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Personal growth, economic growth

“Недавно я познакомилась с одним школьным учителем. Он учит детей страшным вещам. Он учит их, что работать гораздо интереснее, чем развлекаться. И они верят ему….”

 А. и Б. Стругацкие «Стажеры» (1960) 

“I recently met a school teacher. He teaches children terrible things. He teaches them that work is much more interesting than having fun. And they believe him…”

A. and B. Strugatsky, “Space Apprentice” (1960)

In two Vedomosti articles, economists Vladimir Mau and Alexey Ulyukaev discuss the origins of the 2008 global financial crisis and describe the associated ‘lessons from history, which they feel we should learn. Referring to previous financial crises, the authors state that “the task of economists and politicians is to find additional tools to regulate economic development which will allow us to avoid long periods of stagnation on a background of low inflation.” The measures they suggest for achieving this include: ensuring the competitiveness of producers, both domestically and internationally, working towards a more streamlined manufacturing base, and developing an institutional framework for new branches of industry to evolve. Whilst important, I believe that these measures miss a crucial element. Underpinning any long-term response to the new global economic landscape should be the development of intellectual and human capital.

Investing in people

Recognition of the need to invest in a country’s human capital is an established trend, particularly in a multipolar world. As the QS World University Rankings show, China is among the leaders in this field. Its recent rapid rise in the league tables demonstrates the results which are achievable when a government strategically directs its attentions towards education, not merely economic management. Furthermore, Beijing takes a systematic and targeted approach. Whilst great institutions in China’s eastern metropolises such as Peking University, Tsinghua and Fudan are becoming increasingly known internationally, the government has now started to focus on raising the educational achievements of the country’s less developed western regions.

A recent Economist article provides further indication that developing human capital is not merely a question of funding. It highlights that the US has one of the world’s most financially well-endowed education systems but is finding it increasingly difficult to make this accessible to the country’s most able and deserving students. Therefore, as pointed out in a longer Economist briefing, the country’s well-off are becoming a ‘hereditary meritocracy’, exactly the kind of stale upper class which America’s founders were so keen to escape.

The key point here is that the ‘knowledge economy’ is not incompatible with the points made by Mau and Ulyukaev. But I do feel that without considering this aspect of contemporary development, any solutions which are offered to the current crisis will leave Russia lagging behind its competitors. In a world where, as the Economist succinctly puts it, “intellectual capital drives the knowledge economy, so those who have lots of it get a fat slice of the pie,” creating the right environment for educated populations to thrive is central to growth.

If the state can play an active role in educational development, then it is likely that the need for tighter state regulation of the business world will decrease. In another Vedomosti comment piece, Pavel Samiev states that business is often capable of finding its own way out of trouble. This is even more likely if it has at its disposal an intellectually well-endowed workforce smart enough to manage its own affairs.

Mau and Ulyukaev propose changes to the system which require “not just intellectual, but political bravery.” This is true, but I would argue that the main focus should be on education of the leaders of the world of tomorrow. The Russian primary and secondary school system has held up surprisingly well since the collapse of the Soviet Union. However, since Russia began participating in the international PISA rankings, a different picture has emerged with Russian 15 year-olds scoring below the OECD average, a far cry from the top 10. A prudent researcher would notice however that Estonia, which has built its education system by taking the best from its Soviet heritage, by far outperforms the other FSU republics, especially those that focused on building a completely new schooling system. As such it comes as no surprise that more and more researchers are voicing their concerns about the Russian schooling system, and a recent piece by Dengi – a weekly published by Kommersant – went as far as to suggest that “creativity, critical reasoning, and team work – these skills, which are in demand in the 21st century workplace, are seen much less in Russian graduates in comparison to half the other countries. The Russian educational system values other qualities.”

If the country indeed commits to building a knowledge economy it has to quickly abandon the schooling geared towards achieving top marks in standardized testing. It needs to revert back to the best practices that Soviet schools had to offer and adapt them to the requirements of the 21st century. And this, unfortunately, requires not political, but intellectual bravery (as well as a great deal of intellectual capacity) ;)

Lessons from history are important, but we should look to the future.

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