[Human capital theory cannot solve our economic woes. It’s time
to tell the truth of how we got here and how we can move forward.
Replacing human capital theory with a socialist theory of education
and collective intelligence would be a good start.]
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REBUILDING COLLECTIVE INTELLIGENCE  
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David Ridley
July 24, 2022
Red Pepper
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_ Human capital theory cannot solve our economic woes. It’s time to
tell the truth of how we got here and how we can move forward.
Replacing human capital theory with a socialist theory of education
and collective intelligence would be a good start. _

, Photo credit: Nchssg’15

 

Economists, think tanks and journalists have spent billions of words
trying to convince everyone that economic growth comes primarily from
technological ‘disruption’ and investment by individuals in their
own education and training, rather than from exploitation, imperialism
and financial speculation.

This belief, a key tenet of neoliberalism, continues to shape
education policy in England. The Tories hope that by turning education
into a market, young people will begin to think of themselves as
education consumers, making savvy choices about what degrees will get
them the best paid jobs in the future. Meanwhile, universities will
supposedly ‘incubate’ new technologies, create the UK’s own
Google, Apple or Facebook and kickstart the ailing British economy.

The problem, however, is that students aren’t making the right
choices. They are studying ‘economically useless’ arts and
humanities subjects and dragging the graduate job market in the
process. By crunching university outcomes with graduate employment,
benefits and earnings data, the government can now tell prospective
students roughly the ‘graduate premium’ they can expect from
different subjects. In the 2018/19 ‘experimental’ version of
the Longitudinal Education Outcomes dataset
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for example, medicine and dentistry was shown to deliver salaries of
around £45,000 to £50,000, compared to only £10,000 for the least
fortunate creative arts and design graduates.

Too many graduates

In general, the government thinks that there are too many graduates.
According to the recent Augar Review
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post-18 education and funding, ‘although there is no consensus on
how to measure oversupply, most studies consider the number of English
graduates in “non-graduate employment” to be between 30 and 50 per
cent.’ This is pushing down the average ‘graduate premium’, and
forcing non-graduates out of what decent jobs remain, and into the
lowest paid and most insecure work

Meanwhile, the tech firms driving the ‘fourth industrial
revolution’ are riddled with skills shortages, they claim. What
explains this apparent paradox? Well, the evidence is not very clear
or convincing. But let’s just say that again, it’s too many
university students not studying ‘practical’ subjects that will
plug these gaps and provide better outcomes for both these individuals
and the wider economy.

This view of education – which is a modified, individualised form of
neoliberal ‘human capital theory’ – frames all of the tertiary
education policies we are now seeing from the government. Reduced
tuition fees? Sounds like a great idea. But actually, this hides a
massive cut to arts and humanities funding, because the shortfall in
money going to universities will only be made up for ‘economically
useful’ subjects. Investment in technical education? Excellent, much
needed. But behind this is a frightening authoritarianism in which
colleges will be forced to work with businesses on local skills plans,
or face state intervention, including the transfer of assets to
another provider
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On the one hand, this is all smoke and mirrors. The real Tory agenda
is to privatise, marketise and financialise the English education
system. Scotland, Wales and Northern Ireland are in charge of their
own education systems, and have to a greater or lesser extent, turned
their backs on the English market model. Failing schools, colleges and
universities are ok, because they can be merged to create UK
multinational education corporations, or bought out by for-profit
players lurking in the background, or private equity looking to flip
the sector for a quick buck.

Productivity problems

On the other hand, there is a genuine issue with productivity. Former
Bank of England chief economist Andrew Haldane is one of many who
have highlighted that
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the 2008 financial crisis productivity in the UK has ‘essentially
flat-lined’. UK productivity was running almost 20 per cent below
that of a decade before, he reported, and was about a third behind
that in the US, Germany and France. Furthermore, inflation-adjusted
pay has stood still since the crisis, he added, something also
‘almost unprecedented in the modern era’.

This productivity problem continues to baffle neoliberals. But for
Marxist economists, it’s far from puzzling. Paul Baran and Paul
Sweezy, argued that such stagnation is the norm in ‘monopoly
capitalism’. Without government investment in welfare or war, the
system always returns to this sluggish normal. Building on their work,
John Bellamy Foster and Harry Magdoff explain that the deregulation
and rapid growth of the global finance over the last forty years was
essentially a stimulus, albeit one that redistributed wealth to the
already rich and increased inequality in the long-term. So, when this
bubble finally burst a decade ago, we found ourselves back in the same
place.

The issue with financialisation is that it encourages short-termism
and prioritises shareholder returns, directing investment away from
the real economy. Combined with deindustrialisation, the deregulation
of the country’s job market in favour of ‘flexibility’ and the
erosion of trade union power, there is no countervailing force to make
sure that a significant proportion of profits are also redirected into
people and communities.

Here we reach the truth of human capital. Investment in people, places
and planet produces the need for education, not the other way around.
A Green New Deal, for example, would create millions of new, green,
good jobs that would in turn require education. This would create a
new social purpose or tertiary education, and hope for the millions of
people thrown out of work by Covid-19 and stuck in ‘bullshit’ jobs
because of the 2008 financial crisis.

A socialist Green New Deal would make sure that the investment
ploughed into the green economy would be redistributed fairly and led
by the people and communities that have been left behind by
financialised capitalism. It would place an integrated, free and
lifelong education system at the centre of this ‘just transition’
that would probably look a lot like Labour’s National Education
Service idea. Such an education system would coordinate tertiary
education and training with real, social needs based on local
knowledge and the experience of empowered and respected education
professionals.

It’s time to tell the truth of how we got here and how we can move
forward. Replacing human capital theory with a socialist theory of
education and collective intelligence would be a good start.

_DAVID RIDLEY IS AN INDEPENDENT RESEARCHER, JOURNALIST AND ACTIVIST._

_Red Pepper is a quarterly magazine and website of left politics and
culture. We’re a socialist publication drawing on feminist, green
and anti-racist politics. We seek to be a space for debate on the
left, a resource for movements for social justice, and a home for
open-minded anti-capitalists._

_We’re a non-profit magazine and we operate on a shoestring. We
think the left needs publications which are non-sectarian yet unafraid
to take a stand, radical yet non-dogmatic, and thoughtful yet
orientated on real-world activism. If you think so too, please
consider becoming a subscriber._

_Subscribe to Red Pepper – you choose how much to pay.
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* Green New Deal
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* Education
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* Financialization
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* Neoliberalism
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