Is education the future?
Economists of all stripes have trumpeted education as a key to improving economic outcomes. Whether it’s literacy, math skills, or technical knowledge, our society has become so technological, they state, that an extensive education is necessary to take advantage of our productive potential.
But this is nothing new. Education has been considered a critical element of any state since Plato wrote The Republic 2400 years ago. In fact, Plato expected that a complete course of education would take about 40 years! It doesn’t look like we’ve gone that far. And Plato noted that the main goal of education was moral, not technical. Nonetheless it is striking that the philosopher noted how a well-rounded education is a key components of a just society.
Fast forward to the Middle East in the late 20th century. Countries across the region invested in educational institutions, calculating that a stream of remittances from skilled expatriates could lift their economies without necessitating the economic “shock therapy” of rapid liberalization. Unfortunately, immigration policies in Europe and the US failed to admit many of these highly skilled graduates. The resultant below-potential earnings of many of these engineers-turned-fruit-vendors contributed to the “Arab Spring” of demonstration, revolt, and regime change, particularly in Tunisia, Egypt, and Yemen.
William Blake wrote that “the modest rose puts forth a thorn.” Education lifts the economic potential of any society. But if the economy fails to utilize these resources, political unrest could be a thorny issue.
Douglas R. Tengdin, CFA
Chief Investment Officer
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