Austrians! The Indian Market Beckons

Email Print

India today
is a nation where everyone can see and feel the benefits of private
enterprise, including multinational companies; and, at the same
time, everyone can see state failure writ large in each and every
area where this socialist state is active. Housemaids have mobile
phones; college students now own cars; but roads, electricity, sanitation,
water supply — these areas of state monopoly cry out for a solution.
The situation is no different in education.

A new word
has been coined in India — "edupreneur." Indeed, in India,
it is edupreneurs who have created the vast pool of software engineers
this country now boasts of. Today, there are thousands of private
institutes teaching management, medicine, engineering, hotel management
and so on. We even have an institute teaching retail management
although the government is yet to allow foreign retail chains to
set up shop. We also have many private universities. Most of these
are successful in the sense that they earn profits. But as I told
the chancellor of one of these private universities, they are all
engaged in "training," not "education."

Yet, the rapid
growth of a vibrant private sector in education in India cannot
be denied. There are glossy magazines catering to the sector. The
Times of India, for over a decade now, has a weekly pullout
on private education — and there are lots of advertisements.

I had the occasion
to visit Manipal, a sleepy south Indian village where an edupreneur
set up a medical college twenty years ago. They have expanded their
operations since, covering many disciplines, and Manipal is now
a bustling boom town. Students come from all over the country. I
also met many foreign students.

There is another
word that has gained currency in India — "educrat." So
far, all these private institutes have had to seek permission from
educrats. Recently, corruption was revealed. Coupled with this was
a widespread realization that higher education under the state has
been a failure. Delhi's Jawaharlal Nehru University has produced
the chief ideologue of the Maoists running Nepal today. It has become
obvious to parents and students that state institutions are sinecures
for étatists, Marxists, Keynesians and so on. To paraphrase
Ludwig von Mises, these are the "intellectual bodyguards of
the House of Nehru." This painful reality was apparent to all,
students and parents alike. Many elite schools now offer the International

Public opinion
demanded complete liberalization of higher education. No more educrats,
the English press cried. We want foreign universities to set up
shop here, cried the students and their parents. The education minister
has just announced that his top-most educratic agency is to be closed
down. There will soon be complete liberty.

Of course,
our state is a wily customer. Parliament has recently passed The
Right of Children to Free and Compulsory Education Act. Yet, I sincerely
doubt the administrative capacity of this state to implement this
evil agenda. There are already hundreds of thousands of "unrecognized"
schools for poor children operating throughout India, as James Tooley's
studies have documented. Poor parents prefer to send their children
to these unrecognized private schools because they see government
schools as the pathway to failure in the great game of life. In
time, I am confident that the state's grip over schools will also
go. Some people are suggesting voucherization — and this call has
been taken up by many leading opinion makers. When I asked James
Tooley about vouchers he nonchalantly replied: "The poor don't
need it. They are happy paying for the schooling their children
are getting." Thus, we can visualize India soon becoming a
country "where knowledge is free" — in the free market,
that is.

Let me turn
to education in economics. Here, the state dominates the field.
No private edupreneur has ventured into this critical area, perhaps
because they don't have the knowledge. Yet, the fact that state
education in economics is bogus is beginning to dawn on many bright
students. As in eastern Europe, so too in India, really bright and
hardworking students have turned to other sources for knowledge
in economics. The two libertarian think-tanks in India, both active
for more than a decade now, have done commendable work in fostering
this changed intellectual climate. Mention must also be made of
the activism (among the youth) of the Friedrich Naumann foundation.

Thanks to them,
the philosophy of liberty has made deep inroads into the élite
of the student community. A college topper recently dropped out
of the Delhi School of Economics in order to pursue studies in the
Austrian paradigm in Europe. And there are many others like him.
Where do they go? Another student wants to apply for a PhD program
in America — but cannot find any institution run by Austrians. Étatists
rule the "official" academic world in the USSA.

India is a
nation of over a billion people and the vast majority is young.
They are witnessing the success of the market economy and they seek
their future in it. Finding mainstream economics irrelevant, they
turn to management institutes. But these teaching shops do not teach
them any economics at all. They therefore come out "trained"
as managers who cannot fathom how an economy really works. I say
this from personal experience. Over the years, I have delivered
lectures in many prominent management schools throughout India,
and the ignorance on economics they cultivate has never ceased to
astound me.

There is thus
competitive space in India for a for-profit, independent institute
of catallactics that offers a diploma based on its own academic
standing, without anything to do with the state. I have long been
thinking about this, more as a pipe-dream, but it was the anguish
of the student who wanted to pursue Austrian studies in the USA
but could not find a suitable institution that really energized
me. This is "effective demand." And I do not exaggerate
when I say that there are hundreds (if not thousands) like him.
There is an opportunity here for Austrian scholars. I am told that
most of these scholars today work in mainstream economics departments
where they have teaching duties that include teaching much that
they dislike. They have to find time off for pursuing their own
studies. A new institute of catallactics can employ many such scholars
and give them teaching assignments they will enjoy performing. We
can build a small temple of learning.

To conclude:
India is heading towards capitalism — slowly, but surely, despite
political obstacles. There can never be a return to state socialism.
Knowledge of catallactics, which is knowledge of how human beings
act in markets, and how these markets work, has a definite demand,
and this demand will only grow. I am therefore confident that Austrian
economics can thrive in the Indian education market, while also
contributing hugely to the nation's knowledge pool.

24, 2009

Sauvik Chakaverti
[send him mail] is an
author and columnist. He received the Frdric Bastiat prize in
2002. His monthly column appears in Mint.
He blogs at

Email Print