Ill-informed opposition to private schools for the poor

For a long time in policy circles it was argued that education should be made compulsory for the children of the poor. Apparently, the poor didn’t know the value of education and used their children as labour.

This debate should have died after the 1991 liberalisation when poor parents woke up and became eager to send their children to English medium schools. Was this treated as good news? Not really, for the elites found something else to complain about.

The poor wanted schools, but couldn’t find any. Many primary schools that had supposedly been “built” by government in remote villages simply didn’t exist: that money had long evaporated through corruption. Where the poor did have a local primary school, it was dilapidated and its appointed teachers didn’t even come to the school. And in the few cases where the teachers did come, the parents found the teachers to be hopelessly incompetent. Not a surprise since most of them have bribed their way into the job.

And so, as Gurcharan Das has said, India grows at night. Where the government fails, private enterprise steps in to retrieve the situation and bring in a modicum of development. That’s what happened in the school sector. To meet this huge demand, private for-profit low-cost schools sprung up like mushrooms. These were not perfect by any stretch of imagination but they were vastly superior to the non-existent or even the average government “school”, as Tooley’s diligent research has shown.

When this happened, the elites moved their goalpost and started complaining against these private schools. Anurag Behar’s recent article in Live Mint is a case in point. No matter the poor do, India’s elites will always find something wrong with them.

The elites are now demanding a huge increase in government management and funding in the school sector. Apparently, it was not enough for the government to have failed totally and comprehensively for 70 years. Our only saviour is our government once again, headed by criminals who appoint teachers through bribes and who pocket the taxes allocated for school infrastructure. According to our elites, the private sector is nothing but a pain in the neck and must be sidelined.

In my view there are two explanations for this inexplicable view by people like Mr Behar. Either these elites are grossly ill-informed or they have a hidden agenda. Is it possible that not being capable of delivering better low-cost schools that poor parents will pay for, in the face of cut-throat competition, elite NGOs are bagging their competition in order to grab government subsidies?

But let me take a more charitable perspective, which turns out to be possibly worse in some ways. I suspect the real explanation is that these elites have a strong ideological belief in socialism which has made them blind to the blatant crimes and corruption of government, even where the evidence is right in front of their nose.

In India we pay twice for everything: first we pay the government, and then, after it has failed, we pay a second time, to the private sector, to finally get the job done, with whatever money we still have left in our pocket.

The elites must surely realise that nothing concentrates the mind more than poverty. Even the slightest expenditure the poor make must pass the most stringent tests. That poor parents are choosing to pay twice for their children’s education tells that something is seriously wrong with the government system. To suggest that such poor people are stupid and gullible is to discount what they are trying to tell us: Stop looting us and let us free.

We know from Tooley’s research (and I have some personal direct evidence that I’ll mention some other day in another context) that these parents are actively monitoring the performance of their children. And to ensure that these parents’ don’t move their child to another school, the school owners are constantly monitoring the performance of the teachers. The incentives align perfectly.

Of course, these schools have poor infrastructure – but that’s all the poor can pay for. This, however, is not the pivotal issue. Gandhi rightly told us that it is not school infrastructure but the teacher that matters most. We need teachers who actually come to teach. And second, that these teachers are at least moderately competent.

It is unfortunate that an institution named after one of India’s greatest entrepreneurs, Aziz Premji, has such a dim view about perhaps the greatest example of entrepreneurship in the world – the low cost for-profit private schools of India.

Good policy can’t be made by assuming a role for government. It must begin by understanding any market failure and doing the best to support the market to overcome any such failure. Today there is a real market in school education in India with very little market failure. All we need is to support these schools through school vouchers for the poorest of the poor. Indeed, that’s our party’s policy.

One last point. Mr Behar points out that teachers in such schools are paid below the minimum wage. Our party rejects the very concept of minimum wage which is both theoretically and practically proven to harm the poorest of the poor. Our party will abolish minimum wage laws. Instead of seeing this as a problem, I suggest that Mr Behar celebrate the vast employment that these schools have generated and how well they are serving a genuine need to the best of their ability – despite total government antipathy.

It is not that these teachers are underpaid. Instead, teachers in government schools are grossly overpaid. In a private competitive system, teachers would all receive their marginal product. Better teachers would be paid vastly more than any teacher is paid today.

The private system for education is theoretically and empirically superior to a government system. Let’s stop government waste in education and start supporting the poor.