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Education and an Economic Future for America are Linked Together

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Reposted from the Organization for Competitive Markets


Education and an Economic Future for America are Linked Together

Jacek Popiel | December 3, 2012 | OCM

The U.S. education system was once the envy of the world. Yet according to many surveys we are now falling behind many other nations – particularly in mathematics, science and engineering. What is wrong? Why are we slipping?

The debate proceeds on the assumption that there is one optimal education system. In fact we have a dual-purpose system based on two very different educational concepts. Historical perspective is helpful here.

In the Colonial period American education followed the European – particularly British – model, with education reserved for the elite: the hereditary gentry and the higher echelons of the merchant and military establishments.

Its purpose was not limited to instilling the knowledge needed by the sons of the ruling elite to be competent leaders. It was also teaching them the essence of the culture and social order, so as to assure national stability. This was done through study; shared discipline; and close acquaintance and friendship resulting from participation in common activities. The product was a networked group with a shared concept of national destiny and an implied duty to perpetuate the status quo.

Early American education was patterned on this model, which still lives within the circle loosely defined as the “Ivy League”. Eastern elite universities still perform the function of training the networked elite prominent in finance, law and government.

The other pole of our system could be defined as “mass education”, and is a typically American invention. Immigrants to the United States were well aware of the value of education – in their home countries accessible only to the privileged few. A different system was thus created by popular demand and local initiative, growing in stages reflecting national economic life.

The first phase was the village schoolhouse, providing the basic knowledge a farmer, shopkeeper or craftsman needed to attain prosperity. Such schools were unknown in Europe at the time.

The second phase, covering most of the 1800’s, was the creation of urban high schools, which catered to the needs of merchants and professionals. Funded by local tax levies or church donations, open to all, high schools and village schoolhouses made America the most literate nation in the world. General literacy allowed for the ubiquitous development of newspapers and pamphlets which fed our political life.

The following phase was the foundation of land-grant colleges. These “Agricultural and Mechanical” schools provided the mass of technical personnel – surveyors, pharmacists, veterinarians, engineers, attorneys – required by industrialization and Western settlement. “A&M’s” were the educational foundation of America’s rise to industrial power, spurring growth, innovation and the building of world-class corporations.

The last educational wave grew out of the unique advances generated by the WWII industrial build-up. In the war years our economy made huge strides in applied science, technology, management and productivity. A vast expansion of higher education – initially fueled by the G.I. Bill – was the foundation on which the post-war boom was built.

While our two educational concepts – elite and mass – tend in practice to blend into a continuous spectrum, they are different in concept and operation. “Elite” education looks at the present through the lens of the past, seeking to preserve an existing order. The “mass” system sees the present through the lens of the (perceived) future, to build is seen as the next wave. One is limited to a selected few. The other invites everybody in.

Historically the mass educational system has responded to demand born of economic advances. It works best when a future can be discerned. In a time of economic stagnation or decline it will be the first to suffer.

Such is its situation today. Our once stellar educational establishment is not failing because students are lazy, or teachers incompetent. It is declining primarily because we see no economic future. Excellence is being lost because there is no demand – no visible field to deploy talent and initiative, and thereby reward those who excel.

We should ask not why our schools are losing ground, but why we are, as a nation going backwards economically. The two are intimately linked. America educates best when the promise of the future is at hand.

11 Responses to “Education and an Economic Future for America are Linked Together”

  1. Joe Brooks says:

    Site admins, this will have more than one URL, please review:

    Since we had little success at the Federal level in the past election, I have changed my focus to local officials, while they are still somewhat accessible to citizens.

    Recently I was given the opportunity to examine the current US History book my school system uses. Communication trail:

    Hi ——

    Here are my responses to the entries in the US History book that need some clarification, as far as the actual historical practice of political economy in the United States.

    I have used only factual, verifiable and credible sources, that contain basically the information that I was taught here in the — school system over 40 years ago.

    I would like to meet the Superintendent and/or your history teacher again to discuss supplementing the history book with this information. I certainly feel that the students should be exposed to this pretty fundamental history.

    Analysis of —- US History book

    Page 291

    This statement that Alexander Hamilton favored a “strong” national government needs clarification, as any suggestion that this Founder, who wrote the majority of the Federalist Papers and created Hamiltonian Economics, was any type of totalitarian is ridiculous, at best. George Washington picked Hamilton to devise a government that would be functional. The first Constitutional Congress and Washington as the first US President, followed most of Hamilton’s plan, after the Articles of Confederation were abandoned as not “strong” enough to actually base a government on.

    Page 36

    The authors should also point out that the British were enforcing free trade on the colonies, while practicing major economic protections for their own benefit. These British policies resulted in the Boston Tea Party.

    Page 128

    This entry should mention that Henry Clay further advanced Hamiltonian Economics that he championed as the American System.

    Page 468

    This reference to the “global village” is opinion and should be qualified. There is no global village while 150 nations practice economic protectionism, while the US practices unilateral free trade.*

    Page 661

    This reference to British Empire Citizen Adam Smith’s 1776 book “Wealth of Nations,” written as the War of Independence was beginning and containing theories that were opposed by the vast majority of the Founder’s needs rebuttal by the American political and historical figures of the time, at minimum.

    Examples of Americans promoting the American System vs. free trade:

    The Report on Manufactures is the third report of American Founding Father and 1st U.S. Treasury Secretary Alexander Hamilton. It was presented to Congress on December 5, 1791 and recommended economic policies to stimulate the new republic’s economy and ensure the independence won with the conclusion of the Revolutionary War in 1783.

    Hamilton proposed a system of import tariffs, duties and grants to stimulate manufacturing, jobs, research and development and infrastructure to insure US independence and self reliance for necessary items; “particularly to the means of promoting such as will tend to render the United States, independent on foreign nations, for military and other essential manufactures.”

    The principal ideas of the “Report” would later be integrated into the “American System” form of national political economy by Senator Henry Clay of Kentucky and his Whig Party. Abraham Lincoln, who called himself a “Henry Clay tariff Whig” during his early years, would later make the principles outlined in the “Report” and furthered by Clay’s “American System” program cornerstones, together with opposition to the institution and expansion of slavery, of the fledgling Republican Party.

    Hamilton’s ideas formed the basis for the American School of economics. Under the American System the United States became the largest economy in the world with the highest standard of living by the 1880s.

    Henry Clay defended the American System on February 2, 1832:

    “Gentlemen deceive themselves.

    It is not free trade that they are recommending to our acceptance. It is, in effect, the British colonial system that we are invited to adopt; and, if their policy prevail, it will lead, substantially, to the recolonization of these States, under the commercial dominion of Great Britain.”

    Abraham Lincoln on the American System, bottom of page 416:

    “Believing that these propositions, and the [conclusions] I draw from them can not be successfully controverted, I, for the present, assume their correctness, and proceed to try to show, that the abandonment of the protective policy by the American Government, must result in the increase of both useless labour, and idleness; and so, in proportion, must produce want and ruin among our people.”;singlegenre=All;sort=occur;subview=detail;type=simple;view=fulltext;q1=fragments+of+a+tariff+discussion

    Henry C. Carey was Lincoln’s economist and the author of A Harmony of Interests. Within the book he confronts the free trade arguments of David Ricardo and Adam Smith:

    “Two systems are before the world;… One looks to increasing the necessity of commerce; the other to increasing the power to maintain it. One looks to underworking the Hindoo, and sinking the rest of the world to his level; the other to raising the standard of man throughout the world to our level. One looks to pauperism, ignorance, depopulation, and barbarism; the other to increasing wealth, comfort, intelligence, combination of action, and civilization. One looks towards universal war; the other towards universal peace. One is the English system; the other we may be proud to call the American system, for it is the only one ever devised the tendency of which was that of elevating while equalizing the condition of man throughout the world”;cc=moa;q1=American%20System;rgn=full%20text;idno=AJB8869.0001.001;didno=AJB8869.0001.001;view=image;seq=00000019

    Article 1 Section 8 of the Constitution says this:

    The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
    To borrow Money on the credit of the United States;
    To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; The Founder’s did not set up US Global free trade.

    Article I, Section 10 of our Federal Constitution prohibits the state governments, without the consent of the Federal Congress, from collecting Tariffs on goods imported into the states. Likewise, Article I, Section 9 prohibited the Federal Congress from assessing tariffs or taxes on goods exported from any state. This is why there are no tax/tariffs when buying from another state. The Founder’s set up a free trade zone within our borders, not international free trade, where it could be regulated by the States and Federal government for the benefit of US citizens.

    Also, by page 661 mistakenly suggesting that the policy of the US has always been British free trade; this passage opens up the discussion to the fact that the US practiced the American System from 1789 to 1970 with a few ups and downs and again under Reagan, he imposed up to 100% import tariffs on many imports.

    The US did not practice unilateral free trade until 1994, which has led to a near 10 Trillion Dollar trade deficit over the last 19 years contributing to all of the employment, manufacturing and tax revenue losses leading to Local, State and Federal related deficits. Prior to 1971 the US had a slight trade surplus.

    *The US government provides info for US manufacturing to export products. Nearly every other country in the world protects their industries and citizens from “free trade”, including the countries the US has free trade agreements with. The WTO [World Trade Organization] limits tariffs so these countries create the Value Added Tax on imports, add Border Duties or manipulate currency, etc. By these means, legal under the WTO, they [150 other nations] effectively replace their protective tariffs [40 to 300%] that WTO membership removed. Nearly all countries leave their tariffs in place, anyway. China has a 17% VAT, rebated to Made in China companies yearly. The US can leave the WTO at any time.

    *Here is the US tariff schedule for imports. Most tariffs are between 0 and 6% average 2.5%, extremely low, compared to 150 other countries 40 to 300%. Column 2 has reasonable tariffs for a sovereign nation, but only applies to Cuba and North Korea.
    The (A,AU,B,BH,CA,CL,E,IL,J,JO,MA,MX,OM,P,PE,SG) refers to “free trade” agreement countries, generally no tariffs at all. The US has no Value Added Tax.

    Further research:
    American School link:

    Modern treatments of the trade issue, there are many more:

    Ian Fletcher; Economist:

    Clyde Prestowitz, Reagan Administration Economist:

    Cut Trade Deficit, Create 6.5M Jobs
    Clyde Prestowitz discusses the trade deficit on Fox Business News. Watch

    Warren Buffett on the US trade deficit, made just before the crash:

  2. Joe Brooks says:

    From Alan, a near perfect analysis:

    Today was the last day of the Fifth Annual National Summit on Education Reform in Washington D.C. The event was sponsored by the Foundation for Excellence, and gave its’ chairman of the board, former Florida Governor Jeb Bush, an opportunity to tell the country how to fix education. As the former Governor of the state that ranks first in the nation in basing teacher performance on standardized test scores, recently adopted a policy of setting different standards for students of different ethnicity, and whose national rankings in education actually dropped last year after instituting broad “reforms,” Governor Bush isn’t exactly uniquely qualified to tell America how to fix its broken schools. But speak he did, and what sage advice did the former Governor have for America? That the teachers, particularly the Unions, are the problem, that those same teachers should be held even more accountable based on less than perfect test results, and that “digital learning”, code for so-called virtual charters or online schools, will become commonplace.

    Everyone can see that America’s schools are in trouble, and need improvement, but Governor Bush’s ideas are neither new, nor have they proven to be any more effective at teaching our children than traditional public education. Since President Bush, Governor Bush’s brother, signed No Child Left Behind into law in 2002, standardized testing-based school accountability has been required for all schools receiving federal funds. The ideas of choice and privatization, where parents choose what school their children attend, thereby deciding where public funds are allocated, has been around for decades, first in the form of private school vouchers, then charter schools, and now laws that allow parents to directly decide the fate of schools. But in all that time, many results show that education has actually gotten worse, largely as a consequence of bullied teachers literally teaching their students how to pass high-stakes state tests like the FCAT, while being forced to ignore actual education.

    Despite unconvincing results though, these ideas for education reform have captured the interest of many pundits, wealthy donors, and politicians on both sides of the aisle. While Republicans may have been first to lead the charge for choice and eventual privatization of our schools, the Democrats, at least the Party leadership, have recently jumped on the bandwagon. At the beginning of the school year, the Chicago Teacher’s Union went on strike to protest these very policies, including testing and accountability, being implemented by Mayor Rahm Emanuel, former Chief of Staff for President Obama, who was himself following the guidelines set by his former boss in the Race to the Top initiative, which gives states federal funds for adopting such reforms.

    In the midst of that strike, another influential Democrat, Chairman of the Democrats for Education Reform, and former education advisor to President Obama during the 2008 campaign, Kevin Chavous, gave a speech to a group of entrepreneurs in California. During that speech, Chavous said many of the same things as Governor Bush, highlighting teachers and teachers unions as obstacles to improving education while espousing the benefits of charter schools and choice in education. Chavous even compared choice in education to international trade, by comparing it to the American auto-industry’s experience with having to improve in the face of foreign competition. This analogy is actually pretty good. In the same way that foreign manufacturers are able to use unfair advantages like government subsidies and protected markets to undermine American industries and American workers, charter schools are able to look better than their public school counterparts by taking badly needed funds to educate hand-picked students who are intelligent, motivated and likely to succeed just about anywhere, while leaving public schools to educate everyone else. The fact that most charter schools still don’t have better results than nearby public schools, despite their advantages, should in fact be a red-flag for anybody pushing for their expansion.

    American schools are in trouble. But the problems aren’t anything that can be solved by gimmicks and free markets. Most results show that upper and middle income schools perform on par with students around the world. The biggest problems in American education are the differences among income groups and racial groups, issues that aren’t even addressed by these so-called reforms. These reforms won’t make communities stable, or parents who are to put food on the table or help with homework. Better teachers, while nice, cannot fix those problems either, no matter how much you threaten to fire them, cut their pay, or close their schools. There are things government can do to fix these issues. For starters, our government can adopt trade policies that reduce income inequality by bringing back American jobs that don’t require a college degree but that can still support a family. For decades, America’s industrial economy gave children the opportunity to go to good schools while not having to worry about where their next meal was coming from, despite their parents’ background. It can again; with a much better chance to have a positive effect on schools then the “reforms” being currently being advanced.

  3. Joe Brooks says:

    This review is from: The Death and Life of the Great American School System: How Testing and Choice Are Undermining Education (Hardcover)

    No silver bullets. This is the simple premise of Diane Ravitch’s new book, “The Death and Life of the Great American School System,” which is being brought out this week by Basic Books. Written by one of our nation’s most respected scholars, it has been eagerly awaited. But it has also been, at least in some quarters, anticipated with a certain foreboding, because it was likely to debunk much of the conventional — and some not so conventional — wisdom surrounding education reform. This is a fabulous book that may well become the most widely read volume on education reform in memory.

    Much of the publicity and controversy over the book has to do with changes in public policy positions Dr. Ravitch has taken recently – away from choice and testing. And while she has evolved in her thinking, to my mind she has been remarkably consistent. As she always has, Dr. Ravitch believes in high standards, a rigorous curriculum, treating teachers with respect and never straying from the truth – which is why she has become critical of testing programs that have fostered a culture of lies and exaggeration. And she backs up her positions – old and new – with convincing data and perceptive analysis.

    “The Death and Life of the Great American School System” is a passionate defense of our nation’s public schools, a national treasure that Dr. Ravitch believes is “intimately connected to our concepts of citizenship and democracy and to the promise of American life.” She issues a warning against handing over educational policy decisions to private interests, and criticizes misguided government policies that have done more harm than good.

    Ideas such as choice, utilizing a “business model” structure, accountability based on standardized tests and others, some favored by the left, others by the right are deemed as less, often much less, than advertised. Dr. Ravitch doesn’t oppose charters, but rather feels that the structure itself doesn’t mandate success. As in conventional schools, there will be good ones and bad ones. But charters must not be allowed to cream off the best students, or avoid taking the most troubled, as has been alleged here in New York City.

    Her main point, however, is broader. “It is worth reflecting on the wisdom of allowing educational policy to be directed, or one might say, captured by private foundations,” Dr. Ravitch notes. She suggests that there is “something fundamentally antidemocratic about relinquishing control of the public educational policy to private foundations run by society’s wealthiest people.” However well intended the effort, the results, in her telling, have not been impressive, in some cases doing more harm than good.

    These foundations are beyond the reach of the voters’ will, and they themselves, “are accountable to no one,” Dr. Ravitch writes. “If their plans fail, no sanctions are levied against them. They are bastions of unaccountable power.” Dr. Ravitch questions why we’re allowing the relatively small financial contributions made by the foundations, dwarfed by the hundreds of billions America spends on public education, to leverage the entire investment? And she asks who, when there is no accountability, will take the fall if things go horribly wrong?

  4. Will Wilkin says:

    Education is part of larger society, we need to look at what kinds of aspirations and values are being encouraged in youth, not just at school but in the culture. Education should be in partnership with surrounding enterprises. But that takes us to the mass (vocational) vs. elite (liberal arts and sciences) divide in education described in the article. The country would be a true wasteland without good history books and symphonies too.

  5. Harry Moser says:

    The article says there is “no demand.” for educated workers. We have 2 huge supply imbalances. First, far too many 4 year liberal arts graduates. 40% of all workers with university degrees are in jobs that do not require a university degree. Second, far too few trained technical professionals: tool and die makers, precision machinists, etc. Many jobs are unfilled because we do not have the trained workforce.

    • Bruce Bishop says:

      Mr. Moser,

      Where are these job openings for “tool and die makers?” It is very easy for companies to claim that there is a “shortage” of skilled workers. This gives them an excuse for offshoring jobs.

      It is also very difficult to prove that these shortages do not exist. If companies are really trying to hire “tool and die makers,” there would be ads in the newspapers and on the job boards.

      As to: “Many jobs are unfilled because we do not have the trained workforce.” How does that work? Overtime? Does the company turn away business? Do the managers run the machines at night?

      Typically, large manufacturers are surrounded by small “Tool and Die” shops that bid on new tooling and help maintain the existing tooling. Where are these large manufacturers who are supporting these small “Tool and Die” shops? Are they farming their “Tool and Die” work out to China?

      What happened to all of the “Tool and Die Makers” who were let go when 5 million manufacturing jobs were offshored to China?

      • Tom T. says:

        Bruce, my dad was plant manager of a 4 Houston city block rubber/plastics firm but one of his best friends at the plant was a tool and die guy. The article does point to some truths here. We have discounted the value of manufacturing because of our trade policy. Incentives to be a tool and die guy should have kept those jobs in the U.S. as you rightly point out. We have allowed our manufacturing base to be hollowed out, if you will, and we have empty demands from businesses that claim they can not find the right workers. Maybe the supply/demand equation for tool and die workers and many like them is maladjusted because of the policy decisions from our politicians.

        A real demand for labor will increase their wages, not a continual capitulation to business to get cheaper labor so they can make a “decent” profit”.

        We have allowed our politicians, both conservative (Bush) and liberal (Clinton) to royally mess up our economy and the wages people make according to the delicate balance of supply and demand in our economy. Clinton started it, Bush continued. It decreased the ability of our economy to function judged by sustainable growth.

        Tom T.

  6. Tom T. says:

    I think this article hit the nail on the head, in spite of my close association with OCM (Organization for Competitive Markets). I also have to say that my wife is a high school math teacher with a masters degree working on her doctorate and I have two kids in college– one at the University of the South in Sewanee and the other at University of TN. My third child is just 12 but is expected to go to college.

    What this article implies is that more education being thrown about as a panacea for our economy is simply incorrect. If everyone were college educated (and a good one at that), it would not solve our economic problems of low employment. It is a red herring for failed policies that have put us in the current economy. My wife will be the first to tell you that not everyone is or should be college bound, even if everyone we could accomplish that. Our economy still needs to have jobs to employ those without a propensity for higher education. That is one of the main insights from the education field. Our state does have technical schools for those who are not suited for “higher education” but hopefully, if we retain our manufacturing, might still be a way to earn a good living.

    What we need more than ever is education on how the policy mistakes of our current and past policy makers have given us the present economy. I think everyone on this group is working towards that goal in the subject of trade and manufacturing. Furthermore, when I talk to people, whether they have higher education or not, they know that this is one of the the problems, not a “poor” educational system. They just don’t know how to change it. Politicians get elected more on appearance than substance. We rarely hold them accountable when they make policy mistakes– or the correlation between their mistakes and being voted into office is muddied by other issues that dominate political discussion.

    By the way, my daughter at the University of the South is in one of the “elite” schools without the benefit of being from one of the family elites and doing quite well (she has 3 or 4 jobs, is news editor for their newspaper and has a full academic load majoring in Philosophy and English). She totally out preforms many of those from elite families, in part, because her mother and I value education (although her majors are still debated). She wants to attend summer school at Oxford but that part of her “elite” education may just be too far from our meager means at the moment.

    Tom T.

  7. Joe Brooks says:

    Tom T, on a purely personal note one of our children graduated from a very well respected school, earning a scholarship to study English Literature in Ireland for a summer session, almost 10 years sgo. Very similar disciplines as your child.

    I lobbied hard for another major in an alternate field, that would result in gainful employment. Did not happen and neither has a reasonable paying job. But, your child may want to teach?

    • Tom T. says:

      I think she wants to stay in journalism. The economic model for that industry is a bit shaky but what industry is not at this time except perhaps working for the goals of the plutocrats and elites much of the time against the public good. Journalism exposes that when it is done well so that people can be aware of the abuses. The recent 3 part article in the New York Times on corporate “incentives”/welfare is a good example.

      An interesting point in that series (print and interviews) showed, for example, that Texas has a reported 19 billion dollars in incentives per year, with a budget shortfall expected to be around 27 billion on a biennial rate.

      I don’t think she wants to teach although she does a lot of tutoring now. She is just a sophomore.

      Tom T.

  8. Joe Brooks says:

    Cool, it sounds like you are being “proactive” in the plan for gainful employment. I wish you and and yours all success.

    Speaking of journalism, which I would love to see someone who has been influenced by you enter, my efforts at the local school system may be helping others speak up, here is a junior in High School on this subject. This young person is dead on and Will can appreciate this, too.


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