I was always fascinated by the concept since the day I read about it. People respond to incentives. It is easy to end it with a full-stop there acknowledging the veracity of the fact and accepting it as gospel truth. It is only when you bump into the dividing line between the good and the no-so-good incentives that you feel the need to question. More than anything, the unease stems from the dehumanized, asocial and antiseptic worldview that economics as a discipline resorts to sometimes.
One particular occasion when I was incensed was when I read Mankiw’s views on education in the chapter on earnings. So why do people study and why do they spend so much on education?
There has to be an incentive.
And my book said the incentive was money. That was harrowing. I remember venting out my ire and discontentment on a page in my diary. Isn’t it cheapening of the entire concept of education by relating it with pecuniary objectives of profit maximization?
On one side, I found myself philosophizing on the ‘purpose’ of education in Dr. Gabriel’s English class and here the discipline I loved spelled out ‘purposes’ like those. It all seemed to imply that:
I was studying economics so that I could earn for myself tomorrow, and that if the prospects of earning for an economist were nil, I would not be studying economics.
What the hell!
I was critical of this view on education (although I read about the human capital view which chimed with my thoughts) until the following happened.
The first day, my friend Geetika and I went looking for kids to teach, we spotted a construction site with a lot of migrant laborer families residing there along with of course, a lot of their (non-enrolled) kids.
We called them out in the park, made them sit for some ice-breaking éclair session. I perfunctorily asked them their names and then raised a question.
“ Batao, humhe parhna kyon chahiye?”, I asked in an innocent voice pressing them to think for themselves.
A little girl (whose name escapes my memory right now) rose and answered in a squeaky voice,
“Kyunki, parhne se ‘payysa’ milta hai”
The way she stressed on the word ‘payysa’ in her native accent, it struck a chord.
I found bells ringing. She was not enrolled in a school and surely Mankiw couldn’t have whispered that into her ear or crossed her dreams last night.
The phenomenon was universal. I learnt vital lessons.
1. Just because I thought in a certain way did not imply that the world too thought on similar lines. In short, my personal views could be illustrative but not exhaustive.
2. It isn’t an economist’s business to judge about the morality of rationality. In fact rationality itself as Hume remarked is a ‘slave of passions’.
3. ‘Tis true that had it not been for incomes, some people indeed might not have gone to school and also that this is a well known fact.
So if education is sought for such bright incentives as seeking higher future incomes, does this imply that the poor in our country are irrational?
Why does the government have to entice the poor with mid-day meals and scrapping school fees under the RTE? Isn’t wage an organic incentive already?
Perhaps, the answer to the question no. 1 is YES. The little girl can earn more in the future even in present discounted terms that she could earn today as a domestic help in a 'kothi'.
But the hard truth is that ‘FUTURE’ is a vague term and that earning in the present is always more lucrative than tomorrow’s since that ‘tomorrow’ is so uncertain. Do you know the reason why people are lax about sustainable development despite such awareness campaigns and why the Copenhagen summit was a fiasco? I have found it. It is because sustainable development concerns concern for ‘future’ generations and future, as I said is so vague a term.
The solution in my view is that the incentive in all such cases has to concern THE INDIVIDUAL HIMSELF (since self-interest rules) and that too in the PRESENT, to be effective.
Development has to concern the present generation first to be sustainable. Education has to lure people today, to be universal.
The incentives in education, I believe have to be somewhat like Kerala, where kids get to carry bags of rice and wheat home from school for use of the entire family. Education in short promises income in kind today apart from income in cash tomorrow.
Aren’t those truly intelligently-crafted-incentives.
