Over the weekend, I’ve been doing two things: obsessing about who I am going to vote for in this godawful Ontario election, and reading about post-Soviet Russia (in particular, Stephen Kotkin’s Armageddon Averted: The Soviet Collapse, 1970-2000).  And these two things have got me thinking a lot about what makes for a good economy and a good society and the extent to which post-secondary education plays a role in all that.

If there is one thing the twentieth century proved, it is that market economies are enormously more successful that any other type of economy at promoting economic growth.  Allied to what we in Canada would call a “liberal” (but others would probably call social democratic) state, it’s also pretty good reducing poverty, too.  It’s less clear if it’s particularly good at reducing inequality or improving mobility (two concepts which are quite separate from poverty reduction as well as from each other), but it’s not clear that other systems out there are consistently better at either task.

Growth matters, because rising living standards increase life spans and happiness.  To quote Benjamin Friedman (from his The Moral Consequences of Economic Growth): “Economic growth…more often than not fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness, and dedication to democracy.” Stagnation, by contrast, tends to retard all of these things – as indeed most of the commentary around Trump’s victory last year seems to suggest.

So it is supremely disheartening that growth is slowing, decade by decade.  (If you’re looking for a big summer read and haven’t yet got round to Robert Gordon’s The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War, I’d recommend it; Tyler Cowen’s The Great Stagnation is not nearly as good but has the merit of being a lot shorter.)  Whether it’s because we’ve picked clean the easy parts of growth from urbanization (the Gordon thesis), greater competition from developing countries/China, or the increase of rent-seeking in democratic societies (the Mancur Olson thesis, basically), or some combination of the three doesn’t really matter.  Growth is getting harder.  If it was ever sensible to take it for granted, we no longer can.  This is why political parties which simply take growth for granted, which focus exclusively on redistributing existing wealth – whether through public spending or tax cuts – are so incredibly pernicious (and why the current Ontario election is so frustrating).

Part of the problem, of course, is that no one has ever come up with a reliable formula for growth.  What works varies enormously from place to place, based on historical circumstance, level of development, and point on the economic cycle.  What’s needed to fuel growth in Tanzania is different from what’s needed in Canada, which in turn is different from Japan or Singapore.  There’s plenty of room for arguing – in good faith and bad – about “what works”.

But there are not many academically respectable theories of growth which don’t involve knowledge and skills somehow.  The ability of workers to constantly add value to products and services, their ability to work in new combinations with computers/machines and other workers, is a fundamental bedrock of growth.  And fundamentally, this is why governments devote so much money to post-secondary education: to maximize citizens’ ability to obtain these skills and thus make better lives for themselves and society.

(There are, of course, other rationales for post-secondary education, but by and large they aren’t rationales that attract a great deal of public subsidy).

Now you might think that a task this important would attract a lot of attention from government and from institutions themselves, that working out what configurations of skills are needed at any given point in time and how best to deliver them would be a major preoccupation of governments because it’s a growth factor they can actually influence (as opposed to, say, the business cycle, which is a lot more capricious).  But historically they have not, because somehow we collectively came to the notion that “credentials” (degrees, diplomas, certificates, whatever) were a really good proxy for “knowledge and skills”.

It would be great – not to mention much simpler politically and administratively – if that were uniformly true, but everyone knows it is not.  While there are some areas where employer skill needs and credentials do line up relatively closely, by and large there are quite significant gaps.  Even where needs line up directly, the natural and gradual atrophying relevance of skills acquired through formal learning in the face of technological change (not to mention the completely natural migration of workers from one field to another over time) means the relationship never actually remains tight for that long.

You’d think, given that we know skills and knowledge are central to growth, that we might have better ways to define and measure them, but our governments can’t work out a consistent nomenclature for them (Essential skills?  Employability skills?  Soft skills?  The hell does any of this mean?).  You’d think that institutions that are first and foremost paid to deliver knowledge and skills could properly define their outputs and pay more attention to how graduate skills are actually deployed in the labour market (colleges do OK at this, as do some specific bits of universities, but there a long way to go).

Growth is hard.  We make it harder on ourselves if we do not invest wisely in skills and knowledge.  But we also make it harder if we are not consistently working to improve how we are packaging education in ways that enhance skills and knowledge.  And it’s not a job any sector can do alone: doing this requires constant and ongoing partnership among institutions, employers and governments.  I see post-secondary institutions working on this to various degrees – not nearly as much as I’d like, but it’s happening.  But governments?  Read the Ontario political platforms and weep. 20 years ago, Canadian political parties had a grasp on this issue.  Today, they mostly seem to believe growth should be assumed rather than earned and improving skills and knowledge can safely be ignored.

It’s sad and not a little bit terrifying.  This way lies stagnation and ruin.