Monday, December 5, 2011

College Education, Climate Change and Your Business Value

Recently, Intelligence Squared (IQ2) hosted a debate about the worth of getting a college education. One of the debating points was whether a college education led to higher earnings in life (causation) or whether the higher earnings occurred because the type of person who went to college would succeed anyway (correlation).

Similarly, people and scientists are relating that human activity has caused global warming. Is it correlation or causation? If it's causation, why then did global temperatures decrease for 900 years (at least) in a time of growing human population, industrialization and massive deforestation to fuel higher lifestyles, buildings (like cathedrals), inventiveness and agricultural needs throughout the world? The link below is to the IPCC's own chart.

Causation theories regarding human activity would have to explain both the increase in the last 100 years and the decrease in the previous 900 years.

If you followed correlation as a means of causation, you would do several things to increase the value of your business--because if the public stock market values go up (, your own business value increases:

1) Insist on shorter skirt and dress lengths for women;
2) Buy butter from Bangladesh
3) Root for and support an NFC team so they can go to and win the Super Bowl
4) Help to elect the presidential candidate in whom you have the least confidence
5) Petition Sports Illustrated to put an American model on their swimsuit edition
6) Bet against a horse poised to win the Triple Crown

None of these will directly cause more profitable customers to buy from your business, but the power of correlation would say it will happen so that your enterprise's value sky-rockets. Imagine if all five of those things occurred in!

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