The New York Times <http://www.nytimes.com/>
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November 13, 2005
Op-Ed Columnist

Psst! 'Human Capital'

By DAVID BROOKS
<http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/davidbrooks/index.html?inline=nyt-per>

Help! I'm turning into the "plastics" guy from "The Graduate." I'm
pulling people aside at parties and whispering that if they want to
understand the future, it's just two words: "Human Capital."

If we want to keep up with the Chinese and the Indians, we've got to
develop our Human Capital. If we want to remain a just, fluid society:
Human Capital. If we want to head off underclass riots: Human Capital.

As people drift away from me at these parties by pretending to recognize
long-lost friends across the room, I'm convinced that they don't really
understand what human capital is.

Most people think of human capital the way economists and policy makers
do - as the skills and knowledge people need to get jobs and thrive in a
modern economy. When President Bush proposed his big education reform,
he insisted on tests to measure skills and knowledge. When commissions
issue reports, they call for longer school years, revamped curriculums
and more funds so teachers can transmit skills and knowledge.

But skills and knowledge - the stuff you can measure with tests - is
only the most superficial component of human capital. U.S. education
reforms have generally failed because they try to improve the skills of
students without addressing the underlying components of human capital.

These underlying components are hard to measure and uncomfortable to
talk about, but they are the foundation of everything that follows.

There's cultural capital: the habits, assumptions, emotional
dispositions and linguistic capacities we unconsciously pick up from
families, neighbors and ethnic groups - usually by age 3. In a classic
study, James S. Coleman found that what happens in the family shapes a
child's educational achievement more than what happens in school. In
more recent research, James Heckman and Pedro Carneiro found that "most
of the gaps in college attendance and delay are determined by early
family factors."

There's social capital: the knowledge of how to behave in groups and
within institutions. This can mean, for example, knowing what to do if
your community college loses your transcript. Or it can mean knowing the
basic rules of politeness. The University of North Carolina now offers
seminars to poorer students so they'll know how to behave in restaurants.

There's moral capital: the ability to be trustworthy. Students who drop
out of high school, but take the G.E.D. exam, tend to be smarter than
high school dropouts. But their lifetime wages tend to be no higher than
they are for those with no high school diplomas. That's because many
people who pass the G.E.D. are less organized and less dependable than
their less educated peers - as employers soon discover. Brains and
skills don't matter if you don't show up on time.

There's cognitive capital. This can mean pure, inherited brainpower. But
important cognitive skills are not measured by IQ tests and are not
fixed. Some people know how to evaluate themselves and their abilities,
while others with higher IQ's are clueless. Some low-IQ people can sense
what others are feeling, while brainier peers cannot. Such skills can be
improved over a lifetime.

Then there's aspirational capital: the fire-in-the-belly ambition to
achieve. In his book "The Millionaire Mind," Thomas J. Stanley reports
that the average millionaire had a B-minus collegiate G.P.A. - not very
good. But millionaires often had this experience: People told them they
were too stupid to achieve something, so they set out to prove the
naysayers wrong.

Over the past quarter-century, researchers have done a lot of work
trying to understand the different parts of human capital. Their work
has been almost completely ignored by policy makers, who continue to
treat human capital as just skills and knowledge. The result? A series
of expensive policy failures.

We now spend more per capita on education than just about any other
country on earth, and the results are mediocre. No Child Left Behind
treats students as skill-acquiring cogs in an economic wheel, and the
results have been disappointing. We pour money into Title 1 and Head
Start, but the long-term gains are insignificant.

These programs are not designed for the way people really are. The only
things that work are local, human-to-human immersions that transform the
students down to their very beings. Extraordinary schools, which create
intense cultures of achievement, work. Extraordinary teachers, who
inspire students to transform their lives, work. The programs that work
touch all the components of human capital.

There's a great future in Human Capital, buddy. Enough said.