Value factor knowledge

0 Introductory words: Additions to the revised version 2022


Knowledge is at least as important as money as a factor for economic growth and will probably become increasingly important in the future. The most important function at present is probably that of innovation (value creation). Just like money, knowledge also has the function of valuation (value measurement) and that of archiving (value retention). Although knowledge cannot be used directly as a means of payment like money, it can also take on indirect means of payment functions after conversion into money, but the conversion of the factors will only be hinted at here, not explained in detail. In the case of knowledge, it is more important to work out the new function, that of innovation. However, before knowledge can cause innovative processes, it must first be appropriated and assimilated by individuals in an educational process. One could see parallels to the passive money creation process, because there, too, the new creations are inconceivable without the activity of those affected, such as borrowers and multipliers. Without assimilation and accommodation in a personal cognitive space, knowledge cannot be utilised, cannot then be helpful in evaluation, proper archiving and the construction of generally accessible search functions.

Education now must struggle with various problems, problems that, even if often seen only marginally, should also be positively factored into the solution for the desired growth process, even if dependent on the available educational capital.

Longer periods in the education and training system as a pupil or student mean reduced periods in the normal working day for the individual in any case and thus, of course, missing paid-in money for the pension system. If one does not want to increase the retirement age or assume other distribution systems for the profit from work performance, then this could mean the collapse of the system. The existing knowledge in its activated form in the human capital of citizens must not be put on the social siding after reaching an age limit. If this line of thought is strictly followed, then there is no longer a pension problem. On the other hand, the content of knowledge, the information from generation to generation, is increasing at an ever-faster pace; we need people who are familiar with the new relevant content of knowledge and can deal with it. The general knowledge to be imparted and the special knowledge that is important for special training courses, these cannot always be the same, but both must be selected again and again, adapted to the current conditions, compiled and even put to the test again and again into old age.

The activated stock of knowledge, which can also be described as activated educational capital, primarily determines the possible work performance. In addition, the degree of health and the age are also determining factors. If there is enough money for a project, then the assumption is usually not wrong that the lack of information is decisive for failure and a decline in productivity, while important information, if available, is decisive for the growth in productivity. Therefore, we also have to briefly address a problem that was already a topic in „SUPER FACTOR MONEY“(Möltgen, 2021) namely, what do we actually understand by economic growth, which we are referring to here. Is growth defined by GDP, or by socio-economic facts with an integrating index, or by an index of productivity growth extrapolated to sectors and economies. What is clear is that new information, new knowledge, leads to innovation and thus to increased productivity.

The lack of information input can not only limit growth when it is insufficient or when it is missing, it can even lead to no growth at all, even though all other factors are sufficiently present; information, the available knowledge, thus becomes the current limiting factor. As a rule, it is the information that decisively determines the competition. Totally new ideas can help to conquer a new niche and avoid a competitive struggle through the unique selling proposition thus acquired.

Technical progress and the accumulation of knowledge in general demand more and more educated and well-trained citizens in order to be able to control and master the cognitive advances, especially in artificial intelligence. Understandable then is the demand for support of the human brain by assistant computers that can expand the natural memory of our brain. A direct connection between man and machine can not only simplify the availability of information, but one day make the laborious acquisition of knowledge not only easier, but even superfluous, disregarding the specificity of human learning. Whether this will one day be the case is still written in the stars, but in any case, the statement made in the interview with neuroinformatican Christof Koch is valid: “In the past, you were born into a good position in life. Today, you need mental skills and a good education to gain a social position.” The cognitive structure in our personal cognitive space cannot emerge without our own activity; it develops based on assimilative learning processes. We must not forget the goal of optimal differentiated structuring, which is becoming increasingly important, rather than the accumulation of more and more knowledge. Didactics provides instruments for this, even if empirical didactic research is not yet sufficiently appreciated and supported, which is why there are still large gaps here.

Didactics is often seen only in terms of the how and not the what. The right choice of content to be taught is becoming increasingly important and should be given top priority. With his principle of the exemplary, Klafki was one of the first to attempt to select the content that is important for learning as teaching material from the multitude of knowledge content. In doing so, it is important to find teaching material that not only explains specific contexts but can also convey general principles in the selected example.

One starting point should be the question of how knowledge growth, preservation and transmission of knowledge and information are possible at all, since entropy is increasing in our universe? A question that may seem insignificant to many, but it is a question that is fundamental and therefore absolutely must be addressed at the beginning. Both the acquisition of new knowledge and the learning process to acquire stored knowledge are inconceivable without work processes that consume energy. This must always be kept in mind. Subsequently, the question must be addressed as to how social knowledge, the cultural asset, is to be preserved and actively carried forward. How can one crystallise the most important, the fundamental, the exemplary in a sea of knowledge, in order to enable the next generation to deal with the knowledge of their ancestors in the best possible way? These are precisely the important questions and not how to convey even irrelevant knowledge as effectively as possible.

The selection of teaching and learning content should be given increased attention in the future! This raises the questions of the individual relevance of the learning content, the social relevance and the fundamental content, as well as the exemplary content, not forgetting the efficiency in comprehensibility and communicability. Apart from this, the content to be taught must also be considered in terms of its ethical evaluation and effectiveness. Finally, the communication of values must be the goal of every educational measure. It would also be presumptuous to assume that every pupil, every student could be taught everything; not everyone has what it takes to be a professor!

Who chooses which course of study or even which apprenticeship is partly due to special talents, but also partly due to origin and other environmental influences! It would be desirable if everyone found themselves in exactly the professional field in which they can best realise their abilities, both for individual satisfaction in life and for maximum benefit to society.

A not unimportant factor is and was whether the parents could or can finance a course of study! Although the introduction of Bafög in Germany seems to have made it possible for everyone to study who has achieved sufficient grades in the German Abitur, it is still the case that certain courses of study have a strong correlation with the occupations and wealth of the parents, not only in Germany. Even today, the so-called working-class children are less likely to dare to study law; despite a free place at university, they still need a lot of money for the tutorials before the exams. Children from the educated middle classes are more likely to be found in the humanities. Whereas in the 1960s and 1970s one still had to apply for a scholarship in order to be able to study with some degree of security if one’s parents were unable to help. In the meantime it is increasingly the private universities that have a selective effect due to high tuition fees. In 1978/1979, it was interesting to find out whether there were differences in the study situation and the socio-economic situation of students at a PH and at university. It was astonishing for me, who was allowed to participate in the study until the end of the statistical evaluations, that this study showed that the students at the PH in Cologne were financially better off on average than the students at the university. This study can certainly not be generalised with regard to the individual results, since it was more the seminar work of a group of students than an advanced research study, but it certainly shows that the expected results do not always have to come out. On the other hand, the approach seems to me to be very noteworthy and should be taken up and broadened in perspective in order to gain further insights into the economic conditions of the choice of study. On the one hand, it should be clarified whether the parental home continues to be the deciding factor for education and studies, and on the other hand, to what extent private money from the parental home is important for later careers and to what extent intelligence plays a role here. The increase in private universities, especially in the field of economics and in the catering and hotel industry, alone points to an increasing importance of the parental home in pecuniary terms, and this even though tuition fees at state universities have been abolished in many countries. That the level of education in the parental home will show and has shown strong effects is almost obvious.

That a well-functioning higher education system, as well as the entire education system, cannot be obtained for free, that also seems obvious. Whether the state should finance the education system or leave this to private initiatives is open to discussion, including whether at least a certain share should be financed privately. Since the survival of an economy is vital for the whole society, the whole society is also responsible for a good education system. In order to ensure that the best, and not those with the most money from their parents, rise to the top positions in both business and politics, open access for all to the various educational institutions must be ensured. The content of education must be accessible to all and the desire to further one’s education must be promoted on a broad basis. To this end, education does not have to be free of charge in principle, but it should then be possible to realise it with scholarships. Not to be forgotten, and perhaps even of decisive importance, is the fact that digitalisation is becoming more and more important in all areas of life and that the progress of artificial intelligence in connection with digital networking will determine the future not only in the human sphere, but also in the networking of the machines that surround us!



1 Foreword: What choice do we have as educated people?


“Economics is all about how people make choices; sociology is all about how people don’t have any choice to make.”
(James Duesenberry 1960)

The choice we have, or do not have, although we should actually have it, this choice always includes a valuation, whereby it is still open at first how the valuations come about, according to which values we align our actions and how we learn our valuation system! In order to be able to choose in the market, one needs knowledge in order to be able to judge what the best goods are and, moreover, one needs money in order to be able to pay for them. Well, what good is knowledge if you don’t have money and what good is money if you don’t have knowledge? One could say it is of use if one has learned to evaluate things and courses of action correctly, to evaluate them in such a way that we can make the best choice for the money at our disposal! Knowledge and money are the most important factors to initiate growth, to promote it and to keep it going, clearly, without work performance everything is in vain, knowledge is the most important factor here. Without sound knowledge, neither the value of an art object nor that of a property nor that of a car can be adequately assessed. When assessing the current value of a painting, knowledge about the painter, the painting technique, the appreciation of the paintings in the past and the market situation are included in the assessment when determining a potential sales price and generally in the valuation. The first basic steps on the way to becoming an art appraiser with the development of important knowledge elements probably already originate as a rule from art lessons in school, the further knowledge elements from the time of study and the practical experience in dealing with artists, buyers, museum directors and art journalists. The corresponding knowledge of the art appraiser leads to valuations that do not necessarily correspond to the market values achieved at auctions, but they represent the basis for any well-founded valuation. Such valuations stimulate the market and the growth in the so-called art market. Especially in the art market, it is evident that money sometimes sets the decisive impulse here, especially if we consider the market price ultimately achieved as the criterion for the value of the work of art. As already indicated, art education should play an important role here when it comes to gaining a basic understanding of art movements and artists as well as painting techniques and thus being classified as an educated person. However, education that imparts knowledge that can be used personally is of limited use in a society that is only oriented towards financial capital in the all-encompassing possibilities of evaluation, when power and positions of power are only determined by money. In the long run, however, knowledge will prevail, since even the powerful will not remain in power for long without the knowledge that mediates growth. A broad education, imparted by a good education system, is a nation’s best investment for the future, and not only for parliamentary democracies. The knowledge generated needs to be well imparted and processed in order to fuel and stabilise growth in the local economy in a desirable way. Only by paying close attention to the time dimension will knowledge as a factor be able to develop its full power. Therefore, educational processes are only efficient if they are planned as precisely as possible in the time line in cooperation with all those concerned, so that the knowledge thus activated can also be used accordingly.
Knowledge transfer and education can now be viewed and dealt with purely from an educational perspective but can also be examined from a sociological or economic perspective. Here, all aspects are to be assigned first and foremost to the economic perspective, because it seems to me that this is the most important and also the most all-encompassing of the aspects addressed in everyday life. If we want to look at growth in an economy holistically, we have to take sociological and pedagogical aspects into account in every case, and, to be precise, also the psychological conditions that always determine the individual case. In addition to the factor “money”, in the accumulation of financial capital, the factor “knowledge” to be addressed here is to be assigned to educational capital with the accumulation of active knowledge. In a digital future, knowledge is probably the most important factor influencing growth.
When we talk about the growth of an economy, we usually talk about the GDP (gross domestic product) and consider how we can increase this GDP as much as possible, or at least stabilise it, in order to avoid depression and repression. In the process, the national gross domestic product is hardly ever examined for its relevance. No matter how growth is measured, it must always be seen as the growth of an economy in relation to population density and the growth of the population. In addition, the level of education is of crucial importance. Machines and robots demand increasingly better training standards and levels of education from the people who have to deal with them in their everyday work as robotisation and digitalisation increase. In general, therefore, the question arises as to how education and knowledge can influence the production process and thus increase the growth of an economy.

If one starts from the existing economic systems in Europe and America, the financial crises between 2005 and 2015 and the reactions to them can also be processed as an increase in economic knowledge. One approach to this is provided by Olli Rehn with his lessons on the euro crisis, delivered in Dublin on 3 February 2018.

It is not only the technological knowledge of technicians and that of natural scientists that promotes the growth process, it is also the less obvious knowledge in the organisational field, in logistics, the cultural field and in office management.

The more demanding the processes in everyday work become, the longer the training periods and the necessary time for general schooling. As a result, fewer and fewer workers are needed in production and more and more in apprenticeships. Other jobs in the service sector are also expanding, for example in the care professions and in the hotel and restaurant industry. In percentage terms, the number of people employed in the service sector is increasing at the expense of those employed in the manufacturing sector.

One question that arises here is how the balance of factors needed for growth can be maintained, or re-established, in the face of the necessary shifts? Unlike money, the necessary information that is obtained and passed on through educational processes is not so easily exchangeable for other factors of growth. Information is also to be found everywhere in one form or another as knowledge that can be applied again and again, since the development of ordered structures in the nature that surrounds us is also dependent on existing information. Every construction of a new order structure requires above all information and the energy to create order out of disorder. Although information has always played a significant role in the process of economic growth, it will become increasingly important in the future, more important than financial capital, which has been so important up to now. There is a secret hidden in knowledge that was perhaps first unveiled in the Enlightenment. In the meantime, we suspect that knowledge and power have transferred money into all our daily lives, and perhaps the unholy alliance between knowledge and power in their mutual ambivalence was the true force that shaped the construction of capitalism in its present form. In the 21st century, however, money is gradually losing its original claim to power and handing it over to knowledge, as the new partner in the future that enables responsibility, in the form of activated education.