The education factor: schooling once drove the nation's rise to the top, but things have changed, unfortunately.(The Race Between Education and Technology)(Book review)

The Race between Education and Technology

By Claudia Goldin and Lawrence F. Katz

Belknap Press, 2008, $39.95; 496 pages.

Many of the briefs for American exceptionalism, from de Tocqueville's Democracy in America to Louis Hartz's The Liberal Tradition in America, focus on the nation's political and economic systems. Claudia Goldin and Lawrence Katz, two historically minded economists, advance the claim that America has followed a path of development unique among nations by rapidly building a comprehensive education system. Ultimately, they argue, America surged to global preeminence and created immense, widespread wealth by turning what was once the province of the elite into a utility for the masses. "That the twentieth century was both the American Century and the Human Capital Century is no historical accident," the authors write. "The nation that invested the most in education, and did much of that investment during the century in which education would critically matter, was the nation that had the highest level of per capita income."

Goldin and Katz delineate the historical process through which technology and education encouraged economic growth. It's not quite a dialectic, but more of a race "between the growth in the demand for skills driven by technological advances and the growth in the supply of skills driven by demographic change, educational investment choices, and immigration." But the story of the race is also a cautionary tale of how progress has stalled in the past 30 years, contributing to corrosive inequality and "late twentieth-century angst."

Goldin, professor of economics at Harvard, and Katz, a Harvard professor of economics who worked as chief economist at the Labor Department, cover subjects that generate a great deal of cable-news and op-ed-page heat, such as the stagnation of incomes and the failures of public education. But partisans expecting to have their biases confirmed won't find much succor here. The book's conclusions are based not on talking points but on deep dives into data, like the 1915 Iowa Census, and much considered number crunching.

The story starts in the early 19th century, when the "virtues" of the American education system took shape. By virtues, Goldin and Katz mean "a set of characteristics that originated in basic democratic and egalitarian principles and that influenced the educational system." Among them were public funding, decentralization, the separation of church and state, an open and forgiving structure, and a lack of gender bias. The result: "By the middle of the nineteenth century the United States had the most educated youth in the world."