A clash of ideals over welfare-funded education

by Kasun Kariyawasam

The conflict between idealism and materialism has a long history in Western philosophy. Titus Lucretius Carus was a Hellenistic philosopher, who was the first to confront idealism and propose a materialistic approach to worldly matters. One might wonder why this philosophical conflict is relevant to the welfare debate over welfare-funded education in Sri Lanka.

Sri Lankan education is regarded as one of the best in developing countries. It nearly eradicated illiteracy in the country, which remains a major challenge for most poor countries. The country’s primary and secondary education quality is nearly on par with that of most advanced economies. However, with the implementation of market reforms in 1977, education was underfunded in order to allow markets to develop some of the education capacities. This was due to the orthodoxy of neoclassical economics. On the policy level, it was pure idealism. It argued that the country should underfund education (and, in general, welfare) and allow markets to develop. It also assumes that markets can self-correct and compute potential externalities. However, this was just an idea; there was no empirical data to back it up. In fact, empirical data is clearly against it even now. The best education systems are found in western countries, particularly Scandinavia, which has a fully state-funded education system. Countries with a market-state mix model lag behind those countries.

It is no coincidence that countries with fully funded public education outperformed the mix education model. Education is the process of acquiring labour skills. Skilled labour is required if an economy desires diverse cutting-edge markets. Markets cannot develop because market participants lack fiscal capacity and are unable to facilitate above-rate-of-return facilitation. Anyone looking at data could see that state-funded education is the best way to improve the education system. What went wrong in countries like Sri Lanka is a good example of how the education system collapsed due to decades of underfunding.

One idealism confronted with another idealism

Anyone who understood the paradox of neoliberal idealism challenged it with various interventions. Many lives were lost in the fight against the white papers (Dhawala Pathrika) that proposed privatising education. In Sri Lanka, numerous battles were fought to defend the right to education. Over the years, such battles cemented another idealism, anti-privatisation of education idealism, which was created to counter neoliberal idealism.

Despite the fact that it was coined as anti-privatisation in its intervention, it is clear that it is also anti-marketization of education. To begin, it should be stated unequivocally that primary education should be provided free of charge to all citizens as it is the first step in developing labour. Literacy is a primary skill that is required to advance a labor’s skill capacity. Labour cannot advance without literacy, which will continue to be a developmental bottleneck in its economy, as it is in most developing countries.

Sri Lanka is not Finland

Finnish education has remained a poster child for welfare-funded education, and various surveys regard Finnish education as a success story. Many people argue that the Finnish education system should be fully adopted because it has clearly accomplished a lot. True, we have a plethora of institutional adoptions that Sri Lanka can consider from the so-called Scandinavian education system. However, our country’s material conditions differ greatly from those of Scandinavia.

The Scandinavian welfare state was founded at a time when the industrial rate of return was relatively high in comparison to the current situation. High tax regimes were thus justified by a high industrial rate of return. As the labour sklling process was well funded by the fiscal arm, high tax revenues were generated, creating a virtuous cycle. Second, the educational threshold at the time was very low. Most departments, including data science and computer science, did not exist at the time of their gradual development. Education is currently extremely expensive. The annual budget of Helsinhki University is 743 million Euros (260 billion LKR). The total expenditure on education in Sri Lanka is 158 billion LKR. Maintaining cutting-edge educational facilities necessitates a high level of capital goods, which the Sri Lankan government cannot provide due to fiscal constraints. In addition, Helsinki University covers nearly 42% of its expenses, while the state only covers about 60%. In Sri Lanka most universities not even 10% is self-funded.

Most universities around the world devote a large portion of their departments to natural sciences, which are inextricably linked to the industrial sector. In contrast, the largest departments in Sri Lanka are social science departments that are not directly related to the industrial sector of the economy.

Way Forward

There are numerous success stories from emerging markets. Malaysia, Singapore, and China are just a few examples. Looking at the education systems in emerging markets, it is clear that none of the success stories followed the Scandinavian model, instead opting for a hybrid system of state and market. The reason for this is due to the fiscal constraints that these countries faced when developing their education systems. The difference between Sri Lankan education marktisation and those emerging market success stories education systems is that they marketized with an industrial plan. When Malaysia needed telecommunication engineers, the Malaysian government established a private university (the first in Malaysia) in collaboration with Princeton University. Where they were able to obtain the majority of the cutting-edge technology developed with private capital.

Another problem with anti-privatisation idealism is that it encompasses the entire spectrum of institutional innovation. They tend to include markatisation and monetisation in the anti-privatisation ideology. There are numerous institutional innovations and advancements in the Sri Lankan education system that can be explored through marketization and monetization.

Sri Lankan state universities can generate more revenue if they can monetize not only for foreign students but also for local students based on advanced level results. Markatisation of education is required because the state lacks the capacity to build the majority of the required education infrastructure. The main criticism stems from the current unplanned marketization process’s flaws. The current marketization process was not carried out to advance labour to its industrial plan. The current plan simply replaced education with purely market-driven educational institutions with little regard for industrial expansion. The lack of an industrial plan in Sri Lanka is both a micro and macro issue.

The importance of vocational training is consistently overlooked in Sri Lankan education debates. In any economy, vocational education is a major economic contributor, accounting for the majority of workers in the industry. The government should create a navigation and sandboxing mechanism to help private entities develop such capabilities.

The Sri Lankan primary state education sector accomplished an admirable task, demonstrating the effectiveness of state-funded primary education. However, state-funded primary education should be advanced and modernised. The state primary education system should be further digitised in order to increase its service capacity.

The education sector in Sri Lanka faces the same challenges as most emerging markets. To advance the education sector in the country, a scientific approach based on the country’s material conditions should be used, rather than falling prey to irrational idealisms in the pursuit of building education capacities.