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Intellectual capital and the new aristocracy

In a thought-provoking lead essay titled “America's new aristocracy’ the Economist of the week covering January 23 to 30, provides deep insights into the new phenomenon of intellectual capital.

Intellectual capital is the driving force behind the knowledge economy which dominates the world's most powerful country, the U.S.

The aristocracy

The magazine recalls early in this presentation what a great President of the U.S., Thomas Jefferson opined in describing two distinct strains of aristocracy. They are the natural aristocracy comprising the virtuous and the talented and the artificial aristocracy founded on wealth and birth.

Incidentally, President Jefferson is a hybrid version of both. An outstanding lawyer of his time, he was bestowed with what is known as a dowry in this country which included 10,000 acres of land and 135 slaves! Slavery at the time of Jefferson was widely practised in the U.S.

Biggest share

It is today a known fact that the backers of intellectual capital derive the major share of the economic pie not only in the U.S. but also in nations such India and China.

This writer observed that the essay referred to, has some features common to both the USA and Sri Lanka may be on account of the freedom both economies enjoy despite the enormous gulf between the two. In other words, Sri Lanka's free economy is tiny in comparison to that of the U.S.

Also in case of both unlike the generations of the past, the modern professional usually marries another professional.

But in the US this contributes to the increase in inequality, by something like 25 percent, since professional couples or to put it in another way such households enjoy larger incomes that to the others.

Also such power couple unions not only in the US but also in other economically powerful nations lead to a generational stimulus which has a tendency to last decades.

Such couples also conceive bright children, bring them up in a congenial atmosphere and environment and send them to good schools, all of which in the final analysis add to the intellectual capacity of a country. The parental support to schools in another notable feature.

Today the connection between parental income and academic achievements of their progeny is stronger than ever.

Middle class woes

As opposed to the above middle class unfortunately tends to accumulate large debts in educating the young particularly in the pursuit of a post graduate degree which seems a necessity to get a good job.

This trend which the article says is prevalent in the US is to an extent common to Sri Lanka too.

Also in the US there is yet another social divide.

This is between a college graduate and a high school ‘grad'. The former is able to earn 65 percent more than the latter.

In other words, once you pass out of the best universities in the US you straightway move onto a good job. As a result you earn more or are potentially able to reap better rewards.

These facts are, however, not exclusive to the US but according to the magazine they are most visible in that country.

They were highlighted in point of fact by President Barack Obama in his state-of-the-Union address on January 20.

This is due to the system prevalent in the US which favours the better off more than all other countries in the rich worlds.

Role of universities

According to the Economist the universities that mould the lives of the American elites are inclined to look out for talented students from diverse segments of the population.

And what's more, the universities waive-off fees from the poor who make it to the lvy league. Also in describing a special feature in the US known as “hyper funding” it says that the US is one of the three rich countries where more money is spent on schools in economically better-off areas than in poor areas, which is clearly inequitable.

In advancing a solution to this state of affairs the Economist does not wish to discourage the rich from investing in their children, but the nation (the US) needs to do substantially more to help clever children who do not have rich or posh patents.

But a system that encourages the gifted from the poorer and lesser privileged homes needs to be introduced early - which means when the children are very young and when the mind is more malleable and could be moulded and appropriate stimulation of their mind, has the best effect.

American dream

All this has led to a fear of profound gravity that weighs heavily in the minds of the more enlightened and thoughtful of the political hierarchy of the U.S.

As a sequel to the lead essay or the editorial in the magazine in question, some salient comments on the US educational system which has been the envy of many nations and which many countries also try to emulate relates to the existent inequality.

The US educational system is the breeding ground of the elites today and the much referred to inequality bother the top layer of US society.

To be continued

 

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