Showing papers by "Theodore W. Schultz published in 1968"

Institutions and the Rising Economic Value of Man

Abstract: I TAKE it to be true that there is a strong connection between the investment in human capital and the secular rise in the economic value of man. The institutional implications of this development are, however, far from clear. My purpose is to show that the rise in the economic value of human agents makes new demands on institutions, that some political and legal institutions are especially subject to these demands, that there are lags in adjusting to the new demands and these lags are the key to important public problems, and that economic theory is a necessary analytical tool in clarifying and solving these problems. It might be said that human capital is protesting the status quo of institutions as it seeks participation rights for itself. Be that as it may, there is enough historical perspective to see that the ownership of land is declining as a source of economic leverage, and so is the ownership of physical capital relative to that of human capital. We have long known that Ricardian rent is not the fulcrum of economic values; nor is physical capital the critical historical factor, as Marx believed. The institutions governing private rights in land and in other forms of physical capital when Ricardo and Marx made their contributions would be far from adequate in contemporary society with its large investment in human capital. Would that economics could have been blessed by the marriage of Irving Fisher's allinclusive concept of capital [4] and John R. Commons' legal foundations of that capital [3]. It is currently a mark of sophistication in presenting economic models not to mention institutions. But for all that, it is a significant trait of contemporary economics that, despite this omission, it manages somehow to find support for institutional changes. It is a neat trick, but it cannot hide the fact that, in thinking about institutions, the analytical cupboard is bare. There are a few old boxes on the back shelf labeled "institutional economics" which have been pushed aside and which have long been

Resources for Higher Education: An Economist's View

Abstract: It would be convenient, in good grace, and not too difficult to make a strong case for more funds for higher education. Such a case could be made convincing by simply projecting the recent high rate of increase in higher education, with student enrolment and the cost per student continuing to rise, by proclaiming that soon virtually every high school graduate will require some higher education. This would set the stage for universal higher education with the implication that it should become more nearly free to students and would stress the necessity of supporting more quantity and more quality everywhere. Thus, it would seem that there are reasons aplenty for more federal funds, preferably without public control, and for a public package that would finance everybody. But I would serve you badly by making such a case. The problems here that await solution cannot be treated in so convenient a manner. Even the preliminary task of identifying the problems that matter is a major undertaking. I am attracted to Professor Shackle's (1966) distinction between poetry as a search for beauty and policy as a search for solutions to problems. Our search is for solutions to the problem of financing higher education. Raising money falls on the President, whereas the task of finding beauty is left to students. While bards with beards protest, poets command a low price. University administrators who are successful financiers are scarce and dear. Although poetry is an art, not all of financing is problem solving; for it seems to be true that it has many of the earmarks of an art, subject to convention and tradition, as is the art of the poet in his use of words. It