ECONOMICS OF EDUCATION: What is the evolution of thought on economics of education?

CHAPTER TWO

THEORY OF HUMAN CAPITAL

2 a i). Analyze the evolution of thought on economics of education.

Evolution of thought on economics of education

Thinkers from time immemorial to the present day have shown concern with the economic role education plays in society. The following is a summary of the reviews that have historically evolved in course of time on education as consumption and or investment items.

  • Early Greek and Roman Philosophers

Pioneering Greek philosophers such as Socrates and Plato saw education as an instrument to be utilized in shaping the youth to be useful citizens who would serve the state. They saw knowledge acquisition as a pleasurable pursuit to be enjoyed as an end in itself in clear contrast to using it to help members of the society to be capable of producing desired goods and services.

 

  • Adam Smith (1776)

He is regarded as the father of modern Economics a discipline and saw the role of education as that of creating morally upright citizens who would contribute to good governance and I social-economic development of the economy.

 

  • David Ricardo and Robert Malthus

Writing early in 20th Century David Ricardo and Robert Malthus drew attention to the relationship between economic well being of the masses, population, size and education. They saw education as a means of developing attitudes and habits conducive to population control and maintenance of civil liberty.

 

  • John Stuart Mill

John Stuart Mill was utilitarian and he advocated for the provision of education of all so that th could make maximum use of their total environment including their abilities of doing useful work. He was opposed to treatment of human beings as purely capital goods that should be used in production.

 

  • Alfred Marshall

Alfred Marshall at the end of the 19 century emphasized the profit motives of parents in the providing education for their children. He therefore advocated for a partnership of the government and parents in the provision of education. He also called for a technically oriented education which meets the demands of the labour force resulting in the creation of wealth and promotion of social harmony, social peace, and self improvement.

 

  • Von Thunen

He was an ardent advocate of human capital theory and saw schooling obtained through an educational system as helping citizens to create more national wealth. He supported the costing of the value of man just like other productive goods and stressed that such costing ought to be seen beyond the concept of slavery. He saw education as critical in the creation of more national wealth.

 

  • Karl Marx

Karl Marx, writing in the latter half of the 19 century supported education for workers which would increase their skills. He envisaged education as acting as a counterbalance to the tendency of capitalist development which erodes the workers’ security and helps in anticipating the wastage of the workforce and any potential discontent.

  • Theodore Schultz

He is regarded as the father of economics of education as a distinct academic discipline. In 1960, t.W. Schultz argued that the development of human beings (through education, health, etc) should be considered as a process of investment in human capital to be used in production in the same manner as physical capital is regarded. He considered expenditure on education and health which have the effect of cultivating and maintaining a viable workforce as constituting investment rather than consumption expenditure on human capital. He computed the human capital (% contribution of education to economic growth for the USA between 1930 and 1960).

 

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