The claim in the previous part of this essay was that one of the most important policies changes that India needs is to liberate the education sector from political and bureaucratic control, and that the free market must be allowed to operate in the educational sector.
Why do I stress education? It’s important to me because I have benefited enormously from being educated. It has enabled me to make a net positive contribution to the world — which is reflected in the fact that people voluntarily pay me in exchange for my services.
Education enables a person to do well and achieve his potential. An uneducated person is handicapped. And that handicap is a tragedy if it can be easily avoided. Aside from that pragmatic and utilitarian reason, it increases a person’s capacity to enjoy and appreciate the world around him.
At the collective level, the wealth of an economy is a consequence of, and directly related t0, the level of education of its citizens. This was not true of the world in the past. Modern technology has made it impossible for an uneducated population to prosper. The time when unskilled human labor could have produced wealth is gone. Fifty years ago a country could somehow rely on its cheap unskilled labor to somehow get some comparative advantage in trade but because of technology, that is no longer the case. More about this later when I explore in what specific ways the world has changed.
Universal Education
I believe in the concept I call universal education. It doesn’t mean everyone should get a college degree. In fact, the whole concept of colleges and degrees is outdated and silly today. I will expand on this later.
People differ in their abilities and their preferences. They require different kinds of training. One doesn’t have to know the calculus if one is really interested in becoming a motorcycle repairman. And someone who wants to be a musician must not be forced to waste time learning algebra or astronomy.
Universal education does mean that everyone has to have the basics under his belt. Everyone must know how to read, write and do arithmetic. Everyone must be exposed to the basics of the natural sciences (physics, chemistry, biology) and the social sciences (history, economics, psychology, etc.) All this can be done in a very short time — between 7 to 10 years depending on how interested the learner is. If one starts learning all this at the age of 6, then everyone would have the basic education done by age 16, and be ready for the next big step: choosing what one wishes to do next.
Those with the interest and ability to become an X should have the opportunity to learn how to become an X where X is drawn from the set {physicist, plumber, philosopher, web designer, mechanical engineer, trucker, steel worker, architect, biologist, doctor, chemist, farmer, beautician, musician, pilot, train driver, nurse, social worker, carpenter, cook, hotel manager, actor, teacher, …, million other occupations}.
But the objection could be: isn’t that what goes on already? Well, not really. Many people in poor countries with poor educational systems (the two go together) don’t get basic education, which is a barrier to their further education. Among the hundreds of millions who barely get an education must be thousands who could have contributed immensely to humanity as inventors and innovators in diverse fields but never realized their potential. Who knows how many Ramanujans and Einsteins India has lost!
In the following, I will argue that universal education is realizable if only the free market is allowed to operate in education. It will liberate the poor. The market can do what no government can do. It can release the credit constraint that the poor face (and indeed I believe that the fact of being poor is congruent with the very concept of credit-constraint.) And most importantly, I will argue that in the modern world, a country that fails in education can ever climb out of poverty.
{Continue to read Part 3 of this essay.}
{Why the image above? Because Nehru must be blamed for India’s dismal education system. He was a retard.}
Life is a Random Draw 
Atanu wrote:
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Universal education does mean that EVERYONE HAS TO HAVE THE BASICS UNDER HIS BELT. Everyone must know how to read, write and do arithmetic. Everyone must be exposed to the basics of the natural sciences (physics, chemistry, biology) and the social sciences (history, economics, psychology, etc.) All this can be done in a very short time — between 7 to 10 years depending on how interested the learner is.
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This is very well put.
While it is true that a free-market based system is usually the best way to organize services like education, I highly doubt if it alone will be sufficient.
The main problem will be (and is) that, in the quest to maximize profits, the scope of BASIC EDUCATION will be ever expanded to whatever the ‘market can be made to bear’. Very soon it will be made to bear stuff like: sociology, postmodernism, political science, gender/race/caste studies, religious studies, and on and on, in addition to ever expanding the syllabi for the previous basics.
In a free-market, most of the political action just moves to resetting the rules of the market. In this case, changing the definition of: THE BASICS.
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