Free Education Now A Reality

I have been saying that the internet would enable free markets to provide free education. This is now a reality. And this will radically reshape the education industry which has been founded on the industrial era template.

The ball just got rolling with University of People. (pointer to Jeff Tucker Mises Blog)

University of the People (UoPeople) is the world’s first tuition-free online academic institution dedicated to the global advancement and democratization of higher education. The high-quality low-cost global educational model embraces the worldwide presence of the Internet and dropping technology costs to bring university-level studies within reach of millions of people across the world. With the support of respected academics, humanitarians and other visionaries, the UoPeople student body represents a new wave in global education.

UoP’s Mission

University of the People (UoPeople) is a non-profit organization devoted to providing universal access to quality, online post-secondary education to qualified students.

The vision of University of the People is grounded in the belief that universal access to education is a key ingredient in the promotion of world peace and global economic development.

Spiraling costs of industrial era education is about to crater, whether in the US or in the Philippines. And so will public (tax payer funded) education. Credentialism via certification will likewise be transformed.

When Public Education Backfires: Seeds To Egypt’s Revolt

Education equals prosperity is an immensely misguided concept.

It is a belief founded on an observation where prosperous societies are populated by educated people. The oversimplistic causation or applied syllogism which led to this conclusion says that education “caused” prosperity. Hence, many social policies adapted by nation states focus on getting people “educated”.

We have pointed out in this space that this isn’t (necessarily) true. Throngs of unemployed in many places as the Philippines have been “educated” people.

Here is an eye-opening insight from Troy Camplin who argues that Egypt’s free “public” education has backfired and has virtually sowed the seeds of the today’s upheaval.

We quote Mr. Camplin, (all bold highlights mine)

There are plenty of reasons to want to overthrow the sitting Egyptian government. But the irony is that the government’s largesse is part of the problem. The government provided free educations for its people, even though there was not a sufficiently complex economic system in place to create jobs for all of those people. In 2001, Alison Wolf argued in Does Education Matter? that “Egypt is a country whose government made a commitment to give (university) graduates first call on jobs in the public sector. It very quickly found itself with a vast and underemployed army of civil servants, and a huge queue of students aiming at comparable sinecures for themselves” (p.40).

There can only be so many government jobs. What happens when government can no longer absorb the excess college graduates? In the end, the Egyptian government created the current situation by creating a population too educated for its economic system.

Critics will immediately accuse me of arguing that we ought to keep the masses poor and uneducated, to ensure they don’t rise up. What I am in fact arguing is that we cannot create wealth by skipping steps, by leaping a country into a population whose education does not match its economic realities.

One of the side effects of an overly-educated population (overly-educated meaning there are more people with educations than jobs for them at that level of education) is that one has a population composed of people who are both dissatisfied with their lot in life and who know exactly what is causing their dissatisfaction. Their world is bigger, and the limits of their situation cannot contain them. It eventually spills into the streets.

Keeping people ignorant is one way to control people.

Also indoctrination in the form of public education is another form of control, as John Stuart Mill once wrote

A general State education is a mere contrivance for molding people to be exactly like one another; and as the mold in which it casts them is that which pleases the dominant power in the government, whether this be a monarch, an aristocracy, or a majority of the existing generation; in proportion as it is efficient and successful, it establishes a despotism over the mind, leading by a natural tendency to one over the body

Nevertheless, governments, as F. A. Hayek and Mises pointed out, can’t know everything and can’t calculate the nitty-gritty requirements of society. Thus, governments frequently institute policies that are noble sounding that comes with short term benefits, but has been laden self destructive traps, e.g. policies may eventually be used against themselves.

I am reminded of the nice apropos quote from A. Whitney Griswold (1909-1963: Essays on Education, 1954) who wrote,

"Certain things we cannot accomplish… by any process of government. We cannot legislate intelligence. We cannot legislate morality. No, and we cannot legislate loyalty, for loyalty is a kind of morality."

Education isn’t intelligence nor is it a source of political loyalty. The Egyptian Revolt seems to demonstrate this.

Despite High Education Levels, Filipinos Workers Among The Lowest Paid

From the Yahoo news

The ILO's "Global Wage Report 2010" also noted a paradox in Philippine wage trends: Higher education did not correlate with higher wages, contrary to the pattern in many other parts of the world.

The ILO's "Global Wage Report 2010" also noted a paradox in Philippine wage trends: Higher education did not correlate with higher wages, contrary to the pattern in many other parts of the world.

In the Philippines, low pay--particularly among domestic workers--"is partly caused by the lack of proper wage protection, notably the common practice of excluding such workers from the application of minimum wages," said the latest report.

And while low wages are correlated with low educational attainment in most parts of the world, the Philippine case seems to be the opposite.

"Surprisingly, the Philippines seems to represent an interesting exception to this common pattern, registering a high incidence of low wage employment among those with a primary and secondary education," the report said. (all bold emphasis mine)

So what does all these suggest?

Here are some:

In contrast to common wisdom, education per se does not automatically translate into jobs or employment.

There is a great deal of mismatch between the educational output and the jobs demanded in the marketplace. The shift towards the information economy is likely to enhance the requirements for work specialization as niche markets expand.

The investment environment likewise determines employment conditions. Excessive government intervention only serves to reduce opportunities by distorting investment and labor markets.

Low wages does not translate to more employment.

Of course all these have policy ramifications.

Mass (free and compulsory) education and low wages are not optimum policy options that deal with socio-economic development.

Interventionism (via manifold regulations and inflationism) only makes good instruments for the promotion of the interests of politicians and to the specific groups they implicitly represent than of the general public. This applies to public education as well.

Professor Barry Simpson explains,

Public education, with the added feature of compulsion, reduces the cost to politicians of making wealth transfers. The cost of making transfers is diminished by reducing the opposition to transfers. If politicians can reduce the cost of transferring wealth by reducing the opposition to them, then they can continue to authorize transfers to interested parties for a price.

At the end of the day, good intentions don’t square with economic reality. And the Philippine experience is a demonstration of such unintended consequences.