U.S. Decline in the Context of Formal Education and In Situ Learning

Abstract

A substantial literature links the level of formal education to the level or rate of growth of national income. For some observers, education as a path to development is so straightforward as to elicit the question Why Isn't the Whole World Developed? (Easterlin 1981). But formal education accounts for only part of the process of the acquisition and dispersion of economically relevant knowledge and skills, and ecorfomic growth is not co-extensive with economic development. In leading nations such as the contemporary United States, the working population gains a whole set of implicit or in situ advantages simply as a result of growing up, living, and working in a leading economy. These in situ advantages partially compensate for the low ranking of the United States in current international comparisons of scholastic achievement. As a result, the relative decline of great economic powers such as the United States might be slower than expected purely on the basis of their failures in the maintenance or development of explicit or formal forms of education vis-a-vis rivals. On the other hand, the evaporation of some of the invisible residual strengths of the U.S. human capital stock from in situ knowledge is likely to be more rapid than heretofore for several reasons, including changes in the global competitive environment and the widespread presence of foreign direct investment (FDI). The next section considers education and economic development in a social context, and is followed by an outline of U.S. failures in education. The in situ advantages likely to mitigate any U.S. economic decline as a result of its weaknesses in formal education are described in the fourth section, but in the section entitled Current Tendencies Weakening In Situ Advantages it is argued that these very advantages are being dissipated more rapidly than in earlier periods. A set of concluding remarks follows.