Education as the Elixir of Growth II

A while ago I wrote Education as the Elixir of Growth on DR, in which I noted that in most countries the educational profile is closely correlated to their level of productivity. The major exceptions are nations with resource windfalls (inflated productivity) and socialist legacies (deflated productivity). Furthermore, the greater the gap between the ‘potential productivity’, as suggested by the human capital level, and actual productivity, the greater will be the rate of economic convergence. This rate in turn depends on the openness of an economy (i.e. the rate at which it can absorb the latest know-how). Some countries, however, cannot converge to advanced industrial levels, since their human capital is set at a low level – they have reached an asymptote relative to the developed world and cannot converge without improving their educational profiles relative to the latter.

I have come across this article by Russian sociologist Andrei Korotayev, Reconsidering Weber: Literacy and the Spirit of Capitalism, which places the above into a long-term historical perspective. I will quote in extenso:

As has been mentioned earlier, human capital development has been suggested as one of the most important factors of economic growth, whereas education is considered to be one of the most important components of human capital (see, e.g., Schultz 1963, Denison 1962, Lucas 1988, Scholing and Timmermann 1988 etc.)…

In the 20th century mass literacy spread around the globe, and nowadays differences in literacy levels between different countries tend to disappear. At the same time, according to our hypothesis, the differences in economic developments of various countries are rooted in the period of the beginning of modernization era. Therefore, it seems reasonable to explore the connection between such indicators as GDP per capita at present and the literacy level in the early 19th century.

The data in Table 6.1 show that the level of economic wealth in the early 19th century in various regions did not differ greatly enough to be considered the leading factor of economic differentiation between the regions later on.

Diagram 6.1 shows that there is a strong and definitely significant linear correlation between the literacy rate in 1800 and GDP per capita at present. R2 coefficient indicates that this correlation explains 86% of the entire data dispersion.

Therefore, the hypothesis that the spread of literacy was one of the major factors of modern economic growth gains additional support. On the one hand, literate populations have many more opportunities to obtain and utilize the achievements of modernization than illiterate ones. On the other hand, literate people could be characterized by a greater innovative-activity level, which provides opportunities for modernization, development, and economic growth.

Literacy does not simply facilitate the process of perceiving innovation by an individual. It also changes her or his cognition to a certain extent. This problem was studied by Luria, Vygotsky, and Shemiakin, the famous Soviet psychologists, on the basis of the results of their fieldwork in Central Asia in the 1930s. Their study shows that education has a fundamental effect on the formation of cognitive processes (perception, memory, cognition). The researchers found out that illiterate respondents, unlike literate ones, preferred concrete names for colors to abstract ones, and situative groupings of items to categorical ones (note that abstract thinking is based on category cognition). Furthermore, illiterate respondents could not solve syllogistic problems like the following one – “Precious metals do not get rust. Gold is a precious metal. Can gold get rust or not?”. These syllogistic problems did not make any sense to illiterate respondents because they were out of the sphere of their practical experience. Literate respondents who had at least minimal formal education solved the suggested syllogistic problems easily (Luria 1974, 1976, 1982: 47–69).

Therefore, literate workers, soldiers, inventors and so on turn out to be more effective than illiterate ones not only due to their ability to read instructions, manuals, and textbooks, but also because of the developed skills of abstract thinking. Some additional support for this could be found in Weber’s book itself:

“The type of backward traditional form of labor is today very often exemplified by women workers, especially unmarried ones. An almost universal complaint of employers of girls, for instance German girls, is that they are almost entirely unable and unwilling to give up methods of work inherited or once learned in favor of more efficient ones, to adapt themselves to new methods, to learn and to concentrate their intelligence, or even to use it at all. Explanations of the possibility of making work easier, above all more profitable to themselves, generally encounter a complete lack of understanding. Increases of piece rates are without avail against the stone wall of habit. In general it is otherwise, and that is a point of no little importance from our view-point, only with girls having a specifically religious, especially a Pietistic, background” (Weber 1972: 75−6).

We believe that the above mentioned features of the behavior of German female workers in the late 19th−early 20th centuries simply reflects a relatively low educational level of German women from labor circles at that time. The spread of female literacy in Germany, as elsewhere, lagged behind that of male literacy (see Chapter 7). In the early 20th century the majority of women could write and read only in the most developed parts of Germany (Meliantsev 1996). More rational behavior of German workers from Pietistic circles could be easily explained by the special role of education in the lives of Protestants.

The ability to read was essential for Protestants (unlike Catholics) to perform their religious duty − to read the Bible. The reading of Holy Scripture was not just unnecessary for Catholic laymen, for a long time it was even prohibited for them. The edict of the Toulouse Synod (1229) prohibited the Catholic laymen from possessing copies of the Bible. Soon after that, a decision by the Tarragon Synod spread this
prohibition to ecclesiastic people as well. In 1408, the Oxford Synod absolutely prohibited translations of the Holy Scripture. From the very beginning, Protestant groups did not accept this prohibition. Thus, Luther translated in 1522–1534 first the New Testament, and then the Old Testament, into German, so that any German-speaking person could read the Holy Scripture in his or her native language. Moreover, the Protestants viewed reading the Holy Scripture as a religious duty of any Christian. As a result, the level of literacy and education was, in general, higher for Protestants not only than it was for Catholics and for followers of other confessions that did not provide religious stimuli for learning literacy (see, for example: Malherbe 1997: 139–57).

In our opinion, this could explain to a considerable extent the differences between economic performance of the Protestants and the Catholics in the late 19th − early 20th centuries in Europe noticed by Weber. One of Weber’s research goals was to show that religion can have independent influence on economic processes. The results of our study support this point. Indeed, spiritual leaders of Protestantism persuaded their followers to read the Bible not to support the economic growth but for religious reasons, which were formulated as a result of ideological processes that were rat
her independent of economic life. We do not question that specific features of Protestant ethics could have facilitated economic development. However, we believe that we found another (and probably more powerful) channel of Protestantism’s influence on the economic growth of the Western countries.

Literacy is a means of sharing information. Someone knowledgeable writes something (or not – but on average they will be more knowledgeable than the average reader on their subject, and in neural networks, that’s what matters), you read it and become more efficient at something, more productive. (It is not the only – another example would be speech, albeit the latter is much less intense and preservable.)

Looking back, the means of sharing ever larger amounts of information have been growing at a doubly exponential pace. Speech evolved a few tens of thousands of years ago. The first cuneiform tablets appeared in Mesopotamia a few thousands of years ago, and writing migrated to paper within that timeframe. The printing press appeared a few hundred years ago, first fitfully in China, then in Europe with gusto. The seeds of the Computer Age were sown in the past decades, and have since metamorphed into the information highway. Within several decades Singularitarians predict the occurence of such paradign shifts every few years, then months, then days, then seconds, unto and beyond the event horizon of our current world consciousness. Our universal history has been characterized by this one meta-narrative, of technological progress which proceeds at a doubly exponential pace, and of which the means of sharing information is a subset. (For the theory behind this observation, take a look at Korotayev’s Introduction: Millennial Trends).

And to peer into the future you need this kind of universal perspective. For even as in the decades ahead civilization’s material base is constrained and undermined by the limits to growth (resource depletion, catastrophic climate change, overpopulation), the electronic web will embrace the world ever tighter and ascent above it and float, lighter than air, even as the forests below wither away to reveal the desert of the real.

I am of the opinion that just as industrial take-off appeared first in the most highly literate countries and explains current international wealth disparities, so the key transformatory technologies of this century (nanotechnology, strong AI, etc) will be best utilized by those countries with the highest proportions of connected agents, netizens (as measured by Internet penetration, share of Top 500 supercomputers, spending on nanotechnology, etc). Even as the populations of these advanced regions gradually transcend, laggards will be stuck for a time in the (rapidly degrading) material world, just as in the nineteenth century the rest languished as the West made the world its oyster.

However, literati must precede digerati. The most networked countries also tend to be those which are best educated, like South Korea, Finland, Taiwan and the Netherlands. And in general education gives very good returns on investment. As such, in the name of egalitarianism and development, the flow of information must be made as free as possible so that as great a percentage of the world’s population could partake of the economic and spiritual benefits of the Singularity, as soon as possible. The maximum rate of catch-up of follower countries (developing) relative to leader countries (developed) in the nineteenth century was 1-2%; today, with improvements in transport and communications, it’s closer to 10% (see China). Imagine what it could be with the phenomenal bandwidths we’ll see in the decades to come! Unlike with the Industrial Revolution, or the Agricultural, this paradigm shift could in principle be a collective, universal human experience.

1. Abolish intellectual property. The main argument is that it won’t reward creators. I disagree. IP rights are a relatively recent Western development and great works of art and scientific progress has occured before the term was invented. Truly genuine artists and scientists do it out of altruism (a few) or a desire for recognition (the many), to satisfy their thymos, and monetary benefits are not the key factor.

2. Free information. The world’s libraries, universities and think-tanks should fling open the doors to their ivory towers, at least in the electronic world. People should be able to access the contents of courses on any subject, take the exams in them any time they want and following verification, get their degrees.

3. Universities should enter the modern world. For supposed bastions of enlightenment, universities are remarkably backwards today. In some people are expected to go to lectures and have qualified professors waste their time reading out elementary concepts in some subject or another to freshmen, when they could do it once, record it and post webcasts, and have students view it at their leisure, anywhere. They also tend to have Kafkaesque bureaucracies. Admittedly, at least on some fronts (access to course contents), trends are moving in a positive direction – but it is happening far too slowly.

4. Encourage denser networking and informatization in as many spheres as possible. Because crowds tend to be wiser than individuals and bio-metric data is more reliable and easier to procure (it’s always on you, duh!) than paper ID’s.

5. Encourage a culture of enlightenment. The state should do its utmost to ensure society respects intellectual culture instead of dissing it and invest the greatest resources into it, seeing as how it is the basis of long-term productivity growth and on a larger scale universal history itself. Shift the masses from materialistic concerns (mass consumerism) to a green civilization based on broad participation in scientific research and artistic endevours. Suppress factors that go against this culture (religion that tries to interfere in social and political life would be a prime target).

The countries that follow the above prescriptions and have the best pre-requisites (a solid educational profile – literacy, PISA scores, tertiary enrolment, etc – and a densely networked citizenry) will be at the forefront of those who will experience information takeoff – the new ‘leader’ countries, like as Britannia of industrial yore.

Anatoly Karlin is a transhumanist interested in psychometrics, life extension, UBI, crypto/network states, X risks, and ushering in the Biosingularity.


Inventor of Idiot’s Limbo, the Katechon Hypothesis, and Elite Human Capital.


Apart from writing booksreviewstravel writing, and sundry blogging, I Tweet at @powerfultakes and run a Substack newsletter.