Arnold Kling  

Businesses as Storehouses of Knowledge

Why the IMF and World Bank?... Belief in Communism...

It turns out that my post on Test Scores and Economic Performance was preceded by Stuart Buck's meditation on the knowledge contained in businesses.

For any type of business that you can imagine, the overwhelming majority of the information necessary to run the business consists of informal knowledge that has accumulated over years or decades, and that will never be taught in schools.

William Lewis, in The Power of Productivity, points out that the same uneducated construction workers who have low productivity in Latin America have high productivity in the United States. Business know-how accounts for much of the difference.

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CATEGORIES: Business Economics

COMMENTS (5 to date)
Lord writes:

Skeptical. Rather they have value here because there is a need here. There isn't much need for them there since there is little demand or development. It is less a lack of business expertise than of an affluent population in need of their services.

Matt writes:

It is installed infrastructure. We can pack workers efficiently into these massive cities and sort of put them asleep for years with little marginal cost. These are drones, and we can wake them up for menial tasks and put them back to sleep and still have a decent return on investment.

Rodriguez12 writes:

"Noble goals"? Pish-tosh. So-called public schools were conceived as instruments of social control. Their primary purpose is to train the mass of men to be obedient subjects of the state and willing, docile serfs for corporate managers and bosses. A good place to start your research would be with the system as it was being established. Here's an essay by anarchist de Cleyre about the effects and purpose of the school system:

Carson's blog also has the occassional comment about the school racket:

Vive le liberte!

[N.B. Rodriguez12 is also posting under other nicks on EconLog, including the banned nick Anonymous2. See the comment thread under Silent Signals for current info.--Econlib Ed.]

Omer K writes:

Ties in nicely with the assertion that education is overrated and merely a signalling model largely to compensate for the infamous Griggs Vs Duke Power 1971.

Also, if Milton Friedman is right on his 'Free to Choose' Video series, Hong Kong soared with hardly any "formal education" infrastructure.

Matt writes:

Well, so much for "No Child Left behind". I would suspect that the main supporters of that fiasco were business executives who just got a tax cut, and so bought into cheap government.

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