I just came across this article from Cato VP Brink Lindsey, which was published in the Wall Street Journal last summer. Lindsey talks about the misconception that economic inequality is the result of unfettered markets, and he points to a cultural shortfall wherein the vast majority of people living in poverty in the United States are not working full-time and aren’t finishing school.

The wage premium associated with a college degree has jumped to around 70% in recent years from around 30% in 1980; the graduate degree premium has soared to over 100% from 50%. Meanwhile, dropping out of high school now all but guarantees socioeconomic failure.

In part this development is cause for celebration. Rising demand for analytical and interpersonal skills has been driving the change, and surely it is good news that economic signals now so strongly encourage the development of human talent. Yet – and here is the cause for concern – the supply of skilled people is responding sluggishly to the increased demand.

It seems that certain segments of American culture are to blame for more people not simply laying claim to the rewards the market is offering to anyone willing to educate themselves and hold down a job. With all of the artificial impediments to economic growth in this country, it’s unfortunate that the job market is experiencing resistance from the the least likely of places– the jobless.

Which brings us back to the real issue: the human capital gap, and the culture gap that impedes its closure. The most obvious and heartrending cultural deficits are those that produce and perpetuate the inner-city underclass. Consider this arresting fact: While the poverty rate nationwide is 13%, only 3% of adults with full-time, year-round jobs fall below the poverty line. Poverty in America today is thus largely about failing to get and hold a job, any job.

The problem is not lack of opportunity. If it were, the country wouldn’t be a magnet for illegal immigrants. The problem is a lack of elementary self-discipline: failing to stay in school, failing to live within the law, failing to get and stay married to the mother or father of your children. The prevalence of all these pathologies reflects a dysfunctional culture that fails to invest in human capital.

The trouble, of course, is the difficulty in effecting any significant change in social systems, when the change needed is for the people in society to be more proactive in the first place. Lindsey suggests education reform, and I think that’s a good place to start. However, I tend to think that a great deal of American complacency can be linked to a broad relinquishment of choice and civil liberty. The American government is taking nearly half of our means of survival, which limits our ability to do for ourselves, and it is also regulating nearly every aspect of civilized human life. The mere fact that we are not as free as we should be has led us, by and large, to become less active participants in our future.

Reforming education in order to help future generations climb out of this climate of torpor is a step in the right direction, but we may be doomed to a “slave’s mentality” if more sweeping changes aren’t made to the way our government intervenes in our lives.