told us that the fate of empires depends on the education
of its youth.
ancient Greece, education for free men was a matter of studying
Homer, mathematics, music, and gymnastics. Higher education
was carried on by the Sophists and philosophers. Hebrews
left education to its Talmudic scholars and rabbis. In medieval
Western Europe, education was also typically a charge of
the church. With the Renaissance, education in classics and
mathematics became widespread. After the Reformation, both
Protestant and Roman Catholic groups began to offer formal
education to more people, and there was a great increase
in the number of private and public schools.
education developed from European intellectual traditions
transmitted to the New World. Throughout the 13 colonies,
the English language, laws, and customs came to define colonial
educational practice. The first American formal schools appeared
in the 1630s. The Boston Latin School, established in 1635,
is considered the first town-supported school with a continuous
history. In 1647, Massachusetts enacted a law requiring every
town of at least 50 households to hire a teacher for reading
and writing; those of 100 or more were required to establish
and operate a grammar school.
have always had a passion for higher education. Harvard College
came first in 1636, William and Mary of Virginia followed
in 1693, Yale in 1701, and Princeton in 1746. America's institutions
of higher education are today accepted as the best in the
world. Through a combination of growth, pluralism, and competition,
our colleges and universities provide the widest access to
postsecondary education anywhere on the globe. Indeed, recent
international studies have concluded that 17 of the top 20
universities in the world are American.
is said that education is the process, either formal or
informal, that shapes the potential of a maturing organism.
was 1939, the world was on fire, but my parents, consummate
teachers both, never lost sight of their priorities. Although
we were chased by the Gestapo and the KGB, my father sat
me down one day to lecture.
one hand, he held up a Polish zloty, in the other a Lithuanian
you know what these are?" he asked.
I answered, proud to show off my deep understanding of such matters.
he agreed. "And do you know how much each of them is worth?"
shrugged my shoulders, having exhausted my expertise in high
father then carefully explained that the value of those two
units of currency could be determined only by what they can
buy in the marketplace. What followed was my first exposure
to the logic of Milton Friedman. I learned that while the
official rate of exchange between the zloty and the lit was
one for one, in fact it would take two zlotys to buy a loaf
of bread but only one lit. "The government's official
rate doesn't mean a thing,"
my father admonished. "Real value can only be determined
in the marketplace."
lessons in Milton Friedman's free market economics left an
indelible impression as we chased around the world, and as
the lit changed to a ruble, the ruble to a yen, and finally
a yen to a dollar.
the mid-1950s, when this young law student, futures trader
cum financial engineer was captured by the tumult and dazzle
of the floor at the Chicago Mercantile Exchange, his font
of knowledge were the grizzled old-timers on the Exchange
floor who sometimes would take pity on the wide-eyed youngster
thirsting for every smidgen of information and offer some
of their precious wisdom. Their lore was thoroughly appreciated.
There was virtually nothing of any academic substance about
the markets of futures available anywhere. It was still some
15 years before Thomas Hieronymus of the University of Illinois
would publish his Economics of Futures Trading,
the 1971 seminal work on our markets—a work that quickly
became the bible of futures trade and established the author
as the high priest of futures.
Professor Hieronymus stated at the time, the arcane world
of futures was "little known and less understood." For
the very first time, someone with his academic authority
defined a futures contract, explained the need for price
discovery, the role of speculation, the mechanics of hedging,
the value of risk management, as well as the architecture
of a futures exchange, its unique operation, singular terminology,
and its historical development.
Mandela lectured that education is the most powerful weapon
with which to change the world.
Chicago Mercantile Exchange today is well known as the house
that innovation built. Its original logo, "The Exchange
was as much a catchy phrase as a defining statement. However,
far less known is the fact that among its greatest achievements
is the Exchange's commitment to advancing market education. Beginning
in the early 1970s and continuing throughout its three-decade
rise in the financial world, the CME was a leading force, if
not the leading force, in advancing academic education,
courses, textbooks, studies, learning centers, workshops, and
symposia in the field of futures options—and most recently
on behalf of the advancement of electronic trade.
was the first exchange to promote a center for futures education
in partnership with the Comex at Columbia University, a prize
at the University of Chicago to recognize outstanding scholarship
by a business school professor, and to sponsor chairs for
the study of futures at both Chicago and Northwestern universities.
Nothing—neither success nor change in leadership—has
altered or diminished this mission. In 2003, it founded the
CME Center of Innovation. Among its accomplishments is the
establishment of the Fred Arditti Innovation Award to individuals
who have made significant conceptual or practical contributions
to commerce or markets. The center also teamed up with the
Mathematical Sciences Research Institute (MSRI) to create
a prize for the innovation of mathematical, statistical,
or computational methods in the study and behavior of markets.
years ago, the CME Trust—which originated in 1969 for customer
protection—was converted to the CME Charitable Trust with
a primary goal of promoting, teaching, and learning about
financial markets. In 2006, toward that goal, the trust distributed
grants in excess of $10 million, the greatest portion to
universities and colleges in the Chicago area. Last week,
the trustees announced an additional $1.75 million in grant
commitments to Loyola University, University of Illinois
at Chicago, and Erikson Institute of Chicago for early childhood
Einstein believed that the supreme art of the teacher
is to awaken joy in creative expression and knowledge.
would be impossible to attempt to enumerate the number of
books, textbooks, magazines, journals, and periodicals about
financial futures and derivatives that permeate today's
economic fabric, not to mention the daily coverage of these
markets in the electronic and printed media. Suffice it to
say that last week on my visit to the Shanghai campus of
China Foreign Exchange Trading System (CFETS), with which
the CME forged a historic agreement, I was escorted to its
library, which boasted no less than 1,000 books, all in English,
on the subject of financial futures and derivatives.
and derivatives courses and MBA programs today exist at American
universities too numerous to mention, including those at the
top of the U.S. academic ladder, such as Harvard, Stanford,
Pennsylvania, Cornell, Dartmouth, DePaul, Duke, MIT, Illinois,
UIC, Loyola, University of Chicago, and Northwestern, as well
as at relatively unknown academic institutions across the breadth
of this country, from the likes of Emmanuel College in Boston,
to Mills College in Oakland, California. Similarly, courses
in futures and financial derivatives are available in universities
throughout the world, including Singapore, India, Thailand,
Spain, Great Britain, France, just to name but a few. And soon
at Peking and Hebrew universities.
the markets of futures have come a long way from the days of
innovation has been the key to our achievements, but only because
of our equal partnership with education. In no small measure,
this success is due to a host of prestigious innovators and
teachers, such as Milton Friedman, Merton Miller, Gary Becker,
William Sharpe, Bob Merton, and Myron Scholes, to mention only
those who have received the Nobel Prize for their academic
contribution to our markets.
best thing for being sad," said Merlin, in T. H. White's The
Once and Future King,
"is to learn something. That's the only thing that never
fails. You may grow old and trembling in your anatomies, you
may lie awake at night listening to the disorder of your veins,
you may miss your only love, you may see the world about you
devastated by evil lunatics, or know your honor trampled in
the sewers of baser minds. There is only one thing for it then—to
learn. Learn why the world wags and what wags it. That is the
only thing which the mind can never exhaust, never alienate,
never be tortured by, never fear or distrust, and never dream
of regretting. Learning is the only thing for you. Look what
a lot of things there are to learn."
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