By Clint Bolick
America at Human Capital Crossroads
By Clint Bolick The Smart Society: Strengthening America’s Greatest Resource, Its People by Peter D. Salins (Encounter Books, 304 pp., $25.99)
Salins defines a “smart society” as a “country where a majority of its citizens, and not just a privileged elite, possess high levels of human capital” and “put it to productive use.” America became the richest nation by being the smartest society. But the U.S. “today can ill afford to rest on its laurels,” Salins urges. “Unless we rapidly revitalize our human capital capabilities we are not only in danger of seeing a growing roster of other countries overtaking us, but we also risk cheating future American generations of staggering levels of opportunity and economic prosperity.” Nor, he points out, can we continue to support a generous and growing welfare state with diminishing levels of economic productivity.
Salins perceptively focuses on three elements of public policy that are rarely viewed in tandem—education, productivity, and immigration—as the legs of the human capital “tripod,” each of which is teetering. For perhaps the first time, most young Americans are not as well-educated as their parents. Americans are working less than before. And our immigration laws no longer allow us to attract sufficient numbers of the world’s best and brightest.
Salins offers policy prescriptions to address each of those three challenges, some of which are bold and sound while others are lacking.
In K-12 education, Salins argues that we are not demanding enough from our students and urges higher educational expectations backed by more rigorous curricula. Happily, he endorses training teachers in subject-matter proficiency rather than in second-rate schools of education.
To address the gaping educational opportunity gap for children from low-income families, he calls for universal publicly funded pre-school, despite slim evidence that it ensures enduring success. At the same time, he dismisses school choice and charter schools (except for higher-income students) despite evidence that the latter can close the “Megagap” between low-income and more affluent children. He completely overlooks Florida’s remarkable success in boosting educational outcomes for all children—especially minority students—by combining robust school choice with greater public school accountability.
To raise worker productivity, Salins recommends a combination of greater public support for research and development paired with sensible labor policies that promote work. Salins correctly points out that union-backed government policies provide increasing rewards for working less. He proposes transforming unemployment insurance into a re-employment program, delaying Social Security benefits, and shifting defined-benefit public pensions into defined-contribution plans, all intended to keep more Americans working rather than dependent upon the support of an ever-shrinking workforce.
Salins extols the virtues of an immigration system that brings in highly skilled and productive workers and entrepreneurs without having to educate them. But since the 1970s, our immigration system has focused on family-based preferences, which account for about two-thirds of the million or so immigrants who are admitted legally each year, as opposed to work- and skills-based immigrants, who represent only 14 percent.
Salins wisely proposes reducing family preferences and assigning points to prospective immigrants based on the skills they bring. Unquestionably, such an overdue shift back to a work-based immigration system would generate significant economic growth. But despite recognizing that even low-skilled immigrants bring with them a valuable work ethic, Salins urges keeping their numbers to a minimum. When Alabama and Georgia sent illegal immigrants packing, they lost billions of dollars in agricultural GDP—including upstream middle-class agricultural processing jobs—because native-born workers would not fill the jobs even at higher wages. Instead, as a result of immigration policies that value family ties over work, we are exporting both high- and low-skilled jobs to our foreign competitors.
Salins does a great job synthesizing the public policy flaws America needs to fix in order to boost our anemic economic growth. Even if his policy prescriptions are hit and miss, that is less important than refocusing the policy debate that badly needs to occur. After more than a decade of spinning our wheels, The Smart Society jump-starts a vital national conversation just in time for a crossroads national election.