Education and Productivity Go Hand in Hand

Once the acute phases of the financial and euro crises were over, it was clear that it would take time for advanced economies to recover. The history of past financial crises gave a clear warning that recovery would typically be long and painful.

Source: Slow growth is a fact of life in the post-crisis world – FT.com

I commented as follows.

“Let’s suppose for argument’s sake that, except for a very few schools, higher education in the U.S. is a not only a sham, but is also quite destructive of K-12 education.   (See my blog inside-higher-ed for the details of how this works.)

What is the effect on productivity?

I’m not an economist, so I have no ability to model this scenario; but, after decades as a professor, I know that what I assumed “for argument’s sake” is sadly true.  Also, as a reader, I know that, in his book “Capital”, Prof. Piketty states over and over that the dissemination of knowledge is critical to growth.  I don’t think he meant just dissemination to the “best and brightest” but to all of those who help the “best and brightest” with their work.

If I’m correct, we have not only misallocated resources to buildings, egos, construction companies, politicians, investment managers, and so on, but, we have embedded a vicious cycle of lower productivity into our economic system.”