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Paul W. Boltz, who received his MS and PhD degrees from the College of Business, delivered the convocation address to the December 2003 College of Business graduates in a ceremony held in the Krannert Center for the Performing Arts. Boltz was vice president and financial economist with T. Rowe Price before his retirement.

Dr. Boltz's speech is reprinted below with his permission.


Thank you for that generous introduction, and thank you, graduating students, for your sitting ovation. I am delighted to be here this morning to share this exciting moment in your lives, surrounded by your families, friends, and the dedicated faculty of the College of Business.

I love events like these because I love funny hats. As you may know, a mortar board - a real mortar board - is a piece of wood used by a bricklayer to mix mortar and keep it moist. I once was told that it is traditionally on the hat of one leaving school to remind the graduate that if things don't pan out, there are always jobs in construction.

As I look out on your youthful faces, I feel my years. I'm old enough to remember when an ordinary person with no prior training could open a new bottle of aspirin in a matter of seconds. Try that now. On a more serious note, I am also old enough to remember walking through airports and boarding planes without any security checks whatsoever. That world, I am sorry to say, is gone.

The world today looks scary. We are engaged in a global struggle against terrorism. Though the economy normally booms during periods of wartime, economic activity has been soft until just recently, as we adjusted to the aftermath of the euphoria of the 1990s which resembled the 1920s in many ways. But if you think this is a particularly bad period in our history, let me tell you about the world thirty years ago when I was completing my education.

In 1973 we were trying to extract ourselves from the Vietnam War, and 1973 was the last year of the draft as we switched to an all-volunteer army. Political leadership in Washington was paralyzed by the unfolding Watergate scandal. The economy was reeling from an economic assault in the form of the OPEC oil embargo. That economic attack on the US and its allies was orchestrated and led by our friend, Saudi Arabia.

If this dark picture has some familiar features, let me also tell you how different the world was in 1973. No one had a personal computer. Google was an obscure term used in the game of cricket. Yahoo was either a member of a race encountered by Mr. Gulliver in his travels, or just a student at some other Big Ten university. At that time real personal income on a per capita basis was less than two-thirds of what it is now in the United States. I know I am addressing graduates of a business school, so you all know what per capita real personal income is. For those of you in the audience who may not have had a thorough economic education and do not know what it is, I know just the school for you.

Yes, 1973 was not a golden year in our history. Thirty years before that in 1943, it was far worse. Back then, we were engaged in the most destructive war in history. We were fighting the Germans and the Japanese. In North Africa, for a while we were even fighting French troops, who thought we were the enemy, not the Nazis. In other ways, the world of 1943 was vastly different from today's world. No one in 1943 watched television. If you wanted to air condition your car, you rolled the windows down, not up. Per capita real personal income in the US was less than one-third of what it is today. The meteoric rise in our standard of living since World War II is illustrated by the fact that the US now has more passenger motor vehicles than licensed drivers. Wealth of this magnitude, unfortunately, makes us the envy of the world.

I've reviewed the past in 30-year increments because your working careers will span about 30 or 40 years. Over those decades, history will march on, and you all will be part of it. To understand the world and to understand your place in it, you must strive to understand the larger forces at work in your time. The wider the perspective that you achieve, the better you will be able to conduct yourself at home, at work, and in your civic life.

So what about the future? Having looked at the past, let me assume a familiar role for an economist and do some forecasting about the decades ahead. I discovered during my career as a financial economist that forecasting is very easy. Of course, if the goal is accuracy, then forecasting becomes extremely difficult. During my career I was inspired by the motto of Wall Street economists: "To err is human. To get paid for it is divine." Incidentally, for those of you who may be interested in becoming stockbrokers, this is their motto as well.

I also often thought of the words of the philosopher George Santayana, who is not to be confused with Carlos Santana who is somebody else entirely. The philosopher Santayana wrote, "I know of no better guide to the future than the past." So as we consider the features of the past 30 years and the 30 before that, I think we can reasonably conclude two things about the coming several decades.

First, parts of the world will continue to be embroiled in conflict, violence, and chaos, and the United States will be a major, perhaps the major defender of civilized values. With our colossal military power and colossal wealth, we will provide leadership to other countries who wish to create a free, prosperous, and just world. And, I firmly believe that we will survive the ordeals ahead just as we have those of the past.

Second, and here's the good news, the United States can be expected to continue leading the world in creating new technology and enjoying a standard of living whose rise will continue to astonish as it did over the twentieth century. As Michael Lewis put it so cleverly, "Microsoft is to the US economy, as the US economy is to the world."

As we blaze the path into the future with important help from our friends around the world, the technological progress creating higher standards of material welfare will also present immense opportunities for you graduates. You are well-equipped to seize those opportunities with the fine education you have had here at the University of Illinois. You will find out that seizing opportunities requires a willingness to take risk. But I think the entrepreneurial spirit is alive and well here in this room, and I am sure that you are up to the task.

When I left school, I had a wife, a child, and a notably negative net worth. Taking risk was the furthest thing from my mind. It took me several years to figure out that risk-taking is a rewarding course. Let me emphasize that I am not talking here about pointless risk. I, for example, engage in no activity that requires a helmet. The reason is helmets have a way of becoming crash helmets. I leave skydiving and motorcycle riding to the more adventurous. No, I am talking about risk that has been carefully thought out, carefully modulated.

I may be preaching to the choir here. Some of you, no doubt, are raring to go out and become entrepreneurs, and I salute your spirit. On the other hand, as we say in economics, some of you may feel the way I did when I left school. I wish I could guarantee that all your risk-taking will lead to success, but I cannot. I can guarantee that, if you take risks, every day you will know you are alive, and odds favor that you will achieve success, and even have fun while you are doing it.

As I said at the beginning of my remarks, it is a delight to see you on such an exciting day in your lives. Adam Smith, the great economist and moral philosopher, expressed well my feelings at this moment. He wrote, "How selfish soever a man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it." It is a pleasure to see you today.

Thank you for your kind attention, and good luck on the great adventure on which you are now embarking!

--Paul W. Boltz
December 2003