PUP’s first eBook-original HUMAN CAPITALISM: How Economic Growth Has Made Us Smarter–and More Unequal, by Brink Lindsey
In Princeton University Press’s first EBook original, Brink Lindsey demands an investment in “human capital” to stop the growing divide between the haves and have-nots
What explains the growing divide between the wealthy and everybody else? Politicians, pundits, scholars, journalists, economists and many others have tried to solve this critical question that would create a more equal society. In Princeton University Press’s first Ebook original HUMAN CAPITALISM: How Economic Growth Has Made Us Smarter—and More Unequal (Publication Date: August 8, 2012; Ebook $4.99), author and Kauffman Foundation scholar Brink Lindsey argues that the gap between elites and the rest of us can best be explained by the ever-growing complexity of modern economies and the barriers to the acquisition of the skills—“Human Capital”— necessary to not only survive but thrive in a new economic landscape.
The complexity of today’s economy is not only making these elites richer—it is also making them smarter. As the economy makes ever-greater demands on their minds, the successful are making ever-greater investments in education and other ways of increasing their children’s human capital, expanding their cognitive skills and leading them to still higher levels of success. But unfortunately, even as the rich are securely riding this virtuous cycle, the poor are trapped in a vicious one, as a pattern of family breakdown, unemployment, and dysfunction, leads to a further erosion of knowledge and skills.
Lindsey shows how high skill level jobs are rewarded, while mid-level jobs are outsourced, further widening the gap. Simply retraining workers or teaching skills isn’t working because it’s not removing the cultural divisions and polarization that permeates the economy; those cultural factors are impeding the success of targeted programs that he espouses. Fueling the
polarization is the resentment of those on the lower end who don’t want to hear that the world has changed and that they need better jobs.
Lindsey’s solutions? To redeem the promise of human capitalism, it is necessary to restore the connection between rising complexity and rising human capital cross the socioeconomic spectrum.
o Maintain growth through policies that encourage entrepreneurship and innovation.
o Reform K-12 education by unleashing competition.
o Step up experiments with early childhood interventions that can compensate for disadvantaged environments.
o Combat social exclusion of low-skilled adults through low-wage job subsidies, changes in disability insurance, and penal reform to reduce mass incarceration.
o Improve higher education by limiting tuition subsidies.
o Reform land use regulation and occupational licensing to facilitate upward mobility.
In this brief, clear, and forthright eBook original, Lindsey shows how economic growth is creating unprecedented levels of human capital—and suggests how the huge benefits of this development can be spread beyond those who are already enjoying its rewards.
Coming in Spring 2013, Princeton University Press will also be publishing an expanded hardcover edition of the book.
Max Bazerman, co-author of Blind Spots: Why We Fail to Do What’s Right and What to Do about It (along with Ann Tenbrunsel) appeared on WNYC’s The Takeaway to discuss the trial of former Penn State assistant football coach Jerry Sandusky. You can listen to the interview below.
Robert Shiller was in the UK during the first week of May to promote his latest book ‘Finance and the Good Society’. His appearances ranged from an interview on CNBC Europe Squawk Box to videos for The Guardian and Economia as well as lectures at the Royal Society of Arts and the London School of Economics.
Please follow the links to catch up with any of these appearances.
David Vogel discusses regulating health, safety, and environmental risks in Europe and the United States
David Vogel, whose book The Politics of Precaution: Regulating Health, Safety, and Environmental Risks in Europe and the United States was published this Spring, will be in the UK on 10 May and will be speaking at the Said Business School, Oxford at 11.30am, and the London School of Economics at 6.30pm.
Please follow links to sign up for either of these events or contact Julia Hall firstname.lastname@example.org for more information.
A series of excerpts from FINANCE AND THE GOOD SOCIETY, the new book from economist and New York Times Economic Scene columnist Robert J. Shiller, is running this week on Bloomberg View. Yesterday’s piece, “Walt Whitman, First Artist of Finance,” is already generating quite a discussion and today’s “Finance Isn’t as Amoral as It Seems,” already is sure to continue . Stay tuned thoughout the week for more slices from the book.
Walt Whitman, First Artist of Finance
One of the myths surrounding economic inequality in our society is that high incomes are often the result of selfishness and narrow-mindedness, rather than idealism and humanity. We tend to think that those in careers other than our own are fundamentally different kinds of people.
Personality and character differences are, indeed, somewhat associated with occupation. But we tend to attribute the behavior of others to personality differences far more often than is warranted.
We tend to think of philosophers, artists or poets as the polar opposite of chief executive officers, bankers or businesspeople. But the idea that those involved in business have personalities fundamentally different from those in other walks of life is belied by the fact that many often combine or switch careers. Consider a few examples.
Walt Whitman is one of our most revered poets, and his poetry is among the most transcendent. But he could not ignore more material concerns; he had to make a living. To do so, he turned to fiction — more marketable than poetry — and made his name with a commercial novel called “Franklin Evans, or The Inebriate: A Tale of the Times”….
Check out a terrific review of Ruth Grant’s new book STRINGS ATTACHED: Untangling the Ethics of Incentives in yesterday’s Sunday Business section of the New York Times.
Ruth Grant, author of Strings Attached: Untangling the Ethics of Incentives, sat down with our co-publishers The Russell Sage Foundation for a brief Q&A in which she offers her take on what happens when you dig beneath the surface of incentives and view them as a form of power. Here are a few questions to whet your appetite, but head over to the Russell Sage Foundation site to read the complete interview: http://www.russellsage.org/blog/interview-ruth-grant-ethics-incentives
Q: While incentives are largely viewed now as an alternative to social control, you look at the history of their use at the turn of the 20th century and find a much more controversial and worrying story. How were incentives perceived back then, and in what context were they discussed?
A: The term “incentives” was introduced in America in the early 20th century in several different contexts, including Frederick Taylor’s scientific management in industry and the new field of behaviorism in psychology. (Surprisingly, the term is not found in 18th century writers like Adam Smith). Incentives were introduced in industry as a tool of social engineering, while in psychology, behaviorists believed that they could gain social control by using incentives to induce desired behaviors. Incentives were quite controversial at the time. They were often criticized as dehumanizing, and in the form of piece-rate wages, they were a source of conflict between unionized labor and management.
Q: Someone defending incentives could say they merely offer a choice to the public. So, for example, states didn’t have to compete in the Race to the Top education program if they didn’t want the strings attached to the federal funds. But you suggest this focus on voluntariness relies on a rather narrow definition of freedom and rationality. Could you elaborate?
A: When incentives are viewed as a type of bargain or trade, the ethical focus is exclusively on whether or not the transaction is voluntary. So, for example, people argue over whether offering large sums of money to a poor person to participate in research is “coercive.” But this is not the only question. When incentives are viewed as a form of power – one way I can get you to do something you otherwise wouldn’t – additional ethical questions arise of the sort that always arise about the use and abuse of power. To return to the example — if the research is filling out a questionnaire, nobody would really worry about coercion. If the research involves invasive and painful procedures, then the first question is whether the researcher ought to be conducting this study on human subjects at all. (Of course, often the answer will be “yes”).
Incentives do offer a choice – but that is not sufficient. Mice in a maze also have choices: left or right? Studies have shown that incentives with human beings often backfire in situations where people find the incentives insulting. Incentives imply that you wouldn’t do the thing you are being asked to do for intrinsic reasons. Studies show that people tend to feel insulted by incentives when they take the place of persuasion; when they micromanage; or when they fly in the face of people’s generous impulses – for example, paying for blood “donations” can decrease the number willing to give. In other words, while incentives offer choices, they are based on a psychology that assumes people are reactive and malleable, like the mouse. They do not treat people as fully autonomous rational agents.
You can also read a sample from Ruth’s book here: http://press.princeton.edu/chapters/s9546.pdf
Economist Carmen Reinhart, coauthor of THIS TIME IS DIFFERENT, shares a prestigious NY Times Opinion panel with Paul Krugman, Tom Friedman, and Joseph Nocera, and
Wow, what a lineup! We are so proud to see Carmen Reinhart, the co-author of our New York Times bestselling classic THIS TIME IS DIFFERENT: Eight Centuries of Financial Folly, discuss economic issues on a recent New York Times Opinion talk with Times journalists Tom Friedman, Paul Krugman, and Joe Nocera. This brilliant and entertaining program streamed live on the internet and covered today’s economic issues such as the Eurozone crisis, deleveraging, inequality, Occupy Wall Street, and space aliens. Check out the video if you want to see what great minds have to say about our economic situation and what’s coming next.