Prior to 1958, “human capital” was little more than a suggestive phrase in economics and played no role in discussions of education policy. Within five years, there was an active theoretical and empirical human capital research program in economics. Over the same period, the new idea of public spending on education as a form of investment with a demonstrably high rate of return, and the capacity to contribute to the achievement of important national goals, was enthusiastically communicated to the public by opinion leaders, policymakers, and even a president. This paper discusses two reasons why the human capital idea so rapidly came to influence education policy: (1) the human capital idea implied that policies promoting education could advance goals—first faster economic growth, then poverty reduction—that circumstances pushed to the top of the nation’s policy agenda during the period of human capital theory’s initial development; and (2) an advocate of the theory who could persuasively explain the logic and the emerging empirical evidence linking education to those goals moved into a position of power and influence. We also suggest that this episode marks the beginning of, and was a contributing factor to, a profound transformation of the public discourse surrounding education policy in the United States.

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