As previously noted in this chapter and chapter three, there are a significant number of Indian middle-class parents and ‘the growing segment of the upwardly mobile rural and urban poor’ (Dhesi, 2001, p14), with the father influenced by his educational background and his occupation (Agarwala, 2008; Blau & Duncan, 2000; Mazzarol & Souter, 2002), who invest their financial capital in their children’s education, to develop their human capital, i.e. knowledge and skills, through masters business programmes, in order to hopefully secure a competitive advantage and thus future employment, and improved salary, for their offspring (Becker, 1993; GMAC, 2008; Shultz, 1961). Altbach (1993) argues that Indian parents consider that foreign education i.e. American higher education may result in even greater career success.
142 Sociologist, Bourdieu (1977), and economist, Becker (1993, p21), both argue that the family is important for educational achievement; for the development of ‘knowledge, skills, values and habits of their children’. Becker (1993) also argues that families with greater economic capital can support their children through their education, or, as in the case of poorer families, they loan their children money for their education to be paid back later (ibid). Bourdieu (1977) argues that culture and education are also important to influence educational outcomes, and thus financial gain. He further argues that those parents from higher social classes, who often have educational credentials and higher occupational status, often have greater economic capital, and greater cultural capital, all of which enables and influences their children to study higher level qualifications, resulting in a replication of their parents’ social status. Other studies also reflect Bourdieu’s views i.e. Aschaffenburg & Mass, 1997; Coleman 1988; Fitzgerald & Delaney, 2002; McDonough, 1997; and Di Maggio (1979, p1461), who argue that Bourdieu’s main focus is the ‘intimate relationships among culture, power, and stratification’.
In order to understand the term “capital” it requires defining; Lin’s (2001, p3) economic definition states that it is:
‘investment of resources with expected returns in the marketplace. Capital is resources when these resources are invested and mobilized in pursuit of profit – as a goal in action. Thus capital is resources twice processed. In the first process, resources are being produced or altered as investment; in the second, the produced or altered resources are being offered in the marketplace for a profit’.
Nahapiet (2011) maintains that in economics, there are different views and definitions about the concept of capital, the detail of which is beyond the scope of this study. This study does, however, review the most significant and relevant concepts which have been used to investigate the topic.
After Adam Smith’s Wealth of Nations (1776), ‘labour was treated as a homogenous category’ (Brown, Green & Lauder, 2001, p3), disregarding the
143 skills of workers e.g. human capital, with a concentration on the division of labour into tasks which would ensure economic growth. A later theory, the classic theory of “capital” as described by Marx, was conceptualized as ‘the surplus value captured by capitalists or the bourgeoisie, who control the means of production…where labourers are paid for their labour… and… where surplus is captured by the dominant class’ (Lin, Cook, & Burt, 2001, p4); this is a theory based on the ‘exploitative nature of social relations between the two classes’ (ibid). This later developed into what Lin (2001, p8) refers to as ‘neo-capital theory’, which is associated more closely with the ‘process of labour’, which rejected the idea of labour as a homogeneous phenomenon and was thus developed into the concept of human capital i.e. the development of knowledge and skills, through education, training or work experience, and which, according to Becker (1964), adds value to an employee which may be exchanged for wages and may result in increased productivity, and economic growth (Brown, Green, & Lauder, 2001; Lin, 2001).
Human capital, according to Jones & Spender (2011, pp1-3) is a heterogeneous and dynamic concept and is the ‘lynch-pin of social and other forms of capital …. The ability of combinations of things and ideas to produce value over time’.
Further, it is argued that human capital, may be invested in, in order to produce greater returns for individuals, and may result in the accumulation, or surplus of capital, which may then also be invested, or used for personal satisfaction; thus, the owners of this capital could also become capitalists themselves (Lin, 2001). Those with ‘better human capital’ (ibid p12) are available in the labour market so that employers can ‘capture this human capital by hiring these labourers’ (ibid). The value of the human capital embedded in these employees can be calculated by employers, and attractive wages and benefits will attract those with the best human capital. Lin (2001, p9) further argues that human capital may be regarded as an investment that will result in increased worth, a worth which increases through expenditure on knowledge and skills, by gaining education or training, or by on the job work experience. This is a value which Schultz
144 (1960, p8, cited in Lin, 2001, p9) suggests should be estimated by its yield not its cost, ‘the resulting increase in earnings is the yield on the investment’. It is an ‘investment, with an expected return in the market place’ (Lin, 2001, P19); and a ‘market’ may regarded as either, ‘economic, political, labour, or community’ (ibid). Wages and/or benefits from investment may then be used to attract those with the best human capital in any particular market. It should also be noted, however, that, despite evidence to show that investing in human capital does provide returns to individuals, companies and the economy, calculating the return on the investment in education, and or training presents some problems, as the cause and resultant effect may not be as simple as they seem. Issues of ability, measurement bias, measurement of productivity and returns to the economy also need to be addressed (Blundell, et al, 1999).
The concept of human capital theory, which some regard as a ‘mechanistic view of the individual worker’ (Brown, Green & Lauder, 2001, p13), was, it is suggested, developed from Adam Smith’s Wealth of Nations, 1776, by Schultz, in the 1950s, and later by Gary Becker, and Jacob Mincer, from Columbia and Chicago universities respectively (Brown, Green & Lauder, 2001; Lewin, 2011; Nahapiet, 2011). Becker (1962), argues that investing in ‘human capital’ through such activities as education and on the job training, primarily affects earnings, and his original studies were used to evaluate the financial rate of return from college and high school education, and the idea that investment in human capital is tied in with intangible resources and ‘may be useful in attempts to understand the inequality in income among people’ (ibid, p9). Becker (1993, p17) still contends that:
‘high school and college education greatly raises a person’s income, even after netting out direct and indirect costs of schooling and after adjusting for the better family backgrounds and greater abilities of more educated people. Similar evidence is now available … from different cultures and economic systems’.
Becker (1993) also argues that human capital theory assumes that education improves earnings and productivity, whereas alternative views deny that productivity occurs only that credentials are gained. He suggests that
145 employers want evidence of potential employees’ abilities and performance, not just certificates.
Nahapiet (2011, p76) suggests that, currently, ‘educational credentials are a simple and readily measured proxy for skills and competence’ and that there is now a need to review individuals’ ‘actual knowledge and skills’ (ibid) and not just the time spent in education, the measures of which should also include ‘innate talents and abilities’ (ibid). The OECD (2001, p18) defined human capital as ‘the knowledge, skills, competencies and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being’.
As previously outlined economists regard education, as a form of investment in human capital. This is an investment in knowledge and skills to improve an individual’s future prospects and for economic development. This knowledge and skills may also provide an individual with credentials, which may have global appeal and which ‘workers own’, and can use to determine their employability and levels of income, and to compete in the ‘knowledge wars’ (Brown & Lauder, 2006), in the global market place of the twenty first century. Brown, Green, & Lauder (2001, p11) have also suggested that from a ‘neo-liberal view, questions of skill formation are limited to ‘supply side’ policies that place schools, colleges, universities and training organisations on the frontline in the battle for economic competitiveness’; and that, the state is responsible for providing lifelong learning opportunities for workers to ‘gain education and training necessary to develop marketable skills (ibid); and to learn more and earn more. Moreover, by studying in an elite university it brings even better returns (ibid), in the form of improved social identity.
Brown, Green & Lauder (2001, p28) further argue, that investment in human capital, e.g. postgraduate programmes, can result in a zero-sum game, as some elite groups limit entry to elite educational institutions by excluding those from less privileged backgrounds. As previously highlighted in this thesis, in the section on the Role of Higher Education for Stakeholders,
146 Brown, Green & Lauder (2001, p9) argue that what is facing individuals in the twenty first century may be regarded as a ‘global auction’, bringing more rewards only for those who have gained ‘human capital with global appeal … ’symbolic analysts’ (Reich, 1991:177) e.g.… engineers, and management, financial and energy consultants’ i.e. the best top-talent, or the educated elite, from the top global elite universities, thus perpetuating social divisions in different societies, a phenomenon which was also highlighted by the work of Bourdieu (1986), and later by Bourdieu and Passeron (1990). Brown, Green and Lauder (2001, pvii) further argue that development of human capital, ‘better education, better jobs, and better incomes can no longer deliver the American Dream’, or perhaps, even the Indian dream, a view which is explored in this study.
Waters (2008) highlights that, in addition to human capital, and in order to understand middle-class ambitions, in times of increasingly competitive environments, as in the case of developing economies e.g. China and India, researchers need to understand the importance of the other capitals for social reproduction by middle-class families and she refers to Bourdieu’s theory of cultural capital to review these ideas. Bourdieu (1986) argues that capital can be in a material form e.g. economic, or in immaterial form as cultural or social capital, and he suggests that ‘capital is accumulated labor (in its materialized form, or its ‘incorporated,’ embodied form)’ (ibid, p241), to be used for outputs; which, he further argues, comprises three principal forms of capital often employed to maintain social status.
Lin (2001 p14) also references the work of Bourdieu, and of Bourdieu and Passeron, to present a distinctive and alternative neo-capital theoretical explanations of human capital. This Lin (2001) refers to as a ‘theory of cultural capital.. with .. culture defined as a system of symbolism and meaning’. Lin (2001) further suggests that Bourdieu’s views were consistent with Marx’s in that one class dominates another with those who occupy the top positions in society dominating those of lower class through education. Lin also noted that education or training, which is regarded by some as human capital, is also regarded by others ‘as cultural capital’ (Lin, 2001, p15). Lin further argues that Bourdieu does, however, share similar features
147 to the work of Becker, as he focuses on the ‘labourer and on relations between acquired capital and the market’ (Lin, 2001, p16).
Bourdieu considers that cultural capital can exist in three forms, in an objectified state, an embodied state or institutionalised state (Bourdieu, 1986), and, Brown (1995, p29) argues that these are ‘dominant forms of cultural capital associated with middle class’, which may provide, ‘access to bureaucratic careers’ are he further argues ‘being devalued due to credential inflation’, and that competition for a livelihood in the future will increase class conflict.