on average in 2012 CEOs in the US earned 380 times more than a typical American worker. It makes one wonder whether a CEO creates 380 times more value for the company than an average worker…

Balance and benefits The unequal balance of power that exists between talent, labor and capital has a profound impact on laborers

and society as a whole. There is for instance a growing body of evidence that inequality is associated with all kinds of social problems such as crime, a decrease in social capital or trust: issues that concern all in society.

Arguments and attempts to alter the unequal balance are often associated with leftist groups in society. Striving for more equality it is argued that society should aim at helping labor to become talent. Educational systems should be altered to meet this objective for they should not merely prepare labor to be used by capital and talent.

Following this reasoning one could say that here lays an important task for policy makers and people involved in training, education and HR practices. In South Korea for instance, the vast majority of youngsters graduate from high school and of these, 82% continue their education at university. Although appealing for some, the story sketched above is not without criticism. One may ask himself for example, who will perform unskilled labor if everyone is talent?

A man with an alternative and more radical perspective on these issues and who tries to change the nature of the conflict is Ricardo Semler. This Brazilian CEO of Semco SA actually tries to help labor become talent for he believes this is beneficial for all involved and a more intelligent way of organizing not only industrial production but society as a whole. Employees at Semco are entitled to choose their direct supervisor as well as the height of their salaries. They are also able to actively participate in the decision-making processes in the firm and therefore have full access to financial statements.

Furthermore, there are no offices, other fixed workplaces or fixed time schedules. Employees can decide for themselves at what time they start working; the only thing required from employees at Semco is that the work is done within a given time. The innovative corporate reengineering practices that Semler implemented turned out to be a huge success; the firm’s turnover grew from 30

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 39 --------------------------------------------------------------------------------------------------------------------------------

-------------------------------------------semLer understood that structuraL changes For the Better in the struggLes BetWeen caPitaL, taLent and LaBor are to Be achieVed through education. million dollar in 1988 to 212 million dollar in 2003 and Semco is currently market leader in all industries in which it is active. It seems that treating labor as talent is key in this regard. Because employees are encouraged to learn, tend to have a relatively high task variety, are allowed access to management information and are co-decision makers, traditional talent in the organization loses leverage over labor as more equality is achieved. The spectacular increases in productivity and employee happiness are a direct result of this and key in explaining the spectacular performance of the firm.

Semler understood that structural changes for the better in the struggles between capital, talent and labor are to be achieved through education. He therefore redirected his focus to the foundation of schools, governed by the same principles as Semco. Children are for instance engaged in projects of their own interest, are involved in the decisionmaking process regarding school policy and are in fact stimulated to become talent rather than merely labor.

Through his company and educational projects, Semler is trying to bridge the gap between talent and labor by battling inequality instead of battling with others over the spoils of production.

The huge success of Semco indicates that instead of suppressing labor, it might actually be smart to aim at transforming labor into talent. Unfortunately it seems that in most industries, the scales have ended up too far in the direction of talent. In order to change the outcome of the struggles between capital, talent and labor, educational and corporate policy aimed at helping each person to become talented seems to make a difference. As mentioned earlier, not only labor, but society as a whole will benefit.

-------------------------------------------------------------------------------------------------------------------------------40 rostraeconomica bookreview -------------------------------------------------------------------------------------------------------------------------------Deutschland schafft sich ab author: thilo sarrazin number of pages: 461 Publisher: deutsche Verlags-anstalt

text ruben slot

ruben slot is a 22-year-old Bachelor student of economics and Physics.

actuaLity readaBiLity content

an inconVenient oPinion

i

n fall 2010, the publication of the book Deutschland schafft sich ab by Thilo Sarrazin, often translated as “Germany is abolishing itself ”, sparked lively debates in the country’s newspapers and talk shows. The book’s conclusions, critical of current integration and education policies and calling for a general overhaul of Germany’s welfare state, were quickly denounced by most politicians and pundits. Some commentators went so far as to accuse him of racism, an especially hard allegation given Germany’s troubled history. However, many ordinary Germans were far less critical of the book’s claims; Sarrazin, a long-time civil servant and politician for the social-democratic SPD, reported that he received mostly positive responses to his book. Nevertheless, he was forced to resign his position as a member of the Executive Board of the Bundesbank, the German central bank.

What exactly did Sarrazin write that caused such as stir, and why could this book also be relevant for other European countries?

Critics often focus on a small but sensitive part of Sarrazin’s claims, namely those about immigration and integration, even though these form only a part of his thesis. The book’s main argument rests on two assumptions and can be summed up as follows. First, intelligence is to a large part genetically determined; most biologists assume that its heredity lies

somewhere between 50 and 80 per cent. Second, the fertility rate of higher educated people is lower than that of lower educated people and education correlates strongly with intelligence; crudely said, clever people have fewer children. The logical conclusion from these two assumptions is that the relative share of intelligent people in the population must decrease with time. Since highly educated people provide most of the tax revenues and lower educated people generally use the government services provided by these revenues, this demographic trend puts a strain on the welfare state. According to Sarrazin, this issue is amplified by several factors, to each of which he devotes a chapter to elaborate: the lack of incentives to work for those on welfare, the gradually decreasing standards of education and the incomplete integration by the Muslim community in Germany. The end result, the author claims, is a Germany that gets progressively less intelligent, both due to biological and societal reasons, a given that is ignored by the country’s leaders due to political expedience and historical sensitivities.

One of the two assumptions Sarrazin needs to support his claim of a dumber Germany, that of the heredity of intelligence, is under fire from biologists and geneticists. Some claim he confuses the heredity of intelligence within a group – generally seen as a fact – with the heredity of intelligence

within individuals, which does not follow from the former. It is thus not necessarily true that intelligent people have mostly intelligent children, which weakens one of the two pillars upon which Sarrazin’s argument rests.

However, this does not diminish the relevance of the book: despite this and other factual inaccuracies, the book points towards many issues that have until now been too sensitive to discuss and which also play a role in other Western societies: the generally declining level of educational standards, especially in comparison to Eastern-Asia, the lack of incentives to work that a generous welfare system such as ours provides and the problematic integration of Muslims communities in Western societies. In a country still troubled by its nazi-past, Sarrazin’s focus on biological reasons for a lack of success in life was bound to stir up controversy. It is an interesting topic nonetheless, as it questions the conventional wisdom that most of society’s problems are endogenous to it, i.e. can be ameliorated by government intervention. “Deutschland schafft sich ab” is thus a book worth reading not for its flawless logical analysis or its impeccable empirical evidence, as it lacks both, but for the poignant way the author describes the threats to the Western-European welfare state.

Hence, it is a must-read for anyone interested in this wide-ranging and often emotional issue.

-------------------------------------------------------------------------------------------------------------------------------the dutch inhouse tours 2013 rostraeconomica 41 --------------------------------------------------------------------------------------------------------------------------------

The committee members of the Dutch Inhouse Tours from left to right: Mieke Schouten, Daan Heitmeijer, Bo-Marie Stokman, Bart Slieker, Maeyken Heijne

What’s in a name? t

he Dutch Inhouse Tours of 2013 are exactly that, a fun, interesting and meaningful experience at some of the finest Dutch multinationals. During twelve days in April and May, the DIT will bring together students and companies for a formal and informal orientation, knowledge exchange and networking experience. For the fifth year in a row, the Dutch Inhouse Tours (DIT) is organized by a collaboration between the faculty associations Sefa (UvA), EBF (RuG) and Aureus (VU).

The aim of the DIT is to make sure third-year bachelor, pre-master and master students can get acquainted with future employers and explore their options. If you are a master student, pre-master student or third year bachelor student, if you have an economic, business or technical interest, if you are wondering what your career possibilities are, if you would like to know what it is like to work at a multinational and if you would like to get to know a specific company a little better, you should sign up for the Dutch Inhouse Tours 2013.

During an inhouse day all of the questions will be answered through a program constructed and presented

by the company itself at a location chosen by the company. During this one-day inhouse tour, the hosting company will challenge a selection of talented students with an exciting case, workshop or presentation and give them the opportunity to get to know their companies in a more informal way, by concluding the day with some drinks. Therefore there will be enough time to get to know the company and present your capabilities to the company.

The selected companies for this year’s edition are ten top performers in their segment, which are always looking for young talented students. The companies participating are Accenture, Achmea, Deloitte, Double Effect, Ernst & Young, Hay Group, Hewlett-Packard, NS, Oracle and PostNL. For more information about the companies you should visit www.doedit.nu or take a look at the profile book. After having decided at which company you’d want to participate, you should make sure that your CV is attractive and correct. This is because the companies will select the participants for their inhouse day. The deadline for signing up will be the 5th of April, 23:59h.

-------------------------------------------------------------------------------------------------------------------------------42 rostraeconomica economics from the outside --------------------------------------------------------------------------------------------------------------------------------

economics: science or PoWer game?

L

ast time in this rubric, I expressed doubts about the financial sector.

While mainstream economists advice and work within this sector, others see it as ‘legalized crime’. Besides this aversion to ideas and practices in economics, I have noticed another issue surrounding economic science: power.

There is no other science which has influenced politics and society as much as economics has. In the words of John Maynard Keynes: “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”

This leads to an interesting aspect of economic science. As other social sciences, it tries to describe a reality in which it is an actor. Economic scientists influence the economy whether they want to do or not, because they are part of the economy. And not just as an individual, but also as an expert.

Economists are far more often than other social scientists asked for advice on policy and expectations. Even more importantly, economic institutions like the European Central Bank (ECB) and the International Monetary Fund (IMF) influence the real world directly through their actions. Macroeconomists that want to become part of these institutions or influence them will take this in account in their

research publications. They will try to investigate questions of policy-makers and give their potential solutions in a politically appropriate way. What does this close relation with power means for economic science?

---------------------------there is no other science Which has inFLuenced PoLitics LiKe economics Performative Science The French sociologist Michel Callon has gone as far as stating that economic science is foremost performative. He means with this that economists are not focused on describing the world, but on influencing the world through their actions. Economists, according to Callon, are thus performing their theories on society. His colleague MacKenzie puts it like this: It is not (only) about “knowing” the world, accurately or not. It is also about producing it. Economics swings between representation and action, between science and policy, between academic inquiry and political intervention.

This might sound a bit strange and radical, so let’s give an example.

text corneel den hartogh -------------------------image yvonne roos

corneel den hartogh is 23 years old and masterstudent Philosophy of social sciences.

Option trading was possible long before it grew into a serious business.

What changed? Was it the rules? Was it incentives for traders? No, what changed was economic science. The Black-Scholes model was introduced.

This model had only one parameter and professor Black produced monthly paper sheets with theoretical prices of all relevant options.

However, the Black-Scholes model did not accurately describe the price; it systematically calculated too low prices . In addition, it suggested to users to spread their risks by buying high and small volatility shocks whose risks would cancel each other out. This spreading actually led to a flattening of the volatilities. Hence; the advice of economists was not based on a correct description of the world, but the advice was a self-fulling prophecy. To profit more from the model, market participants pushed to change market regulations in the direction of the model (for instance: lowering transaction costs since the model assumed none).

Power or given authority Following from this, MacKenzie concludes that economists are acting on the world. They did not only develop the Black-Scholes model, but

-------------------------------------------------------------------------------------------------------------------------------rostraeconomica 43 --------------------------------------------------------------------------------------------------------------------------------

Black continuously supplied traders with advice based on his model. This led not only to a change in behaviour of those agents, but, in the long run, even to a change in the regulatory framework. However, this is not the end of the story. A crash occurred in 1987 and the Black-Scholes model was altered significantly. If economists are so powerful, why did their models fail?

A possible explanation can be found by Bourdieu. In his book â&#x20AC;&#x2DC;Authorized Languageâ&#x20AC;&#x2122; he stresses that language in general (including models) cannot be investigated on its content alone.

Language receives its power from the authority of the speaker. Professor Black and his colleagues had received this authority, because the traders had the impression that these professors had in-depth knowledge of the business.

When this confidence was lost due to developments in the market, the model of Black-Scholes was tossed away.

Bourdieu adds to this that strong authority is found by groups that have a need for homogenous behaviour.

Since group members have a need for homogeneity, they are willing to install authority.

For a group of traders homogeneity leads to stabilization and therefore less risk. Thus, traders are particularly willing to follow authority. They adopt models, because they provide a more solid, less risky environment. When the problems of a model finally manifest themself, it is quickly exchanged for a different one in order to achieve new stability. Hence, the influence of economists on the market is fragile. The market participants decide who they follow and they can change this quickly.

Conclusion I think this conclusion also holds for the power of economists in politics.

Economists have certainly had an impact on politics, but this influence is very fragile. As soon as politicians take a different approach or elections have resulted in new presidents,

economists and their theories can be put out of work. However, because economists are eager to give advice and expectations, they are blamed when something goes wrong.

Due to this fragility and possible reputation damage, economists would be better of refraining from giving direct advice. The value of science lies partly in the fact that they can research phenomena in-depth and independently. Giving continuous advice on political questions is not only difficult for scientists, but also not very rewarding since they have no control about how their advice will be used and for how long they are asked advice. Economists that nonetheless like the power games to such an extent that they are not able to let them go, should face this and become politicians. In that way, they could transform their advices into policies and take responsibility for it. More importantly, economic science could become more independent and restore its reputation.

-------------------------------------------------------------------------------------------------------------------------------44 rostraeconomica column --------------------------------------------------------------------------------------------------------------------------------

Dr Joop Hartog

an inVisiBLe hand For the research agenda?

a

university position is a position with an incredible level of freedom. Within some general bounds on what should be taught, there is substantial scope for a personal perspective, in terms of topics, approaches and assessments.

It’s even possible to teach a particular subject with the motivation that this knowledge is essential part of what economists know and apply and add an extensive elaboration of its very limited relevance and usefulness.

Indeed, it would be a good example of teaching the critical attitude that is always seen as the hallmark of an academic training.

There is even more freedom in the domain of research. Roughly half the formal working time of an academic is devoted to research. As most academics are fascinated by their work, this share easily increases in practice, by adding working hours beyond formal working time in evenings and weekends. Issues selected for research should fit the general focus of a research group, but this is usually quite broadly formulated, and within these wide boundaries a researcher can make her own choice. Will such freedom produce the right type of research?

Do we get the new knowledge that society benefits most from?

A key driver of the direction of research is the ambition of the individual

researcher. Curiosity and competition govern the choices. Just trying to understand the world, just being intrigued by a particular question or observation may get the researcher going. Pure curiosity leads to what is often called fundamental research: research that does not explicitly aim for an application. Trying to contribute to happiness and welfare of the population may also be an important motivation. In the Depression of the 1930’s, Tinbergen and Koopmans switched over to economics, to help solve the crisis, and both later won a Nobel Prize. In medicine it’s an often expressed motivation. Competition is the aim for fame: researchers often want to show off as the smartest of their field. An effect or law that carries their name is a much desired trophy.

A less transparent factor is the research agenda of a field or subfield. To become famous in a field one should solve a problem that is high on the research agenda. But the research agenda is not set in a formal meeting of the research community. It’s an understanding that surfaces in discussions, in introductions to papers or presentations. It floats around, and is often subject to debate. It’s essentially an internal norm, set by the community: the agenda is what prestigious or powerful members of the community think it is. Success within the community requires

text dr Joop hartog -------------------------emeritus Professor of economics amsterdam school of economics university of amsterdam Fellow of tinbergen institute, iza, aias, cesifo, cream member KnaW royal dutch academy of sciences.

obeying the agenda, or changing the agenda and so obtain prestige. Just like individuals, the community may set an agenda based on pressing social problems or simply intellectual challenges and excitement.

An important conditioning factor is the role of the government as the funding institution. Here, the inquiry on the quality of the invisible hand is not an academic question. Should the government fund free, curiosity driven research, or applied research that should contribute visibly to welldefined problems, or improve the competitive power of business? At first sight it seems obvious that taxpayers’ money should lead to visible social benefits. Hence, the government should set the agenda and only fund research that promises to solve relevant problems. However, it’s not as simple as it seems. All major innovations, the big jumps forward, are outflows of curiosity driven, free research. No one ever set out to replace horse-andcarriage by an automobile, no one had a vision of email and then invented it, applications of electricity were only created long after it had been discovered. On top of that, it should be hard to imagine civilization without intellectual ambition, adventure and excitement. Sadly enough, under present circumstances more and more one has to defend what should be obvious.

-------------------------------------------------------------------------------------------------------------------------------46 rostraeconomica FeB flash --------------------------------------------------------------------------------------------------------------------------------

FeB FLASH

JooP hartog dissertation Prize On January 17, 2013, the Joop Hartog Dissertation Prize was awarded to Petr Sedláček for his thesis Macroeconomic implications of labor market frictions, written under the supervision of professor Wouter den Haan. The Joop Hartog Dissertation Prize has been awarded for the third time.

The jury, consisting of professor J.S. Cramer, professor J. Hartog (chair) and professor H. Jager, evaluated dissertations that had been defended at the Amsterdam School of Economics in 2010 and 2011. In this period, 19 PhD theses were

defended, of which 4 had been nominated. The other candidates were Tatiana Kiseleva, Marit Schoonhoven and Benjamin Kemper.

Sedláček’s thesis has three substantial chapters (papers) of which two have been written independently and one jointly with the supervisor. The jury appreciated the persistent and creative search for a solution of the research problem that had been defined, in a fine balance of empirical and analytical work. Empirically and analytically, he delivered contributions of high standing, with good perspective of publication in top journals.

amsterdam center For entrePreneurshiP (ace) & KicKstartuP Present:

the startuP Kids!

A documentary about young web entrepreneurs who realised their ideas and created today’s world with companies such as Vimeo, Dropbox, Soundcloud and many others. After two previously sold-out events, the last showing in Amsterdam will be in the Zuiderkerk on 28 March. The event will start at 19:00 and finish at midnight - an evening with interesting people followed by an after-party with drinks and DJs. Tickets can be purchased at www.kickstartup.nl/tickets

research coLLaBoration ABS and ING economic Bureau researchers from the international strategy & marketing section of the amsterdam Business school have started a collaboration with ing economic Bureau / international trade research. in what is meant to be a longer-term relationship, data will be collected on key issues for international business and trade. the researchers involved are ans Kolk, alan muller and Johan Lindeque, while the project leader from ing economic Bureau is Fabienne Fortanier. the idea is to generate research insights that ing can use to inform and support its corporate clients, while aBs researchers can use the data for future publications, in line with their long-standing expertise and output on international business and management.