The Rise of Human Capital

The first of these was the role of literacy in acquiring, consolidating, and signalling social status. From early on, in the upper classes everywhere in Europe, that is, excluding all those in trade or manual occupations, reading and writing skills were virtually universal. Yet how ‘necessary', in practice, was this to the English gentry or to the members of the ‘three robes' in France? For some it would have been very important for the exercise of their occupations, but for many others—all those who were not actively engaged in administering estates, participating in politics, public administration, military activity, or justice—it was hardly imperative. On the other hand, not to receive an education, probably at a higher level

than the simple three Rs, would have been unthinkable, so much had it become a mark of social distinction, apart from the fact that anyone in these strata was liable to be called upon to undertake such tasks at any moment (Queniart 1977). The mass of the population was not alien, however, to such considerations either. Further down the social ladder, for anyone seeking upward mobility, literacy could be a powerful and indispensable tool. In late seventeenth­century rural Catalonia, for example, rich peasants who sought to rise socially, left the traditional hearth to go and live in the town and had their children educated.²¹ The same goes for Griete Pietersdochter, a poor widow with four illiterate children in seventeenth-century Amsterdam. Her second husband was also of humble origin but was able to become rich and rose to high officialdom in the city.

A second motivation for acquiring literacy is illustrated by a recent article by Nilsson, Pettersson, and Svensson (1999), who have identified the need for a more powerful ‘transactions technology' among farmers in southern Sweden. Around the turn of the eighteenth to the nineteenth centuries, it became increasingly important for them to be able not only to sign their names clearly but also to be able to apprehend the meaning of legal charters, leases, titles of ownership, and so on. On this depended their successful participation in the then on-going process of land redistribution and enclosure, the legal intricacies of which were hardly minor.²² As a result, during the 1780—1820 period, in freeholding parishes, the literacy of peasants rose from around 40% to over 80% and the highest rate was to be found among those who applied for enclosure.²³ Obviously, situations of this kind were not so common in earlier periods but the concept of a ‘transactions technology' finds a useful application in the far more numerous cases of participation in local government by members of the ‘popular classes'. Thus, it is interesting to note that in several well-known instances of low-income mountainous regions, where literacy was unexpectedly high for a rural milieu, an active involvement in a very open and democratic conduct of local affairs was prevalent. This was so, for instance, in the Alps near Briangon during the eighteenth century, where at assemblies of heads of households, more than 90% of them signed legal documents, the same happening contemporaneously in Hesse (Granet-Abisset 1996; Hofmeister et al.1998').

The preceding examples illustrate some of the ways in which the self-interest of individuals and even of communities might be served by raising literacy standards. Human capital in this form found its most powerful motivation, however, in its day-to-day usefulness for the exercise of professional occupations and in this sense was strongly determined by development and economic growth. Both points have been forcefully made in a variety of national and chronological contexts and the evidence that sustains this is nothing less than abundant. For the macroeconomic perspective, what has been asserted by de Vries and van der Woude (1997) about

seventeenth-century Netherlands can be claimed for almost anywhere in early modern Europe.²⁴ The importance of education to industrialization remains unclear and contested but its importance to the development of a differentiated, complex commercial economy needs no further rehearsal here. From a micro point of view, the conclusion is the same. Already in the sixteenth century, in early Reformation Germany, many towns were promulgating ordinances to foster education, not on religious grounds, but because it was deemed important that both artisans and tradesmen learn to read, write, and count (Gawthrop and Strauss 1984). The same functionality was present in seventeenth­century England where the literacy of craftsmen was deemed ‘roughly commensurate' with occupational requirements (Cressy 1981) and in France it was the same. Besides a rise over time in the proportion of the labour force engaged in occupations that called for reading and writing skills, an upward drift in literacy was also occurring driven by the increased requirement in this respect within many occupations themselves. This could arise in a variety of ways. One of them was the expanding recourse, in retail activities, to customer credit, particularly during the eighteenth century, and the consequent need among small traders and shopkeepers to administer effectively an increasingly complex system of ‘accounts books' in which the appropriate tallies were kept (Chartier et α∕,1976). Another was the rise in the cultural level of the clientele itself which created a greater demand for sophistication on the part of suppliers too, a phenomenon that was particularly visible in the ‘higher trades', such as cabinet makers, barbers, and tailors (Queniart 1977). Finally, the educational needs associated with the greater complexity of certain tasks themselves have been suggested as being on the rise (Houston 1988). The strength of the link between literacy and productivity finds support in the large literature that describes the socio-economic stratification of literacy among males during the period. The picture varies little from country to country or even from region to region. At the top of the pyramid, where one encounters the nobility, the high administration and professionals such as doctors, pharmacists, and lawyers, the ability to sign (and probably much else as well) was practically universal by the seventeenth century. In the towns, they were closely followed by large merchants, financiers, contractors, and the like, also with high attainments from early on, and at a distance by people in trade and in the ‘better' crafts. In London, of the last two categories the first one was already in the 60% range by the late sixteenth century, rose to 70—80% during the next 100 years and was almost universally literate by the middle of the eighteenth century. Meanwhile, in provincial England they progressed at a more gradual pace: 40%, 50-60%, and 70% respectively. The lower crafts followed a parallel path but further down the scale (Cressy 1980). In a rural setting, the better-off farmers, whether landed or tenant and in whichever country, also formed a cultural elite endowed with reasonably higher and rising educational achievement. On the other hand, unskilled manual workers occupied the lowest positions, both in rural and in urban settings, usually with very low rates, which over time climbed slowly, if at all, and then only in the more ‘advanced' countries of the European core. At one extreme of this spectrum, we find that 66% of Amsterdam's ‘proletarians' could sign their names

already by 1700, while in the twenty-three English parishes studied by Schofield (1973) the figure was 65% for labourers and servants in 1785—1814. At the other end, peasants and farm workers in Hungary and around Parma reached no higher than a 6% rate around 1800 (Marchesini 1983; Toth 1998).

A further demonstration of the importance of the practical benefits of human capital in determining whether to acquire it lies in the role played by gender in its distribution throughout society Everywhere in Europe and at all times until well into the nineteenth century, women were considerably less literate than men and only rarely did this gap close much. Moreover, when literate their ability in reading and writing tended to be of a lower standard than that of men in the same socio-economic stratum (Grevet 1985). One reason was that in a situation of scarcity of resources, it made sense to undereducate girls and favour boys instead because the latter were the future heads of households and holders of the jobs where this know-how was required. This is confirmed by the fact that women tended to be relatively more literate where they were business associates of their husbands or were in business for their own account, as was frequently the case of widows. It was thus not enough that they were their wives, a situation in which their ignorance would be freely allowed to reflect their lowly social status (Queniart 1977). But this outcome was also a non-economic response to the prevalent code of values. For as long as women, in early modern society, occupied a subordinate position within the family and the community it would have to be so since ‘the overriding aim was to offer an education appropriate to a person's established place in society⁵ (Houston 1988). Like the poor, whom many feared might want to leave their lowly station and aspire to something better if they were sent to school (Larquie 1987), a greater extent of female literacy was viewed by many as unsettling for the natural order of things.²⁵

Finally, it must be noted that although demand side factors played the major role in determining the pattern of the spread of literacy, supply side elements also shaped this outcome, and some of them clearly associated with the evolution of real income per capita too. Location was one of them. The unequal density of the population and better or worse communications made an enormous difference to the provision and cost of schooling and therefore to the chances of escaping illiteracy. In northern Castile, for instance, the famous Catasto de Ensenada (1754) reveals that only 22% of localities had a teacher and about as many again were within reach of a school. In other words, in the other half, the possibility to learn to read and write was virtually nil, whatever the other circumstances (Amalric 1987). From this point of view, the urban environment was the most favourable of all. As a rule it had not only a higher number of schools per capita and an easier access to them, but it was where there were better teachers and where the authorities inspected them more regularly and thoroughly (Compere 1995). But this was not the only reason why towns and cities had literacy rates that tended to be at least 20% higher than in the countryside. The daily life of early modern towns was permeated by the written word to an extent undreamed of in rural parts, as a result of the more frequent contact with the law, the authorities and the frequency of the circulation of printed information.²⁶

They contained the highest proportion of individuals engaged in occupations—crafts, trade, and other services—for which at least an elementary education was essential, not to mention the fact that they concentrated the majority of the highly educated who served in the Church, the administration, and the professions. On average, their inhabitants were more prosperous when compared with the rural population and could therefore more easily afford the acquisition of this know-how. And those who were not well off were eligible for the many charitable opportunities that were available in the cities and towns, where their wealthy founders tended to live. Finally, it was among urban dwellers that the small degree of upward mobility that was possible in pre-industrial times had its principal locus.²⁷ Taking the upper classes as a role model entailed copying their cultural traits and the first step was schooling and the achievement of literacy. Being physically and socially closer to them in the cities made this still more likely to happen (Furet and Ozouf 1977).

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