The post does mention the government a couple of times — “. . . the government decided to abolish interviews at the nursery level . . . In 2006 a government committee came up with a system that gave kids points from 0 to 100 for . . .” — but does not reveal a connection between the acute and persistent shortage in the education sector and government action.

The government through its heavy-handed control and ineptitude has brought the Indian education system to this sorry state. The people are clueless about this fact — naturally so since they are largely the product of that same inadequate education system which does not equip them with critical thinking skills. In a different state of the world, the parents would have dragged out the bureaucrats in charge of controlling the education system and given them a sound whipping.

I am repeating myself here but here’s the story about government control and shortages. The government engineers the shortage by imposing barriers to the supply. This is done through a licensing scheme. It hands out the licenses at a price. That’s where the black money originates, which then ends up in overseas banks. The quantum of black money abroad is now reportedly around $1.5 trillion.

According to media reports, the Italian-born UPA Chairman Antonia Maino aka Sonia Gandhi’s family has a few billion dollars salted away. These reports have been surfacing regularly and have met with stony silence from the accused, underlining their veracity.

The billions of the Gandhi family being both bribes and monies stashed away in Swiss banks, they are inextricably linked to the larger issue of bringing back the huge national wealth stashed abroad. All world nations, except India, are mad after their black wealth secreted in Swiss and like banks. But India has shown little enthusiasm to track the illicit funds of Indians in Swiss and other banks. Why such reticence?

Why such reticence? Because the government of Antonia Maino cannot reasonably be expected to recover the money from her. The money was not taken for safe-keeping. It was taken away for keeps.

Before moving on, here’s a point worth noting. In the quote above, it says, “India has shown little enthusiasm to track the illicit funds . . . ” India is a country and not an individual. Individuals have emotions and motivations that abstractions like a country cannot have. As a figure of speech (synecdoche), writing “India” to mean “people who are in the government of India” is understandable. But we have to be careful that that shorthand way of writing does not lead to shortcuts in thinking.

The word “government” is an abstraction, and what the government does is done by real flesh and blood people. These flesh and blood people are self-interested people, just like you and me. The people who run the government do what is in their interest, which may or may not be in the larger interests of the people they are supposed to serve.

Anyway, back to our main story. The government erects barriers to entry, and charges a high price for handing out licenses. The resulting supply shortage leads to high prices. Desperate people pay whatever they can. The difference between the high prices and the costs is profits — which is absolutely needed to pay for the licenses that were obtained through black money.

Same old story in every sector that the government controls — which means practically all aspects of the Indian economy since India is a socialist economy.

Talking of which, the other day, I was at a dinner party. One dinner guest was surprised to learn that India was a socialist country. He was surprised to learn that to contest elections, political parties have to swear that they uphold socialist principles.

Socialism is great — for the leaders, not the people. In socialism, the state is supreme and controls everything. The people obey and the leaders command. The vicious cycle of socialism goes thusly: the people are serfs; the leaders lord it over the people and impoverish them; the people beg for their existence; the leaders throw out scraps to those people who bow and scrape and grovel on bended knees; the people reduced to beggars hold the leaders up as their benefactors; the cycle of impoverishment and dependence continues.

Every street of Mumbai is resplendent with huge bill boards with pictures of Antonia Maino aka Sonia Gandhi and other Congress leaders. These are the people who have billions stashed away. The people vote for them. In exchange, the government of Antonia Maino taxes the working stiffs and uses the tax monies to fund schemes that are named after the Nehru-Gandhi family. The people who are reduced to beggary by the Nehru-Gandhi family vote for the Congress. The middle-class watches helplessly.

~ ~ ~ ~ ~

Back to the WSJ blog post. One comment by someone who goes by “frodo” says — frodo wrote:

Reading this, I am puzzled as to why parents don’t skip school and form homeschool groups instead. Given the tuition charged by the top schools, a group of as few as four students would be able to hire good quality tutors for the children. Or do the schools function more as childcare establishments, such that most of their value is in taking the children off the parents otherwise busy schedules?

I could not agree more. I have been telling people that they should homeschool their kids. The current system of sending kids to schools where they sit in classrooms of 30 or 40 kids of the same age is about 200 years old. The system was invented to meet the specific needs of a world that is totally different from the world of today and tomorrow. If you want your kids to be prepared to meet the world that they will face, you have to get them out of a system what is totally outdated and obsolete.

If you want the school system to turn your kids into retards, by all means get them enrolled into schools — the government mandates who will teach, what will be taught, who will attend, etc. But be prepared for the consequences.

~ ~ ~ ~ ~

In my opinion, homeschooling is not really a choice any more. It is the only alternative for parents who don’t want to handicap their children.

Lower capacity: RTE timetables the extinction of 25% of India’s 15 lakh schools that are ‘unrecognised’. These mostly low-cost schools have been an entrepreneurial response to parental choice – the antibiotic reaction to dysfunctional government schools chronicled in The Beautiful Tree by James Tooley.

Our demographic dividend – 10 lakh people will join the labour force every month for the next 20 years – would have been a bigger nightmare if these private schools had not substituted for the missing state in the last 20 years. And while it is a lie that all these schools deliver quality, it is true that a bad school is better than no school. To paraphrase a beheaded French queen, this provision of RTE effectively says “if you can’t have cake, don’t eat bread”.

Higher cost: RTE essentially mandates a huge rise in school fees. It micro-specifies salaries, qualifications and infrastructure. Delhi schools that don’t pay a minimum of 23,000 per month to teachers will not receive recognition and specifies that primary teachers must have a two-year education diploma; this means that 33% of teachers have to be fired. RTE specifies that every school must have a playground; Delhi specifies 900 sq yards but I know a state that is considering 1,500 sq yards.

The 25% children from disadvantaged groups will require massive cross-subsidisation because state governments propose to reimburse way below cost, e.g. Karnataka caps it at 7,000 per student per year. All this micromanaging of schools – to the delight of teachers and the real estate mafia – hits middle class parents with higher prices for essentially the same quality product.

Lower competition: A big driver of higher quality and lower costs in higher education has been competition. The 50% vacant seats of 1 lakh capacity UP Technical University are forcing engineering colleges to offer free hostels, English training, only MTech faculty, and much else. About 15,000 of the 45,000 Karnataka MBA seats are vacant; these colleges are reducing fees, guaranteeing internships and embedding soft skills in their curriculum.

RTE makes it impossible for education entrepreneurs to compete on price since many states propose to regulate fees and uncertainty has paused the Cambrian explosion of energy in school entrepreneurship. This means lower capacity and lower competition. And that means schools don’t have clients, but hostages.

Higher corruption: RTE mandates schools to take 25% students from ‘poor’ backgrounds. Some states are going overboard – Karnataka requires schools to conduct household surveys to create and maintain records of all children in a 1-3 km area from birth till 14 years of age to identify the poor. But who is poor? If the Indian government can’t decide whether 24% or 42% of India is poor, how will a BEO (block education officer)?

In reality, he or she won’t; they will auction their certification of poor to the highest bidder. What constitutes appropriate efforts to bring back dropouts? How will teacher student-ratios be calculated? The BEO, long a thorn in the flesh, now has powers to be a dagger in the heart. RTE provides the BEO’s the ability to convert every school into a personal ATM. Not all, but most will.

More confusion: Does changed evaluation mean no exams? What does immunity for government bureaucrats mean? Is incompetence good faith? How will mid-day meals be handled for the 25% in private schools? Where will these 25% go after Grade VIII? Will the 75% parent-populated government school management committees have the power to hire and fire teachers?

Small towns are churning out big news. Unbelievable as it may sound, people from BIMARU regions are making more money, in turn, fuelling the nation’s economic resurgence.

According to latest Income Tax (I-T) data, economic powerhouses Mumbai, Delhi, Hyderabad, Chennai and Kolkata have lost out to Patna, Lucknow, Meerut, Chandigarh, Kanpur and Kochi in net personal I-T (PIT) mop up.

None of the metros, barring Bangalore, figure in the top 10 cities that have posted highest growth in personal I-T collection during the April-July 2010 period as compared to the same period in 2009.

The highest growth (95%), among all regions, has been posted by Bihar and Jharkhand followed by Purvanchal or eastern UP, where collection shows an increase of 91%.

Meerut, or western UP region (51%), is third on the list, followed by Bangalore (50%); Chandigarh (41%); Kanpur (40%); Guwahati (23%); Pune and Kochi (22%) and Nagpur (18%). In comparison, the growth of PIT in megapolises like Delhi and Mumbai have been a paltry 4% and 6%, respectively. {Emphasis added.}

The writer includes a painful list of growth rates but nowhere in the article even bothers to indicate the bases on which the growth rates are computed. I am certain that he does not even understand why comparison of growth rates are meaningless without the bases. I am sure he has no idea that there’s a distinction between stocks and flows.

Sure it is better to have a higher growth rate than a lower growth rate of positive indicators such as life expectancy, or income or whatever. But one cannot conclude anything of importance from comparing growth rates alone. Here’s a concocted example.

Ethiopia and Zambia have trumped the most developed richest nations in terms of growth of life expectancy at birth in the last decade. Life expectancy grew at a phenomenal 38 percent in Ethiopia and a mercurial 64 percent in Zambia. Compare that to Switzerland (2 percent), the US (2 percent), and Denmark’s anemic 1 percent. The conclusion that Ethiopians and Zambians contribute more to the overall health of the global population than the developed countries is inescapable.

What’s missing is the information that the life expectancy at birth in the developed countries is around 80 years and that of the poorest, hardest hit by AIDS and such countries is around 30 years. (All numbers are for illustrative purposes only and are not claimed accurate.)

It may appear that I am needlessly nitpicking. But actually this sort of innumeracy and illogic among the general public is dangerous in a democracy. People vote based on their understanding of what is happening around them. If they cannot reason out the implications of policies — most of which are to some degree quantifiable — they will make the wrong choices.

Though much of the policy errors are the result of self serving myopia of the politicians and bureaucrats, I would not be surprised that some of it arises out of innumeracy.

The editors of the Times of India clearly are innumerate in this instance. That is why they end up publishing nonsense.

Remember that these politicians are elected by the same population which eventually suffers the consequences of the government control of education.

Here’s a news item which reports that medical post graduate studies involve bribes of up to Rs 2 crores (around $ 400,000.)

The TOI report on MBBS seats sold for between Rs 12 lakh and Rs 40 lakh by two private colleges in Chennai barely exposes the tip of the iceberg. The scam gets bigger, more brazen as medical graduates embark on specializations that are necessary for a successful career. The price this year for a post-graduate seat in radiology in most leading private colleges across the country is Rs 2 crore while in cardiology, gynaecology and orthopaedics are priced around Rs 1.5 crore.

It should be obvious why this sort of thing can happen. It is not quantum mechanics. It is a predictable consequence of what I call “engineered scarcity.” Briefly the problem can be stated as

To address not just this question but a whole family of related questions, I propose a general theory of “Power, Scarcity, and Corruption.” Basically, the three form a nexus, with mutually reinforcing influences. Scarcity in general is not a chronic condition in any functioning economy; it has to be engineered. Given economic freedom, people work their way out of any transient scarcity. For persistent scarcity to exist, it has to be carefully nurtured. The motivation for engineering scarcity is that it allows the consolidation of power. This is Econ101 and even a superficial reading of the chapter on monopolies is sufficient to persuade one that monopolies do restrict quantities to maximize “profits.”

The relationship between power and scarcity is bi-directional. You have to have power to engineer scarcity, and through that engineered scarcity you gain power. Political power allows you to dictate policies that give you monopoly control and then you use that for gaining even more political power. Then of course, where there is scarcity, corruption cannot be far behind. Corruption is therefore a mechanism which allows the collection of rents that arise from the scarcity.

If scarcity were to vanish for some reason, both the corruption and the power to extract rents would disappear. For those in power, therefore, the primary objective is to somehow maintain an artificial scarcity both for maintaining power and for gaining from the corruption.

Now back to our educational system. The government has a monopoly control of the sector through many institutions such as the Ministry of Human Resources and Development, the University Grants Commission, etc. Licenses and other requirements force the private sector from fully and freely participating in providing education. The resulting scarcity gives the government a handy lever for manipulating voting blocks. Quotas and reservations are handed out to favored groups. And more directly, the bureaucrats and politicians extract rents from handing out the licenses and permits to those who have the deepest pockets. ["Power, Scarcity, and Corruption." Sept 2007.]

How does the arithmetic of corruption in education work? I gave an illustrative hypothetical example in May 2007:

Some institution wants to start a medical college somewhere in India. It applies for a license and is told off the record that the price is Rs 20 lakhs (approximately US$ 50,000) per seat. For the 200-seat license applied for the price is Rs 4,000 lakhs, to be delivered in unmarked bills in a large plain brown envelope. That “fee” is routed through the licensing bureaucracy with appropriate payoffs to different people—the lion’s share ending up in the appropriate political hands. After all, securing top positions at the bureaucracy is not cheap; and running elections is a costly business.

The firm having paid the whopping fee to operate a medical college, now has to recover its costs. Perhaps its actual cost of training a medical student is Rs 5 lakhs per year. It adds on a “special college entry fee” of say Rs 10 lakhs (remember to bring in unmarked bills in a plain brown envelope) to the normal tuition fees. The hapless students are forced to pay because seats are limited. The four year medical training which should have cost only Rs 20 lakhs if free entry were allowed into the field now has to pay Rs 30 lakhs, and perhaps gets substandard training. Further down the line, doctors are in short supply and therefore they command some market power and thus are able to recover their costs. The patients suffer but that is why they are patients—they suffer.

Engineering shortages is what the government does very effectively. Engineer scarcity in sufficient number of sectors, and you have engineered a very poor economy. India’s poverty is engineered by the government. There’s really no earthly (or even heavenly reason) for India to be a “third world” country. The decades of governance by the Congress has effectively destroyed India’s potential.

The government has done the most damage to India through its stranglehold on education. By destroying the education system, it has destroyed the capacity among the people to perceive the problem in the first place. It is like the human immunodeficiency virus which causes AIDS: HIV acts by attacking the immune system itself. Similarly, hitting the education system destroys the capacity among the people to ever understand what ails the education system and why.

Here’s an example of the lack of understanding of what’s wrong. The news item linked above ends with this:

Another senior expert, who has held prestigious posts at the national level, says he has urged the UGC to hold centralized examinations like JEE for admissions to both MBBS and PG courses. “It’s a national shame to commercialize education. Besides, death of merit affects the quality of medical education. When money is paid, these colleges ensure that the exit is definite. The students pass, qualified or not,” he said.

I have added the emphasis in the above quote. The “senior expert” does not even realize that it higher education and “commercialization” go together. That commercialization can be legal and in the open (as it is, say, in the US) or it can be part of the underground corrupt system. The latter is an inefficient system that arises out of the government monopoly control of the system. Of course, governments don’t do things without a reason. The reason in this case is that it allows the government to extract rents through bribes. The people in government gain at the expense of the economy.

Related post: Lynching is too good for some.

About 350,000 foreign students study in Australia. India gets 8,000.

Adjusted for population size, relative to Australia, India gets 133 foreign students. That is not a typo. Let me spell it out: it is a hundred and thirty-three, not one hundred and thirty-three thousand. Australia get around three thousand times the number of students per capita compared to India. (India is approximately 60 times Australia’s population.)

How much do Indians spend in studying abroad? Estimates range from a conservative $5 billion to a generous $10 billion per year. That a humongous sum. Why do Indians go abroad to study? Because they are forced to. India does not have the colleges and universities for them. Why? Because the government does not allow free entry into the education system. It’s the Congress party with its Nehruvian licence-quota-permit-control raj. It makes them money. It helps them get votes by restricting supply and then doling out the limited supply to favored vote banks based on religion and caste. They — the people of the Congress party — make money while the country suffers huge losses.

What sort of losses? First, there are the obvious financial losses of the order of billions of dollars. And that too the expense is in foreign exchange. A sh*tload of stuff has to be exported out of India to earn the dollars that go to pay for the education abroad. Then there is the loss of human capital. Many students who study abroad — especially the most competent and talented — end up migrating to the developed countries such as the US and Australia. The estimated loss has to be in the tens of billions of dollars a year. Add to that the personal costs that students have to bear in xenophobic societies that they are forced to live in.

What are the root causes of all these losses? It is government policy. Who made the policy that has reduced India to this horribly dire straits? The party that has ruled India for practically all its existence as an independent country — the Congress party led by the Nehru-Gandhi family.

How can we be sure that it is the policy that is to blame and not some inherent characteristic of Indians that make it impossible for Indians to create and run educational institutions that will serve the needs of the citizens? I don’t know. It appears to me that Indians are fairly average as far as human standards go. They do well when they are given the opportunity. They can become artists and engineers, scientists and philosophers, dancers and carpenters as easily as anyone elsewhere in the world. They do well in practically all spheres of human endeavor anywhere they are in the world — except in India. So there’s something special about being in India that makes Indians end up in the bottom of the barrel.

Let’s get back to education. Do Indians have the money to pay for education? Certainly. See they privately spend billions of dollars in India and abroad to get an education. Even very poor people spend a significant amount on education. A recent study revealed that middle class families spend as much as a third of their household income on education. The demand is undeniably huge. And the supply is also undeniably meager. Just to get into those average (by international standards) engineering schools called the IITs, superhuman effort is required. Families spend years of income and undergo years of stress and worry for the 2 percent chance that the kid will get admission to an IIT.

So the ability and the willingness is there among Indians for education. One side of the market exists without a doubt. The other side of the market, the supply side, would have been there naturally but it is artificially constrained from operating. That is what policy does. That, we must never forget, is the policy that the Congress party has instituted from Nehru onwards to the most recent prime minister of India, Dr Manmohan Singh.

The bottom line is that India lacks a decent education system because the government has seen to it that the education system is as pathetic as it can possibly be. The system guarantees India’s backwardness and makes it pathetically poor but it enriches the people who run the government. The money extracted through the pathetic government-controlled education system ends up in foreign banks, and must account for at least a part of the reported $1.5 trillion stashed away in Swiss and other off-shore banks.

Manmohan Singh is an economist. He of all people should know the value of human resources and therefore education. That he fails in his job despite being an economist is the most blatant indication of his incompetence and general spinelessness. And talking of Manmohan Singh, the next time I read how decent he is, I am going to throw up. The man is as lacking in ethics and morality as the moon lacks oceans and forests. His is a barren landscape littered with sterile craters devoid of any humanity. That’s Dr Manmohan Singh for you.

And the next time I read that he was the architect of any economic reforms, I am going to blow a friggin’ fuse. It was his boss, Mr Narasimha Rao who gave the orders. Dr MM Singh follows orders. His present boss is not so smart as Mr Rao.

Do you know what the unspeakably pathetic specimen of the human species did about the attacks on the Indian students in Australia?

The attacks have been the discussion of talks at the highest levels of government. The Indian Prime Minister Manmohan Singh expressed concern in a phone conversation with the Australian Prime Minister Kevin Rudd late on Friday.

Expressed concern? EXPRESSED CONCERN? How about covering your head in shame, you pathetic loser! I suppose you cannot lose sleep over this matter — losing sleep appears to be the limit of your abilities to do something about something — since that is already done for the families of Islamic terrorists.

But let’s be clear about one thing. Where is the outrage? I am not talking about the outrage on the matter of Australian attacks on Indian students. I am talking about the outrage that the population should feel about the disastrous condition of the education system that the Congress governments have brought about. Should the people not be literally dragging the unspeakable bunch of immoral greedy lousy cretins that rule the country on to the streets and flogging them to an inch of their lives?

Forget the outrage, the people actually go and elect them to run the country.

It’s all karma, neh?

Just as an aside I recall that the US elected George W Bush in 2000. He gave plenty of indications during his first term that he was not good for the US (and by extension for the world.) The American voter disregarded it all, and going against all reason and sanity, voted once again for George W Bush. In the eight years that Bush ruled, he wrecked the US economy. No empire lasts forever and the US’s preeminent position was not guaranteed forever. Bush Jr hastened the day when the US loses its position. The American voter cannot escape responsibility that it, through its mindless support to a criminal (recall invasion of a country and the use of torture) retard (can barely express a coherent thought, leave alone have one), is complicit in the downfall of the US.

Indians have been electing the Congress for decades. India is a third-world country, a country that is listed together with sub-saharan African countries such as Burundi, Uganda, and Burkina Faso. Congress brought that about by following insane economic policies. The tragedy is that even if the party wakes up and realizes that the policies are absolutely mindless and wrong, they still cannot follow other policies — for it would then have to admit that the worthies who made these policies were retards like George W Bush. But those worthies have to be worshiped because the Indian population will vote for any progeny — regardless of any merit — of the worthies.

That is what nails India to a cross: the Indian voter will vote for the Nehru/Gandhi family, and the resulting government can never change any of the disastrous policies that Nehru set in place. India is caught between a rock and a very hard place. India’s future is bleak because good people can never head the government and make rational policy. India suffers ignominy in international forums because India is too poor. India’s poverty is the direct consequence of the insane policies made by the governments of India — and did I mention that practically of of those have involved the Congress?

Sorry for the digression but let me come back to the point that I was making on education. The system is a disaster. Let me put it this way. If you want to know if something is good or is a p o s, just look at the demand for it. If a lot of people go for it, it is good; if the demand is low, it is a p o s.

Let’s consider one measure: number of foreign students in the Indian education system. Why is this measure reasonable? Because foreign students have a choice in which education system to enroll in — unlike the majority of Indian students who cannot just up and leave for a foreign education (because India is a poor country, and that poverty is the result of Congress governments . . . you get the picture). So here’s a number that will not come as a surprise to you if you have been paying attention: About 350,000 foreign students study in Australia. India gets 8,000.

Adjusted for population size, relative to Australia, India gets 133 foreign students. That is not a typo. Let me spell it out: it is a hundred and thirty-three, not one hundred and thirty-three thousand. Australia get around three thousand times the number of students per capita compared to India. (India is approximately 60 times Australia’s population.)

You can do the same for other developed countries. And how is China doing? In 2005, it had around 140,000 foreign students and probably has around 200,000 by now. Compared to India, China attracts 25 times as many students as India does. And you know what’s the worst part? The numbers for India are shrinking.

There is practically no demand for education in India by foreign students. Ergo, it is a p o s. QED.

I got those numbers from Arun Shourie. He gave a Foundation Day Lecture in Sept 2006 to the IIT Kharagpur Alumni Association Delhi. (Hat tip: Akshar Prabhudesai.) You should click over there to read the article but for the record, I am reproducing it here in full.

Just remember: those policies that have prevented the Indian education system from developing (much like the policies that have prevented India from developing) have been brought to you (to paraphrase them programs on PBS) by the generosity of your fine Congress governments, and by voters just like you!

Enjoy! Or should I say, weep for India?

About 8,000 foreign students are studying in India. In Australia, on the other hand, there are about 350,000 — and remember, we add to our numbers every year more than the total population of Australia. Nor is it just that foreign students studying in India are less than a fortieth of those studying in Australia. The number of students who come to India has actually been going down: according to government figures, in 1990/91, there were over 12,765; last year there were 7,745! (By contrast, the increase in 2004 in the number of foreign students studying in China was three times the total number of foreign students that came to India: China hosted 141,087 foreign students in 2005.) We could be educators to the world — just as we could be surgeons to the world. But here is another opportunity missed: while Dubai, Singapore, Australia, to say nothing of distant US, etc. are positioning themselves as education hubs, we remain mired in that bog — the HRD Ministry.

It isn’t just that we are missing an opportunity. We are paying a huge cost every year. One estimate puts the amount that is spent on Indian students studying abroad at a figure that would be sufficient to set up 30-40 IIMs or 15-20 IITs every year. And going abroad to study is just the first step. Having studied in that country, having got familiar with the place and people, most decide to take up work there. Soon enough, they settle down there. Science and Engineering Indicators, 2006, reports that of Indian students who received doctorates in Science and Engineering between 2000 and 2003, close to 90 per cent said they planned to stay on in the US; two-thirds had firmed up “definite plans to stay.” The proportions were the same in one critical discipline after another: 91% and 62% in biological and agricultural sciences; 92% and 72% in mathematics and computer sciences; 90% and 70% in engineering…(Science and Engineering Indicators, 2006, Appendix tables, A2-96 to 100.)

The fault is by no means that of the youngsters. And there is no doubt that those who have stayed on in the US, etc. have also done much for India — they have, among other things, helped change the world’s perception of India, and, thereby, India’s perception of itself. But imagine how much our country would have gained in actual productive potential if we had educational institutions of such quality that these youngsters did not have to go abroad. Imagine how much our country would have gained if they worked here, that is if the work environment here had been such that they had felt confident they could develop to their fullest potential, and reap rewards commensurate with their capabilities and with the effort they put in.

And if we persist in the obscurantist policies and practices that mar our educational sector, this drain will only increase in the coming years. Countries are straining to develop themselves as the more attractive destinations — for students, for investors, for firms. Nor is the matter confined to choice, there is a compulsion too, a compulsion of which these leading countries are well aware and to counter which they are taking focused steps. In regard to the US, for instance, National Science Foundation data reveal that in 2003, 85 per cent of those holding Science and Engineering doctorates and working were above 55 years of age; 76 per cent were above 60 years; 20 per cent were 70 and above. The proportions for those holding Master’s degrees were equally significant: they were 85%, 65%, and 16% respectively. (Science and Engineering Indicators, 2006, Appendix tables, A3-43.) And this is just one among many reasons on account of which these countries will continue to aggressively court researchers and skilled workers from India and elsewhere.

Indeed, the threat now is not just that individuals will be wooed away. Countries — from Singapore to South Korea to Taiwan to China to the EU-25 — are making even greater efforts to woo entire firms away, in particular R&D firms. Singapore, South Korea and Taiwan have already become significant research-hubs. But the suction for entire R&D firms can come from farther a-field too. We think of the US as a high-cost economy, as one that is now compelled to outsource R&D efforts to a country like India. But that is just one side of the picture, and that is true only for one end of research. In 2002, US firms spent around $ 21 billion doing research in foreign countries. As against this, foreign firms spent close to $ 26 billion doing research in the US. (Science and Engineering Indicators, 2006, Volume I, 0-4, 0-5, 18.) And that stands to reason: researchers are less costly in countries like India, but today a great deal of research, and almost all of frontier research, involves such high-technology infrastructure that it is best executed in countries like the US.

Things to do

The first thing to do is to stop counter-positioning primary, universal education against higher education. We need both. We can afford both. Second, we must see both — the threat as well as the opportunity: the threat that we may lose our best minds at an even faster rate than the rate at which we have been losing them in the past decades; on the other side, the opportunity that we can be educators to the world.

Third, to ward off the threat and to tap into the opportunity, we require the same sort of measures. To arrest and reverse the alarming deterioration of standards in most of our institutions of higher learning. To ensure that in regard to both – students as well as faculty – merit, performance here and now, alone counts. To ensure that rewards are strictly commensurate with performance.

And resources. A large proportion of these will have to come from the government – for instance, private entrepreneurs just do not have the long horizons that basic research requires. Equally, government alone will just not have enough resources for this sector. Thus, one service that finance ministers can do is to give the most generous incentives and tax-breaks for industry to invest in education and in R&D. For every trifling misuse, a Manipal will come up.
And the resources have to be defrayed not just on equipment – that is what is done ever so often: and by the time the underpaid, under-motivated faculty learn to exploit the equipment to its full potential, the equipment is obsolete. A good proportion of the resources have to be set apart for making salaries and allowances of faculty and researchers and their work-environment attractive enough for them to forego careers in private industry and to choose instead to be in universities and research institutions.

It is obvious that we cannot do any of this so long as higher education and research is dominated by governmental institutions. China, for instance, has launched an aggressive drive to bring back the very best Chinese faculty who are working in universities in the US, Europe and the like. To attract them back, China is giving them remuneration and allowances and work facilities that are better than what they have in universities where they are working. This is being done irrespective of what existing faculty get in the Chinese establishments in which these returnees will be lodged. Can such a thing be done in a governmental organisation in India – what with its scales and unions; what with the fact that the salary of a professor cannot be higher than that of the vice chancellor, and the salary of a vice chancellor cannot be higher than that of secretary, HRD…? I am, therefore, wholly against the current rush for affiliation, etc. We should encourage institutions to de-affiliate, from existing universities and the like. Colleges and research departments and institutions will come to be known by the work they do, by the standards to which they adhere. Along with this movement to de-affiliate we should develop first-rate, wholly objective and reliable methods to rank institutions.

But the gaps are so vast that mere resources will not do. We need to adopt unconventional methods to scale up this sector. The remarkable success that F C Kohli, one of the fathers of IT in India, has achieved with the “total-immersion” method in making absolutely illiterate persons literate enough to read a newspaper within 8 to 10 weeks; his analysis of “gaps” between the best engineering college in Maharashtra and other colleges in the state, and how these can be bridged by using modern IT and communications technologies – these are the sorts of measures we need to put in place. And, instead of stuffing IITs and IIMs with mediocrities just because they were born to one set of parents than another, we should induce them to multiply faculty, and to upgrade existing faculty in other institutions.

Two prerequisites

But for any of these measures to be executed we need two prerequisites. The first is to outgrow clichés. “Do not make a commodity of education,” our politicians shout every time there is the slightest effort to make educational institutions self-sustaining. “Do not sell ma-Saraswati,” they shout every time there is an effort to induce industry to take up education. All such shouting ensures is that existing scarcities continue, and the existing education-czars rate off the lolly. All it accomplishes is to enable a dental college here, near Delhi itself, to pocket a “donation” of Rs 28 lakh from every entrant…Is the way to deal with the fact that 150,000 students have just applied to the IIM, Ahmedabad, for 250 seats in its two-year course, to force it to take in 27 per cent additional students — that is, sixty two more students — on the basis of birth? Or is it to give incentives to industry to set up 62 institutions of comparable worth?

And then there is the even more urgent task — to reverse the recent trend in regard to the few islands of excellence that remain: the recent trend of interfering in the IITs and IIMs. The recent edicts regarding reservations are just one — though by itself fatal enough — lance of such interference. Appointments of directors; hauling them up before Commissions because some congenitally disgruntled employee keeps writing letters to high-ups; the insistence of a legislative Committee that they switch to Hindi as the medium of instruction…There is an all-round assault to breach their autonomy.

To ward off such senselessness, three things are required. First, do not temporise: do not think that the way to meet the assault is to concede a bit – those concessions will not assuage the grabbers; on the contrary, they will become the reasons for the political and bureaucratic class to grab all: “See, the director himself is saying that they are ready to abide by our order – all he is asking is that he be given a little time to do so…” Second, as those who are working in these institutions are in a sense under the thumb of government — and I have been struck dumb by fear to which faculty themselves testify in open meetings — outsiders, in particular the alumni of these institutions, have an important duty: they must constitute themselves as firewalls around these institutions.

But the assault on such institutions is but an instance of the general assault on excellence in India today: from legislatures to civil service to educational establishments, mediocrity is being asserted as norm, vulgarity as right, intimidation as argument, assault as proof. Two classes today stand in counter-position to this assault on standards – entrepreneurs and the professional middle class. Accordingly, the pan-Indian organisations of professionals should get together to contain, roll-back and eventually eliminate this assault.

If you were to read the archives on education on this blog, you will find a lot of proposed solutions. All of the solutions start with getting the government out of the system.

Here’s a recent article in the Wall Street Journal, “India’s Colleges Battle a Thicket of Red Tape” (link thanks to A Sarda.):

Loosening the Indian government’s famously bureaucratic “License Raj” when it comes to governing businesses has helped spur an economic surge that has transformed the country and its standing in the world. In contrast, critics say India’s educational system remains mired in red tape that stifles expansion and innovation.

The system falls far short of meeting the demand among young people for places in good colleges and universities. And it deprives India of the ranks of well-educated graduates it needs to supply crucial industries such as information technology and pharmaceuticals.

Sad really. Here’s more

“Nothing has gotten in the way of educational improvement and expansion here in India more than the government’s own regulators,” says Anil Harish, chairman of the Hyderabad (Sind) National Collegiate Board, a nonprofit organization in Mumbai that governs the Kundnani pharmacy college and 16 others.

Too Few Good Schools

Very few of India’s higher-education institutions were ranked in the top 500 world-wide in Shanghai University’s 2008 annual ranking.

India 2
China 30
Brazil 6
Japan 31
U.S. 159
Source: Center for World-Class Universities, Shanghai Jiao Tong University

The National Knowledge Commission, an advisory committee appointed by the prime minister, is proposing to set up a new independent regulatory authority, invest more government funding in higher education and build 50 national universities.

“There is a quiet crisis in higher education in India that runs deep,” said Sam Pitroda, chairman of commission, in a report. “The system as a whole is overregulated.”

India’s national and state governments are pouring billions of dollars into expanding higher education. The Indian government, which funds about a third of India’s public higher-education costs (states pay the rest), plans a ninefold increase in spending to $17 billion over the next five years, according to a plan unveiled in 2007.

But reducing the bureaucratic burden on the sector won’t be easy. Any change in the powers of the All India Council for Technical Education requires a vote of Parliament, whose members can derive influence by pressuring educational institutions to admit children of supporters, several officials of colleges and college boards say.

“Education is a vote-getting patronage item,” says Ajit Rangnekar, deputy dean of the Indian Business School. That school, launched in 2001 with the support of India’s business elite, isn’t under the purview of the Council for Technical Education.

ISB is a shining example of how the private sector can fix the problem. But it won’t be allowed to because with a good education system, it will mean the politicians who depend on an illiterate and poor population will not be electable.

India is being raped by criminals who are dressed up as politicians. It makes a body weep bitter tears.

Related link: A series on the Indian Education System.

New Delhi, May 27: India has asked Britain for financial and technical assistance to set up a new “world class” university (WCU), nearly half a century after it last asked for foreign help in starting a premier education institution.

Junior higher education minister Purandeswari Devi has also asked her British counterpart Bill Rammell for assistance in upgrading facilities and teaching standards at the Indian Institutes of Technology, government officials told The Telegraph.

I hang my head in shame to see India debased so pathetically. Indians are second to none when it comes to talent, drive, hard work, and entrepreneurial ambition. Whenever they have had the freedom to do so, Indians have demonstrated all those through their considerable success. Until very recently, those success stories have mainly been associated with Indians abroad because it was in free countries such as the US that they had the freedom to achieve their destiny. The government of India, until very recently, following the enlightened policies of socialism, denied its citizens the freedom to achieve, to build, to compete in the world, to serve domestic and foreign markets. To the limited extent that the government has deviated from its avowed socialistic goals of scaling the commanding heights of the economy by controlling every minute aspect of the economic lives of its citizens, the people and corporations of India have prospered and gained global respect and attention.

Why does the government of India continue to imprison the educational system even now? What is the reason that it will not allow Indians the freedom to build educational institutions in India? Why does the government then go out with a begging bowl to foreign governments asking for help with building “world class universities” when Indians are quite capable of doing so?

Do you have any doubts that Indians can build world class institutions of learning? Let us recall that the world’s best universities were in India once upon a time. That was a time when India did not have “The Ministry of Human Resource Development of the Government of India” and did not have a minister for higher education or an education minister. Do you have any doubts that India has world class scholars and professors? Just two days ago I had the honor of meeting two celebrated Indian professors — both working in world class universities abroad. You cannot examine the faculty list of any top class American university without picking out dozens of Indians on it.

Why, oh, why does the government of India have to imprison the education sector? There may be many reasons for India’s pathetic economic performance. (Yes, ladies and gentlemen, let’s be honest about this. India is pathetically poor. Sure the GDP is growing at a respectable rate after decades of 2 and 3 percent Nehru rate of growth but that growth rate is on a really small base. India’s per capita GDP of US$700 cannot be compared to the per capita GDP of the US of US$28,000.) It is my opinion that one of the primary reasons is that its education system is flawed. It is also my considered opinion that the reason for India’s pathetic educational system is that the government has total control over it.

So back to the question: why does the government control the educational system? I believe it does so because it is the life-blood of the economy. By controlling that, it gains a stranglehold on the economy which it can exploit for its objective of extracting every bit of rent that it can. Let’s remember that government is made up of people — the bureaucrats and politicians. People are motivated by self interest. Through their control, they gain personally in terms of power, prestige and most importantly money. Like any monopolist, these people limit the supply of educational opportunities and then ration out the limited supply to favored groups to buy their allegiance. Reservations based on caste, religion and other non-relevant criteria are obvious symptoms of this rent-seeking rationing.

Control is the operative word. The last paragraph of that Telegraph article is revealing. It says,

The universities will be controlled by the Centre but kept distinct from existing central universities, and will be nurtured to compete with institutions like Harvard and Cambridge.

Centralized micro-level control is inimical to growth and development at the macro-level. We have to continually refer to those sectors where the government has relinquished control (even partially) and note how those sectors have prospered. And why shouldn’t they prosper? As I never tire of pointing out, there is nothing inherently lacking among Indians that they cannot build world class companies. It need not be necessarily so but the broad generalization is forced on one after even a cursory examination of India’s economy that the Indian government is the greatest impediment to India’s economic growth, and that the government of India is perhaps the greatest enemy of the Indian people.

Allow me to quote some more from the Telegraph:

Sources said Purandeswari told Rammell at a meeting in Delhi yesterday that India needed assistance in modernising teacher-training programmes in higher education.

Faculty support — a euphemism for greater participation of guest lecturers from the foreign country — was another request put forward by Purandeswari, the sources said, adding that she also dwelt on skill development — educating students for the job market — as a “key issue”.

Rammell is learnt to have told the minister that the UK was in the process of restructuring its own skill development process, and was willing to share its experiences.

The two ministers are expected to meet again in London on July 18 or 19.

The sources said India, at yesterday’s meeting, indicated its desire to firm up details of the plan before the end of the year. Higher education secretary R.P. Agrawal asked Rammell if the deal could be finalised by July, but the British minister evaded any commitment to a timeline. [Emphasis added.]

Now why would the British government official not be overly eager to help India in this regard? Let me try to answer that. If my allegiance were to Britain, the last thing I would like to see is that India become so successful in the education sector that it hurts British interests. In fact, I would wake up every day and give thanks to the gods that the Indian government has crippled India’s education system and thus ensured that Britain continues to gain from the flight of human capital from India. Lacking educational opportunities in India, those among the talented Indians who can afford it are forced to go to the UK and the US for higher education. Once there, they add to the human capital of those foreign countries as they settle down and further enrich their adopted countries. I don’t blame them. Humans value freedom like they value the air they breathe: without it, they suffocate and die.

(Aside: Just moments ago, the power failed. Yesterday afternoon where I live in Pune, the power failed about a dozen times, with outages ranging from a few minutes to half an hour. God alone knows how long this failure would be. Power here is predictably unpredictable. My laptop power will last about 3 hours and I just hope that the power returns before too long. You need not ask which agency is responsible for power in Pune. It is the Maharastra State Electricity Board — a government undertaking. Now back to the current rant.)

So will the US and the UK help out India build world class universities in India? Like hell they will. Indians are forced to spend billions of dollars each year in education abroad. (Estimates are of the order of US$10 billion annually.) They have to be stupid to do something that will hurt their national interest. They will not only lose the income from providing education to India, they will lose out on the added human capital. And most of all, they will lose jobs that Indians educated well in India can do in India.

Here’s a story from the NY Times of April 4, 2007, which should scare the pants off of the Americans: India’s Edge Goes Beyond Outsourcing. They are witnessing job flight to India on a scale that they had not anticipated. Corporations such as Boeing, Morgan Stanley, Eli Lilly, Accenture, IBM, Airbus, Cisco, and Microsoft are mentioned in the context of the number of jobs they are transferring to India. Here’s a bit:

With multinationals employing tens of thousands of Indians, some are beginning to treat the country like a second headquarters, sending senior executives with global responsibilities to work there. For example, Cisco Systems, the leading maker of communications equipment, has decided that 20 percent of its top talent should be in India within five years; it recently moved one of its highest-ranking executives, Wim Elfrink, to Bangalore, the center of the Indian industry, as chief globalization officer.

(Just by the way, last month I met Wim Elfrink at the opening of a Cisco Systems training and development center in the Zensar campus in Pune.)

So what is happening over here? Globalization. It is the erasing of national boundaries with respect to jobs that can be outsourced through the magic of the recent revolution in information and communications technologies (for services) and manufacturing jobs through the magic of the 52-year old shipping container revolution. Transnational corporations shifting jobs wherever they find labor-cost arbitrage opportunities.

Yes jobs are moving to India. So far, the foreign corporations are picking up the low-hanging fruits among the employable in India. But that well (to mix metaphors shamelessly) is going to go dry very soon. From the NYT article:

. . .specialists warned that a continued flow of work to India required drastic improvements in its educational system and basic facilities. Water and power shortages are endemic, and industry experts predict that India could lack 500,000 engineers by 2010. Yet the country has already tapped a deep well of English-speaking engineers, attracting more outsourced work than any other country.

(Oh goody, the power just came back on. Now I can save this draft and continue my rant.)

Within just two years, India will face a shortage of half a million engineers! If that is so, the labor-cost advantage of India will most certainly disappear as the price of engineers will be bid up. As it is the reported churn among software engineers in India is phenomenally high and wages are going up 30 percent per annum by some estimates.

Wouldn’t liberalizing the educational system be the most rational response to solve the shortage of skilled manpower? Yes, it would. Will it be done? Not if India continues to have a ministry of higher education and a minister of education of the likes of Arjun Singh.

Economist Alan Blinder has characterized outsourcing as “the third Industrial Revolution.” The first one was missed thanks to the British: they were the colonial power ruling India and it was not in their interest to see that India become an industrial giant. I don’t blame the British. If I was a loyal Britisher, I too would not like to hurt Britain’s interests. The second industrial revolution (I am guessing) that Blinder refers to is the off-shoring of manufacturing that mainly happened to the East Asian tigers and later to China. India missed that because of the Nehruvian socialist policies of barriers to foreign investment, archaic labor laws, xenophobia’s, and plain old fashioned stupidity.

This third industrial revolution bus is about to depart. India does not seem too eager to get on that one. No, I take that back. Indians are desperately impatient to get on this one. They are struggling to get on board. But the government of India is doing its best to prevent that from happening. It is as if the government is saying, “Just try to get on that bus and we will break your kneecaps for you. Don’t you dare escape from our clutches.”

If I had my way, I would charge junior higher education minister Purandeswari Devi with treason for having debased the country by begging a foreign nation for assistance with doing something that Indians can do. She has shamed Indians and implied that Indians are incapable of creating world class universities. I think that all Indians in the education professions — both at home and abroad — should tar and feather her for her direct insult at them. Shame on you, Ms Devi. Just resign from your post and go beg for a living instead of feeding at the taxpayers’ expense — the tax payers whom you insult so deeply.

End of rant.

Sam Pitroda, chairman of the National Knowledge Commission says that of the 90,000 MBAs that come out every year, only around 10,000 are worth employing. Kiran Karnik, former NASSCOM president, puts the blame at the door of India’s education system, saying that only 25 per cent of the country’s engineering graduates deserve jobs. No wonder companies today have to invest heavily in training fresh graduates, helping them to unlearn and pick up skills. As there are dramatic changes in politics and business as well as international scenarios, there is a need to keep updating the syllabus almost every year. Manohar Chellani, Secretary General, Education Promotion Society for India, New Delhi, points out that there is tremendous scope for improving the quality of education in India, and delay in doing it will cost us heavily.

The National Knowledge Commission has said that India will have to bring in education reforms if it has to emerge as the workforce of the world. India today needs at least 1,500 universities, but has only 370. There are more than 550 million young people in need of education but do not have educational institutes to go to. India also needs around 1,500 IITs, 1,500 management institutes, and 1,500 medical schools. A million good schools are also required. All that the present education minister, Arjun Singh, has done in his tenure is to fool around with reservations and suggest that Rahul Gandhi be made prime minister.

Though the IT industry needs 3.5 lakh engineers a year, only 1.5 lakh are available. This could lead to a shortage of over five lakh engineers in the next few years. A recent Nasscom-Crisil report says that the IT industry is expected to create about 11 million jobs by 2010. In another two years, the II sector would need half a million professionals. Presently, it employs over 350,000 but is short of around 90,000 workers. In another year, the shortfall is expected to cross 200,000. In 2007, the job market was vibrant. 2008 promises to be better as India goes on to vitalise its various sectors, which require over 1,000 CEOs across industries.

Read the whole article. Here’s the puzzle: Why is it that the writer, a documentary film maker, is alarmed by the situation that apparently the honorable education minister never seems to lose any sleep over? Actually, most dispassionate observers of the Indian economy invariably point to the disaster which is the Indian education system as the greatest obstacle to India’s development. What needs to be done to fix the education system is also fairly well-understood. The problem does not have the complexity of quantum mechanics or brain surgery. The solution to the problem is certainly as well-known as the problem itself. So what is it about the problem and its solution that evade the sainted policy makers of the Indian government? What is it that they don’t understand?

Upton Sinclair had noted that it is difficult to get a man to understand something when his job depends on not understanding it. That is a specific instance of the more general principle that economists consider to be a fundamental truth about human behavior: “Incentives matter.” The system does not provide the policy makers an incentive to improve the educational system. Conversely, they have an incentive to keep the system dysfunctional. Given the current structure of incentives, they would lose whatever advantage their gain from the existing system.

The demand for education is overwhelming and urgent. In any system in which demand outstrips supply massively, rationing of the limited supply is the only option. Those who control the rationing system gain tremendously. The Indian education system is a victim of vote bank politics. If the supply were to expand to meet the demand, those in charge of handing out quotas and reservations would suddenly find themselves without the levers that not only give them political leverage but also allow them to extract huge rents that arise from a monopolistic control of the system.

There’s a follow up puzzle. It is widely reported that India is a democracy. If democracy means anything at all, it surely means that the people are in control and are the principals, and that the political leaders and policymakers are the agents that implement the will of the people.

Does the Indian population have a definite will to have a good education system? One could cynically note that they have gone through the same educational system and therefore perhaps are not fully equipped to even understand what’s wrong with it. If we don’t take that unkind stance, then we could conclude that the will exists but that will is not communicated to the policy makers. Perhaps if the people expressed their preference for a good education system, the policy makers will deliver. But the situation could be worse. It could be that the people prefer a good system, and effectively communicate that preference, but in the end the policymakers simply ignore the will of the people. Ignoring the will of the people is something that comes rather naturally to rulers of an imperial bent of mind.

So here’s my conjecture. I think that it is an unholy mix of unfortunate factors: the people only weakly understand what the problem is; they articulate that understanding imperfectly; that articulation is imperfectly communicated to the policy makers; and, the policy makers choose to ignore what is good for the country because it helps them in their narrow interests.

Final question: will we be able to get out of this whole sorry scheme and if so how?

My feeling is that the market forces will become overwhelming and change the situation. The solution will not be bottom-up from the people but top-down from the corporations. They have an incentive to have productive workers because it adds to their bottom line. The Indian industry will drive policy change. My guess would be that within the next decade we will see a massive overhaul of the education system.

I am very optimistic.

So that’s it for now from JP’s hangout in Edison NJ. The weather is nice and sunny.

Let’s pause for a moment and figure. $13 billion every year. Or in the last 10 years, about $100 billion. Imagine what you could buy for that money. How about 100 colleges with first class infrastructure with housing, classrooms, labs? Each year India could have an additional capacity for 10,000 college students and in 10 years you could have 100,000 additional capacity. Imagine the multiplier effect of that spending — in construction, in salaries to teaching and non-teaching staff. Imagine the boost to the industry from creating human capital. The imagination boggles at the sheer waste.

Imagine how much infrastructure you could build for $100 billion.

One of the principal lessons one learns as one studies economic development is that success or failure depends largely on the set of economic policies that govern the economy. India, for instance, is poor and economically a failure because its economic policies are extremely brain-dead. Of course one can explain why these brain-dead economic policies exist. We will not visit that now. Here I would only mention that the policy on education is the most brain-dead and that educational policy is largely to blame for why India is poor today, and if the policy is not changed, then it will certainly doom India in the future.

In other words, India is poor because Indian policymakers are either (1) morons who are too bloody stupid to realize that they are continuing to keep India poor and are killing any future that India may have, or (2) they are evil immoral bastards that know what they are doing to the country but do it anyway because by controlling the system they line their own pockets. Or perhaps a combination: some policymakers are of the first kind (morons), and some of the second (bastards.) In end result is the same, however.

Here’s the text of that article — for the record.

Industry body Assocham said on Monday that over $13 billion is spent every year by about 450,000 Indian students on higher education abroad.

Over 90 per cent of students appearing for the Indian Institutes of Technology (IIT) and the Indian Institute of Management (IIM) entrance examinations are rejected due to capacity constraints, of which the top 40 per cent pay to get admission abroad.

“Over 150,000 students every year go overseas for university education, which costs India a foreign exchange outflow of 10 billion dollars. This amount is sufficient to build more IIMs and IITs,” it said.

The primary reason for a large number of Indian students seeking professional education abroad is lack of capacity in Indian institutions. The trend can be reversed by opening series of quality institutes with public-private partnership by completely deregulating higher education, Assocham President Venugopal Dhoot said in a statement.

Higher education in India is subsidised as an IIT student pays an average 120 dollar monthly fee, while students opting for education in institutions in Australia, Canada, Singapore, the US and UK shell out 1,500-5,000 dollars as fees every month.

Deregulation of higher education in the country will result in creating annual revenues of 50-100 billion dollars, besides providing 10-20 million additional jobs in the field of education alone, the chamber said. India has only 27,000 foreign students, as compared to four lakh in Australia.

Assocham further said vocational education in India is a meagre five per cent of its total employed workforce of 459.10 million as against 95 per cent in South Korea, 80 per cent in Japan and 70 per cent in Germany.

[See follow up article on Educational Spending.]

For many years past, those who have known India best have recognized that one of her greatest, if not her greatest, problem was that of education.

The article goes on to quote experts who have concluded that even if the government were to decree compulsory education for everyone, and even if money did not matter, the problem is finding the teachers required. I concur with these experts that finding teachers is a challenge at least as great as finding the money and the political will to educate — or at least make literate — India’s vast population. The article also recognizes the deep-rooted conservatism and the resistance to reform in education. I could not agree more.

Here’s a bit more from the article.

There can be no question that … education in India has largely failed because … education has been made far too much a question simply of intellect . . . one of the most pressing needs of India is to foster more widely in schools and colleges, those ideas of duty and discipline, of common responsibility and civic obligation on which a sound political life depends.

It is specially welcome to find that an increasing number of prominent Indians are beginning to recognize the truth of this contention, and the importance of securing for their fellow-countrymen an educational system rightly founded.

The article concludes with a quote from Sir James Meston at Delhi referring to the apparent obstacles to progress in India’s path: “Only education will help the liberal mind and understanding heart to surmount these barriers, and prevent the majority from becoming a tyranny and the minority from chronic rebellion.”

The NY Times does highlight every now and then some issue facing contemporary India. The aforementioned NYTimes article is timely and to the point. The sad fact is that the article was timely and to the point when it was published nearly a century ago. Yes sir or madam, the date on that article is October 1918. The situations remains the same; only the numbers have changed.

In 1918, British India had 300 million illiterates. That means, within the boundaries of present day India, there must have been around 200 million illiterates in 1918. Today we have 400 million illiterates. Nearly a century has passed and the number of illiterates have doubled in absolute numbers. And consider this: the government of India has been at the job of educating its population for over 60 years.

India’s greatest problem is this: the government has been doing its best to keep the population uneducated and illiterate. Public funds for education are channeled in only such ways so that it is least capable of delivering education. Corruption and inefficiency collude to keep the funds from actually educating anyone.

India’s great problem is education. India’s greatest problem is the government.

[Hat tip: Ashok Bardhan for the NY Times link.]

The future is not what it used to be. The future of a century ago was not as unpredictable as today’s because the set of possible futures was small. Our present uncertainty about the future has expanded not just in the size of the set but we don’t even know what each possible future contains. The trend is undeniable: as we humans become more powerful in controlling our present, the future becomes less predictable. The boundaries of our ignorance and the range of uncertainties expand beyond human cognition. Our “unknowledge” of the future is unbounded.

It took thousands of years to go from the invention of the wheel to powered flight; it took only an additional 65 years for humans to walk on the moon. Just 50 years ago, IBM’s 5 MB disc drive was state of the art. It cost (in today’s dollars) approximately $250,000 and was as big as a fridge. Today 5 GB – a thousand-fold more storage – costs a dollar. Each year humans create additional exabytes (10^18 bytes) of information. That is, each year more information is created than was created in the entire history of humanity. Technological advance can no longer be plotted on linear graphs; they require logarithmic scales.

Impressive technological advancement at a collective level implies that any individual is totally incapable of even comprehending the technology, leave alone control it in any meaningful sense. It is obvious that nobody knows how to build, say, a modern commercial jetliner. One may know a bit about the avionics, another may know a bit about jet turbines, and yet another about advanced composite materials, and so on. But no one knows it all.

Human ignorance manifests itself on three other dimensions in the production of goods and services. First, no one knows what the future goods and services will be. Second, no one knows who will produce those. And finally, what their impact on human society will be is a mystery. Look no further than the Internet to evaluate human ignorance along those dimensions. Could anyone have predicted any of the services we take for granted today even 25 years ago? Could anyone have picked the winners? Too many young people are doing jobs today that did not exist when they were born.

So how do we prepare to meet an unknowable and uncertain future? Not surprisingly, the answer must lie in the same forces that actually create the future. Every advance in human technology – which is essentially embodied knowledge – is the result of entrepreneurial activity. The innate drive to build ever higher upon the existing base of knowledge finds its full expression in economically free societies. Economic freedom and the freedom to organize lie at the core of humanity’s remarkable successes.

It was possible in the static past to organize society under dictatorial authority. The feudal lords, and later kings and emperors, managed somehow to control relatively primitive society in a manner. But progress imposed enormous informational demands which no central authority could even theoretically possess. Communism’s fall is evidence that even a slightly complex economy cannot be controlled because even if one has the power of coercion, no one has the knowledge to do so. Free enterprise created the complex modern world of today and free enterprise alone will not only continue to shape the future but will provide us the means to meet that future.

To prosper – indeed merely to survive – in the future would require skills that we cannot fully imagine. Certainly a small percentage of the people will continue to be engaged in occupations that have existed for generations but the majority, especially in advanced economies, will be working at jobs that require high degrees of specialization and years of training. Those who are entering the educational system today will retire around 2070. That world is as hard for us to imagine as our world would have been for a caveman. Which imposes some very special requirements on the educational system.

The current educational system was geared to a world of the past, a world where command and control was still not entirely impossible. In India, that system served the needs of a very small segment of society and achieved only a very qualified success. It is strictly out of the bounds of the possible that the present system can ever meet the future needs and for the population at large. Innovation in India’s education system is absolutely essential and continued state control will condemn not only the system to irrelevance but the entire economy as well.

So how do we get an education system that works for the present and the future? Private enterprise and innovation are conjoined twins, sharing the cardio-vascular system of economic freedom. Entrepreneurship creates immense wealth that permeates healthy economies. Entrepreneurship alone has the capacity to create innovations in education that no bureaucrat or centralized planning authority can ever hope to achieve. Yes, central control can control but it cannot create.

In an age where each of us is immensely ignorant relative to the sum total of human knowledge, the skills that the individual acquires over a lifetime of learning cannot be imparted by an educational system that was created for a different world. The resources for building that educational system is out there. All that society has to do is to keep the state out of it so that private enterprise can do its job – which it invariably does. The role of the state is limited to light-handed regulation.

Liberalization of the education system from the political-bureaucratic nexus is absolutely necessary. Without economic freedom, we cannot expect the entrepreneurial innovation required to make the educational system keep pace with the dramatic changes that the future has in store. It would be profoundly ignorant to not liberalize education.

{This article was published in the Aug 2007 special issue of Pragati called “Rejuvenating India.” You can download the entire issue here (pdf 2.3MB). }

Atanu:

I read your article on name change and I found it fascinating. Do you have a numerologist you could recommend? I’ve just written my first novel and I need to choose between my name and married name. Thanks so much.

All the best,
Novel Writer

Thank you kindly for any help.