Socialists Vs Conservatives Damaged Indian Education. Bahujans need market power

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MOne in India believes that an education system driven by market forces can increase inequalities in access to education among different castes. However, economic theory is contrary to the belief that market forces are likely to increase caste discrimination or decline the welfare of oppressed castes.

While there are few studies explicitly measuring caste discrimination within the Indian school education system, reports about poor treatment of Dalit children in government schools are very common. Only last year, for example, school director A Dalit student of a government school in Tamil Nadu asked to clean the toilets of his school. The present system of education in India has performed poorly not only in eliminating caste discrimination but also in producing quality education. Numerous studies show that many middle school children lack the reading and writing skills they should have acquired in primary school. So, the reader may wonder how such an education system originated. And why did it survive more than 70 years. Neither the economic justification, nor the performance of the system is the reason for its existence. This system of Indian education arose out of a stalemate between socialists and conservatives.

For socialists, rival competition based on private property was an instrument of capitalist exploitation. And for the conservatives, the competition jeopardized the caste system by pitting one part of the ‘cosmic man’ against another. Socialists desired complete government control over the functioning of educational institutions in order to impose their vision of egalitarianism on the “people”. But he did not have the strength to defeat the conservatives. Thus a political balance arose between the socialists and the conservatives. Socialists will pass the Affirmative Action Act. And conservatives will thwart its implementation by ‘dragging their feet’ or through judicial intervention. In recent years, conservatives have also taken the legislative route. In 2019, for example, Parliament passed Central Educational Institutions Act, according to which certain “institutions of excellence” will be exempted from affirmative action policies.

The market approach to education presents an alternative to the socialist and conservative approaches. Gary Baker, who was awarded the Nobel Prize in Economics in 1992, showed that competitive market competition can improve the well-being of groups facing discrimination. Baker argued that within a market setting, those who discriminate against consumers or workers face the price of discrimination. This is because consumers may choose to purchase from other firms, and employees may go to other employers. Therefore, profit maximizing firms have an incentive to minimize discrimination.

This minimization of discrimination is not a result of profit-seeking in itself, but the fact that firms must survive within a system of competitive competition. Within a market setting, even the largest managers know that they must choose between their desire to discriminate and their desire to profit. In other words, the market creates a conflict between different forms of an individual, their caste preference being only one of the motives on the basis of which they wish to act.

For these forces to work, however, markets must be competitive. By ‘competitive markets’, we mean a system in which market entry and exit are not restricted by government regulations.

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Competitive markets reduce discrimination

Employers who discriminate against workers are unlikely to face the full cost of discrimination unless workers have no other options. And such options come from firms that enter the market recognizing a profit opportunity. For example, take a case in which a firm pays lower wages to members of oppressed castes than to other castes, even though the productivity of both the groups is equal. Such a setting presents a profit opportunity for other firms, which may place discriminated workers on slightly higher wages than before, and thus cut the gap between workers’ productivity and current wages. . This process of competitive hiring, or even the very danger of it, can bridge the gap between wages and productivity among workers of all races. Market competition can reduce not only discrimination in wages, but also discrimination among workers in terms of how they are treated by managers. Like low-wage workers, workers who are not treated with respect will be more inclined to move to other firms. Competing firms turn away productive workers by offering them a slightly higher ‘dignity’, in the same way that they offer slightly higher wages to low-wage workers.

While competitive markets can reduce discrimination, they do not guarantee a proportionate distribution of castes across all schools and universities. In fact, if consumers have strong preferences for consuming goods made by members of a particular caste, or if workers have a strong preference for working with members of their own caste, competitive markets can create distinct firms. can. In other words, you may find schools and universities that only employ members of certain castes or cater to students from certain castes. Whether such segregation leads to a decline in the welfare of the oppressed castes depends on the size of their population relative to the ‘economics of scale’ in production.

When there is ‘economics of scale’, the average cost of producing a service decreases with an increase in the number of units produced. In such a situation, the optimum size of a school or university may be such that it needs to employ a large number of people. If the oppressed castes have a small population, they will be thrown out of schools and universities because others do not want to work with or teach them. But if there are a large number of people from the oppressed castes, new universities and schools will open to meet their unfulfilled demands. In such a situation, the alienation of markets and firms need not cause deterioration in the welfare of the oppressed castes.

In India, the oppressed castes constitute a large number of people in most, if not all, districts. This means that the number of persons belonging to the oppressed castes is sufficient to overcome the problem posed by economies of scale. The only factor that could hinder the emergence of educational institutions primarily catering to the oppressed is their purchasing power. And this problem can be easily addressed through ‘Education Vouchers’, which are just coupons that a person can use at any educational institution of his choice.

Read also: The abolition of caste is possible in Indian corporates. But firms have to say that downtrodden lives matter

Market can work for Bahujans

Overall, it can be said that market competition among profit-oriented producers of education is likely to lead to a decline in discrimination. And in areas where caste preferences are strong enough, competitive markets will create segregated schools, thereby improving the welfare of oppressed castes. In the light of this logic, opening up the supply side of education in India would be one of the most egalitarian reforms. Under the current circumstances, government regulations dictate the nature of inputs that must be used and the types of outputs that can be produced by educational institutions.

On the input side, government bureaus determine the size of classrooms, the nature of playgrounds, and the degree to which teachers should have (this matter is very different from the quality of teaching itself). On the output side, government bureaus determine the types of courses that can be offered and even the number of hours students must have in class. That’s not all. Foreign universities are not allowed to open campuses in India. This widespread ban disproportionately hurts oppressed castes as they often lack the financial means to send their children abroad. And finally, education cannot be run for profit. This means that new schools and universities cannot be established by raising capital from stock exchanges or venture capital funds. Note that this regulation also disproportionately hurts oppressed castes. Members of oppressed castes are much less likely to inherit wealth than members of ‘upper’ castes. This means that the persons belonging to the oppressed castes should borrow to convert their ideas into institutions. The greater the access to the capital market, the lower the cost of borrowing. This is especially true of access to foreign capital markets as interest rates are lower in the wealthier countries of the world. But capital markets demand repayment from the profit earned. Hence the ban on profit in education stifles the dreams of entrepreneurs coming from oppressed castes.

The ban on for-profit education, along with an elaborate government involved in the production and control of education, is the result of a decades-long battle between conservatives and socialists. The great loss that has happened in all this is the members of the oppressed castes. Their children have been denied quality education in the name of socialist ideals and for the preservation of the mythological caste structure. For many Dalit parents, what matters more is the quality of education their child receives, not the caste of their peers or teachers. Bahujans are likely to benefit greatly from access to competitive markets in education, although such a system may not satisfy the egalitarian fantasies of good comrades.

However, the journey towards competitive markets will not be easy. Not because we don’t have logic and logic. But because socialists and conservatives are entangled in the fabric of the Indian political system. This deep political balance can be broken only when Bahujans understand that the market can work for us.

Vipin P. vetly Assistant Professor at Indian Institute of Technology Madras. Thoughts are personal.

(Edited by Neera Mazumdar)

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