Saturday 13 April 2013

Some thoughts about actuarial training

Having decided that the best way to use time between project (yes, it's a smoother way to say that you are without one for the moment -well, I reckon it's rather likely that there will be one down the line, so it's probably accurate too) was to get new qualifications, I have decided that I would take the actuarial exams. They seem to be quite in demand, and I have the impression that they are close enough from my skillset that I should be able to graduate comparatively fast (it typically takes a lot of time and effort).

But even if you feel that you understand most of a subject, it's wise to do quite a bit more if you are going to take an exam, especially if you have learnt about it in a different language -I'd look rather silly if I failed to understand a question.
So, I've started reading course material -there is a lot to read. I even read the bit about how to use this material. They say you should read it with a critical mind and question what you are reading.

Good. Not that I would normally need much encouragement for that kind of thing, but good to see it encouraged.

However, it quickly dawned on me that I would need to take that advice with a pinch of salt or I would not be getting anywhere. The point is to pass, not to write an essay about why the implicit assumption in the question make little sense. Actually it's worse than that: I would struggle to even finish one binder if I stopped at every step that I felt needed some nuance.

Some examples from the very start: the single objective of the financial director is to maximise the immediate share price. You can use the variation in the share price to see if decisions by the financial director were good (wow -that one was huge). The employees stakes mentioned are purely financial (and static -evolution perspectives are not mentioned) except for receiving training -nothing about having a pleasant and stimulating work environment.

I realise that it's not a sociology course and that it will of necessity mean some kind of bias in the perception of things. Still, I fear that such a lack of nuance does leave some marks -welcome invitation to critical thinking notwithstanding. Very, very few people will study these subjects at a higher level, so the perception of the great majority even of the educated in the field will be of the "companies exist for the sole purpose of maximising their short term share price". Actually, even the idea that companies belong to their shareholders should be immensely controversial -but I am yet to read even a line about a co-operative, despite several famous ones existing in the UK (I am ready to dispute that even a PLC should be seen as belonging solely to its shareholders, but that's clearly not needed to come up with a clear counterexample so let's keep that for another day).

Of course, in the chapter about tax, there is a mention that wealth tax is a double tax -which is plain wrong, as would follow their own breakdown between taxing a flow and taxing a level. On top of that, in the case of a wealth tax, although what is owned has been acquired by a flow (often an inheritance), its current value is not necessarily in direct relation to its acquisition price, often thanks to investment by the public sector, which ought to make some taxation to recoup that quite natural. But nothing like that is suggested, it's mentioned as a double tax, let's move on.

It's not necessarily hugely blatant, in most cases you can make a case for the statement, but at the end of the day you see that there is a massive, insidious right-wing bias. Spend too much time studying and you may not be able to formulate a liberal view of the economy.
As for me, I'll need to learn how to temporarily forget much of what I know, as much as learning the bits I didn't know, so I can give the kind of succinct answer expected to what could be questions leading to a 4-hours essay. It's going to be an interesting exercise.

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