Bishop, Charles E.

English

Research Papers in Economics

THE  UNIVERSITY'S  ROLE  IN  PROGRAMS  ON
RURAL  POVERTY
C. E. Bishop, Vice President
University of North Carolina
The  Report of the National  Advisory Commission  on Rural Pov-
erty  in  1967,  The People Left Behind, contained  distinctly  different
recommendations  for coping  with low  incomes  in rural  America  than
were  contained  in  the  Report  of  the  Country  Life  Commission  in
1909.  Both  Commissions  suggested  numerous  steps  for  improving
the  quality  of  rural  life.  Both  were  established  because  of  concern
over  the  discontent  among people  in rural areas  and the mass migra-
tion to  the  towns  and  cities.
The  Country  Life Commission  recommended  increased  emphasis
upon  education  that  would  prepare  people  for  more  effective  living
in  the  rural  areas,  a  system  of  extension  education  for  rural  com-
munities,  changes  in  financial institutions  to provide  longer  term  and
lower  cost  farm  mortgage  credit,  expansion  of  farm  cooperatives,
and  a  system  of  surveys  to  collect  agricultural  data.  In contrast,  the
Rural  Poverty  Report  placed  emphasis  upon  equality  of  access  to
public  services;  more  vigorous  national  action  to  achieve  and  main-
tain full  employment;  income  maintenance  programs;  reorganization
of government  in  sparsely  settled  areas;  public  investment  in  the  de-
velopment  of  the  infrastructure  in  potential  growth  centers;  and  a
massive program  of human resource  reclamation,  including preschool
programs,  compensatory  education,  intensive  occupational  prepara-
tory  programs,  on-the-job  training,  effective  coordination  of  testing
and  counseling  programs  of  the Employment  Service  and  the Exten-
sion  Service,  and  relocation  assistance  to  help  guide  migration  to
and from  the  sparsely  settled  areas  of  the United  States.
Why  were  there  such  sharp  differences  in  the  recommendations
of  two  Commissions  established  by  two  Presidents  to  study  essen-
tially  the  same  problems?  The  answers  are  to be  found in  differences
in  the  state  of  the  development  of  the  economy  in  the  two  periods
and  differences  in  the  degree  of  knowledge  relative  to  the  operation
of  the economy.
When  the  Country  Life  Commission  Report  was  submitted  the
United  States  was  largely  a  farm-based  society.  The  well-being  of
farm people  was closely  correlated  with  conditions  on farms.  Almost
one-third  of  the  population  lived  on  farms,  and  more  than  one-half
147were  rural  residents.  Farming  was  regarded  as  the  good  life;  it  was
by far the largest form  of employment  in the  nation,  and the capacity
for  increased  employment  in  farming  seemed  very  great.
In  this  context,  the  Commission  offered  recommendations  de-
signed  to shift  the  supply  curve for agricultural products sharply to
the  right. The  public  subsidies  recommended  to  reduce  the  cost  of
mortgage  credit  to  farmers,  to  provide  vocational  agricultural  edu-
cation,  to  develop  scientific  information,  and  to  provide  technical
assistance  to  farmers  all  were  designed  to  decrease  the  cost  of  pro-
ducing  farm commodities,  thereby  shifting  the  supply function  to  the
right.  The  recommendations  with  respect  to  cooperative  marketing
were  offered  in the  hope  of  decreasing  the  cost  of  inputs  purchased.
The recommendations  of the  Country  Life Commission  were very
effective.  From  these  recommendations  emerged  the  Federal  Land
Bank  System,  the  Cooperative  Extension  Service,  vocational  agricul-
tural  education,  modifications  in  land-grant  university  curricula  and
programs,  and  other  significant  changes.  This  Commission  should
be  credited  with  developing  the  institutional  structures  that  trans-
formed  American  agriculture  into  the  vast productive  machine  that
it is  today.
Why,  then,  are  we  still  concerned  about  rural  poverty  in  1968?
Unquestionably,  many  people  who  might  otherwise  have  remained
in  poverty  escaped  as  a  result  of  the  programs  emanating  from  the
recommendations  of  the  Country  Life  Commission.  On  the  other
hand,  there  can  be  little  doubt  that  the  recommendations  of  this
Commission  were  oriented  toward  the  establishment  of  a  commer-
cial  agriculture  and  that  the  agencies  created  to  administer  the  new
programs  were  organized  and  operated  in  ways  which  encouraged
working  with  those  who  had  the  greatest capacity to  increase pro-
duction. Resources were allocated  to  those uses where it was expected
that  the  pay-off  in  terms  of  increased  production  would  be  greatest.
Between  1909  and  1968  the  rural  areas  of  the  United  States
experienced  unparalleled  structural  changes.  There  were  sharp  de-
clines  in  manpower  needs  in  the  natural  resource  based  industries-
agriculture,  forestry,  fisheries,  and  mining-and  a  substantial  reor-
ganization  of  economic  functions  among  communities.  Many  eco-
nomic  functions  were  transferred  from  the  villages  and  small  towns
to the  larger  towns  and  cities.  Many  of  the  small  communities  were
unable  to  keep  pace  with  the  changes  in  the  economic  and  social
fabric  of  the  more  prosperous  ones.  Accordingly,  many  rural  com-
munities  formerly  providing  service  functions  for  rural  families  ex-
perienced  an  eroding  away  of  their  economic  base.
148The  structural  changes  that  have  taken  place  were  stated  suc-
cinctly  in  the Report  of the National  Advisory  Commission  on Rural
Poverty  as  follows:
Developments  in  transportation  and  communication  systems  along
with  the  expanding  network  of  roads  and  highways  have  confronted
many  villages  with  competition  from  larger  towns  and  cities.  The  re-
sult  has  been  an  extension  of  the  trade  areas  of  the  larger  towns  and
cities  into  areas  once  served  by  villages.  The  same  developments  have
made  it  possible  for rural  people  to commute  farther  to jobs in  towns
and  cities.  ...  In  varying  degrees  rural  areas  are  now  parts  of  larger
economic  communities  with  a  dominant  town  or  city  at  the  center,
the  community  encompassing  several  counties.  The  linking of  rural  to
urban  areas  is  continuing  and  indeed,  the  rural-urban  distinction
is  becoming  meaningless.  ...  In  short,  country,  town  and  city  are
one.  They  cannot  be  separated.
As  the  urbanization  process  transformed  farming,  it  also  trans-
formed  rural  communities  and  altered  their  relationship  to  urban
centers.  In  many  respects  mobility  has  been  substituted  for  location.
The  urbanization  of  rural  America  brought  many  changes  that
could  not  possibly  have  been  foreseen  in  1909.  Perhaps  the  most
significant  of  these  is  that  urbanization  is  accompanied  by  lessening
dependence  upon  tradition  and  growing  reliance  upon  the  discovery
and  use  of  knowledge.  As  knowledge  is  discovered  it  opens  up  new
possibilities  for  society.  To  be  used  most  effectively  it  must  be  re-
lated  to  other  knowledge  in  a  meaningful  whole.  In  the  traditional
agrarian  society  organization  was  simple,  and  most  economic  activ-
ities  were  conducted  in a direct  and verbal  manner.  In  the  urbanized
society  emphasis  is  placed upon  specialization  of function,  and  many
activities  are  conducted  by  specialists  through  highly  structured  or-
ganizations  and  agencies.  In  this  society  effective  linkages  among
firms  and  among  communities  assume  greater  importance.  Equilib-
rium for population and economic  activity has been altered by changes
in  production,  transportation,  and  communication  technology.  The
structure  of  society  has  been  changed  in  an  effort  to  reap  the  bene-
fits from  these improvements  in technology.  It will continue  to  change
as  additional  changes  in  technology  occur.
The  urbanization  process  in  the United  States  has  given  us  vast
and  rapidly  expanding  productive  potential.  Consequently,  instead
of  promoting  policies  designed  to  shift  the  supply  function  for farm
commodities  to  the  right,  for  the  past  thirty-five  years  U.S.  farm
policy  has  been directed  toward  shifting the  supply function  for farm
commodities  to  the  left.
The  urbanization  of  the  United  States  has  had other  effects  that
149called  for  a  change  in  policy directions.  Urbanization  gave  rise to  an
increase  in  the  demand  for  highly  skilled  manpower  relative  to  low
skilled  manpower  and  increased  the  return  from  investment  in  hu-
man  capital  relative  to  investments  in  reproducible  forms  of  non-
human  capital.  As  the  life  expectancy  of  man  is  extended  and  his
productivity  increases,  his  economic  value  also  rises.  This  increase
occurs  both  in  the  industrial  sector  and  in  the  farm  sector.  But,  be-
cause  the  demand  for  human  resources  is  derived  from  the  demand
for  the  products  that  they  produce,  the  low  price  elasticity  of  de-
mand  for  farm  commodities  has  kept  the  increase  in  the return  for
the  human resources  in  farming  relatively  low.  Consequently,  urban-
ization  has  been  accompanied  by  an  increase  in  the  premium  on
preparation  for  nonfarm  employment.  The  rise  in  returns  for  man-
power  in  nonfarm  employment  has  increased  the  costs  of  impedi-
ments  to  entry  into  nonfarm  occupations.  As  a  result,  the  costs  of
racial  and  residential  discrimination,  differences  in  access  to  educa-
tion  and  training  programs,  and  other  barriers  which  impede  labor
mobility have  increased  as  the  economic  value  of man  has  increased.
This  increase  in  the  cost  of these  barriers  and  the more  widespread
recognition  of  this  cost,  resulting  from  improved  communications
throughout  the  nation,  undoubtedly  have been  important  factors  un-
derlying  the  recent  resurgence  of  demands  for  equal  access  to  eco-
nomic  opportunity.  Those  who  have  been  denied  access  now  know
what  they  have  been  denied.  They  must  be  denied  no  longer.
It  was  in  this  context  of  a  highly  specialized,  highly  organized,
rapidly  urbanizing  society,  that  the  National  Advisory  Commission
on  Rural  Poverty  made  recommendations  to  combat  rural  poverty.
The  Commission  recognized  that  many  rural towns  now  are  merely
hollow  economic  shells.  They  contain  neither  the  economic  base  for
developing  viable  social  institutions  nor  for  maintaining  those  that
currently  exist.  The  Commission  recognized  that,  because  they  were
presented  with  no  alternatives,  many  rural  youth  were  being  trained
to  climb  an  agricultural  ladder from  which  the  rungs  were  removed
long  ago.  In short,  our  institutions  have  fallen  woefully  short  in  ad-
justing  to  the  rising  economic  value  of  man  and  to  the  changes  in
the  economic  structure  associated  with  the vast urbanization  of rural
America.
The  Commission  quickly  perceived  that  the  economic  value  of
man  was  rising  largely  because  of  our  ability  to  develop  the  human
resource  and  that,  in  order  for individuals  to  participate  in  the  rise,
substantial  investments  in  human  capital  are  necessary.  To  a  large
extent  education  and  training  determine  the  degree  of  participation
in  the  rise  in  the  economic  value  of man.  The  institutions  of  higher
150education,  therefore,  play  an  important  role  in determining  the  dis-
tribution  of  the  benefits  associated  with  urbanization  and  increased
productivity.
Because  of  the  central  role  that the  institutions  of  higher  educa-
tion  play  in  the  urbanizing  society,  it  behooves  us  to  ask  how  the
rise  in  the  economic  value  of  man  affects  the  programs  of  these  in-
stitutions.  In  a  sense  the  institutions  of  higher  education  should  be
viewed  as  agencies  issuing  passports  to  opportunity.  They  constitute
a  channel  through  which  upward  economic  and  social  mobility  can
be  achieved.  Unfortunately,  because  of  the  increasing  costs  of  par-
ticipating  in  their  programs,  and  because  of  admission  criteria  often
emphasizing  previous  education,  the  institutions  have  not  provided
widespread  opportunity  to  the  deprived.  They,  therefore,  have  not
served  as  effectively  as  they  might  in  providing  upward  social  and
economic  mobility.  This  failure  has  generated  increased  demands  to
facilitate  access  to institutions  of  higher  education.
The  desire  to  facilitate  access  to  the institutions  of  higher educa-
tion  is  of  long  standing  in  the  United  States.  It was  in  this  context
that  the  land-grant  universities  were  established  to  provide  educa-
tional  opportunities  for  the  sons  and  daughters  of  farmers  and  me-
chanics.  As early  as  the  1860's  it was  recognized  that education  had
value  and that  it  served  as  an  avenue  to better  opportunities.  There
was  concern  that  access  to  better  economic  opportunities  was  being
denied  by  limited  access  to  higher  education.  It  was  believed  that
the  land-grant  colleges  and  universities  would  provide  this  access.
Recently  these  same  demands  have  culminated  in widespread  devel-
opment  of  community  colleges  and  regional  universities.
Clearly,  the  recent  enhancement  in  the  economic  value  of  man
has  provided  greater  incentives  for  development  and conservation  of
the  human  resource.  Some  implications  for  the  land-grant  univer-
sities  are  apparent.
The  returns  from  recruitment,  effective  counseling,  and  decreas-
ing  attrition  in  educational  programs  have  been  increased.  Unless
the  costs  have  increased  accordingly,  more  resources  should  be  de-
voted to  these  activities.
In  like  manner,  a  greater  share  of  the  research  resources  of  the
universities  should  be  devoted  to  the  study  of  various  forms  of  in-
vestment  in  human  resources,  to  structural  organizations  of  society
that  will  facilitate  access  to  health,  educational  services,  and  other
forms  of  investment  in  the  human  agent,  and  to  ways  of  removing
barriers  to  the  development  and  utilization  of  the  human  resource
151potential.  The  rise  in  the  economic  value  of the  human resource  has
increased  the  income  that  must  be  foregone  while  enrolled  in  edu-
cation  programs.  The  universities,  therefore,  should  bring  their  re-
search  resources  to  focus  more  sharply  upon  ways  of  decreasing  the
time  required  to  achieve  specified  standards  of education  and  should
devise  means  of  making  educational  materials  available  to  people
without  a  sacrifice  of earnings.  Teaching  methods  should  be  devised
that  are  effective  in  reclaiming  human  resources,  and  programs  of
continuing  education  should  be  developed  to  decrease  their  rate  of
depreciation.
If the  programs  of  the  universities  are  to  be  consonant  with  the
implications  of  the  rise  in  the  economic  value  of man,  their  content
must  be  changed  accordingly.  More  programs  should  be  directed  to
the development  and use of human resources.  Criteria of performance
must  be  evolved  that  encourage  more  efficient  development  of  hu-
man  resources.  In  extension  programs,  for  example,  relatively  less
emphasis  must  be  placed  upon  achieving  farm  commodity  produc-
tion  targets  and  more  emphasis  upon  developing  the  potential  of
human  resources.
The  rise  in the  economic  value  of man in  our  society is  not  acci-
dental.  It is  intentional.  It  was in  the expectation,  and hope, that this
rise  would continue  that the National Advisory Commission  on Rural
Poverty  placed  so much  emphasis  upon  the  need  for  a  massive  pro-
gram  of  reclamation  and development  of the  human resources  of the
poor.  The universities  can  play a leadership  role in  this development.
University  programs  are  not  very  flexible,  and  it  will  not be  easy  to
reorient programs  to  give greater  weight  to human resource  develop-
ment.  But  it can  be  done.  Indeed,  it  must,  for the  development  and
conservation  of the  human  resource  is  the  ultimate  relevance  of  the
university  to  society.
152

THE UNIVERSITY'S ROLE IN PROGRAMS ON RURAL POVERTY

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Research Papers in Economics