Central Planning in Education Fails

Central planning even in education doesn’t work. Take a look at Japan’s PhD’s experience

From Nature.com (hat tip: Prof Arnold Kling) [bold emphasis mine]

Of all the countries in which to graduate with a science PhD, Japan is arguably one of the worst. In the 1990s, the government set a policy to triple the number of postdocs to 10,000, and stepped up PhD recruitment to meet that goal. The policy was meant to bring Japan’s science capacity up to match that of the West — but is now much criticized because, although it quickly succeeded, it gave little thought to where all those postdocs were going to end up.

Academia doesn’t want them: the number of 18-year-olds entering higher education has been dropping, so universities don’t need the staff. Neither does Japanese industry, which has traditionally preferred young, fresh bachelor’s graduates who can be trained on the job. The science and education ministry couldn’t even sell them off when, in 2009, it started offering companies around ¥4 million (US$47,000) each to take on some of the country’s 18,000 unemployed postdoctoral students (one of several initiatives that have been introduced to improve the situation). “It’s just hard to find a match” between postdoc and company, says Koichi Kitazawa, the head of the Japan Science and Technology Agency.

This means there are few jobs for the current
crop of PhDs. Of the 1,350 people awarded doctorates in natural sciences in 2010, just over half (746) had full-time posts lined up by the time they graduated. But only 162 were in the academic sciences or technological services,; of the rest, 250 took industry positions, 256 went into education and 38 got government jobs.

In short, even PhD graduates end up jobless.

The basic problem is that educational output does not conform with the desires or requirements of the marketplace.

Instead government policies, out of political goals “to match the capacity of the West”, produced surpluses, which has led to these unemployed “experts”. In other words, these unemployed PhDs had been products of misdirected political imperatives. This also applies to capital too.

It’s the same with public education. Four out of TEN college graduates in the Philippines have been unemployed. That’s because the problem hasn’t been about the lack of education, but rather, the lack of economic opportunities and the misguidance brought about by too much government interventionism.

Graduates can only work when there are available jobs. And economically productive jobs emanate from the private sector. Even government jobs are financed by taxes from the private sector. When the private sector are burdened by too much regulations, political mandates, taxes and compliance costs, investment opportunities dwindles. Thus, the surge in unemployment.

Bottom line: Education does not guarantee jobs. Economic freedom does.