Wednesday, March 30, 2011

Ignorant Yet Richer?


Recently, Newsweek ran a story entitled “How Ignorant Are Americans”. The article discusses how Newsweek gave over 1,000 people a quiz and found that 38% failed (or 62% passed). So what questions were asked? Questions like reasons why the Cold War was fought, defining the Bill of Rights, and other civics questions. I am all for educated people but is this really the right kind of education?

My larger point comes from Dr. Bryan Caplan making the case against education. Do employers value civic knowledge? The only people that would really need this knowledge are perhaps people that teach civics, historians, and maybe people in government. Other than that what job would require this knowledge? Also given that that brain is only so large and if we could store skills that were useful storing this type of knowledge may be harmful since hardly anyone values it. I think people have the following thought process… “If you don’t know history, you don’t have knowledge, which means you won’t be able to add value”. Again technical knowledge is much more important than general knowledge since that is what employers are paying for. Someone could have make the argument even 20 years ago that knowing storing information was important but that argument today is very weak with the internet.

My main point however is that we really can’t be that dumb since GDP per capita has been growing since 1969 (in 2005 dollars). GDP per capita in 2010 is double what it was 1969! This means individuals in America are becoming more valuable. The bigger issue is that general education isn’t important what is important is the right kind of education that employers and the market values.

Source: ERS International Macroeconomic Data Set (Dr. Matthew Shane)

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