My recent posts on economic development were inspired by a quandary. I could not understand why so much of education terminology was couched in terms from economic development theory. To answer this question I began reading the classic texts on economic development. I immediately noted that the thinking on economic development is incredibly complicated and incorporates the entire socio-economic-political system. This degree of complexity immediately made me suspicious. The notion that education is just another social problem along with poverty or social exclusion also gave me cause for concern. My suspicion or belief is that education is a more fundamental issue upon which the solutions to the other problems are derived. Implicit in this view of education is the notion that education permits individual empowerment, which allows the individual to solve the other social or economic issues with little or no assistance from a government. This view of the role of education is based on an inherent belief that the role of government should be small and that individuals and markets can better solve problems if there is no government interference.
Now this is only my view of economic development and education and to take on the luminaries at the multi-national banks, I needed some intellectual backing. I found that intellectual backing through George Soros, who made reference to Friedrich Hayek in a recent article in Politico.com. Hayek is probably the most unknown economist to win a Nobel Prize and a pillar of the Austrian school of economics. I should have started my research on economic development with the Austrian school writers. Every semester I have my students read Israel Kirzner's Competition and Entrepreneurship. Kirzner is another member of the Austrian school and his book highlights many themes in entrepreneurship and most importantly the idea of "asymetry of information".
Much of Hayek's writings were around the time of WWII. Hayek believed that the role of a bigger government, popularized by his contemporary John Maynard Keynes, was actually an extension of wartime centralized planning in the peace that followed WWII. Hayek's dislike of big government is summarized in this quote.
"To accept the exigencies of wartime planning in peacetime is to start down the road which leads to fascist dictatorship, and ends the freedom of individuals."
OK, so Hayek agrees with me on the role of government--smaller is better--but how does that help us understand education. Another idea from Hayek moves us forward in a meaningful way and also speaks to my concern about the complexity of economic development thinking.
"Hayek argues that state intervention, the welfare state, socialism, fascism, bureaucracies, all share the same fallacy: that the human mind is capable of integrating the needs of the populace into a plan which can be executed by government." Source.
Governments cannot develop integrated plans to serve the needs of the populace. Therefore, complex, multi-dimensional plans for economic development are a fallacy. We have just rejected traditional economic planning by multi-lateral banks and the governments of most countries. All we had to do is reject Keynes and embrace Hayek.
Most would think that Hayek would side with Milton Friedman and see education as a market responsibility rather than a government responsibility. However, here is where Hayek really impressed me (because he agreed with me). Hayek argued that a minimum amount of education for the population is a public good that should be provided by government and probably protected by statute law (so a subsequent government could not change it). The recent legislation in Uruguay, Paraguay and Peru to make education a constitutional right suggests support for Hayek's ideas.
Based on Hayek I think that economic development should make a distinction between public good and other types of projects (provided they do not violate the notion of small government). Included in public good would be education, food and water and perhaps minimal healthcare and nothing else. The start and perhaps the end of government directed public good would include only the three pillars of public good--education, food and water and minimal healthcare. Individuals with these three needs satisfied can solve all their other problems that so taunt the economic development theorists. Interesting that the popular and successful President Lula of Brazil focused on these three needs. Focusing on these three basic needs simplifies economic development to the point where the human mind can tackle the problems. Now, if the Keynesians and multi-lateral bankers would just stop trying to complicate it we could fix education in the developing world.
The views expressed herein are my personal views and do not reflect the views of any organization with whom I am affiliated.
