The Schooling Industry as a Possibly Pathological Section of the American Economy

Abstract

The industry may be described as the segment of an economy that maintains the institutions of formal education-kindergartens, schools, colleges, universities, and so on. One should really include private schools, technical schools, occupational schools and perhaps, a little more doubtfully, training programs in industry, especially where these have independent organizations. As a segment of the American economy, the industry now represents between 6% and 7% of the total, having risen from somewhat under 3% in the last thirty years. It is now a larger segment of the American economy than agriculture, and there are good reasons for supposing that it will continue to grow at least until the end of the century. Like the war industry, which is the segment of the economy that produces what is purchased with the military budget, the industry is supported mainly through public or private grants (that is, one-way transfer payments) rather than by the sale of services in an open market. The war industry, incidentally, at 8% is not much larger than the industry. I have used the term schooling rather than deliberately; schooling is what is done in schools and other places of formal education, whereas is a much larger phenomenon that includes all human learning. The education industry would include not only but also a great deal of child rearing, travel, books, newspapers, television, radio, public speeches, meetings, churches, indeed, all situations in human life where some kind of change is effected in the cognitive structure of the human nervous system. Machlup (1962) has devised an even larger concept that he calls the knowledge industry; this includes not only all forms of human learning, but also entertainment and any situation where some kind of communication passes from one human being to another. Machlup in