U.S. War on Poverty – Stalemate on Capital Inputs

Since 1980, the U.S. government has spent, in 2017 dollars, almost $500 billion on compensatory education to lift the achievement of disadvantaged children and another $250 billion on early childhood education for children from low income families. Individual states have spent more on these programs.

Despite all the public money invested in these programs, the achievement gap in educational outcomes has not narrowed. For all students, there has been no gain in overall performance at age 17. Students from the bottom 10% of socioeconomic distribution and the bottom quartile have the same relative lack of educational achievement compared to those in the top 10% and top quartile as before.

A World Bank report of December 2015 argued that “mind” and “society” influenced individual behavior and individual behavior influenced economic outcomes in life.

If special public educational programs in the U.S. have not resulted in constructive changes in mind, socialization and behavior, then what is to be done?

One is driven to conclude that culture in general – culture determined by free individuals living as they want to live – has its shortcomings. And those shortcomings may be values communicated to and character socialization for children.

Just transferring wealth to those who have less does not seem to bring about systemic change.

A new, deeper look at the foundations of social and human capital may be needed. As some business leaders in our network once told me, capitalism takes in and makes the most of whatever society puts out. If you want good values to prevail, don’t look first to markets but to families and religions.