Journal Article Welfare Economics and Individual Development: A Reply to Talcott Parsons Get access Herbert Gintis Herbert Gintis University of Massachusetts, Amherst Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 89, Issue 2, May 1975, Pages 291–302, https://doi.org/10.2307/1884434 Published: 01 May 1975

I. On individual welfare, 574. — II. An overview critique, 576. — III. The generalized production possibilities set, 579. — IV. Functional imperatives and individual development, 580. — V. Structural operation: Associative, cybernetic, and institutional patterning, 584. — VI. Recapitulation, 587. — VII. Work, 590. —VIII. Technology, 591. — IX. Education, 592. — X. Consumer sovereignty, 594. — XI. Conclusion, 595.

This paper deals with the way alternative economic models interpret important aspects of modern capitalism. What is to be explained is the clear tendency of capitalist societies to generate vast quantities of goods and services-both public and private while social life falls into progressive decay. WAork remains bureaucratic, fragmented, and unfulfilling; communities are rendered architectural, social, and ecological monstrosities; the natural environment is destroyed; cultural activity becomes a mere passive consumption item in our daily lives; education remains unequalizing and unliberating; and the list continues. The three alternative paradigms I shall discuss are the traditional neoclassical, the widely held Galbraithian, and the more heterodox radical, with its heavy debt to Karl Marx. The neoclassical view takes social outcomes as the reflection of individual preferences, constrained by available resources and knowledge of technologies, perhaps distorted by ultimately correctible organizational inefficiencies. For instance, the undesirability of work reflects the nature of technology and the preferences of individuals for yet higher levels of consumption rather than creative work. The fragmentation of communities reflects the individual's preference for private expenditure over increased tax dollars for community development. And so on. The Qalbraithian views social outcomes partly as the result of the direct power of those who control large productive organizations, and partly as the result of consumer choices manipulated by those who control production. In short, while neoclassical theory holds that citizen, worker, and consumer obtain, Galbraith replaces them with a theory of producer sovereignty. In contrast, radical theorists hold that social decay is a normal result of the development of capitalism and cannot be reduced to the irrationalities of consumer preferences or the autonomous and socially irresponsible exercise of power by controllers of production. This radical paradigm involves two basic assertions. First, the choice-set of socially feasible options in the areas of work, technology, and public policy does not extend over all technologically feasible alternatives, but is constrained to those compatible with the reproduction of the social relations of capitalist production. In this sense, worker and citizen sovereignty fail to hold, and social outcomes tend to follow the requisites of capitalist accumulation rather than the preferences of individuals. Second, observed consumer behavior in capitalist society is a rational reaction to the structure of available alternatives for social activity open to the individual. No theory of con* Lecturer and research associate, Graduate School of Education, Harvard University. This paper was made possible bv massive doses of advice from Samuel Bowles, as well as helpful arm twisting by Keith Aufhauser, Andrew Barlow, Steve Marglin, James Medoff, and Ellen Willis.

Economists have long noted the relationship between the level of schooling in workers and their earnings. The relationship has been formalized in numerous recent studies of the rate of return to schooling and the contribution of education to worker productivity. Almost no attempt has been made, however, to determine the mechanism by which education affects earnings or productivity. In the absence of any direct evidence, it is commonly assumed that the main effect of schooling is to raise the level of cognitive development of students and that it is this increase which explains the relationship between schooling and earnings. This view of the schooling-earnings linkage has provided the conceptual framework for studies which seek to control for the quality of schooling through the use of variables such as scores on achievement tests and IQ. [26, 46] The objective of this paper is to demonstrate that this interpretation is fundamentally incorrect. It will be seen that rejection of the putative central role of cognitive development in the schoolingearnings relationship requires a reformulation of much of the extant economic research on education, as well as a radical rethinking of the normative bases of the economics of education in particular, and neo-classical welfare economics in general. In Section I, I will present data to suggest that the contribution of schooling to worker earnings or occupational status cannot be explained by the relationship between schooling and the level of cognitive achievement. Indeed, the data there introduced strongly suggest the importance of noncognitive personality characteristics which have direct bearing on worker earnings and productivity. In Section II, I will give substantive content to the relevant personality variables operative in the relationship between education and earnnings. With the theoretical literature on the personality requisites of adequate roleperformance in a bureaucratic and hierarchical work-enrivonment as a frame of reference, I will sketch some mechanisms through which schools affect earnings. This involves scrutinizing the social relations of education and the pattern of rewards and penalties revealed in grading practices. I will argue that the authority, motivational, and interpersonal relations codified * This research was supported by a grant from the Carnegie Foundation of New York to the Center for Educational Policy Research, Harvard Graduate School of Education, and a separate grant from the Social and Rehabilitation Service, U. S. Dept. of Health, Education, and Welfare. Special thanks are due to Stephan Michelson, Christopher Jencks and Samuel Bowles, who aided the research through its various stages, and the Union for Radical Political Economics collective at Harvard, whose members helped broaden its scope. This work is part of a larger project in process jointly with Samuel Bowles, on the political economy of education. The arguments presented herein have been significantly abridged, in conformance with stringent space limitations. Requests for amplification of the material should be addressed to the author.

We survey the determinants of earnings and propose a framework for understanding labor market success. We suggest that the advantages of the children of successful parents go considerably beyond the benefits of superior education, the inheritance of wealth, or the genetic inheritance of cognitive ability. We suggest that noncognitive personality variables, such as attitudes towards risk, ability to adapt to new economic conditions, hard work, and the rate of time preference affect both earning and the transmission of economic status across generations.