Education does not cause wealth

There is no evidence that at the national level, education leads to wealth. In the 1970s, Egypt dumped large amounts of money into education and despite the result (many educated people) the nation remained poor. The Soviet Union educated large numbers of people but was so poor their nation collapsed.

Instead, there is quite a bit of evidence that wealth causes education not the other way around. Countries start to get rich first and then start educating their young. Studying the Jewish population in the United States provides a microcosm of this truth. Thomas Sowell notes that when the first waves of Jewish migrants came to the United States in the early 20th century, many were extremely poor and started businesses making textiles in their apartments. As they built up their businesses and slowly accumulated money, they started to emphasize education to their kids. Soon, the Jewish population was disproportionately educated but the wealth came before the education. 

In the United States, people often bemoan our terrible education system. "On the World Stage," a Washington Post headline wrote, "US students fall behind." We consistently rank low among developed nations for test scores and education. I doubt some of these studies but, regardless, we need to remind the people writing these headlines that the US continues to be among the wealthiest and more innovative nations in the history of the planet. If education led to wealth, countries like Barbados would be much wealthier than they are. Barbados ranks 70th on the list of nations for per capita GDP but it boasts an excellent educational system. The Independent ranked them 9th globally and said, "The Barbados government has invested heavily in education, resulting in a literacy rate of 98%, one of the highest in the world."

Nationally, emphasizing education as a way to get out poverty is mistaken. The way to get out of poverty is simple: stable government, strong property rights, ease of doing business, low regulations, low taxes, safe monetary policies, and consistent contract enforcement. Do those things for a generation or so and your nation will get out of poverty. Education will follow soon after. 

This might change a little on the individual level (although, I would note that some of the richest people in history were college drop outs) but at the national level the results are clear: education does not cause wealth.

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