The Right Opinion

Education Spending That Isn't Smart

By Jonah Goldberg · Feb. 6, 2013

Not long after President Obama proclaimed in his second inaugural that “an economic recovery has begun,” we learned that the U.S. economy actually shrank in the last quarter. Many economists believe this is a temporary setback. This recovery may be the weakest in American history, but the economy isn't cratering either.

Still, you can bet that if the economy continues to contract, Obama will propose the same remedy he always has: more “investments” in education, infrastructure and various industries of the future. It seems that whatever the ailment, Dr. Obama always writes the same prescription.

This is hardly shocking: Building roads and schools is a big reason why God created Democrats in the first place. And identifying the Next Big Thing – and taking credit for it – is something of a vocation for many liberal policymakers.

But are these really the drivers of economic growth?

Higher education in particular is almost universally championed as the key to “winning the future” – a buzz phrase the president borrowed from Newt Gingrich a while back. New York Times economics columnist David Leonhardt calls education the “lifeblood of economic growth.”

Often channeling such writers as Thomas Friedman, whose fondness for the Chinese economic model borders on the perverse, Obama routinely elevates education to a national security issue. “There's an educational arms race taking place around the world right now – from China to Germany, to India to South Korea,” Obama said in 2010. “Cutting back on education would amount to unilateral disarmament. We can't afford to do that.”

Now, obviously, education is important and necessary for a host of reasons (and nobody is calling for “disarmament,” whatever that means). But there's little evidence it drives growth.

British scholar Alison Wolf writes in “Does Education Matter?”: “The simple one-way relationship … – education spending in, economic growth out – simply does not exist. Moreover, the larger and more complex the education sector, the less obvious any links to productivity.”

Nassim Nicholas Taleb, author of “Antifragile: Things That Gain From Disorder,” argues that education pays real benefits at a micro level because it allows families to lock in their economic status. An entrepreneurial father can ensure his kids will do OK by paying for them to become doctors and lawyers. But what is true at the micro level is not always true at the macro level.

Think about it this way: Growing economies spend a lot on education, but that doesn't necessarily mean that spending makes them grow. During the so-called Gilded Age, the U.S. economy roared faster and longer than ever before or since, while the illiteracy rate went down. But the rising literacy didn't cause the growth. Similarly, in the 20th century, in places like China, South Korea and India, the economic boom – and the policies that create it – always come first while the investments in education come later.

There are similar problems with claims that infrastructure spending will pay off. When I was in college, prominent experts and journalists – Lester Thurow, Robert Reich, James Fallows, Kevin Phillips et al. – were insisting Japan would be the next world economic superpower. In the late 1980s, Jacques Attali, the first head of the European Bank for Reconstruction and Development, claimed that “America has become Japan's granary, like Poland was for Flanders in the 17th century.” Attali did allow for the possibility that the U.S. West Coast might do OK, but only because it was “in the gravitational pull of Japanese financial power and geographic proximity.”

Japan is now well into its third “lost decade.” Over the years, it has poured money into “stimulative” infrastructure projects that have yet to stimulate and protected industries that have steadily lost their competitive edge. Economic growth has averaged less than 1 percent since 2000, while government debt is now more than twice its GDP. If a highly educated workforce, support for allegedly cutting-edge industries and lavish spending on infrastructure was the recipe for economic growth (and if debt didn't matter), Japan would be doing great.

Obama surely wants to see some real economic growth. Perhaps the problem is that he thinks investing in a much bigger cart to put before the horse will get him where he wants to go.

© 2013 Tribune Media Services, Inc.

6 Comments

Tod the tool guy in brooklyn ny said:

Maybe what America needs, Jonah, is less economics professors, and more young people who are willing to work hard. I cannot explain it, but there is something rewarding about manual labor. "Hands to work, and hearts to God!"One of my favorite tasks, is using a short-handled shovel, on snow & ice! I am grateful to be a working man and a great provider.God will raise up the humble, but bring down the haughty/lying reprobates!

Wednesday, February 6, 2013 at 6:33 AM

wjm in Colorado said:

Real education is important, not the government funded public indoctrination centers of child abuse. If you want an education, public shools are ALWAYS the wrong choice. If you want to be an idoctrinated useful idiot dependant on government to survive, then you would be a fan of public schools. Why did the public schools do away with shop and mechanic classes? Can't have people learning useful trades, they might get real jobs, recognize the tryranny of government taxing away their earnings, and vote against them!

Wednesday, February 6, 2013 at 10:00 AM

ripvanwinkle in Oklahoma replied:

The reason we did away with "shop" classes is because no one learned anything in them. A better option was to just get a job at the local mechanic shop or in my case the local machine shop where I worked my way through Engineering school. Learned something from some smart people about how things were made.

Wednesday, February 6, 2013 at 2:24 PM

Wayne in Hinesville, GA replied:

If no one learned anything in them then whose fault was it? My Board of Education this year opened an Academy for 10th through 12th grades to teach Plumbing, Electricity, Computers, Hair Styling, etc. If a young person wants to learn a trade this will be a great opportunity. There will always be a certain percentage of those who will attend but do nothing to better themselves.

Wednesday, February 6, 2013 at 8:48 PM

Tod the tool guy in brooklyn ny said:

In addition, shop classes were shut down by trial lawyers. One careless incident, and wham---- millions of dollars to attorneys & accident victims. The board of ed did not want the liability.

Wednesday, February 6, 2013 at 5:01 PM

MNIce in Minnesota said:

The United States has the world's most expensive public schools, but we are way behind many other nations in academic achievement. Does this sound familiar? It's the same argument used for the Obamacare takeover of the medical industry. Oh, wait a minute. The government already took over education. Oops.

The fact is, throwing bigger piles of (borrowed) money at something does not guarantee it will be better; it only guarantees that it will be more expensive. The results of formal education depend primarily on the knowledge of the teacher and the effective mastery of the skills to impart that knowledge, and the motivation and capabilities of the students. These are not necessarily purchasable with money.

Wednesday, February 6, 2013 at 10:52 PM