God, Markets, And Fast Social Mobility

26 Sep 2019

God, Markets and Fast Social Mobility

“God is dead. God remains dead. And we have killed him. .. ” said Nietzsche in the 19th century. Many commentators and public in general, mistake this to be a celebration. A celebration of the fact that humans do not need God and humans have now killed Him. This is just reading Nietzsche out of context. Nietzsche in fact goes onto indicate (through the mad man) that the world might have lost a (moral) compass. And that now we do not know what is up from down, is it morning or is it evening? (metaphorically speaking).

What comes afterwards is equally gut wrenching. He says “How shall we comfort ourselves, the murderers of all murderers? What was holiest and mightiest of all that the world has yet owned has bled to death under our knives: who will wipe this blood off us? What water is there for us to clean ourselves? What festivals of atonement, what sacred games shall we have to invent? Is not the greatness of this deed too great for us? Must we ourselves not become gods simply to appear worthy of it?”

Nietzsche asks these important questions. What should man do now? Now that he has killed what was the most holy. How shall man fill in the void?


I for one, have some biases when it comes to the above questions posed by Nietzsche. I believe that humanity is on a path to kill God if it has not yet. I also believe that humanity replaced God when they killed Him. There are a number of replacements that humanity has made. But I believe the two big institutions/entities that have replaced God in modernity. They are:

  1. Governments/The idea of the state
  2. Educational Institutes/ Universities

The public tends to believe in these entities with the same level of cynicism, admiration and doubt that God was bestowed. Largely the public feels that these institutions can’t be replaced even if they go on doing enormous amounts of harm. Every year one watches governments plundering public money, looting tax payers, wasting national resources. But there is hardly any thought that goes beyond harsh criticism of the current political party in power. Almost no one seriously thinks, that the problem is structural. There is a foolish assumption that Constitution Of India is some great solution that might save the country from its own corrupt hands.

Over bearing, irrational and blind belief in a structure is a symptom of humanity being trapped by the imaginary goodness of an institution. It is especially entertaining to see how the institution is defended while the office holders are held guilty in events of corruption. Is it not possible that the structure of the institution and the officers are equally guilty?

For this essay though, I want to turn your attention to the other institution. Schools and universities in our country are corrupted and the public belief in these institutions is blind and superstitious. Similar to the death of God, there will come a time when these institutions in their current form will vanish.

Let us talk data. When you go over the data available at, Annual Status of Education Report (ASER) (2015) you find that Maharashtra is one of the better performing states in India when it comes to primary education. Even then, in Maharashtra only 1 out of 2 children in Std III can read at least a Std I level text. The situation does not change for the percentage of children in Std V who can read a Std II level text. Maharashtra really disappoints when it comes to mathematics. Only around 19% of children in Std III can do at least subtraction.

Only 50% of the Std Vth students could read English words and only around 21% of children could read English sentences. This number barely increases a little as only 40% of Std VII students can read full English sentences. Additionally, data from Reserve Bank of India’s Database on Indian Economy (DBIE) tells us that the expenditure of education dropped from around 22% of total expenditure in 2000 to only around 18% in 2016.

Similarly the data for higher level of education exists and that is also embarrassing to say the least. Engineering students receive dismal quality of education. Joining a coaching class during or after degree programmes is common. It is so common that students spend more time choosing and surfing for coaching classes, than actually studying in an engineering degree. Annual Employability Survey 2019 by Aspiring Minds says that 80% of Indian engineers can not be employed for any job in the knowledge economy.

It is harder and harder to find well rounded smart engineers. These arguments very strongly indicate huge gaps in the education field while underlining the blind trust put by millions of Indians in the education system. You can know education is a easy money minting business when politicians start investing money in it. Year after year technical education institutes are founded by politicians and other “business groups” and they make a load of money without actually providing any value to the society. I seldom hear of politicians starting up software or technology companies that solve public problems. Education is the great belief of the day, and hiding behind this new God bad entrepreneurs can make loads of money.

Let me be clear, I have absolutely no problem with anyone earning profits through an education venture. What I take issue is with the phenomena that educational institutes today have become a great business venture where essentially you can loot consumers by delivering a product that is practically worthless. [Very recently engineering enrolments have dropped and its a good news. Good news because the public in general has now an inkling what is happening to their cherished savings.]

There needs to be a constant and thorough thought given to how hard earned savings of a growing middle class and especially low incoming families are being spent on a commodity that does not return much. Engineering education on an average in India is a commodity that a person buys and then has to buy additional amounts (through other coaching institutes) to get at least some return on the whole investments. It is also true for students pursuing a masters degree just because the bachelor training was not simply useful enough.

Bryan Caplan’s new book, “The Case Against Education: Why the Education System is a Waste of Time and Money” and the ideas put forward are a sobering and powerful reminder that even in advanced countries like the United States the whole utility of education is mostly signalling. For the uninitiated, “signalling is the idea that one party (termed the agent) credibly conveys some information about itself to another party (the principal).” A degree is mostly useful only to signal to a potential employer some traits that might be desirable to the particular employer.

When it comes to developing countries and continents like India, South East Asia and Africa, we should introspect how much should an average family spend or waste on mere signalling? There is a growing consensus in the economics community that families with higher and stable amounts of incomes tend to invest more in their children and these children end up having greater skills. I would argue that we as a market economy can do better to provide capital for children from lower income families. There is a lot of room for innovation in education financing, payout options, role of private markets in education and others.

Good amounts of work needs to be done on both fronts. We need to build institutions that introspect today’s state of our society critically, understand the needs of the modern workforce and build curriculum(s), learning environments and bridges to jobs and the best opportunities for the most underprivileged.

Talking of building bridges, there is interesting bit of research coming out of Stanford Institute For Economic Policy Research which underlines how making college application process more transparent for high achieving, low income students can bring along great benefits to those students. The research paper, “Expanding College Opportunities for High-Achieving, Low Income Students” underlines how in the U.S, high achieving students from low income families underestimate the quality of colleges that they can get into and certain interventions resulted in a huge benefit to cost ratio overall. Raising the ambitions of high talent, low income students is really a rewarding activity.

Coming back to India, a January 2018 survey report by World Economic Forum suggests that Indians have a lot of belief in upward social mobility. This is even though lower castes in India enjoy almost half the social mobility when compared to higher castes. Quoting directly from a paper by University Of Manchester, “In India, vast differences exist in the upward mobility prospects of urban vs. rural residents and upper-caste Hindus v. SCs and STs.”

In a country like India and other developing countries goals of social mobility for individual and families have been always been a programme run by government. Why should this always be the case? Creation of new jobs, new educational courses and the growth of the internet enabling faster information propagation put together should enable faster rates of social mobility for various strata of the society. In a more abstract view of the world, a growing economy should and does hold an implicit promise of social mobility for the poor and underserved but we should not always take this for granted. At least we should be ambitious in creating systems and institutions that cater market based tools for individuals for achieving mobility in education and learning.

The way I see it some of the tools/ vehicles that are needed to achieve high mobility are:

  1. Good and job relevant education.
  2. Stable and easy access to credit with attractive payout options.
  3. Access to reliable healthcare insurance.
  4. Access to high quality educational information.

I believe the individual access to above attributes on a continuous basis for months with directed efforts should provide anyone with a escape velocity to attain good amounts of income mobility. This is just a hunch, I am not an economist or a sociologist. Another hunch is that moving from a government dependent model to a deliberate and focussed market based model to enable social mobility for individuals and families should work. There is more to be said about how education and learning opportunities can be funded. A good amount of options like ISA, community funding of education for inividuals, social games for funding of education remain underexplored. There are growing number of alternative options that seem very promising. I will write or refer to work done by many others in an upcoming blog.

In propagating this optimism about the possibility of a market based solutions for fast social mobility, there is wisdom in recognising that such solutions are only possible in a growing and robust economy with growing number of jobs and income opportunities. Like many other noble and good things in this world, fast social mobility (which is not government assisted), needs that we see economic growth as a moral imperative.

I personally believe that our inability to see this particular problem or our readiness to build market solutions to solve for fast social mobility suffers from “schlep blindness”. Quoting Paul Graham who proposed this particular idea here, he says, ”There are great startup ideas lying around unexploited right under our noses. One reason we don’t see them is a phenomenon I call schlep blindness. It means a tedious, unpleasant task.”

There are actual physical on ground knowledge and information to be acknowledged and taken into account to solve the problem of fast social mobility. As Graham says in the same essay, “ No, you can’t start a startup by just writing code.”