Higher Education is Private Property

DURING a recent visit to China, I was most impressed by Ms Yang Moqiou, principal of one of Shanghai’s top government schools. She is a member of the Communist Party, and proud of it. But don’t expect her to repeat the old socialist cliches about socialised education for all. She says that all basic education should be free, compulsory and funded by the state, and opposes the current Chinese policy of asking schools to overcome their financial problems by running profit-making enterprises, garnering donations, and charging miscellaneous fees. She is equally clear that students should be charged high fees for higher education and technical training.

The old system of free education in China at all levels meant that the biggest subsidies were given for costly higher education and the lowest for primary education (which benefits many millions more). Ms Wang favours teaching Marxist ideology in all schools, but departs radically from the socialist maxim that education represents public property and so should be free. She sees this is a convenient way for the urban power elite to hog limited state finance for higher education for its scions, while backward village schools languish for want of money.

HIKE FEES: This is a familiar phenomenon in India too, and many educationists have long suggested raising fees for higher education in India, thus releasing limited state finances for primary education. For poor students who cannot afford the full cost of college education, Indian educationists suggest ‘scholarships’.

However, parts of China would regard even this as insufficient reform. Mr Pan Guang-Yi, vice-chief of basic education, Guangdong, says that in his province, colleges and technical institutes have started charging up to 15,000 yuan (Rs 85,000) for a four-year course. This would be regarded as outrageous in India, but would certainly facilitate the urgently-needed diversion of state budgets from higher to primary education different institutions in, Guangdong have different systems, but on an average the higher fees cover half of all students. Even more interesting, scholarships are not given to poor students-these are reserved for the cleverest students and certain priority subjects where skills are scarce. Poor students merely get loans to cover their education costs. Since graduation greatly improves their earning capacity and enables them to join the elite, they are expected to repay these loans no matter how poor they may have been earlier.

SC FAILS: Mr Pan, Ms Wang and other Chinese educationists are not economists, but have instinctively understood a vital economic principle of education, which the Indian Supreme Court has failed to. The Supreme Court held in a recent judgment that education must not be treated as a form of private property which can be bought by the rich. The Court was trying to curb malpractices of capitation fee colleges, but in the process muddled a vital distinction between primary education and higher education.

It is now universally recognised that primary education is essential for the health of every society, that it provides the bedrock for developing human capital, which is as essential for prosperity as financial or physical capital. Literacy does much more than benefit the student-it releases energies of society as a whole and enables it to grow rapidly. So it makes sense to recognise primary education as a form of public property, which should be financed entirely by the state for the public good.

This is not true of higher education, especially technical education. When a person becomes an engineer or a doctor, he acquires human capital, which earns him a handsome return in the form of high earnings. But the benefit here is mainly a private benefit, not a public one. No engineer or doctor is obliged to serve in backward areas where society may need him most – he can go to the biggest cities to maximise his earnings. He can (and often does) go abroad, taking his human capital along with him.

COMMERCIAL TRANSACTION: In short, while basic education should be considered public property, higher education should be regarded as private property. Contrary to what the Supreme Court thinks, higher education is very much a commercial transaction in which graduates acquire private property. There is no good reason why the state should hand over such private property to graduates free of charge, especially since most college-goers belong to the richer sections of society.

Should we follow the Chinese experiment of having only student loans instead of scholarships for the poor? Many will say no. There are so many surplus graduates today that a B.A. degree is no guarantee of a high income. On the other hand, charging full fees will certainly reduce the demand for higher education, reduce the number of unwanted and unemployed graduates and reduce the social tensions generated by idle youths, with aspirations unrelated to what society needs. Such youths have been the raw material for s thousand bloody, sometime secessionist agitations. We need to curb over education even while expanding primary schools, for the sake of political and social stability no less than improved education.

What do you think?