There’s something peculiar about the world today that was not true about the world of the past. It’s this: the world of today is about ideas whereas the world of the past before the recent 500 years or so was a world that was about objects. Ideas, and not objects, characterize today’s world. This distinction between ideas and objects lies at the core of the argument of why freeing education from the clutches of the government of India is central to India reaching its potential.
Ideas and Objects
Let’s start with the distinction between ideas and objects. Objects are what economists call private goods and ideas are public goods. If you consume a certain amount of a private good, the amount available for consumption by others is diminished by that amount. If you eat an apple, the stock of apples available for others to consume is diminished by one apple. But that is not true about ideas. If you use an idea — the prototypical example of an idea is a recipe — then that does not diminish any other person’s ability to use that same idea. For instance, I can use the recipe (an idea) for a cake without affecting your use of the same recipe but if I eat a cake, I reduce the amount of cake (an object) aviable for you. Ideas don’t get consumed in the same sense that objects get consumed.
The next step is to recognize that ideas create objects that otherwise would not have existed. Ideas are recipes, as noted before. More ideas means more objects. Here’s how. Objects exist in nature. For example, uranium. It’s a silvery grey metal, most which is the uranisum-238, and a very tiny bit of it is uranium-235 which is fissile. That latter bit is useful for making bombs or generating power. We don’t have to go into the details of how that is done. We just note here that from some naturally occuring stuff on earth (the objects) we are able to transform naturally occurring stuff into useable stuff using ideas. We have to know the recipe to extract the U-235 from the uranium ore.
To stress the basic lesson here: Uranium-235 is provided by nature. Ideas transform that naturally occuring object into useful stuff. People who lived one hundred years ago were not stupid; they lacked the ideas that transformed the nature provided stuff into stuff that people value.
The important bit in the whole mix is people. Without people, you don’t get ideas. Without ideas, you don’t get useful stuff. That means that without people who know what the world is you don’t get ideas about how to use the stuff that nature provides. And finally, without a proper education system, you don’t get people who know the world, and therefore they cannot generate ideas that manipulate objects.
If you have a good education system, then you have the necessary bit — people who generate ideas — for manipulating objects in ways that are beneficial for people. Note that it is a necessary bit and not sufficient.
Wealth in the modern world is not so much about objects as it is about ideas. Therefore anything that prevents the generation of ideas is harmful. Which leads us to the fact that any system that hinders education (broadly defined) is guaranteed to fail because it will prevent the creation of ideas that create wealth.
India is poor, partly, because Indians are prevented from generating ideas. Educated Indians who emigrate to where they are free to create ideas do particularly well but in India people are unable to create wealth because they are not free.
In the subsequent parts, I will explore why liberating the education sector will lead to an explosion of ideas and that will lead to an explosion of objects.