Back to Beginnings: Credentialism, Productivity, and Adam Smith's Division of Labour

Author(s): Denis J. Davis

Source: Higher Education, Vol. 10, No. 6 (Nov., 1981), pp. 649-661
Published by: Springer
Stable URL: http://www.jstor.org/stable/3446429
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 649

Higher Education 10 (1981) 649-661

Elsevier Scientific Publishing Company, Amsterdam - Printed in the Netherlands

BACK TO BEGINNINGS: CREDENTIALISM, PRODUCTIVITY, AND

ADAM SMITH'S DIVISION OF LABOUR*

DENIS J. DAVIS
School of Education, Macquarie University, North Ryde, N.S. W. 2113 Australia

ABSTRACT

The aim of this article is to examine critically - through a review of human capital
and screening theories - the foundation of factional pressures for upgrading educational
credentials in the labour market. The article refers back to the writings of Adam Smith to
show that not only do the claims of the beneficial and productive social effects of educa-
tional upgrading need questioning but that these have been so questioned for more than
200 years.

Credentialism, Productivity and Smith's Division of Labour

Credentialism (whether or not it is the "wasteful" version described

below) can be defined as pressure to upgrade formal educational pre-requi-
sites for entry into and promotion through labour markets. Credentialism is
a ubiquitous feature of bureaucratic and hierarchical societies. In the case of
Australian society, in spite of attention being drawn to the extent of creden-
tialism and its possible deleterious aspects from sources overseas (see for
U.S.A.: Miller (1968), for England: Dore (1976a,b), for OECD (1976)) and
local (see Williams Report, 1979), examples are easy to find of professional
organisations still pressing and sometimes winning powerful support for the
formalisation and upgrading of pre-service and educational programs. Evi-
dence is available, for instance, in nursing, where the professional association
is pressing for initial training to be removed from "apprenticeship" type
hospital programs and to be placed in formal colleges of advanced education
programs. It is also evident at the level of primary school teaching, where the

* While accepting full responsibility for the views expressed in this article, I would like
to acknowledge the advice given to me in the final preparation of the draft by Professors
M. Blaug and P. J. Foster.

0018-1560/81/0000-0000/$02.50 ? 1981 Elsevier Scientific Publishing Company

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650

majority of the Commonwealth government's Auchmuty Committee (1980)

recommended the lengthening of pre-service education from the present
three to four years. Meanwhile as the debate concerning these recommenda-
tions proceeds, other occupations "wait in the wings"; the level of educa-
tional intake desired by each occupation being linked to the achieved levels
of its economic and social competitors.
Whether or not these particular instances involve "wasteful credential-
ism" is the issue that should be clarified and this in turn depends upon the
net social benefits. In this article, "wasteful credentialism" is defined as cre-
dentialism that is partisan, benefiting the interests of its advocates without
compensatory benefit to the community in general. In deciding if a creden-
tialist move is wasteful or not we can hardly rely on the arguments of the
institutional advocates. In their arguments, professional associations, trade
unions, or educational institutions with a vested market interest in persuad-
ing the public of the benefit of upgrading credentials would naturally not be
prepared to accept that the upgrading was wasteful, nor would they be
inclined to stress the advantages from the educational upgrading to their
incumbent members; advantages in terms of income, job security, or just
selecting other workers with a desired social affinity. On the contrary, these
groups would more than likely stress the improved quality resulting from the
upgrading in service to the community from their members. The public, or at
least those responsible for policy, require, therefore, a certain level of
"informed cynicism" that would enable a careful evaluation of educational
upgrading proposals. This would be encouraged by some understanding of
the academic debate underlying the arguments for and against credentialism;
the debate upon education's relationship with the productive and with the
distributive functions of the economy.

In the development of this article, I aim first to describe how the lines
of this debate, some portions of which are at least 300 years old, might cur-
rently be drawn between some principal, especially the human capital and
screening, schools of thought. In the review, I draw a major distinction
between schools accepting, and those not, the notion that education, at the
post-compulsory level, en masse, has a substantive productive function,
and in so doing I prepare the way for attempting the second objective of the
article, namely, to discuss some principal claims for and against this notion.
In this discussion I intend to follow the common practice of a number
of writers of first presenting and second critiquing the "human capitalist" argu-
ments supporting education's contribution to economic growth but I intend
to do the critique by following a less common though not unpioneered route
of analysing the arguments of one of the original thinkers in this field, namely
Adam Smith (see West, 1964; Rosenberg, 1965). I do this because some of
the more extreme advocates of educational investment in job preparation

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 651

seem to suggest an almost public consensual belief in the "good of educa-

tion", as though no evil can come from it, and thus put their case as though
it were beyond challenge. I want to reject this assumption, and an analysis of
Adam Smith's work helps serve the purpose. Although Smith was one of the
first to conceptualise the notion of "human capital" and is viewed by some
members of the school as its founding father, he did not ascribe to human
capital the importance it has seemingly been currently given as a source of
economic growth; for him, the primary source of growth was the division of
labour, and one could argue that this concept is not so much consistent as
inconsistent with educational investment in human capital. Thus I hope to
show that not only is there now no consensual belief in the "good" of formal
vocational education but that there never has been.

Underlying the public pressure for and against the upgrading of creden-
tials there is an academic debate whose lines seem to be drawn between cer-
tain "traditions". The first gives education an economically "productive"
rationale and maintains on the basis of several arguments that the education
process improves the growth of the economy and the material well-being of
the citizens. Second, another tradition stresses the economically distributive
function of education, and stresses that the education process divides a given
amount of income and jobs amongst the different groups in the community.
Third, we can identify a "hybrid" interpretation, given not just token (for all
schools tend to give at least this) but a substantive acceptance to both ration-
ales, and showing how they interlock together.
The groupings of the "productive" tradition that have relevance for our
discussion are as follow.
The first concentrates upon the positive effect that education has upon
the "store of knowledge" of the community, and how this through its
encouragement of invention and diffusion of technology effects economic
growth. Thus, Denison (1963), though ascribing the greater part of educa-
tion's impact on the U.S. economy to its improvement of human skills, also
ascribed a significant part to the factor of the improved "state of the art",
and evidence will be provided later to show how Adam Smith may have used
the division of labour and seen the leisure of the gentry as partial proxies for
this factor. Incidentally we should note from these two particular cases and
their appearance elsewhere that membership of one "school" does not pre-
clude membership of another.
Second, another group possessing a psychological orientation, as illus-
trated for example in the writing of McClelland (1961) and Inkeles and
Smith (1974), sees education having its impact upon the economy through
the influencing of social and individual attitudes towards modernisation and
achievement. McClelland's thesis ascribes a substantive amount of the prog-
ress made in one society over another to the sources of cultures in motivat-

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652

ing achievement values, such as those transmitted through children's stories.

Inkeles and Smith's work stresses the importance of school, mass media, and
factory experience in modernising individual traits. Thus this school could
also if it so desired claim an association with Smith, insofar that Smith saw
the rationale for popular education in its fostering a "martial spirit" (Seligman,
1910: V. 268).
But it is the "human capital" school which most concerns our arguing
the rights and wrongs of "credentialism", in that its arguments underpin the
positive case for extending schooling. The locus of this version of the "pro-
ductive" tradition in contrast with that of those just described is worker
based: it ascribes education's impact upon the economy through its impart-
ing of skills to the workforce rather than through building up of a storehouse
of national knowledge or national spirit. This investment in the worker is,
after all, what Denison described as the more significant educational factor
influencing the U.S.A.'s economic growth, but historically, Denison (1963),
Schultz (1961) and Becker (1964), writing about the same time, were only
reviving an old interest in the concept of human capital as a tool of eco-
nomic analysis. As early as 1691 Sir William Petty had used the notion to
attempt a capital valuation of England's population, and in eighteenth and
nineteenth century work it was not unusual to refer to the skills of the
workforce as capital. Kiker (1966) suggests that it was the influence of Alfred
Marshall (but see Blaug, 1972b) who drew the economic mainstream even-
tually away from the concept. In national accounting, for example, all
expenditure on education, investment in human capital or otherwise, is mea-
sured as consumption. Marshall gave "practical" reasons for so doing but
even he wrote in 1890 "The most valuable of all capital is that invested in
human beings . ." (1959: 564).
The link of this school with the arguments of Smith would seem to be
a strong one, and it is worth substantiating this with two quotations from
Wealth of Nations: first, in terms of the rationality of the employer's invest-
ment in education

Fourthly, of the acquired and useful abilities of all the inhabitants or members of
the society. The acquisition of such talents, by the maintenance of the acquirer dur-
ing his education, study, or apprenticeship, always costs a real expense, which is a
capital fixed and realized, as it were, in his person. Those talents, as they make a
part of this fortune, so do they likewise of that of the society to which he belongs.
The improved dexterity of a workman may be considered in the same light as a
machine or instrument of trade which facilitates and abridges labour, and which,
though it costs a certain expense, repays that expense with a profit (Smith quoted
in Skinner, 1970: II, Ch. 1).

and second, in respect of the employee's

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 653

When any expensive machine is erected, the extraordinary work to be performed by

it before it is worn out, it must be expected, will replace the capital laid out upon
it, with at least the ordinary profits. A man's education at the expense of much
labour and time to any of those employments which require extraordinary dexter-
ity and skill, may be compared to one of those expensive machines. The work
which he learns to perform, it must be expected, over and above the usual wages of
common labour, will replace to him the whole expense of his education, with at
least the ordinary profits of an equally valuable capital. It must do this, too, in a
reasonable time, regard being had to the very uncertain duration of human life, in
the same manner as to the more certain duration of the machine (Smith quoted in
Skinner, 1970: I, 203-4).

The human capital writers could not then be blamed in thinking that
Smith gives them strong support, particularly when he even defends the eco-
nomic rationality of liberal arts studies. Why, in Smith's time, might one ask,
would these students pursue studies, a living from which only a few of them
could expect to receive, if they were not in fact acting in ignorance of the
market or participating for non-economic reasons? Not so, says Smith, their
behaviour is for two reasons economically rational: people are gamblers
when the prize to be gained is tempting, and they are also initially optimists.
Thus they underplay the risk and overplay the chance of success, but from
the perspective of how they perceive the risk they are acting quite rationally.
I need to make it clear that the arguments that follow are not pertinent
to every version of the human capital school. The principal arguments of the
human capital school, and its measurement of returns, have centred upon the
increasing length of formal (including secondary, and tertiary) education,
and it is with this version that I am concerned. But the human capital school
has other versions that include investment in human skills through improved
health and through on-the-job training; I am not concerned with the former,
but regarding the latter I shall make mention in the context of the "hybrid"
interpretation. But unless otherwise qualified, further mention of the human
capital school is specific to investment in formal education through the
school system.
The final principal productive "school" I want to mention is what I
refer to as the "screening" Type A. "Screening" is an established term refer-
ring to the use of the education system for identifying persons with desired
productive or social attributes. The reasons for doing this, however, have both
productive and distributive rationales, and call, I believe, for a distinction
which here I have labelled Type A and Type B, respectively. The productive
Type A version has been delineated by Arrow (1974). It assumes that the
employer faces a supply of labour and provides jobs requiring a variety of
innate skills or talents. The skills required to persevere and succeed through
the education system are believed to be closely associated with the skills
required by the employer for select positions. Thus the education system

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654

increases the productivity of the workforce, not by imparting skill to the

worker, but by helping those already possessing the required skill to find and
be identified for the job where it can be used, the exercise of finding the
"right shaped pegs for the right shaped holes". The productive value of the
education system lies in its cost-effectiveness as a screen. If society could
find a cheaper way of screening than education at whatever level, the latter
would no longer have a productive rationale.
We now turn to the traditions based on a distributive rationale, those
from which an attack upon credentialism could be launched. Basically they
argue from a screening "Type B" rationale which maintains that the skills
required and the skills offered in the market place are not in the bulk of
cases so much different that they could not be matched by a combination of
suitable basic schooling and on-the-job training, and that from the produc-
tive perspective higher education is largely non-functional. The role, then, of
requiring extended schooling for job entry is merely to ration the number of
"good" jobs ranked high on a "contrived" hierarchical scale (which has no
more economic foundation than the educational qualifications required to
enter them) amongst the worker supply. As it assumes that selection has no
economic rationale, this view fits naturally into sociological interpretations
of the market, having close links also with dual-labour market and labour
segmentationist arguments (see for example, Piore, 1973; Reich et al., 1973)
[1]. Its indictment of higher education (and of credentialism) is that it sees
higher education as a means of creating barriers; drawing income, good jobs,
and security away from those without tertiary qualifications. Given that
access to and "knowledge of how to play" the system favours the already
socially and economically privileged, the process is inequitable. Thus Berg
states

Educational credentials have become the new property in America. Our nation,
which has attempted to make the transmission of real and personal property diffi-
cult, has contrived to replace it with an inheritable set of values concerning degrees
and diplomas which will most certainly reinforce the formidable class barriers that
remain, even without the right within families to pass benefices from parents to
their children (Berg, 1971: 185).

while Blaug, looking at the matter from the perspective of wastage, comments

It is also obvious that the "professionalisation" of certain occupations, like medi-

cine, dentistry, teaching, law and accounting invariably leads to longer courses and
more technical syllabus, thus effectively limiting entry to the profession by raising
the minimum requirements for qualification. This acts to reduce the number of
skills that are being labelled and this narrows the range of potential substitution
possibilities between different skills, all of which is far from optimal; what started
as an effective device for reducing the costs of obtaining information ends up all
too frequently as a potent source of the malutilisation of labour (Blaug, 1972a).

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 655

I have referred to the distributive group as consisting of "schools" of

persons sharing a common belief in a screening Type B rationale but who
differ over whether they place the responsibility for creating labour market
barriers on capitalist owners (which Marxists and some other radical thinkers
might do) or on the workers themselves. Shortly we shall recall this distinc-
tion when asking why it is, if such an inequity exists, society would tolerate
it and answers would differ according to the parties concerned. Berg seems
to identify both viewpoints in two different writings: in his Education and
Jobs (1971) he seems to concentrate primarily upon employer accountabil-
ity, but in an article published four years later (1975) he concentrates upon
professional and paraprofessional organisation. This article describes very
well how the party with the vested interest in licensing or upgrading will
advance a public cause based upon a human capital rationale while primarily
being concerned with the advantages of monopolisation.
Now let us return to Smith. Considering that we have linked him so
closely with the "productive" tradition, it might seem contradictory that
Adam Smith anticipated the screening Type B argument at least two years
before his publication of the Wealth of Nations. Surprise is likely for those
who believe Smith to be merely a "capitalist" economist, but to so label him
without our analysing the context in which he wrote is to treat him far too
simplistically. Smith was the scourge of monopolies, and we might remember
in this context his famous remark of gatherings of businessmen (and perhaps
implicitly of academics) as conspiracies against the public interest. Thus in
1774 on his being asked to advise on an attempt to confine the practice of
medicine to all persons with a "qualified" university degree, Smith recom-
mended against it. We might think this surprising but in Smith's time the risk
could be the same whether or not one went to the university-trained doctor
or to a "quack". Smith saw the move as an attempt by doctors to monopo-
lise the market, and his arguments resemble the screening Type B, given
above (West, 1969: 159-162).

The case just mentioned gives us a valuable insight into why it is mis-
leading to identify Smith with a human capital rationale for the expansion of
education in the population. For its empirical validity the human capital
rationale depends upon the public interest being identical with the private,
but to assume Smith makes this assumption from the statements quoted
above concerning the private investment value of possessing vocational skills,
would be no more valid than coming to the rather commonly held belief that
his analysis applied only to "laissez-faire" situations. The famous "invisible
hand" model of Smith, the model whereby market forces would determine
the socially optimal production and distribution of goods for consumer satis-
faction was a yardstick, perhaps a goal, but certainly not, as Smith's attitude
to the doctors indicates, a belief of the way the world really operated. One

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656

can refer to Rosenberg (1960) to see how Smith used this model to test the
institutional settings of his day. We would probably be right in inferring,
from the instance of the doctors and from a number of his caustic state-
ments on the selfishness of educationists in the Wealth of Nations, that
Smith would no more have directly attributed a social gain from the differ-
ential incomes ascribed to education in our time than in his own. Obviously
for Smith there was a world of difference between a private and a social
benefit. It is interesting to note that though Smith recommended the provi-
sion of public education he did not do so on human capital grounds.
It is thus possible using Smith's own technique of viewing issues in their
institutional context to critique the human capital measures and derive
therefrom an analysis of the credentialist claims of social benefit. But this
track, though promising, is not the one I want to follow; I would rather draw
attention to something I believe far more challenging to the human capital
rationale, the effect of the division of labour upon the productive rationale
of education.
Smith stressed the prime role of the division of labour in causing eco-
nomic growth. The opening paragraph of the Wealth of Nations reads

The greatest improvement in the productive powers of labour, and the greater part
of the skill, dexterity, and judgement with which it is anywhere directed, or applied,
seem to have been the effects of the division of labour (Smith quoted in Skinner,
1970: I. 1).

Smith then elaborates on how the division of labour affects the econ-
omy through improving labour's dexterity and inventiveness, thus the first
impression one gets is that Smith believes in a compatibility of specialisation
with human capital skills. But what Smith wrote here must be seen in the
context of what he later wrote in Book V, where he roundly condemned the
deskilling and the debilitating effects of the division of labour.

In the progress of the division of labour, the employment of the far greater part of
those who live by labour, that is, of the great body of the people, comes to be con-
fined to a few very simple operations, frequently to one or two. But the under-
standings of the greater part of men are necessarily formed by their ordinary
employments. The man whose whole life is spent in performing a few simple opera-
tions, of which the effects are perhaps always the same, or very nearly the same, has
no occasion to exert his understanding or to exercise his invention in finding out
expedients for removing difficulties which never occur. He naturally loses, there-
fore, the habit of such exertion, and generally becomes as stupid and ignorant as it
is possible for a human creature to become (Smith quoted in Seligman, 1910: V.
263-4).

In so doing he indicated a viewpoint shared by other contemporaries of

the time; for example Adam Ferguson writing in 1770 about the "age of
separations" commented

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 657

It may even be doubted, whether the measure of national capacity increases with the
advancement of arts. Many mechanical arts . . . succeed best under a total suppres-
sion of sentiment and reason; and ignorance is the mother of industry as well as of
superstition.

One might use the dates to argue that Smith took over the idea from
Ferguson, but in fact, as Smith's lecture notes attest (West, 1964: 27), it was
a view he had held long before the latter's publication.
An attempt by West (1964) to explain the difference in viewpoint of
Smith eventually concludes, rather unconvincingly I feel, that Smith, suc-
cumbing to righteous indignation, allowed himself to over-react to the
deleterious effects of the division of labour at the expense of maintaining
consistency with the more reasoned beneficial effects described earlier.
Rosenberg (1965), however, in reply, does not agree, and maintains that
Smith was being quite consistent with a view he had of a hierarchical scaling
of invention involving "break-through" and "adaptative" levels, a view that
went a long way to reconciling the seeming contradiction. The latter level of
invention was the sort of thing, described by Smith in Book I (for example,
Skinner, 1970, I, 114) that the ordinary workman specialising in only one
or two tasks would be able to discover when he wanted to make his job less
arduous or time-consuming. But though productive, it was the type of inven-
tion that would soon be fully exploited. Further gains would then depend
upon the "break-through" inventions, and these in turn depended upon the
very attributes, that is, leisure for contemplation and knowledge of a wide
perspective of tasks, the division of labour was causing the ordinary work-
man to lose. The so-called contradiction of "gain" and of "loss" of initiative
and skill in the worker through the division of labour was, therefore, resolved
by recognising the nature of invention being conceived, but based upon Smith's
ranking of inventions the gains ascribed to the worker's specialisation would
seem limited while his losses in skill would seem enduring. But this did not
mean that education could not have a productive rationale through the divi-
sion of labour because it could produce a group with the leisure whose func-
tion Smith saw as advancing science and research. Thus Smith did not see
productive rationale of education in terms of human capital, but in terms of
the more elitist increase of the national "store of knowledge" and advancement
in the "state of the art".
It would seem then that the grounds for arguing that a modem indus-
trial state does not need extensive educational investment in human capital
are at least as old as the argument that it does; a point that Blaug made clear
in 1972 (Blaug, 1972b), when he took the assumptions of a number of recent
writers to task - not only in regard to their interpretation of Adam Smith but
the whole of the Classical School. But if in fact education through human capi-
tal development does not play a significant part in economic growth, then we

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658

should not allow the significance of the point to escape us. For if the con-
tention that it does were true, the screening Type B argument applied to a
large part of the educational workforce would be irrational and societies
would be discriminating at the expense of economic viability. If it were false,
if production does not depend on skills acquired through education, screen-
ing Type B would be quite possible, credentials thus becoming one of the
alternative ways of distributing income and jobs without affecting produc-
tion. The implication of this is quite challenging for we would then need to
accept that the so-called commonsense notion that the workforce is produc-
tively dependent on its hierarchically credentialled structure is not fact but
myth: a myth, however, that is legitimising the inequalities of distribution of
primary jobs, of income, and of employment. We might then suspect that
those who encourage this myth, the incumbents of primary labour markets
protected by credentialist entry, and the educational system supplying the
credentials, would, rather than society, be benefiting from its propagation.
That brings us back to the distinction made earlier between the two
Type B screening viewpoints. If entry to the labour market were controlled
by capitalist owners, given the assumption that production is not tied to
formal education, there would seem to be no real reason why employers
would elect to distribute income and jobs on a credential basis. Why reduce
profits or depress wages of other workers by employing credentialled persons
expecting higher salaries? Thus with capitalists in control the practice would
seem to have no logic, and the validity of the Type B rationale would be sus-
pect. But there is some logic if the incumbent workers are in control of entry
to the market, as is sometimes the case in bureaucracies, industries with
powerful unions, and those dominated by a professional association or
"ethic". The logic of credentialled entry is then two-fold; simultaneously
with reducing competition for entry, it legitimises the way the jobs are
rationed, selection through the education system still being believed by the
public as the fairest method of selection. The "myth" thus has two parts:
that skills acquired through formal education are productively necessary, and
that the acquisition of this formal education is socially equitable.
But the Type B screeners are really stretching our credulity in asking us
to believe that the near universal, long developed, educationally based hier-
archical job structures of the industrial state have no productive rationale,
that it is founded on a myth. Certainly, the "de-skillers" can show the
effects of the division of labour on certain occupations and industries, giving
in so doing creditable and important historic and current examples of jobs
and skills disappearing as productivity increases, but this is only seeing one
factor in the process. The other is the growth in demand for more sophisti-
cated regulatory and distributional techniques, requiring appropriately
skilled administrators, as populations grow and become more concentrated.
Now it is true that this demand has been substantially induced by the divi-

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 659

sion of labour itself - that if we had not elected to specialise, to trade, and
to live in urban concentrations with all their strain on transport and living
conditions, we might not have required these distributional managerial, and
remedial services. But the point is that we have developed this way, and
without these services, demanding quite sophisticated skills, our society
would break down. It is possible, and I have argued such elsewhere (Davis,
1977), that we might saturate the demand for such skills, and, also to ask
whether we have to organise society this way is another matter, raising anar-
chist and "small is beautiful" arguments; but in this discussion I am assuming
the structure we have got and its need for its own sophisticated servicing and
accompanying schooling-imparted skills.
That is the first point. The second brings us to the matter of a com-
promise between the screening and the human capital interpretations of the
education/work process, what I have called a "hybrid" interpretation. The
basic argument is that the screening Type B argument could be substantially
correct up until the time the employees enter the primary job market; in
other words, the formal educational credentials could be merely tickets of
entry, rationing good jobs and good incomes amongst the people. Up to this
point the productive potential between credentialled and non-credentialled
workers may not be, except in certain technically specific occupations, such
as medicine and engineering, that great. But the human capital argument
then becomes valid with its on-the-job training version. There is a supposi-
tion here that there is an interaction between the worker and the job, and
the job in the primary market "bought" with the credential gives a positive
feedback increasing the productivity and ability of the worker in a way that
other jobs, externally disciplined and routine, do not.
This interpretation helps discuss one of three objections that Layard
and Psacharopoulos (1974) had to the earlier screening arguments. Why,
they asked, if credentials were merely being used to ration jobs on just an
assumption rather than a fact that the credentialled were more productive,
would employers persist as they do in paying the credentialled higher salaries
beyond the early years of recruitment? On a pure screening Type B hypothe-
sis with capitalist owners in charge of promotion the logical development
would be, as Layard and Psacharopoulos state, for differentials to re-adjust
as employers become more informed of each recruit's productivity. Hence, if
credentialled workers continue to be paid more they must be more produc-
tive; obviously a strong case against the Type B screening when capitalist
owners are in command. But though this argument rejects Type B screening
under these conditions, it does not give us any reason for supposing that the
productivity of the credentialled worker can be ascribed to the education
that earned him the credential. The difference in productivity could just as
easily be due, as the "hybrid" version would hypothesise, to the worker's
interaction with the job environment and on-the-job training in its broadest

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660

sense. And that is about as far, at the present stage, the debate can proceed,
because as Layard and Psacharopoulos state, the testing of the source of
productivity - whether it is located in the education before or after the job
has commenced - is a very difficult empirical exercise.

The conclusions that we must draw then are that firstly we should be
very wary of credentialist arguments that draw upon a supposed consensual
belief in the social benefit of formal vocational education. Our analysis has
shown that it is not a consensual belief, and never has been. Secondly, we
should bear in mind that in certain institutional settings and under certain
economic circumstances the relative importance of education's productive
and distributive functions probably varies, and the assessment of the creden-
tialist arguments requires the identification of their context. Finally, we
should remember that the repercussions of upgrading could be extensive and
from a policy perspective almost irreversible, releasing pressures of demand
for education that could destroy the value of the credential on which the
upgrading was argued, and unleashing pressure for reciprocal upgrading in
associated occupations. These pressures make the decision to retreat from
the public subsidy of educational upgrading much harder to accomplish than
the decision to institute it.

Note

1 Dual-labour market analysis classifies the labour market into primary jobs, those jobs
with security and career orientation, and secondary, those tending to be "dead-end",
and insecure. I shall in the text be associating credentialism with primary job markets.

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