23 Things they don't tell you about Capitalism

Free-market economists tend to emphasize education as a necessary prerequisite to economic growth and hold that differences in education account for the difference in economic success between Sub-Saharan Africa and the East Asian countries. In today’s world, they claim, the knowledge gained through education is more important than ever.

Contradicting this view, Chang suggests that little evidence shows that education directly impacts productivity. Many East Asian economies grew rapidly despite having lower literacy rates than the Philippines and Argentina, whose growth has been slow by comparison. Meanwhile, in Sub-Saharan Africa, income per capita has not correlated with increasing literacy rates. Chang suggests that despite social and cultural benefits, most schooling does not directly relate to increased workplace productivity.

Chang considers various counterclaims. To those who argue that the rise of the “knowledge economy” makes education even more vital, Chang points out that this phenomenon is nothing new, even as advanced machinery requires less, not more, of most workers. To those who argue that universities, not primary schools, are most important, Chang points out that having a university degree is more valuable in demonstrating worthwhile qualities to a potential employer than it is in demonstrating job-specific knowledge. Over time, this leads to degree inflation, and more people seek degrees to make themselves stand out, even as the degrees become less meaningful. Chang concludes that although other good reasons exist to support education initiatives, education is not the growth-promoting panacea that free-market economists claim.