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About Amit Varma

Amit Varma is a writer based in Mumbai. He worked in journalism for over a decade, and won the Bastiat Prize for Journalism in 2007. His bestselling novel, My Friend Sancho, was published in 2009. He is best known for his blog, India Uncut. His current project is a non-fiction book about the lack of personal and economic freedoms in post-Independence India.




Bastiat Prize 2007 Winner

Recent entries

Searching For Macho

This is the 46th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India…

Immortal Mishtake

This is the 45th installment of Rhyme and Reason, my weekly set of limericks for the Sunday Times of India…

Misogyny is the Oldest Indian Tradition

This is the 40th installment of Lighthouse, my monthly column for BLink, a supplement of the Hindu Business Line. Early…

Beware of the Useful Idiots

This editorial by me appeared today in Pragati. Many of the intellectuals who supported Narendra Modi in 2014 should have…

Bollywood Explains Economics

A few weeks ago, I started a new section in Pragati, the online magazine I edit, called Housefull Economics. The…

12 February, 2017

The One Good Thing You Did Not Know Trump Was Doing

This is a guest column published today in the Sunday Times of India edit page.

The first three weeks of Donald Trump’s presidency have been frightening. This is because he seems to be that one politician who actually intends to do what he promised on the campaign trail. He’s hitting out at immigrants, attacking free trade and it looks like he’ll build that wall, with his own tiny hands if he has to. But even an unhinged demagogue must get some things right, if only by accident. In the middle of this carnage, Trump’s appointment of Betsy DeVos as education secretary is a move in the right direction.

DeVos has been demonised by the Democrats, who tried to block her appointment, but their attacks were mostly personal ones that did not focus on the substance of what she proposes to do in office. For decades, DeVos has been a proponent of School Choice. This would transform education in America, and would show a way forward to other countries, including India. I’ve been writing in favour of School Choice in India for many years, so let me break down what it means in an Indian context.

Education in India, as we know, is in an abysmal state. The government devotes vast amounts of money to it, but outcomes are terrible. A recent Annual Status of Education Report (ASER), described by the government itself as “pretty depressing,” showed that 52% of students in Class V were unable to read a Class II textbook. As much as 58% of Class VIII students could not do simple division, and teacher absenteeism was rampant. Teachers are not the problem, though, but a symptom of it. The problem is incentives.

Government schools are guaranteed their funding, and their teachers, who are paid many times what teachers in budget private schools get, are more or less tenured. They have no reason to aim for excellence and try to provide quality education. How does one make them accountable, and make sure that our money is better spent? One answer is school vouchers.

Under a voucher system, the government, instead of giving money to government schools, gives vouchers to parents. Parents decide what is the best school for their children, and submit the voucher there. That school then gives the voucher to the government and gets the money.

This changes the incentives for government schools and their teachers. They have to perform now, and deliver quality education, or parents will take their kids elsewhere. Competition brings accountability. This also empowers parents with choice. They are the people who should decide what is best for their children, and not a distant, unaccountable government. In a nutshell, the state funds schooling, not schools.

Vouchers are only one piece of the puzzle, of course. They are pointless if there are harsh entry barriers for private players in education. For 70 years, we have had insane regulations in place that disallow or disincentivise private schools, especially for the poor. If a school provides budget education to children in a slum, why should it matter if its playground isn’t big enough? Let parents decide what they value.

As it happens, there is a vast informal economy of budget private schools, and poor parents vote with their feet. Organisations like the Centre for Civil Society have long documented how thousands of poor parents in slums and villages across India prefer to pay to send their kids to a budget private school rather than to a free government school. This speaks volumes.

Private schools are demonised, but contrast their incentives with those of government schools. In a marketplace with no entry barriers – which India is not – the profit motive is the best incentive. After all, you can only make a profit by delivering value to others. When I was growing up in the 1980s, telecom, airlines and education were all government monopolies, and delivered abysmal service. Today, two of them allow private players to compete freely, and because of competition and the profit motive, we the people are better off. But not education, which is so important for our nation’s growth.

When you fight against the system, of course, the system fights back. The status quo is always fiercely defended by the special interests that benefit from it. (Since they are beneficiaries of the status quo, they also have the money to spend on it.) In the US, for example, teachers’ unions are the biggest opponents of education reform, as the current system give them power and privilege without accountability. They happen to be prominent donors to the Democratic Party who, as a result, oppose School Choice.

As an illustration, consider that the sanctimonious Elizabeth Warren actually advocated school vouchers in a book she wrote in 2003. She changed her stance when she joined politics and realised who the most influential donors in the Democratic Party were. That’s the whole game of politics right there: special interest groups purchasing politicians to benefit at the expense of the common people. It’s ironic, then, that Trump should be on the right side of this issue.

Posted by Amit Varma in Economics | India | Politics

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