Vantage point

Tuesday, June 27, 2006

What is "really" wrong with reservations?

This is the first post on this blog by my good friend and guest contributor Sunil Joshi

In this whole debate about reservations, I feel that the really important issue has somehow been lost. It irked me enough to get off my bum and put my thoughts to paper. So here is my first contribution to Vantage Point as a guest blogger.

In this ensuing debate over reservations, I feel that two completely different issues are being mixed up. And the difference is one of greatest importance!

The question of reservations really has two aspects to it:

1. Whether reservations are "effective" means to achieve social equality?

2. Whether it is "morally" right to "enforce" reservations in educational institutes owned and run by private individuals/corporations?

Though one could debate on the first issue and put forth arguments on both sides based on empirical evidence, and a lot of debate has already taken place on this issue; it is the second issue that is really of utmost importance.

I think it is morally incorrect to enforce these kind of rules on private schools/colleges!

In India, the providers of education are looked upon as some kind of "altruists" who are living just to serve mankind! All of us, living a comfortable life earning more than decent salaries, conveniently forget that the teacher working for the small private school also has mouths to feed at home; that he really is selling a service which he would like to sell at the highest price possible! Is there something wrong with that? Similarly, why should the Molly's and the AB's (Two of the best Profs from back in IIML... ) continue to teach you if you are not willing to pay them the price of their service! If they are really good, then dont they deserve more?

I really look at owners of schools/colleges as "businessmen" running a business where they invest "their own hard earned" money to build infrastructure, hire and retain top teachers, create high quality course material; in effect creating a "service" for the consumption of their customers: Students. The way I see it, they have a right to sell their service to whosoever they want!

Will this result in all "seats" being cornered by the rich? Not at all!!

Today, education is a scarce commodity because of artificial barriers of entry. And that is precisely why there is all this talk about "distributing" a limited number of seats across the various sections of society. One only needs to think of the situation a few decades ago, when everything was a "scarce" resource meant to be "distributed". We soon found out in most cases that nothing was naturally scarce; not cars, not TVs, not telephones, not the internet.. all these were scarce only because of barriers to trade in these products/services. I remember that before 1990, telecommunications was called as a "public good" and hence government had strict controls to ensure that private players do not profit off something which is supposed to be a "public good"! What happened? There were 5 year waiting lines for telephone connections! Poor people got access to technology and its benefits only when people were allowed to make "profits" by selling a "product/service"!

Similarly, the problem of scarcity in education is because of the supply being restricted by restricting people who want to make a "profit" selling this service! What is really required in India is for government to stand back and let as many colleges/schools sell their services, in "whatever form", to students. There will be as much supply as there is demand.

True, since there are no free lunches, the supply will only be at a price which allows the suppliers to remain in the business. Now what if this price (where supply matches demand) is a little too high for the really poor? Well, the only way to tackle that is to give money (in the form of vouchers) in the hands of the poor and allow them to choose! It is a much better way to ensure that everyone can afford cheap and quality education! Allow supply to flourish and help the economically challenged by directly putting the choice in their hands!