Why some nations succeed: The US human capital in perspective

CROSSROADS (Toward Philippine Economic and Social Progress)

Why some nations succeed: The US human capital in perspective

By Gerardo P. Sicat

We can learn a lot from the example of other countries. The United States of America demonstrates that economic freedom is as important as political freedom. Such choices imply the importance of competition, merit, and dependence on markets. Also, a nation is the sum of the institutions that make it up, perhaps even more.

I will approach this topic from a highly personal perspective. I was a casual tourist on May 16, 2012 in the corridors of my alma mater, the Massachusetts Institute of Technology, when my wife interrupted to tell me that the new president of MIT had just been appointed. (I graduated from Economics, not Engineering.)

Halfway along the William Barton Rogers Hall that is famed for its distinctive dome, a ceremony had just been finished to anoint a new president of the Institute. This news was flashed electronically in the corridor.

‘America’s immigrant human capital.’ The new president is L. Rafael Reif (“L” for Leo) an unfamiliar name to me. It would turn out that he is an old hand at MIT, having joined the engineering faculty in 1980.

Reif is an immigrant from Venezuela, himself the son of a young poor immigrant in Latin America from Eastern Europe in the 1930s. Reif received his Ph.D. in engineering at Stanford University and was on his way home to his country when MIT’s offer of a faculty appointment intercepted his life plans.

He rose in the ranks as faculty, researcher and also as research administrator. His last post was as provost of MIT, chosen by Susan Hockfield, who herself broke tradition at the 150-year old institution as its first woman president.

Hockfield came from Yale’s biological academic tradition. She was chosen after an intense search to become the first woman to ever lead a first-rank US educational institution of higher learning. The second such female president – Drew Gilpin Faust of Harvard University – the more well-known university in Cambridge, Massachusetts – was appointed shortly after Hockfield arrived at MIT.

Meritocratic vetting of these leaders meant that they were proven or promising leaders in their own right, their background – whether foreign roots or gender – notwithstanding.

A major story in different directions.’ This story of leadership choice in an important institution could be retold in several dimensions.

It could be told as one of choosing new leaders based mainly on merit and quality of past accomplishments to assure good outcomes.

Or it could be analyzed in terms of how great institutions use in-bred or imported leaders to energize their own evolution into the future. Reif came from Stanford but rose in the ranks of MIT. Likewise, Hockfield came from outside, Yale.

Another take would be the immigration story. Reif and Hockfield represent different waves of immigrations. This is the slant I will now stress.

America’s immigration history in a nutshell.’ The human capital of America has been enriched by immigrants from all nations. The US has been an open society since its founding as a nation. It is a country made by immigrants in search of new opportunities.

The politically persecuted religious minorities of England in the seventeenth century gave the new world a strong Anglo-Saxon trace. Immigrants from Western Europe also peopled America, coming from the stock of persecuted religious and political minorities seeking religious, political and economic freedom.

The agricultural and industrial rise of America’s economy coincided, nay, was preceded by the continuous influx of immigrants. In this fashion, the French, Dutch, Germans, Italians, the Scandinavians followed over the decades and then centuries. The Spanish arrived by way of Latin America. Eastern Europe flooded America when political and religious persecution caused them to move out.

There is a dark side to this story: the slave trade from Africa. A second dark side, though less cruel, was that of coolie labor for America’s service industries. In this second stage of America’s darker immigration history, coolie labor from China and other Asian stock were brought in during the late 19th century to help build the railways and secure the service and agricultural industries of the Western Pacific frontiers.

Openness to immigration also brought in people of different talents and background. Through this open sieve, America’s labor resource – including intellectual and business leadership – improved. Many were attracted to the opportunities afforded by America on its way to becoming a major industrial and political power during its period of growth.

‘Examples of immigrant stock who made the US dominant.’ Pax Americana, the term used by historians to describe American domination of political, economic and intellectual life in the last and present century can be partly seen by counting the American winners of the Nobel Prizes, many of whom are of recent immigrant stock.

The strength of America is one anchored on immigrant stock. Openness allowed the entrepreneurial spirit to grow, business opportunities to multiply through the growth of markets, and scientific pursuits to flourish. And those opportunities themselves further enhanced America’s allure to immigrants.

Immigration rules are stricter today. But America is still able to cherry pick the immigrant pool of applicants from different nations. This assures new and modern stock for the future. The graduate schools are the collective instrument for the culling of the brightest among the bright young people of the world who get admitted each year in these schools.

The best among America’s business institutions choose their managers and technicians on the basis of merit where immigrants have a chance to be taken in. Thus, many opportunities of a lifetime are available for immigrants to find the best of all possible worlds and realize their own dreams in an American setting.

‘Back to MIT: the strength of America’s institutions.’ MIT is just one example of America’s strong institutions – educational and otherwise. The list of great American institutions of learning is long and it is still growing. MIT is in competition with them and it makes each of these institutions better, including MIT itself.

Today, MIT’s faculty appears like it reflects the world in some way. The European strain still contains a strong Anglo-Saxon trace but there are many Asian and foreign names too.

We see hints of Pax Asiatica coming in MIT. Programs that MIT has developed are helping China, Singapore, new institutes of science and technology set up in Abu Dhabi and in Russia, speaking only of on-going projects.

MIT has pioneered distance learning using the internet. It is the first institution to share its faculty’s teaching materials Freely on the Internet. Without enrolling at MIT, many students can access course outlines and reading materials and even lectures in mathematics, physics and engineering. This leap of faith in open source teaching has wowed those who have experienced it.

My email is: gpsicat@gmail.com. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/