Capitalism and Western Civilization: Opportunity

William H. Young

In March 2012, a Pew Research poll found that 61 percent of Americans now say that “the economic system in this country unfairly favors the wealthy.” Only 36 percent said “the economic system is generally fair to most Americans.” (For the Public, It’s Not about Class Warfare, But Fairness, Pew Research Center, March 2, 2012) A January 2012 Washington Post/ABC poll found that 55 percent of Americans believe “unfairness in the economic system that favors the wealthy is the biggest problem in the country.” (Washington Post-ABC News Poll, The Washington Post, January 18, 2012, item no.31) These findings indicate that President Obama’s rhetoric about the American economic system is having an effect.

Recently, the President called for an economic system in which “everyone gets a fair shot, and everyone does their fair share, and everyone plays by the same rules….What drags down the entire economy is when there’s an ever-widening chasm between the ultra-rich and everybody else.” (The White House, Remarks by the President to the Associated Press Luncheon, April 3, 2012) He has invoked statements by President Theodore Roosevelt from the Progressive Era (The White House, Remarks by the President on the Economy in Osawatomie, Kansas, December 6, 2011):

The free market has never been a license to take whatever you can from whomever you can….The free market only works when there are rules of the road that ensure competition is fair and open and honest….The triumph of a real democracy…[is] an economic system under which each man shall be guaranteed the opportunity to show the best that there is in him.

President Obama’s misrepresentations of the nature of our economic system give the false impression that it unfairly denies opportunity to other than the wealthy.

Nevertheless, Americans still believe in the capabilities of our economic system for their pursuit of prosperity and mobility based on the founding principle of equality of opportunity. A December 2011 Gallup poll found that 82 percent of Americans considered it most important that “government grow and expand the economy”; 70 percent considered it most important that “government increase equality of opportunity for people to get ahead”; and only 46 percent considered it most important that “government reduce the income and wealth gap between rich and poor”—down from 52 percent in 1998. (Frank Newport, Americans Prioritize Economy Over Reducing Wealth Gap, Gallup, December 16, 2011) The March 2012 Pew poll also found that 70 percent of Americans “want the government to increase the equality of opportunity to get ahead.”

What should government be doing to expand the economy and equality of opportunity? It can enact policies—tax and regulatory reform and reductions in spending and debt—that will better enable the private sector to increase economic growth and provide greater opportunity in the form of jobs. Government can also do much more to develop workers whose best is equal to their opportunities.

In Free to Choose (1980), Milton Friedman defined equality of opportunity for our economy: There should be “no arbitrary obstacles blocking a person from realizing their ambitions…Not birth, nationality, sex, nor any other irrelevant characteristics should determine the opportunities that are open to a person—only his abilities.” Progressivism and postmodern multiculturalism seek substantive (or fair) equality of opportunity by remedying inequalities from unfair disadvantage due to prejudice in the past or inequity in the present, and sending everyone to college.

But from the individuals’ side of the equation, it is the abilities—the skills—that they possess which give them equality of opportunity in the economy. It is the skills they lack which make them unequal and unable to compete for job opportunities that are going begging. It is their education in the public school system, formulated by university schools of education, which has in recent decades been unfair to them—not our economic system.

A study reported by Harvard Graduate School  of Education economist Richard J. Murnane and MIT economist Frank Levy in Teaching the New Basic Skills (1996) concluded that college is neither the desirable nor necessary ticket to the future for many students—even in today’s changing and more demanding economy. A review of the book by Ralph Whitehead Jr. (“High School and the New Jobs,” The Atlantic, September 1997) aptly summarized it this way: “Yes, they say, a high school education is no longer enough to earn a middle-class living—but that doesn’t have to be true.” By middle-class living, the authors mean at the lower end of the middle quintile of household income.

The study found that the difference in wage outcomes between college and high school graduates was small for those who learned the right skills in high school and large for those who did not. This was confirmed by other statistics which showed that growing income inequality among groups of workers of similar sex, age, and schooling was explained by differences in their learned skills. What are those skills? Reading and doing math at a ninth-grade level are two of them. Others involve communicating clearly and working productively in groups. One is computer use. Clearly, a college degree can be an unnecessary and wasteful expenditure for anyone seeking only to acquire those skills.

However, almost half of today’s high school graduates leave without possessing them. African American and Hispanic students are even more likely to enter the labor market without them. The authors concluded that graduates who lack those skills will suffer “disastrous consequences” in the job market; even faster economic growth will leave them behind. President Obama rails against policies that have “stacked the deck against middle-class Americans for way too many years.” Ironically, it is our failed public education system that has stacked the deck against them.

A Hudson Institute report (Richard W. Judy and Carol D’Amico, Workforce 2020: Work and Workers in the 21st Century, 1997) reached the same conclusion as did Murnane and Levy:

The Workforce 2020 team documents the compensation and mobility benefits of higher education, but we part company with those who would create an entitlement to two (or more) years of college. College cannot remedy the deficiencies of primary and secondary education. Nor is it an appropriate path for many prospective workers, who would be better served by solid vocational training. The crucial factor accounting for long-term success in the workforce is a basic education provided at the primary and secondary levels—encompassing the ability to read and write, do basic math, solve problems, and behave dependably.

NAS has long articulated views similar to those above. My article Competency disclosed that American businesses are unable to fill available jobs because applicants lack such skills. In Too Much For Too Little, Peter Wood showed that the lack of skills is not being meliorated in college for most graduates. And my article Education reported that higher education summarily dismisses urgent calls from our nation’s business leaders and governors for college graduates with better qualifications.

Our universities betray students by leading them to believe they can make their way as purveyors of sustainability, social responsibility, and social justice. Instead, college and secondary education should increase equality of opportunity by inculcating in students the abilities required by the twenty-first-century economy as well as the knowledge afforded by Western civilization, as NAS recommends.

Past republics failed because of envy, class warfare, and economic conflict over shortages among factions. The Founders gave us a commercial republic in which economic progress, based on equal opportunity, could avoid that fate and lift the burdens of life from the shoulders of the common man. It is high time that education be reformed to again take advantage of their wisdom.

Next week’s article will discuss skills and community colleges.

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This is one of a series of occasional articles applying the lessons of Western civilization to contemporary issues relevant to the academy.

The Honorable William H. Young was appointed by President George H. W. Bush to be Assistant Secretary for Nuclear Energy and served in that position from November 1989 to January 1993. He is the author of Ordering America: Fulfilling the Ideals of Western Civilization (2010) and Centering America: Resurrecting the Local Progressive Ideal (2002).

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