This is a follow up to the previous post, “Begging for a World Class University.” In this I will address two responses to the post: one, the comment left by Aditya, and two, a post by Pramode titled “A Question (or two) for Atanu“.

First let me take up Aditya’s comments, which are substantial and I am grateful for the time he took to express his point of view. He writes:

I sincerely doubt if Indians are capable of building LARGE world class institutions EFFICIENTLY, without external assistance.

While asking for help does not make anyone particularly proud, I don’t see any shame in approaching a university system consistently known for its high standards and asking for administrative, structural and vision related guidance. This is not a begging bowl scenario, in my opinion. Learning from the best and involving them formally and intimately is an excellent idea, and a respectable form of learning.

Self reliance

I am all in favor of learning from others. In fact, one can achieve very little if one steadfastly refuses to learn from others. (See related post “Ideas on the road to development“, where I discuss briefly the two gaps: the ideas gap and the objects gap. The ideas gap is more constraining and can be bridged by judiciously learning from others. Also see “On Gandhian self-sufficiency” where I argue that ” A goal that seeks self-sufficiency (at any level of analysis) is a prescription for poverty — not just of the body but also of the mind. We are deeply and inalienably connected with all others, however one defines the ‘other.’)

A sure-fire recipe for poverty is to insist on inventing everything before you use it. “Not invented here and therefore we will not use it” is the philosophical underpinnings of the disastrous “import substitution industrialization” (ISI) that Nehru thrust down India’s throat.

Now it is silly to expect Indians to build world class educational institutions by 6 PM next week Saturday if they are only allowed to do so. Today’s world class educational institutions were not built last week. It took them hundreds of years. Indians will not take that long because it has the benefit of the learnings of those institutions. But I am confident that India can have excellent institutions within our lifetimes, iff the government allows Indians the freedom to do so.

Learning by Doing

I am repeating myself but this point is worth repeating till there is no mistaking the essential lesson. There is such a thing as learning by doing. If you allow people freedom to do something, then over time you find some people who get pretty good at doing something. This is a natural process — as natural as natural selection. The marketplace is a strict but fair taskmaster and given sufficient time, it picks winners.

The problem with Indian education is that it is not free. It does not allow the natural selection to take place. The government either runs the institutions (Type 1) or permits some to run educational institutions by licensing them (Type 2). IITs are an example of the former. Those who get the permission to run educational institutions are generally those who have political power or can buy political power. They buy their permissions and run the Type 2 institutions.

IITs

Let’s stick with Type 1 for now. Aditya in his comment writes about his experience at an IIT and his assessment of the quality of teaching there which was good. (Note “was” as opposed to “is.”) But he points out that even the IITs are inflexible and don’t keep up with the times. He thinks it is the mindset which is rigid. I am not surprised. The IITs receive public funding and that is a good thing but only to a limited extent. The drawbacks of public funding are many but the most debilitating bit is that they are prone to political meddling. But aside from all that, IITs operate in a sellers’ market and therefore have very little incentive to actually perform.

Just to remind ourselves, IITs are not universities. They are technical teaching colleges. Their job is to teach some useful technical skill. How good are they at that? I am not sure whether they are any good or not. No one can dispute that some IIT graduates are extremely successful. It is, however, not clear how much value addition the IITs actually do. The top 1 percent of any population can be expected to be good. The IITs, because of their reputation and the fact that they operate in a supply-constrained environment, have the luxury of picking about one or two percent of the applicants. Take any highly motivated bunch of people, select the top few from them, make them compete for grades for a number of years, and it does not matter whether you are good at teaching or not — the resulting graduates are bound to be good.

What if there were hundreds of IITs? What if there were so many that the IITs had to compete amongst themselves to get the best students, instead of the students having to compete to get into a handful of IITs? What if the IIT tuition fees were priced at full cost instead of the heavy public subsidy? What if the intake of the IITs were the average student (instead of the cream of the high-school classes)? If with an average quality intake the IITs produced above average output, one can confidently assert that the IITs do indeed add value; otherwise one can reasonably suspect that the IITs are simply sorting mechanisms merely separating the good students from the not so good.

Other institutions

There are hundreds of type 1 (that is, government funded and controlled) institutions. Most are nothing to write home about with the possible exception of the IITs and IIMs. These successful type 1′s don’t face much competition because free entry is not allowed. Those that the government allows are what I have labeled type 2. Type 2′s don’t pose a threat to the premier type 1′s because the type 2′s are not really interested in performing. Once an institution has the permission from the government, it can get into the business of recovering the costs it had incurred in getting the permission. It can recover the costs because it is also operating in a sellers’ market. Desperate for any sort of degree, people scramble to get into one of these and parents often go into considerable debt to pay for the outrageous under-the-table bribes. Because these type 2 institutions never lack willing customers, they could not really care less about what they teach.

Shifting gears

Let me shift to a different sector to illustrate the major point that I wish to make in this post. Consider the automobile sector in the 1970s in India. There were two manufacturers only and free entry was not allowed. The two companies turned out shoddy cars that were of 1950s vintage. They had no incentive to improve the product because people would be willing to take anything they could get their hands on — and indeed waited for years to get their “allocation.” There was a thriving black market for cars as well. People were willing to pay a premium even for those shoddy cars just so that they won’t have to wait for years. The sector was controlled by the government and for the best of reasons: because manufacturing cars was too important an economic function to be left to free private enterprise that only government control could ensure a plentiful supply, assure quality, and prevent the public from being cheated by unscrupulous private companies.

Imagine that someone had claimed that India could not ever manufacture cars that could meet global standards back in the 1970s. Absolutely reasonable claim. It takes decades of manufacturing cars in a competitive market to learn how to make cars. By not allowing not allowing that learning to occur in the Indian manufacturing sector, the government guaranteed that Indians could not ever manufacture cars.

We all know the rest of the story in the automobile sector. It was liberalized and now Indians are manufacturing cars that can compete in the world markets. But note: India is not a Japan or a Germany in terms of the automobile sector. Indian manufacturers are learning. For now they are collaborating with foreign firms but soon enough they will be competing with the best. For a while now India has been a supplier of intermediate goods to the global automotive sector. (Note especially the phenomenal success story of Bharat Forge.)

Free markets

Analytically the free-market story is simple. Allow firms to enter the market. Let them compete. Firms learn by doing. Let the market pick the winners. The result: world class products. So also the socialist-economy story is analytically simple. Rigidly control who enters the market by predetermining the “winners.” Forbid competition and thus ensure that there is no learning by doing. The result: shoddy products.

The lesson is simple to learn provided one is willing to learn: competition that arises from allowing firms free entry into the market is good for everyone. Refusing to learn that lesson is too costly and India cannot afford not to learn that lesson.

Now back to education. Aditya writes:

I don’t believe Indian universities are far enough along that with the improved communication methods and additional money available that they could be transformed to a world class institution, completely indigenously.

Quite true. India cannot build world class institutions without learning from others. But even learning from others requires a certain degree of preparedness. India cannot build Stanford, Harvard, MIT and Berkeley overnight and cannot do so under the current system of absolute government control of the educational sector. What can it do? India can allow free entry into the education sector. Indian firms will figure out as best as they can what to do. Some will collaborate with foreign institutions perhaps or figure out some other strategy. In the end, the competition will ensure that those that have been most successful in learning succeed in the marketplace.

What will not work is for an “education minister” to go around with a begging bowl to foreign officials for aid in building world class universities while continuing to keep the same old rigid system of government control of the sector. Even in the unlikely event that some foreign government agrees to help, what can it actually do? What does help entail? Will the governments come and build the infrastructure, hire the faculty, set up the research labs, determine the curricula, admit students, teach the courses, conduct the research, administer the tests, and grant the degrees? The best they can do is to say, “We have good universities in our country. Do come by and see what they are doing. Do the same thing.” If Indian cannot learn by carefully observing what it is that makes those institutions tick, I don’t see how else India can emulate — and later surpass — their success.

Liberalization as a dirty word

Now to address the question that Pramode CE raised:

Atanu’s solution?

Liberalise. Liberalise. Liberalise.

That brings up my questions. One, isn’t the Indian education system already “liberalised”?

First, I have often (though not in the present instance) found that “liberalize” is thrown back at me in an accusatory tone, as if I was recommending something dishonorable and immoral. For the life of me I cannot understand what it is that people don’t like about freedom. Does it frighten them to think that they have freedom? Are they so insecure that they find comfort in restrictions on behavior? Have decades of living in a socialistic state where some official sanction is required for even the most trivial of enterprises warped their psyches to the extent that freedom is seen as threatening?

Which part of the cry, “Freedom, freedom, freedom!” don’t they understand? What makes them think that living under bondage and under the paternalistic dispensations of politicians and bureaucrats is preferable to living as free humans? That’s the question that I struggle with. I think that Indians have to introspect deeply and answer that question first before India can truly hope to achieve its potential.

Let me throw out a conjecture: Indians have lived so long in the socialist prison that they have forgotten the meaning of freedom. They falsely believe that they are already free. Are Indians the largest group to suffer a sort of collective Stockhold syndrome?

That could explain the frequently raised objection: “Isn’t the Indian educational sector already liberalized?”

In India today, you cannot run an educational system without government permission. That permission is not given freely but under certain conditions. One condition — not mentioned in the books of course — is a very fat bribe. The other conditions require that you have to be a “trust” or a charitable organization and whatever resources you put into it, you can never ever recover. Then the real shackles come out: everything that you do, you will do only as the government dictates. Whom you hire, how much you pay, whom you admit, what you teach, how long you teach — every trivial matter is dictated by the government. What is worse, the dictations of the government are usually harmful to the whole enterprise and process of teaching and learning.

If this system is called “liberalized,” I am sure that the word means something else to others than what I think it means.

Conclusion

We have a long way to go. The path to development is not easy even with eyes wide open. With eyes firmly shut, it is well nigh impossible to make any progress. India is poor today because Indians lack freedom.

Let’s remember that India was a British colony and therefore Indians did not have freedom, and were dictated to by their colonial masters. The result of that lack of freedom was a steady decline of the economy. By the time the British departed, India was impoverished. In fact, having extracted whatever they could, the British left because the well was sucked dry and little of economic value remained. The institutions that the British had built in India were for the extraction of wealth from India. Controlling every aspect of the economy was the means that the British employed for enriching Britain at India’s expense.

The British have been gone from India for over 60 years. In their place, Indians inherited the system of extraction and exploitation. The Indian government continues in the grand old tradition of the British: control, permit, license, quota. And the effect is the same: impoverishment of the economy and continued misery of the people. Yes, the gora sahibs left but in their place the indigenous brown sahibs are doing quite well.

I am quite sure that corporations are not benevolent higher beings whose only motive is universal peace and prosperity. I am sure that firms supply to my needs out of their self-interest. But in a free market, the firms have to compete for my patronage because otherwise I will go to their competitors. That is what essentially distinguishes private firms from governments: firms have to please me but the government knows that I am a captive and I am powerless against its whims and fancies. That is what frightens me about government control of education: it prevents me from choosing, it denies me freedom.

The denial of freedom is a common enough occurrence in the world for us to be sure of one thing: someone gains and that gain is at someone else’s expense. People wouldn’t be in the denying of freedom business unless it made sense to do so. This is so trivially true that I feel stupid even mentioning this. But then, how frequently do we ask who exactly is gaining by the denial of freedom in Indian education? Someone has to be gaining and we must have a national debate to expose them because the nation is losing any hope of a decent future as a result of their greed. These people should be identified and charged as traitors.