An economic defense of the liberal arts

Liberal arts and especially the humanities seem to be in a bad shape. In some colleges entire fields and departments are deeply politicized so much that they seem to be centers of indoctrination, instead of centers of higher learning. Consequently, the popularity of humanities programs is on the decline, especially in the United States and the United Kingdom. The financial return of some humanities degrees seem to be low and even declining. Writing a post defending the humanities, or more precisely, a liberal arts education, specifically from an economic perspective can seem baffling in view of these developments. It can be all the more baffling because most defenders of the humanities do not like economic arguments very much. Rather, they base their defenses of the humanities on (seemingly) non-economic considerations, and often argue that studying them is “its own reward”. I argue that both detractors who attack the humanities citing low returns and defenders who regard economic arguments as verboten are wrong. Studying in a liberal arts framework can be a crucial part of accumulating and deepening our human capital. It can be a sound basis of further specialization, while its students also benefit from an increased appreciation of life in general, leading them to become not only better workers, but also better consumers. Liberal arts education, however, needs to change and adapt in order to serve once again as a bedrock of learning.

Let us start with the potential economic benefits of studying the liberal arts. Here I would give the floor to the late great Gary Becker, the father of human capital analysis (which allegedly “devalues” the humanities!) himself. Here is an exchange from the interview: Becker: …What people should look for then as they invest in their human capital is more flexibility. Instead of having human capital that would be particularly useful for one company or even one occupation narrowly defined, you should try to recognize that the future may involve working at another company or in a somewhat different occupation. So look for flexibility.

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