“Education as Investment”, by Hazel Henderson©2005

“While Democrats are wringing their hands at losing Virginia’s governorship, let’s look at the good news!  At last, education now tops the nation’s agenda, as in should have for decades, since investing in the education of our children is the bedrock investment in their future and the future of any democracy.

Founder Thomas Jefferson famously warned Americans that if the goal of our Constitution was universal suffrage and a more perfect union, we would have to inform the consent of the electorate.  If you think education is too expensive, try ignorance!

Since then, the USA has consistently under-invested in its public schools needed to assure universal, freely available basic education nationally, as educational funding became too reliant on zip codes, the recipe for inequality led to starving children’s education and schools in less-affluent and rural places, while giving children in rich neighborhoods and schools ever more advantages. In the USA today, we see the tragic results in many ways: from the 20 million US adults who are still functionally illiterate, crowded, broken-down schools with poor ventilation located in polluted areas contributing to growing health problems, asthma, malnutrition and mental distress in violent homes and neighborhoods. In rich school districts, children are subject to the everyday gun violence which plagues their lives, fears, prevents safe learning environments. These children are forced to join political action movements for their own lives, liberty, and pursuit of happiness.

Today, we see the dumbing down of electorates by mass media, drowning in advertising, as described in Neil Posten’s “Amusing Ourselves to Death“ (1985); Kurt Andersen’s “Fantasyland: How America Lost Its Mind“ (2018); psychologists Ian Mitroff and Warren Bennis in “The Unreality Industry” (1989) and many other warnings.  I wrote, “Market’s Problem Twins: Advertising and Trading “  on misuse of marketing, public relations, lobbying  and commercial propaganda, such as the denials by tobacco executives and fossil fuel company executives of the dangers of their products—all amplified by social media monopolies Facebook, Google, Amazon, Twitter and others described by Shoshana Zuboff in, “The Age of Surveillance Capitalism“ (2019).  Today’s conspiracy theories incentivized the insurrection groups who oppose “the government”, the fears of white nationalists, opposition to vaccinations for Covid and masks in schools, “wokeness”, teaching our history of race relations, inequalities, financial power and technologies in globalization.  All are also part of this stew of issues surrounding education.

To deepen this new national debate about education as the foundation of our societies and democracies, let’s look at the faulty price-dominated metrics misguiding our societies from the cash-flow denominate GDP to all other macroeconomic indications, as I wrote in1989:

~Hazel Henderson, Editor”


Hazel Henderson © 01/04/2005

In this twenty-first century Information Age, politicians and leaders worldwide stress the key role of education as the bedrock of human development and social progress. Many economists have now widened their horizons accordingly and acknowledge that the wealth of nations lies in educated, productive citizens, increasingly described as “human capital.”

The World Bank began recognizing such new forms of capital in its Wealth Report in 1995 when it conceded that its previous narrow focus on financial and built capital (money and factories) was misplaced. The Wealth Report explained that 60 percent of its measure consisted of human capital, 20 percent environmental capital (Nature’s resources), and that finance and factories only constituted 20 percent of the real wealth of nations. Since then, the Bank has focused on education — particularly of girls — as one of the most productive investments that governments, businesses, and individuals can make. Of course, parents knew this all along!

So why is it that most economic textbooks, models, and national accounts —like Gross National Product (GNP) and Gross Domestic Product (GDP) — still categorize these investments in education as “consumption,” or “expenses,” as if these funds were just money down the rat hole? Such persistent errors force these crucial investments in our most precious resource, our children, to compete in annual budgets of local, state, and national governments with roads, police, sewage treatment, sports stadiums, and even weapons.

The growing breed of statisticians of quality of life and sustainable development (see for example, the Calvert-Henderson Quality of Life Indicators, www.calvert-henderson.com), have called for correcting such errors in national accounts for decades. In 1992 at the UN Earth Summit in Rio de Janeiro, 170 governments pledged in Agenda 21 to implement these corrections by including human resources, unpaid work, ecological assets, and subtracting pollution and resource-depletion.

Recently, another Agenda 21 recommendation has been implemented: the setting up of asset accounts to properly balance taxpayers’ public investments in vital infrastructure: railroads, airports, public health facilities, and other items still too often booked as “public debt.” The United States made these corrections in January 1996 with a stroke of the pen that contributed one-third of the surplus racked up in the last three years of the Clinton administration. Yet this stroke of the pen did correct an egregious error by which economists had overstated governments’ debts. In effect, they had counted these investments as “expenses” and “debt,” rather than the investments they were in valuable public assets like hospitals, concert halls, and universities with life spans of 100 years or more!

Since the United States made this quiet correction to its GDP, Canada followed suit in 1999. Instead of cutting social safety nets to try to reduce the economists’ “public debt,” they discovered a $50 billion surplus.

Now, Brazil is questioning why the International Monetary Fund (IMF) still insists on the old incorrect national accounting of its “public debt” as a percentage of its GDP. The IMF recently agreed that Brazil was right and that its vitally-needed urban infrastructure investments were just that: investments that would produce long-lasting assets essential for Brazil’s development. The IMF agreed grudgingly “on a pilot basis” not to add these investments into its calculations of Brazil’s “public debt.”

It is equally vital for educators and all those concerned with our children’s future to insist that economists at the IMF, the World Bank, and in national governments, re-designate investments in education as just that: investments. Once this is accomplished, these education investments should also be added to the new asset accounts as part of the infrastructure of all societies that pays dividends over at least 20 years and produces our precious “human capital.” Doing this would open the door to more long-term planning, motivate positive investment, and ensure a brighter future for our children.

We can all hold economists to account to see that these errors in their models no longer compromise our children’s future. Remember, economics is not a science, just a profession, with less quality control than most others. Never again should educators, parents, and concerned citizens have to fight annual budget battles over education. With correct accounting, these investments would be safely protected as the long-term assets they truly are.


Hazel Henderson is the author of many books, including Planetary Citizenship (2004), a dialogue with Center founder Daisaku Ikeda, and Ethical Markets: Growing the Green Economy (2006). This essay was published as a contribution to the Center’s Fall/Winter, 2004/2005 newsletter.