Investing in Human Capital

Though much of our discussion to date has involved capital markets, trade, and taxes, I want to digress a bit into a different, yet related domain. I spend this past weekend at a couple of events for two of my children, which got me to thinking about the extraordinary personal investments that humans make to help raise the next generation.

My son and I spent Friday night and most of the day on Saturday at a retreat, which was offered for fifth and sixth graders in preparation for their first communion. The retreat capped off several weeks of classes devoted to instruction in some basic theology.
Two pastors, along with others on their staff, went to extraordinary efforts to develop teaching materials that would make the theology accessible to their eleven and twelve-year-old minds. They were joined by a host of other volunteers, who together committed an amazing amount of creative energy and personal time to this process.

My daughter, a ninth grader, spent her Saturday in Wahoo, Nebraska, at a special music event, at which Catholic and Lutheran schools in Nebraska and Western Iowa participated together singing and playing music, culminating in a concert in the afternoon. Two talented directors helped them along, building upon the daily instruction that their high school directors had given them throughout the year, and still more hours practicing at home. The gym was packed with parents who drove long distances to see their kids perform and to support their efforts. When I heard their music, and saw my daughter among these kids, I nearly wept with joy.

In both cases, I was amazed by the extent of effort expended for the benefit of these young people. Some of this work spanned generations. Grandparents, parents, teachers, friends, aunts, uncles, all put something in. Yes, some of it took money. But what was really remarkable was the amount of time that was required, for which no amount of money could substitute.

Sitting with young people, listening to them, and helping them make sense of the world, are indispensable to their proper growth and development. Though you can pay professionals to help (and I’m grateful for the band and choir directors, and for the pastors and staff who help develop magnificent programs), the personal commitment of others is indispensable. You can’t really just send the kid away to learn about faith and hope it sticks. The same is true for other forms of education. You see, they get the message you send by your actions.

Much of our economic vitality depends on the extraordinary investments that we are making in human capital, which don’t really show up in our national accounts. It takes a long time to raise a human being, and lots of commitment to do it well. Here, money is not a good substitute for time well spent.

EAM