Measuring the Value of Human Capital

During preparation for a workshop on educational policy in 1982,
I was asked by the host organization to prepare a glossary of terms pertaining
to my presentation. That request seemed simple enough and a reasonable one,
so I set about compiling terms related to Competency-Based Education (CBE, forerunner
of Outcome-Based Education and promulgated by the same man—Bill Spady), our
fad-of-the-moment in educational reformation toward illiteracy in Georgia.

As I said, the task seemed simple enough. However, while still
in the A’s of the alphabet, I developed an overwhelming respect for professional
compilers of glossaries. The first word block I encountered was assessment.
Sure it was familiar; we all knew it meant “test,” but the longer I struggled
to apply that definition to CBE the more elusive assessment’s definition became.

The latest word for “test” was “instrument” and that proved
easy to explain. But assessment was a broader term. Assessment was the noun
form of the verb “assess.” What did assess actually mean? The National Assessment
of Educational Progress (NAEP) had been in use since its development in the
latter 1960s. Had we overlooked a change in emphasis by the Federal level of
education implied by the use of the word assessment that could be significant?
Receiving no help from my small hill of accumulated state department of education
materials relating to assessment, I decided to read the instruction manual:
Webster’s New World Dictionary. Webster’s clearly stated:

In March of 1984 I had the privilege of giving testimony supporting
stringent regulations for the

Later someone sent me pages from a book entitled Human
Capital and America’s Future, edited by David W. Hornbeck and
Lester M. Salamon. The title itself set off alarm bells because of the connection
to education shared by many of the contributors, especially Hornbeck. It was
now the early 1990s and many disturbing things were happening. David Hornbeck
was a highly visible change agent responsible for many radical education reforms
in states from Kentucky to Iowa and had been consultant to many more.

The book was published by Johns Hopkins University Press in
1991 and contains an enlightening list of contributors in addition to Hornbeck:
Ernest Boyer, Nancy Barrett, Anthony Carnavale, Sheldon Danziger, Marian Wright
Edelman, Scott Fosler, Daniel Greenberg, Jason Jaffras, Arnold Packer, Isabel
Sawhill, Marion Pines, Donald Stewart, and Lester Salamon.

The social and political views of Human Capital’s contributors
could be the basis of another whole article, but suffice it to say that most
of the radical changes toward a managed populous in this country can be reflected
among this group of individuals. Weren’t some of them involved in dis-establishing
the U.S. Department of Health, Education and Welfare (HEW) and turning it into
the Department of Education?

While references to human capital have been the fare
of business publications for some time, it has only been in the last few years
that this term has been applied to school children. In Hornbeck’s chapter “New
Paradigm for Action,” he outlined the systemic change which must occur to
produce the workforce for the future and fulfill our nation’s human capital
needs. Hornbeck’s “new paradigm of action” looked a lot like old OBE—setting
specific performance standards and invoking penalties for schools, teachers
and students not meeting them:

“If the new comprehensive system is to be outcome-based,
careful attention must be paid to assessment strategies. The selection
of outcome indicators will be informed by the availability of sound assessment
instruments.” [emphasis added]

Now here was Hornbeck using assessment and instrument together
instead of a substitute for one or the other—and he had selected the two terms
which carried legal usage definitions. Hornbeck asserted that while the NAEP
might be universally available, and portfolio assessments (notice the
use of both words together) would become popular, “the Educational Testing Service
(ETS) is investing time and funds in developing new approaches to assessment.”
He further stated that most of the present assessment observations are “related
to academic objectives”:

“Similar sensitivity is required in carefully defining appropriate
assessment tools in other areas as well. In citizenship, a method should
be developed for expressing qualitative aspects of participation activities….
[A] different value could be placed on community service…. Physical
and mental fitness… problems arise as we confront legal and even
constitutional issues (self-incrimination,

All of this is structured because “incremental change is insufficient.
Systems must be radically altered to produce what the nation’s economy demands
in a work force.”

Weren’t we supposed to be concerned about the education of school
children? This sounded a lot like literature which proposed “full employment”
policies, much like the billboards and signs plastered on public transportation
and public buildings in Grenada—”Work for everyone: everyone working!”—before
the U.S. invasion to overthrow their Communist government in 1983.

Was this why the Council of Chief State School Officers accepted
a contract from the National Center for Educational Statistics to develop what
is known as the SPEEDE ExPRESS (the Exchange of Permanent Records Electronically
of Students and Schools)? This electronic information track can carry the most
diverse and extensive information on a student, delivering it to future employers,
places of higher education, training centers, health providers (contraceptive
histories will be included), the military, and a number of other recipients
yet to be designated. Then if employers, government, and others have input into
what should be the outcome of education in this country—instead of education
being academically and information-based—then this concept of “assessment
as assigning a value” to a child takes on proportions that are certainly
Orwellian.

What if your child’s assessed worth doesn’t meet anyone’s projected
goal? … Have we understood the direction of these changes? Is this constitutional
or moral?

The next piece to the puzzle of assessment fell into place when
my suspicions were confirmed that we really were assessing “value”. The August
1993 issue of Visions, the newsletter of the Education for Future Initiative
sponsored by Pacific Telesis Foundation, was given out at a legislative committee
meeting as part of a packet of information on technology in the classroom and
school-to-work transition activities. The lead article was “Beyond the Bubble”
with a blurb reading: “Educators are finding that new ways of teaching require
new forms of assessment.”

On page three there was a column entitled “Authentic Definitions.”
Finally, I thought, I have found an educational publication that will define
this word and allay my fears. Sure enough, there was the word:

Assessment

The worth or value of something or someone?! This was
confirmation that educational testing had taken an extreme left turn. It was
not comforting to realize that our children were going to be assigned a value
based on “acceptable performance behaviors in life-role applications” as proposed
in Pacific Telesis Foundation’s “Authentic Definitions.”

Knowing that:

    1. our children would be tracked and that extensively
detailed files would be electronically compiled and transmitted to select
users;

   
2. information would include or be based on a value level assigned to
them contingent upon performance—as a child—of life role competencies;

   
3. value levels could reflect the scale of achievement outlined in the
United States Labor Department’s 1993 Secretary’s Commission on Achieving Necessary
Skills (SCANS) publications which encompasses personality traits and private
preferences, and

   
4. the purpose of education had documentably been diverted into workforce
training, led me, ultimately, to the conclusion that indeed the future holds
a less than bright prospect for our young people. To be formally assigned
a “worth” to society based on your ability as a child to demonstrate that you
can perform an “essential skill” should be a foreign concept in a constitutional
republic like the one in which we live—these United States of America.

An example of how these efforts at assessment have been perverted
to the ends outlined above is given in Crucial issues In Testing, edited
by Ralph W. Tyler and Richard M. Wolf. This book is one in a series prepared
under the auspices of the National Society for the Study of Education, which
in 1974 included names like William Spady, John Goodlad, and Robert Havighurst
on its governing committee. On page 98, within an article by Carmen J. Finley
(of the American Institute for Research) is a section entitled “Defining Goals
Versus Comparison with an Average”:

“In the National Assessment program specific objectives
or goals are defined and exercises are written which determine how well
these goals are being met. For example, in citizenship a major objective
is to “Support Rights and Freedoms of All Individuals.” One specific way
in which a person might meet this goal is to defend the right of a person
with very unpopular views to express his opinion and support the right of
‘extreme’ (political or religious) groups to express their views in public.'”

One exercise which was written to try to tell whether or not
this objective was being met is as follows:

Below are three statements which make some people angry.
Mark each statement as to whether you think a person on radio or TV should
or should not be allowed to make these statements:

• Russia is better than the United States.

• Some races of people are better than others.

• It is not necessary to believe in God.

This is the goal-oriented approach. The objectives or goals
represent a kind of standard which is considered desirable to achieve. The
exercises, if they are good measures, tell to what extent the goals are
being achieved. This approach tells very specifically what a person knows
or can do.

I submit that the goals-oriented/performance-based/OBE assessment
approach just outlined tells more than what a child knows or can do. This approach
very specifically reveals what a child feels and believes. Remember that

It just happens that the October 1992 edition of Visions
(Pac Telesis Foundation newsletter) contained an article entitled “Why Technology?”
It began:

“Alvin Toffler, the author of such influential books as
Future Shock and The Third Wave, has written that the spread
of personal computers is the single most important change in the field of
knowledge since the invention of movable type in the 15th century. He goes
on to state that knowledge is the key to power in the 21st century—not mineral
rights or military force.”

This was the same publication that carried the definitive definition
of assessment. And wasn’t this the same Alvin Toffler who wrote Creating
a New American Civilization, which heralds the coming “Third Wave” of global
culture, published by the Progress and Freedom Foundation and introduced at
their “Cyberspace and the New American Dream” conference in Atlanta last year?

Newt Gingrich, the new Speaker of the House, introduced Toffler
as his longtime friend and then sat quietly by to hear Toffler say that national
sovereignty was a thing of the past and that he was an avowed secularist.
These are the stripes of our new “conservative” future? At the same Cyberspace
conference, an array of professionals from many areas of cultural life paraded
their contributions to leadership toward the much-touted “Third Wave”. The spokesperson
for education in Progress and Freedom Foundation’s lineup was—and still is—
Lewis J. Perelman, author of School’s Out: A Radical New Formula
for the Revitalization of America’s Educational System. Perelman advocates
what he calls just-in-time learning, privatized public schools, Total Quality
applications, hyperlearning, and many other catchy concepts which are now, of
course, getting much attention in the policy debates.

It should be noted that in the preface to his book, Perelman
cites Wassily Leontief and B.F. Skinner among those from whom he particularly
benefited during his years at Harvard in the 1970s. Most interesting, since
Leontief is the acknowledged expert on management by objectives (MBO)—the forerunner
and companion to PPBS. And Skinner was the American father of behavioral psychology
and mastery learning/operant conditioning—the foundation for OBE.

These relationships of Perelman’s are important because he supplied
the connecting piece to complete the puzzle picture of our children’s future.
Perelman states on page 316 that …

“Nostalgic mythology about ‘local control’ should not mask
the reality that the state governments have the constitutional authority,
call the shots, and pay most of the bill for education. But government,
local or otherwise, no longer needs to own and operate school systems or
academic institutions.”

Now to the heart of Perelman’s alternative proposal which forms
the future of “conservative” educational policy and expresses assessment’s future
use:

…One possibility would be a human capital tax [emphasis
added]. The human capital tax might be simply the same as a personal income
tax, or might be calculated or ear-marked in a more limited way. Technicalities
aside, it’s logical that if the government is going to help fund investments
in the development of the community’s human capital, taking
back a share of the resulting gains is a good way to pay for it. In
effect, each generation of beneficiaries of such investment pays back some
of the benefits it received to the next generation [value added tax, ed.].

We should deal with parents who are starving their children’s
minds with the same legal remedies we use to deal with parents who are
starving their children’s bodies. The media through which a microchoice
[voucher] system is provided will give public authorities more accurate
information on what individual families and kids are doing than is currently
available, making it easier to identify instances of negligence or misuse.

…[T]here’s no good reason why the learner should not be
able to purchase services or products from any provider—whether public or
private, in-state or out-of-state.

There is the framework. A value-added tax process that will
deduct from a services/education super-voucher a tax for every level of achievement/skill
a student achieves—true assessment. Standards will be rigid and penalties for
non-achievement will be enforceable against the student, his parents, and providers
of educational services in order to achieve a trained workforce.

The implications for families being disrupted by accusations
and prosecutions for Perelman’s implied abuse and neglect over “parental starving
of children’s minds” are startling in their flagrancy.

An elaborate and accurate system will track families and
students, leaving privacy and confidentiality in the dust. The tax/voucher
will follow the student across state and regional boundaries, necessitating
a reformulation of tax bases; this could even be extended to foreign sources—facilitated
by choice and charter school initiatives. (Remember Toffler asserts that national
sovereignty is, or will soon be, a thing of the past. And what about GATT’s
education provision?)

The World Bank has just announced its new formula for estimating a nation’s
worth.

I am reminded that in May of 1984 the Washington Post
published an article entitled “Industrial Policy Urged for GOP.” The Institute
for Contemporary Studies, “founded by Edwin Meese, Caspar Weinberger, and other
Reagan supporters,” issued a report that advocated “Republicans shed some of
their deep-rooted antipathy to a planned economy.” All signals seem to point
to the fact that this has indeed happened.

Somewhere in all of this is lost the ability to communicate
our culture in an organized way and to teach basic skills that can be used whether
cyberspace technology is available or not. Didn’t we used to call this “education”?
Didn’t we believe that our children had some choice in their futures?

When is assessment really assessment? Ernest Boyer, former Director
of the Office of Education and Carnegie Foundation director, once said, “To
be fully human one must serve.” In the future to be fully assessed may mean
our children’s worth as a servant of the state will be “assigned a value for
tax purposes”—assessment.

America, where are you?

1. Lewis J. Perelman,
School’s Out: A Radical New Formula for the Revitalization of America’s Educational
System (New York: Avon, 1992), pages 317-318.

2. D.W. Hornbeck
&. L.M. Salamon, (Eds.), Human capital and America’s future (Baltimore,
MD: Johns Hopkins University Press,1991).

3. Associated
Press, The Des Moines Register, 9/15/ 95