What happens to schools when human capital theory runs out of capital? What future do we give our kids?

In 1964 Gary Becker wrote Human Capital, and treated schooling as an investment: spend years in a classroom now, collect higher wages later.

Once school is an investment, its job is to produce employable people, and you can see that logic in most of what we take for granted. Subjects are ranked by how useful they look to an employer, and success is measured by what comes next, such as the ATAR, the degree, the salary.

Ask a child what they want to be when they grow up and you are quoting this theory back to them.

Yet the deal only works if employers will pay extra for what school puts in your head. AI can now write, summarise, code, translate and tutor, very soon very much more. Routine physical work is next on their list.

So suddenly the idea that school exists to prepare students for the workplace is turned on its head. A school built to stockpile knowledge for employers is investing in an asset that is losing value every year.

What future do we give our kids?

School was never meant to be only about jobs, The aspects that will keep their value are the ones a machine cannot do for you - judgement, character, working with other people, making real things, and knowing when the AI is wrong.

That is the thinking behind the ARC Day at PrimarAI. A third of the day goes to practising the basics with an AI tutor, because you cannot challenge what you do not understand. A third is spent with a teacher and the screens off, and a third on the human skills no theory of capital ever priced properly.

Human capital theory asked what a child would be worth. The better question is who they will become. The full plan is at primarai.com.au.