lies all true education, to develop a cultured manhood and womanhood true to God and country and worthy with their fellow citizens to be intrusted with the interests of our great Republic.

THE ECONOMIC RELATIONS OF EDUCATION

W. O. THOMPSON, PRESIDENT OF OHIO STATE UNIVERSITY, COLUMBUS The purpose of this paper is to offer a few remarks that may suggest the fundamental importance of education from the standpoint of the economic relations involved. A study and interpretation of the physical forces of the universe naturally followed with the growing intelligence of primitive man. We can understand why with limited intelligence he should stand in awe before these forces and that the study of them would increase as his intelligence widened. From the superstitious worship of primitive man we may trace a steady progress to the reverent mind of modern science and philosophy. In the ultimate analysis of these forces recognizing the universal reign of law and the equally manifest fact of personality, a rational explanation led up to the conception of a supreme personality we call God. Modern thought, reverent in the presence of this great First Cause, recognizes man as the crowning masterpiece of the universe, combining the highest expression of the physical with the inspiring ideals of the spiritual. In the study of the development of the world we recognize man with the motives and forces that move him as . the determining factor in the evolution of what we call civilization. It is not physical force or physical resources, but intellectual, moral, and spiritual forces represented in man that determine and fashion civilization. These physical forces and resources are the responsive servants that a masterful personality may direct for the comfort, convenience, and further progress of the individual and the race.

In the increasing mastery over physical forces, which to a large degree measures the progress of man, two important elements are present-that of religion and that of education. These two elements, to a considerable extent, may be interpreted each in terms of the other, for by no distinct cleavage may we separate the area of religion from that of education. This paper, however, presents the place of education as one of the fundamental forces determining civilization.

It is a common conception current even among educators that education is a burden that civilization must carry as a means of perpetuity and progress. We must educate or we must perish is a familiar war cry. With this has been associated the teaching that education must be supported as a gratuity or charity and as a kind of guarantee of the perpetuity of civilization. There is a truth here, but associated with it has been a notion that civilization or more specifically the taxpayer, with commendable generosity has been supporting education as a burden placed upon him because the law so provided. The purpose of this paper will be to suggest that this is a fallacy, and that

the truth is that civilization itself is the burden, if we may use such a term, which education does carry. That is to say, civilization is not the cause but the result of education. To be sure there are relations of mutual helpfulness, but ultimately in our analysis I maintain that education lies fundamentally at the basis. If this be true our conception of its importance and, therefore, of its support should be modified.

Political economy has for a long time directed our attention to land, labor, and capital as the three elements and forces that determine the production and consumption of wealth. Wealth has been regarded as the necessary condition of progress for the individual and society. In our economics we have placed undue emphasis upon wealth as influencing man and too little emphasis upon man as influencing wealth. This fallacy will be found to lie in the Malthusian theories. Back of all these forces treated in political economy, however, is the personal force of the individual with which education has to do. In the analysis of society and the forces of civilization we shall discover the character of the individual as the final explanation of all progress. The progress of civilization is measured in terms of the progress of man. Here is where education finds its field and wins its triumphs. The individual is at once the cause, the interpretation, and the justification of civilization. In seeking, therefore, to develop the possibilities of the individual we are seeking to develop and make possible literally a new heaven and a new earth—a new civilization. In the study of the economic relations of education let us first state a few of the commonly accepted results of education. These are that, (1) education develops the initiative; (2) education develops power, skill, and efficiency; (3) education develops variety of talent, of taste, and of capacity for enjoyment and service; (4) in the development of this variety education awakens desires, ambitions, and ideals that are the evidences of culture widely separating the educated man from his primitive ancestor; (5) education arouses and sustains the higher life expressed in better physical conditions, in wider intellectual sympathies, in a clearer conception of ethical relations, in a profounder spiritual unity, and in a practically unlimited diversity as expressed both in the individual and his achievements; (6) education does modify and change the character of both the individual and the race.

With these results of education even imperfectly realized, what shall we say of their economic importance? First of all the educated man is the man of awakened desires. Desire is the basis of economic demand. He is the man not of a few and simple wants but of many wants. This sense of want, this increased desire, is the result of an intellectual and social awakening. The more education the more numerous are the wants and the more imperious the demand. Education initiates, organizes, and emphasizes a person's desires. It opens the vision of better things and develops the capacity for enjoying them. It cultivates the desire until it arouses action to meet it. Here are the essentials of a market. In fact, the educated man is the

i

market and creates the market. He makes the demand and furnishes the supply. Moreover, the more the educational process is encouraged the more numerous and wider the reach of these desires. In a very real sense the perception and enjoyment of the best turns us away from the less worthy. The mastery developed thru education makes the satisfaction of the elementary and necessary desires easier and of the higher and newer wants possible. It is not so much, therefore, the increase of goods that raises the standard of living as the mental state of the man who has come to taste the higher life. Thus the luxuries of one day become the necessities of another, which is but another way of saying that education has so changed and widened the horizon of the individual that he makes a larger demand upon the supply of the world for the things with which to sustain his life. The economic importance of the educated man as the world's best and most stable market will steadily gain in appreciation.

Moreover, the fact of variety developed thru education is fundamental in the question of a varied industry concerning which we hear so much. Variety of desire calls for a division of labor making demand for every possible talent. It is the highly diversified society, itself the product of education, and not primitive society, that can make profitable use of a variety of talent. The limit of this law of diversity of talent is foreshadowed only by the suggestion of the limit of education and the human mind. As has been well stated,

The progress of society consists in the differentiation of man's relations, and that every differentiation in the social polity is simply an effort to better adapt his social environment to the more complete gratification of his wants.

The wonderful diversity and variety in the products of modern industry with the manifest tendency toward a better grade of finished product, has come about thru an education of the ordinary purchaser. He has improved the character of the demand by insisting upon better products and thus led the way to better wages, firmer markets, and a clearer margin of profit. This variety of taste has not only affected the variety of product but has by specializing industry opened up an opportunity for talent hitherto unusable and directly checked the fierceness of competition while encouraging the development of initiative. By this process every man with a new idea, a new invention, a new efficiency, a new service, has practically the whole world for his market. Beecher with his pulpit had no competition and the world for an audience. The modern telephone and other inventions have created business, increased the efficiency and comfort of society, and made a world of new relationships. Now education is not the source or cause of monotony. God has made this world a place of infinite variety and beauty. To man he has given a diversity of gifts. Education develops this diversity and thus enlarges the world of ideas, of men, and of markets. Into this larger world the teacher is constantly introducing the student. He is leading him away from the nar

Gunton, Principles of Social Economics, p. 80.

rowness and provincialism of ignorance. The primitive men all look alike, feel alike, act alike, and live in the same narrow world. Here the struggle for existence and the survival of the fittest have free play. The economic conditions are the simplest if indeed they exist at all. Education promptly changes all this. The awakened individual becomes the producer, the frequenter of the market place, the larger consumer, society, emerges, and civilization develops. This contrast is sharper where we recognize that education develops individuality and initiative while protesting against any and all attempts to produce uniformity of result and against all school methods that hamper the free expression and development of the individual. That is to say, the development of man's intellectual and social horizon makes a demand. for capital, for human labor, and for all that goes to make up the sum total of human industry. The practically unlimited variety of modern human industry is due to the widespread influence of education. So long as education was for the few and confined to the study of a few subjects the latent talent of the millions was of no service. With the dawn of universal education there has come an awakening among us that has stirred the multitudes and affected every line of human industry. The technical term "division of labor" has a new and richer meaning than Adam Smith ever dreamed of. In the matters of food and clothing we have passed from the simple and unattractive to the beautiful and the useful. The modern merchant, manufacturer, and carpenter are in league with the artist and the engineer, to make the matters of commerce meet the critical taste of the educated man. So true is this that everyone enters protest against the lack of taste in architecture, of beauty in our cities, of comfort in our homes, and, indeed, of the unlovely everywhere. The economic importance of all this striving for better things due to the inspiration of education has not been clearly appreciated or fully acknowledged. The school, the scholar and the influences they have set at work are making fortunes possible and employment a fact to millions of people. It is the man that makes wealth possible; not wealth that makes man possible. The educated man is constantly engaged in a world-building process in which he must provide both the labor and the capital.

Moreover, it may be well to call attention to the persistency of the demand made by education. The educated portion of the world has come to know and appreciate the best things. It will persist in its demands for these things. This persistency of demand is the star of hope in our democracy. Economically speaking, it is the key to stability of markets, of values, and of prices. The educated man persists in his demand for the things he appreciates, and this persistence of demand has more to do with the stability of markets and with perpetual prosperity than any one other element. I should go farther and say it was more important even than tariff legislation. We have been slow to see that men and not laws make markets. In a broad way we need to look only to the fact that in the four great nations where education is most developed the markets are best and famines are fewest. The political econo

mist of the future will see more than a mere coincidence in the fact that the more broadly educated nations have the most stable conditions financially, commercially, industrially, and socially. The progress of civilization is due to the happy co-operation of the conservative and progressive elements in society. Modern education, while sweeping away the conservatism of superstition and tradition and checking the tendency to forget reason on the part of the radical, has given intelligence and direction to both, thus insuring a healthful progress. It is not a question of mere population nor of natural resources that makes the contrast in permanency of markets, of prices, of values, and of commerce between the United States, Great Britain, France, and Germany on the one hand, and China and India on the other. The Philippine problem is one of better roads, better houses, better clothingin a word, the things that result from a better education. The first man in demand after the treaty of peace was the teacher. He was fundamental in the economic development. The government wanted markets. It was not a mistaken policy that said the teacher would produce them. His method of work is to hold up the ideal and then urge the pupil to pursue it persistently at any cost. No true teacher ever lowers that flag. This elevation of the individual which is constantly going on in every quarter of the land is preparing a persistent demand, to which only a persistent supply is adequate. With the increase of education not only the quality of this demand persists but the quantity of it is enlarged. The essential element of material prosperity is provided every time a well-educated person appears.

Again, it is usual to observe that education develops power, mastery, and efficiency in living. These are the qualities that enable a man to support himself and to maintain the highest standard of living toward which education constantly tends. The economic importance of this may well be emphasized. The primitive man knows little of wealth or a leisure rich with pleasure. He is dependent upon the gratuity of nature for a considerable portion of his comfort and pleasure. The educated man is also dependent, but upon gratuitous nature plus the initiative of an awakened individual. Now the most characteristic features of modern progress lie in the area of the mastery and dominion of the educated man. The whole wide field of applied science and of modern inventions has been opened thru the operation of education. This has changed the standard of life and human comfort and brought new life and outlook to commerce and trade. Speaking broadly, it is manifest that the most widely educated nations of the earth have been most influenced by this new standard of life and are also the best markets of the world. The lesseducated nations are the markets for only the surplus of commerce, and no special vision is needed to see that as education makes its progress in these countries the markets will widen and develop. There is an economic importance in the fact that the sultan of Turkey is riding in an automobile, especially when we consider that a short while ago the same authority opposed the introduction of the sewing machine and the telephone. Education even in Turkey