“Human Capital” Is Not the Answer to Inequality

In the neoliberal era, Democrats adopted an elitist approach that emphasized education as the key to individual success. Only the revival of an inclusive social democratic politics can reverse economic inequality and defeat reactionary populism.

We can't educate our way out of economic inequality. (Getty Images)

Education is one of the few common experiences that truly binds Americans together. Virtually everyone today has spent at least some time in an institution of education, and many of us for a long part of our lives: almost 90 percent of young people who attend high school now graduate, and about half of Americans aged twenty-five to twenty-nine have at least an associate degree. Most of us spend a lot of time in the education system, and by choice or by necessity, we see the value of it.

But why do we value education and what do we hope to get out of it? Because our institutions change so slowly — one’s experience in, say, elementary school, is not that different than that of one’s children’s — public education can seem to have a timeless quality, as if we have always valued it for the same reasons. But the reasons American politicians, policymakers, intellectuals, and working people have advocated for more investment in public education has changed dramatically over time.

In the nation’s first century, republican-minded leaders like Thomas Jefferson sought public education to help develop political independence. Though their vision was far from universal, they nonetheless expanded the circle of democracy, and they viewed education as providing the training to help do that. Social reformers like Horace Mann sought investment in education to cultivate dispositions to help working people navigate the rising inequality brought on by market capitalism, but public education as job training was mostly an afterthought. Republicans like Abraham Lincoln supported investment in colleges and universities to provide both “liberal and practical” education, and union activists such as Margaret Haley in the Progressive Era saw public education as teaching students to build industrial democracy.

Though more working people did begin to view public education in terms of economic opportunity, the boldest and most dramatic efforts to expand social democracy in the first half of the twentieth century, such as social security, strong collective bargaining rights, and minimum wage laws had little to do with public education. While New Deal social democracy never fulfilled its promise of fundamentally guaranteeing universal economic security by establishing the right to a job, it nonetheless left in place high expectations for the postwar nation.

Investment in higher education after World War II (through the GI Bill and state support for public education) began to emphasize individual economic opportunity, particularly as the more complex American Cold War economy required more professional labor. But even so, developing citizenship, as evidenced by the Truman Commission recommendations in 1949 and state missions like that of the University of Wisconsin System in 1971, continued to be a twin goal of higher education.

By the 1960s, however, the economists Theodore Schultz and Gary Becker were at the forefront of an intellectual argument emphasizing the importance of investing in human capital. Neither was wrong to assert the importance of improving worker capabilities in American economic growth. Their arguments, however, elevated a call for investing in education at the expense of the other social democratic interventions that had put the United States on a path to greater economic security, even if that security was premised on a breadwinner model that saw women as ancillary partners and excluded many minorities.

The Johnson administration, in the last great reform effort of the twentieth century, sought to rectify past racial injustices and went to war on poverty, but its main weapon in the fight was human capital instead of the broader changes, represented by A. Philip Randolph and Bayard Rustin’s Freedom Budget, that could have taken meaningful steps toward fulfilling the promise of New Deal social democracy.

From there, the seeds of the education myth grew into a fast-growing and ubiquitous weed that increasingly choked off the promise of any broad social democratic possibilities in the future. In the 1970s, there were reform proposals in the political mainstream with broad social backing that could have changed this trajectory. The best example of this effort was the version of Humphrey-Hawkins that would have finally guaranteed the right to a job, thereby giving the United States its best chance of moving toward a true multiracial democracy.

Instead, a new generation of Democrats, led by Jimmy Carter, elevated public education in the federal bureaucracy while withholding support from broader social democratic reforms. This generation of officeholders, seeing themselves as representing the growing number of professional-class college graduates, increasingly imagined the nation as a meritocracy in which not everyone deserved to do well.

By the 1980s, the education myth was prominently advocated by Republicans, too, as even Ronald Reagan’s Education Department advanced the specious argument that the decline of economic security for American workers stemmed from the supposed decline of public education. Major political figures in both parties — including both George Bushes and Bill Clinton — built entire campaigns around the importance of investing in public education so that America’s future workers could compete in a global marketplace.

Crucially, the agenda of both parties also made that competition more cutthroat by negotiating trade deals that empowered American manufacturers to seek cheaper nonunion labor elsewhere. In contrast to earlier proponents of human capital investment, however, these politicians also sought to make teachers and schools more “accountable” for the supposed failure of their students to overcome the poverty and lack of economic options in an increasingly unequal nation.

Intellectuals such as Robert Reich and Richard Florida fancifully pushed to create as many symbolic-analyst or creative-class lifeboats as possible, but by 2008, the economic crash showed in stark relief that investing in human capital was failing to make most Americans, even many college graduates, more economically secure. In the election of 2008, Barack Obama mobilized a coalition built on the premise of improving the lives of professional-class, service-sector, and manufacturing workers, but broad social democratic interventions, if he ever intended to support them, lost out to efforts to mollify finance capital, more bromides about the importance of education, and market-based reform.

Right-wing populists, building on the protean efforts of Reagan, Patrick Buchanan, and Ross Perot, seized the opportunity to exploit anger caused by economic insecurity, the loss of social esteem for many Americans outside the professional class, and the false notions of meritocracy. Though Donald Trump perfected this strategy in 2016, he built on the groundwork laid by reactionary populists like Wisconsin governor Scott Walker who came to power in 2010. On the Left, for the first time in decades, serious social democratic demands moved once again into the political mainstream through insurgent teacher unions and once-marginal politicians like Bernie Sanders.

So, the way we think about public education is once again changing. Though the process is slow, I am hopeful the education myth is falling. Most Americans — even those who have voted for reactionary populists like Walker or Trump — continue to view education as important. But whether it is as simple as trade policy to prioritize American nonprofessional-class jobs, or as transformative as the notion of a federal jobs guarantee, the growing prominence of other political ideas shows that fewer politicians, across the political spectrum, view education as able, as if by magic, to ensure broad economic opportunity. Further, savvy politicians in both parties seem to be recognizing the perniciousness of taking for granted non-college-educated voters.

If we can fully dismantle the education myth, the bigger question moving forward is what will replace it at the center of our politics? Will we transcend it by ensuring the broad economic security, social respect, and civic capability all working Americans deserve? The future of our democracy hinges on this question, and the answer is very much uncertain.

One direction is false concern for those damaged by the myth while advancing reactionary policies and corporate power. Assuming the presidency in January 2017, for example, Trump acted symbolically in the interests of Americans left out of the supposed creative class, but he largely neglected them in favor of the corporate right. The single most consequential policy of his term was the Tax Cuts and Jobs Act of 2017, which, while minimally reducing taxes for many working Americans, dramatically slashed the top rates for wealthy Americans and corporations. For those Americans left out of the knowledge economy, the tax cut did little to help them.

Trump also deeply diminished the civic and democratic capabilities of Americans in an astoundingly short amount of time. Trump’s repeated fabrications about voter fraud falsely cast doubt on the very integrity of American democracy and culminated in the stunning effort by some of his supporters on January 6, 2021, to stage a coup and overturn the results of the 2020 presidential election.

In contrast to reactionary populism, the other alternative is a robust social democracy that finally includes all American working people across the lines of race, gender identity, sexuality, and immigration status.

Sanders’s defeat in 2016 to a candidate who then lost to Trump only emboldened the reemergence of social democracy on the Left. Massive teacher uprisings occurred in surprising places in 2018: first in West Virginia, then Kentucky, Oklahoma, Arizona, and North Carolina. Many of these activists, in West Virginia and Arizona, especially, had been inspired by the Sanders campaign. Insurgent social democratic candidates Alexandria Ocasio-Cortez, Ayanna Pressley, Rashida Tlaib, and Ilhan Omar also won seats in Congress after campaigning on ideas such as eliminating student debt and have since supported visionary ideas such as the Green New Deal and a federal jobs guarantee.

In 2019, more insurgent teacher unions followed the model of the Chicago Teachers Union (CTU) and pushed for broad social democratic changes such as more social workers and mental health services for students and caps on charter schools in attention-grabbing strikes in Los Angeles and elsewhere. The CTU upped the stakes even further in fall 2019, striking again for a social worker and a nurse in every school, reducing class size, protections for undocumented students, and resources for homeless students. Like teachers in LA, the CTU also fought, largely unsuccessfully, to force the city to provide affordable housing.

Though Sanders ultimately lost, his huge margins among young Democratic voters spoke to a growing resistance to the education myth among young people shut out of an economy marked by ever greater inequality.

The Biden administration has moved beyond the assumptions of the education myth in some important ways, prioritizing infrastructure for its significance in creating jobs and expanding child tax credits to include cash payments that will reduce poverty, for example. Still, broad, transformative social democratic changes — a jobs guarantee, labor reform, universal childcare — have remained off the agenda.

There do seem to be a growing number of Democrats who understand a broader social democratic promise has to be at the center of any long-term political movement capable of defeating Trumpism. The future of democracy in the United States depends on the success of this path, and it is a narrow one. If Democrats (or anyone else, for that matter) are going to prevent an ever more mendacious version of reactionary populism in the future, how they approach the connection between education and economic security is vital.

No longer can we privilege those with college degrees. We must ensure that our politics centers life, liberty, and the pursuit of happiness for everyone through an empowering vision of economic and social rights, including the right to a job, high-quality healthcare, good housing, a livable environment, and yes, an education. Whoever can do that can realign American politics for a long time, and for the better.