Economization of Education

Human Capital, Global Corporations, Skills-Based Schooling

Joel Spring

• Publisher: Routledge
• Year: 2015
• ISBN:
  9781317548300
• Edition: 1
• Topic: Education
• Subtopic: Comparative Education

In this timely, cogent analysis of trends and powerful forces shaping global educational policy today, Joel Spring focuses on how economization is making economic growth and increased productivity the main goals of schools, and the ways these goals are achieved—including measuring educational policies by their costs and economic benefits, shaping family life to ensure productive workers and high-achieving students, introducing entrepreneurship education into curricula from preschool through higher education, and increasing the involvement of economists in educational policy analysis. Close attention is given to the Organization for Economic Cooperation and Development (OECD), the World Bank, the World Economic Forum, and multinational corporations, which, as advocates of economization, want schools to focus on teaching hard and soft skills needed by the global labor market.

Economization raises questions about the effects of economically driven agendas for schools: Will education policies advocated by global organizations and multinational businesses corporatize and standardize human personalities and families? What type of global worker is being sought by global organizations and multinational corporations? What education programs are supported to educate the ideal global worker? What is the ideal family life for economic growth and development? Detailing and analyzing the politics and motivations driving economization, the book concludes with an assessment of the impacts of the confluence of business interests, economic theories, governments, and educators.

1 Economization and Corporatization of Education

DOI: 10.4324/9781315730233-1

In his 1992 Nobel Prize acceptance lecture, economist Gary Becker said, “My research uses the economic approach to analyze social issues that range beyond those usually considered by economists.”¹ The title of the lecture, “The Economic Way of Looking at Life,” captured Becker’s pioneering work in applying economic models to a host of social issues, including the family, crime, discrimination, and, most importantly for this book, education. Becker’s 1964 book Human Capital continues to influence governments and global policymaking organizations with its message to invest in education to grow the economy.²

Becker was a member of what became known as the Chicago School of Economics,i which included other Nobel Prize winners who applied economics to education, such as Milton Friedman, Theodore Schultz, and James Heckman. Associated with this group at the University of Chicago was sociologist James Coleman who contributed theoretical frameworks on social capital and rational choice to the economization of education.

i To be referred to in this chapter as the “Chicago School.”

Historically, human capital and the application of free market economics to public education received their greatest support from the Chicago School. In fact, ideas emanating from the Chicago School still infuse global education policies. The global importance of the Chicago School is captured in the title of Johan Van Overtveldt’s The Chicago School: How the University of Chicago Assembled the Thinkers who Revolutionized Economics and Business.³ The Chicago School and its followers not only revolutionized thinking about economics, but also global education policies.

Economization refers to the increasing involvement of economists in education research, the evaluation of the effectiveness of schools and family life according to cost/benefit analyses, and the promotion of school choice in a ­competitive ­marketplace. The Chicago School’s application of economic reasoning to everyday life results in measuring the contribution of family life and schools to economic growth and productivity. This general attempt to apply economic reasoning to all aspects of life is captured in the title of the 1997 publication of Gary Becker’s popular Business Week columns, The Economics of Life: From Baseball to Affirmative Action to Immigration, How Real-World Issues Affect Our Everyday Life.⁴

The application of choice or free market thinking to education can be attributed to the work of Becker’s mentor Milton Friedman. Friedman introduced the ideas of school choice in a paper published in 1955 and then used the term “vouchers” for funding school choice in his now famous 1962 book, Capitalism and Freedom.⁵ Friedman contributed to Becker’s efforts, and that of other economists, to apply economic reasoning to everyday life. In a volume dedicated to remembering the University of Chicago faculty, Becker described the influence of Friedman’s teaching: “The emphasis in his course on applications of theory to the real world set the tone of the department.”⁶

Becker and Friedman’s application of market principles to education had a lasting impact on the language of education, introducing terms such as competition, investment, consumer choice, for-profit schools, vouchers, economic progress, and global free trade in educational services. Friedman advocated school choice, vouchers, and for-profit education using economic phrases such as “vocational training … increases economic productivity”;⁷ “schooling adds to the economic value of the student”;⁸ “the ‘education industry’”;⁹ and “vocational and professional schooling … is a form of investment in human capital precisely analogous to investment in machinery, buildings.”¹⁰ Written for the general public, Free to Choose: A Personal Statement, coauthored with his wife Rose Friedman, refers to students as “consumers”;¹¹ teachers as “producers”;¹² colleges as “selling schooling”;¹³ colleges as producing and selling “monuments and research”;¹⁴ higher education as improving “economic productivity of individuals”;¹⁵ and colleges providing an “incentive” to attend by offering an opportunity for “higher earnings.”¹⁶

Similar economic language applied to education can be found in the work of the pioneer in human capital, economist Theodore Schultz. In his 1963 classic work, The Economic Value of Education, he referred to schools as “firms” that “specialize in producing schooling.”¹⁷ He also called the educational establishment “an industry” that makes “production” decisions.¹⁸ Schultz portrayed student actions in economic terms: “Suppose, then, that all of the costs of schooling are charged to the investment in the production capabilities of students.”¹⁹

Gary Becker would influence public views of education as an economic enterprise by referring in his 1964 book Human Capital to schooling as “Investment in Human Capital” with estimates on “the money rate of return to college and high-school education in the United States.”²⁰ In Becker’s writings, as I describe later, education becomes an investment that results in economic growth, increased productivity, higher incomes, decreased economic inequalities, and the ending of poverty.

Human Capital, Free Markets, and Economization

An important part of the Chicago School’s tradition, as reflected in the work of Friedman, Schultz, Becker, and Heckman, is the consideration of schooling as an investment in human capital. For my purposes, I am using the definition of human capital given in The Oxford Handbook of Human Capital: “The stock of knowledge and skills that enables people to perform work that creates economic value.”²¹

The concept of human capital can be traced back to Adam Smith’s The Wealth of Nations (1776) when Smith wrote about a person’s talents as “a capital fixed and realized, as it were, in his person.”²² After World War II, the Cold War between the Soviet Union and the US pushed the concept of human capital to the forefront. Almost immediately following WWII, US policymakers began to worry about having the knowledge resources to win the military-technology race with the Soviet Union. As a result, the National Science Foundation was created in 1950 to ensure a supply of scientists, engineers, and mathematicians and to sponsor research. In addition, national manpower planning was formally instituted with the passage of the 1951 Universal Military and Training Act requiring military service for all men with deferments from military service for those attending college and for those holding jobs considered important for national defense. The purpose of college and occupational deferments from military service was explained by Anna Rosenberg, the assistant secretary of the Department of Defense, to the Senate Committee considering the legislation: “We feel … that with our shortage of manpower it is essential that we make it up in skills; that the skilled manpower, the scientific manpower, the highly trained manpower is essential for the national interest.”²³

As members of the Chicago School researched the effect of human capital on the economy, the 1957 launching of Soviet Sputnik I created a demand by many politicians for more scientists and engineers to keep pace with Soviet technological advances. Reacting to the Soviet accomplishments in space, President Dwight Eisenhower said in 1957 that the problem facing the US was graduating more scientists and engineers to match the numbers that were graduating from Soviet schools. Eisenhower asserted that “My scientific advisers place this problem above all other immediate tasks of producing missiles … [we need] to stimulate good-quality teaching of mathematics and science.”²⁴ The result was Congressional passage of the 1958 National Defense Education Act which provided funds to attract students into the fields of science, engineering, and math.²⁵

The Cold War also sent a wave of anti-communism through public schools and universities. The anti-Communist movement in universities favored economists advocating free markets and who relied on mathematical methods. Prior to WWII, US economists tended to work from a variety of ideological positions. Economic historian Craufurd Goodwin wrote about this transition: “It is difficult for the present-day academic economist, accustomed to teaching mainly the … wonders of the free market system, to appreciate that not long ago this discipline was widely feared as the seat of radicalism.”²⁶

After WWII, university leaders were afraid to hire professors identified with the political left, or even liberal intellectuals, who might be accused of being Communist or Communist sympathizers. Consequently, universities favored economists who espoused free market principles like those advocated by the Chicago School. In addition, economists strove to be “scientific” so that they could not be accused of ideological interpretations of the functioning of the economy. The use of mathematics became central to economic research after WWII because it appeared ideologically neutral. For instance, Gary Becker’s research on human capital is punctuated with elaborate mathematical formulas. However, as I will discuss, this did not result in completely objective conclusions by Milton Friedman or Gary Becker or other economists of the period. As two economic historians assert, “the tool-kit style of postwar economics … could be used to disguise theoretical content and ideology to the outside world.”²⁷

In public schools progressive education was labeled “Communist” and there were calls for a return to the “basics.”²⁸ Along with anti-Communism and a desire to graduate more scientists and engineers, the post-WWII civil rights movement struggled against school segregation laws. By the 1960s, the civil rights movement focused increasingly on the issue of poverty along with racial equality. A result was the War on Poverty program of President Lyndon B. Johnson’s administration which stressed increased educational opportunities as a solution to poverty. The War on Poverty contained human capital arguments that investment in education would grow the economy, eliminate poverty, and reduce income inequalities. The 1964 Annual Report of the Council of Economic Advisers, “The Problem of Poverty in America,” claimed, “Equality of Opportunity is the American dream, and universal education our noblest pledge to realize it. But, for the children of the poor, education is a handicap race; many are too ill motivated at home to learn in school [author’s emphasis].”²⁹ This statement foreshadowed the increasing concerns by economists with changing family life to prepare children for school so that the economy would grow and poverty would disappear.

Anti-Communism, fears generated by the military-technological race with the Soviet Union, and concerns about poverty contributed to the dominant role in education of the Chicago School’s ideas about free markets and human capital. In 1961, Theodore Schultz noted the importance of human capital: “economists have long known that people are an important part of the wealth of nations.”³⁰ Shultz argued that people invested in themselves through education to improve their job opportunities. In his 1964 book on human capital, Gary Becker asserted that economic growth now depended on the knowledge, information, ideas, skills, and health of the workforce. Investments in education, he argued, could improve human capital which would contribute to economic growth.³¹

Human capital arguments contributed to thinking about education as primarily an economic activity. Knowledge and skills learned in school were capital to be utilized in economic activity. Workers with high levels of skills and ­knowledge acquired through education and experience are enabled “to produce more with the same inputs of land, machines, materials, and time than other workers without those...

Table of contents

• Cover Page
• Half Title Page
• Sociocultural, Political, and Historical Studies in Education
• Title Page
• Copyright Page
• Table of Contents
• Preface
• 1 Economization and Corporatization of Education
• 2 OECD: The Economization of Test Scores
• 3 Skills: The New Global Currency
• 4 World Bank: “Our Dream Is a World Free of Poverty”
• 5 The World Economic Forum: Partnerships and Entrepreneurship Education for Global Businesses
• 6 Economization of the Family and Childhood: Educating the Corporate Personality
• Index