Beyond the Timetable

Barring the common failing of mistaking schooling for education, Surjit Bhalla lives up to his reputation with an insightful state of the world report.

Written by Lant Pritchett | Updated: January 20, 2018 4:40:56 pm
At Jambani primary school in West Bengal. (Express photo by Partha Paul)

Book: The New Wealth of Nations
Author: Surjit S. Bhalla
Publication: Simon and Schuster India
Pages: 224
Price: 599

A new book by Surjit Bhalla is always a highly anticipated event, like a new installment of the Star Wars franchise. The work of a genius, unfettered by either the politics or niceties of academia or development organisations always brings new insights and provocations. And in this, the book does not disappoint — for a book about global education, there is a lot going on. From the impact of education on women’s empowerment to low inflation in the USA to the politics of Brexit. And, like the storied Star Wars franchise, my review of Bhalla’s latest book is indeed a bit like my son’s review of The Last Jedi —“it was a movie with five plots: loved one, three were OK, and hated one.”

The plot line I loved, laid out in the first chapter, is the massive expansion of global education. In particular, the rapid and dramatic expansion of education in the “developing” world at all levels; from primary to tertiary, and its multiple positive influences. Bhalla scores eight points for global education (I thought, given his previous work on the economics of cricket, he could score just a six).

Score one for global education is the declining inequality in income/consumption/wealth across the world. Bhalla emphasises that while great (inordinate?) attention is given to expanding inequality within the dominant “media” countries, the big global story is the rapid convergence of China and India, reducing global inequality.

Score two is that expansion of global education has led to a massive increase in equalisation of education across genders, and hence massive empowerment and equalisation for women. Score three is that greater female education lowers fertility and hence lowers the human carbon footprint through lower populations. Score four is that greater female empowerment through the equalisation of education reduces domestic violence.

Score five is that the continued improvement in production possibilities through the expansion of skilled labor — what he calls the emergence of USSL (unlimited supply of skilled labor), by analogy with Arthur Lewis’s generation-ago emphasis on unlimited supply of unskilled labor — is responsible for lowering structural inflation.

Score six is that an asset that produces income is a source of wealth and, when standard accounts of wealth inequality that include only physical assets are expanded to include education as a source of wealth, this is massive (bigger than the usual measures of financial wealth), and reduces measured wealth inequality.

Score seven is that expanding education, particularly the expansion of tertiary education, increases the size of the global middle class, with important positive impacts on policy and growth. Score eight is that global education is leading to a historically seismic shift in political power from traditional elites based on birth or control of assets to power truly in the hands of the middle class, and that is significant in the larger scheme of things.

The bulk of the book fleshes out his claims, many new and original, in line with the eight hurrahs for the impacts of the expansion of global education. Chapter 6 lays out new and insightful calculations of wealth inequality, including the wealth from education. Chapter 7 lays out an argument about the impact of “unlimited supply of skilled labor” on structural inflation and a novel argument as to why Western central bankers cannot get inflation even up to 2 per cent. Chapter 8 provides evidence about what the equalisation of education across the sexes means for gender equality.

All of these are packed with new and provocative facts and calculations. For instance, Table 8.1 makes the case that, in having qualified women on corporate boards India displays the least discrimination at the stage of choosing female board members of all countries in the world.

Of course, reviewing a book of such originality will produce more than a few objections. Bhalla’s arguments in Chapter 12 about the democratisation of the elite in India and how the election of Narendra Modi in 2014 represents a fundamental shift for India rise to at least Bhalla’s standard of provocation, and I will defer to others with more expertise on Indian politics to evaluate those claims.

As someone who has worked on education and its interplay with economics for a couple of decades now, both globally and in India, I will raise two caveats. First, as with nearly all authors, Bhalla conflates and hence confuses “schooling” and “education.” Schooling just measures “time served” and does not reflect skills attained or ideas mastered. Hence one cannot automatically examine the impact on the global economy of the expansion of “skilled labor” from the expansion of schooling.

A recent Organisation for Economic Cooperation and Development (OECD) study found that the functional literacy of tertiary graduates in Jakarta was lower than that of high school drop outs in Denmark. And, in India’s first foray into international comparisons of learning via participation in Programme for International Student Assessment (PISA) in 2009, they found that even in a high-performing state like Himachal Pradesh, 89 percent of 15-year-olds were at level 1 or below (compared to only 18 percent in the OECD); and, that there was essentially no one at the levels 5 and 6 of performance (roughly the global top 10 percent).

Also, recent work with surveys of women finds that in developing countries only about half of women who completed grade 6 (but no higher) can read a single sentence in their chosen language. So assuming that “primary” or “secondary” or “tertiary” levels of schooling represent the same level of skills or “education” across countries is not on. The global schooling revolution has been historically transformational, but in many countries the true education revolution lies in the future.

Second, and related, Bhalla emphasises the globally revolutionary rise of the economies of China and India, and attributes this to an education expansion. But many countries have had similar expansions in schooling with few to none of the economic expansion benefits. For instance, since 1960, Ghana has expanded its years of schooling more than Thailand — but given that it used to have similar income, now it has income only a third as high. Many regions like the Middle East have had expansions of schooling like China and India too, but few of the demonstrable positive transformational shifts. This is a puzzle of global education to be tackled.
Lant Pritchett is professor of the practice of international development at Harvard Kennedy School, US

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