Teman 2006

(Find more of Teman’s writing at The Ethereal Land where he is the Chieftain, Apeman, and Tradesman.)

Investing in Education
By Teman

How should a country invest in the education of its people?

Unfortunately, no easy answers to that question can be found in textbooks. However, if we take the question of the use and utility of formal education out of the realm of the theoretical and into the world of the real, then we find that matters become more complicated. Our first problem is one of opportunity costs. Formal education may indeed move the Production Possibilities Frontier outward, but does it do so better than other ways we could expend those same resources? Second, we must not uncritically accept the assertion that formal education increases human capital. Only when we have examined both of these questions can we consider how we should apportion resources between the various forms of formal education.

Like most questions in economics, it is impossible to give a definitive answer to the question of whether formal education is the best way of building human capital. Furthermore, our goal for this course is to explore the basics of economics, not various theories of education. However, many people in this course seem to assume that the only way to build human capital is in a setting where a teacher addresses a number of students in a classroom and maybe does some lab work on the side.

This view ignores the fact that throughout human history the most common way of increasing human capital was through the means of apprenticeships. Indeed, such apprenticeships (for our purposes we will define apprenticeship as guided learning while producing goods and services) are still around. They are common in much of Western Europe as a way of learning a variety of skills. Doctors in this country must go through a period of apprenticeship before being able to practice medicine. Much of the way in which the military trains its personnel would fit my definition of apprenticeship. In fact, the higher you go in higher education, the more it tends to resemble an apprenticeship in form and function. Think of how many classes at the lower levels of college are taught by student TA’s or how Ph.D students will help their professors with research projects. Even at the primary school level alternatives to formal schooling can be found, primarily in the growing homeschooling movement.

All this is just to point out that the resources we devote to formal education have a real opportunity cost. Not just in the sense that we can not use the resources we devote to education to building houses or acquiring clothes, but that we can not pursue other means of building human capital as well as we might. Furthermore, we should not assume that just because formal education is the most commonly used method of increasing human capital in the developed world, it therefore must be the best.

In fact, there is some anecdotal evidence to suggest that the opposite is true. In France, the les compagnons (as the people who have been through the various guild apprenticeship programs are called) almost always find a job right away even though the unemployment rate among young people with college degrees is quite high. In Germany, the extensive apprenticeship program is usually given a large share of credit for Germany’s post-war economic success. Back here in the United States, homeschooling has been gaining growing acceptance because people who have been educated in this way tend to do well on any kind of test.

It is such anecdotal evidence that leads some people like John Holt to question the value of formal education. They tend to assert that all such learning actually destroys human capital. Among the sins they accuse formal education of are: Segregating people based on age and intelligence, thus destroying the social fabric. Squelching people’s natural desire to learn because the formal method of learning does not resonate with what they have experienced in their life. And crushing people’s ability to think for themselves because formal education puts the emphases on finding the answers that the teacher wants. Indeed, if you listened to some people who follow John Holt’s way thinking, you might get the impression that formal education was the root cause of all that is wrong with the world.

I believe that such an extreme view of formal education is an error. It springs from the mistaken belief that everything that is imposed by society is bad and that every thing that comes from a person’s own nature is good (John Holt owed a lot to Jean-Jacques Rousseau). But if society does not impose a way of spelling "the" then how will we be able to communicate? That is not to say spelling "the" the way we do is any more morally correct than any other way, only that it is necessary to be able to communicate. Thus, many times, accepting the formal impositions of society allows us to be more productive and creative because we can share our ideas with others and receive their ideas in turn. That is to say, sometimes the right answer to give is the one the teacher wants. This distinction seems to be lost on the people associated with John Holt.

Having said that, I think that it is worth paying attention to what John Holt has to say, if only to counteract the equally extreme (but far more prevalent) view that formal education is an unalloyed good. John Holt may be wrong in his belief that everything imposed by society hampers intellectual growth, but today’s educators need to realize that our classroom-based forms of education are failing to help students increase their creativity and their independent thinking abilities. In the past, those failings were well-disguised by the demands of the industrial economy, as doing the right thing on the industrial production line was more important than independent thought. But we are now in the post-industrial era where service jobs outnumber the old production line jobs and it is becoming increasingly clear that our old education model is failing us.

To some, the answer is to throw more resources at the problem. But I believe that much of what we spend now is wasted, and to spend more would only compound the problem.Our educational needs are more akin to the craftsman of 200 years ago than they are to the factory worker of 50 years ago. It would be wise to remember that people in pre-industrial era were not too stupid to figure out how to have one person stand up in a room and teach 30 other people. In fact, they did do some teaching in the formal form, often for things like writing, math, and reading, but also for anything that the authorities wanted to control (such as religious teaching). But for most of their educational needs they stuck to the apprenticeship form as the best way to train people for jobs that needed technical skill, creativity, and good judgment.

I believe that as our economy grows ever more service oriented, we also will discover that a like form of learning will best suit our needs. In fact, I think that is the case right now and that it is only inertia that keeps us on our present course. That is not say that I think formal education does not have any use. As long as we have to read and write, and do other things where conformity across broad sectors is desirable, there will always be a need for formal education.

To sum up, I believe that we spend way too much money on formal education. Of the resources our country does devote to formal education, I think that most of it should go towards the primary level. What resources are spent on higher education should be in the way of preparing the ground work for an advanced apprent
iceship (sort of the way that doctors do it now).–TP