Nurturing human capital

In the 19th century, industrialization swept the world. Many European nations expanded their welfare states but kept their education systems exclusive.

The U.S. tried the opposite approach. American leaders expanded education and created the highest-quality work force on the planet.

That quality work force was the single biggest reason the U.S. emerged as the economic superpower of the 20th century. Generation after generation, American workers were better educated, more industrious and more innovative than the ones that came before.

That progress stopped about 30 years ago. The percentage of young Americans completing college has been stagnant for a generation. As well-educated boomers retire over the next decades, the quality of the American work force is likely to decline. Mitt Romney captured the consequences in his withdrawal statement: "I am convinced that unless America changes course, we will become the France of the 21st century — still a great nation, but no longer the leader of the world."

Americans feel the slippage.

If I were advising the Republican nominee, I'd ask him to call for a new human-capital revolution, so that the U.S. could recapture the spirit of reforms like the Morrill Act of the 19th century, the high-school movement of the early 20th century and the G.I. Bill after World War II.

Doing that would mean taking on the populists of the left and right, the ones who imagine the problem is globalization and unfair trade when in fact the real problem is that the talents of American workers are not keeping up with technological change.

Doing that would also mean stealing ideas from both the left and right. Liberals have spent more time thinking about human capital than conservatives, who have tended to imagine that if you build a free market, a quality labor force would magically appear.

Doing that would also mean transcending economic-policy categories. If there is one thing we have learned over the bitter experience of the past 30 years, it is that per-pupil expenditures and days in the classroom are not sufficient to produce superb information-economy workers. They emerge from intact families, quality neighborhoods and healthy moral cultures.

Finally, doing that would mean laying down lifelong policies. Human capital development is like nutrition — you have to do it every day.

The first group of policies would foster two-parent families. If all American families looked like the intact middle-class ones, we wouldn't have nationally low education outcomes. Married men earn 10 percent to 40 percent more than single men with similar skills, and their children are much more likely to graduate from high school. But among the lower-middle class, there is a poisonous spiral of economic stress and cultural decay.

A new working-class tax credit applied against the payroll tax would reduce some of the stress. So would a larger child tax credit and increases in the Earned Income Tax Credit. The federal budget should bestow less on seniors and more on young families.

The second group of policies would involve early-childhood education. There could be nurse-home visits for children in chaotic homes so that they have some authority in their lives. Preschool should be radically expanded and accountability programs put in place.

Third, the next president has to loosen the grip of the teachers' unions. Certification rules have to be radically reformed to attract qualified college graduates. Merit pay has to become the norm.

Fourth, Democrats like to talk about college affordability, but that's the least-important explanation for why so many students don't complete college. The real reasons are that students are academically unprepared and emotionally disengaged. National service should be a rite of passage for 20-somethings, and these volunteers could mentor students through high school and college years.

Fifth, portable health-insurance and retraining accounts would give adults workers security. Income taxes are not going to be coming down, but they need to stay where they are. As Edward Prescott has shown, higher taxes mean less work, and less work means less worker development.

The point is this: Democrats believe in fine-tuning the economy. They believe in intervening in a thousand little ways to address problems. Republicans believe these thousands of little Band-Aids hinder movement and distort productivity. But Republicans do believe, or at least should, that positive government can help prepare people for the rigors of competition, so they can have an open field and fair chance.

That's the conservatism of the fresh start.

David Brooks is a regular columnist for The New York Times.