Advertising, coaching classes and education

In the same edition of the The Times of India that carried the news report on Hafiz Contractor, there was a report on a more interesting case. Titled “Coaching class ad leaves IIT dean red-faced”, the report states:

A newspaper advertisement for an IIT entrance coaching class had the campus in a flutter recently. Reason: The ad carried a photograph of IIT Bombay’s dean for student affairs, Prakash Gopalan, along with a note from him praising the coaching class.
    The ad … carried a handwritten note from Gopalan, … “Based on our experiences with our son, we very strongly recommend (this coaching class) to every parent and student in the process of choosing the best coaching class for JEE at Mumbai.’’
“I did not endorse the coaching class,’’ … “I had sent my son there and had written the note as a feedback. The note was written by me in good faith and in my capacity as a parent. I had not written the note as an IIT dean. I had no idea that it would be published in the newspapers. My permission was not sought for using my feedback in an advertisement,’’ Gopalan told TOI… 
   Praveen Tyagi, MD of the class, said he would not have used Gopalan’s feedback in the advertisement had he known it would have caused him so much trouble. Tyagi, however, felt there was nothing wrong with the ad. “If the dean’s son has studied at my coaching class and he is satisfied with the teaching he received, why should it not be publicised? I have the utmost regard for IIT professors and their feedback means a lot to me. I haven’t used this for personal gains. I just wanted parents to be aware of the calibre of my class. Many ads make false claims, but I was only telling the truth,’’ said Tyagi.

Apart from the issue of permission for using the feedback in an advertisement (a narrow technical issue that depends on how the feedback was given, privacy policies etc), just what is wrong with the advertisement? A conflict of interest between the dean’s roles as a parent and as a dean? How so? As Tyagi says, “I was only telling the truth”. Can the truth create a conflict of interest? Also note, how Tyagi feels it necessary to include the rather comic “I haven’t used this for personal gains” as part of his defence. How is it not personal gain? And what is wrong with personal gain anyway?

Part of the reason for the flutter over the incident is that most of the policy makers want to discourage coaching classes. But the coaching classes are there for a reason. The government-approved syllabus and examinations for the years leading up to undergraduate courses holds no challenges (and therefore provides no motivation) for students who aspire to join IIT Bombay. Nor does it prepare them for the highly competitive and challenging Joint Entrance Examination conducted by the IITs (Atleast it used to be challenging. Attempts have been made to lower the bar to make coaching classes irrelevant). The coaching classes (atleast the good ones) actually provide a much better education than the government recognized and mandated pre-undergraduate courses. Coaching classes are so prevalent that most students attend them in addition to regular (government-mandated) school. Indeed, there are government recognized colleges that allow students to take the mandated board examinations but do not require daily attendance (I do not know whether this is legal, but it is definitely widespread). The students attend coaching classes instead of the regular colleges, create fake records of laboratory courses which the coaching classes do not have and clear the board examinations with no trouble at all. All this because regular education is protected from commercialization by state decree. I do not know all the details of what is allowed and what is not but the end result is that any professional needs to hold a government recognized degree from a non-commercial government recognized and regulated organization, while the actual education that the degree is supposed to certify comes from parallel higly profitable commercial organizations. The parents (few students finance their own education) end up paying for both and the students end up wasting a lot of their time at useless institutions where they learn nothing.

Fear of commercialization and the malevolent universe premise

In my previous incomplete post (published by mistake), I quoted a news report on the one year bar on architect Hafeez Contractor for appearing in an advertisement and asked why some professionals are not allowed to advertise. In a comment, Aristotle The Geek explains:

Most professions in India are regulated by so called autonomous bodies brought into being by various acts of parliament – the Bar Council of India, the Medical Council of India, the Institute of Chartered Accountants of India and so on. They thus have a charter that grants them absolute power to decide who is allowed to practice and who isn’t, who’s qualified and who isn’t, and to frame rules to “regulate” the profession. And so the regulations, most of them political in nature, start flowing. The ban on advertising, is one such regulation, because it helps those who are already entrenched in the profession (most clients come though word-of-mouth; this ban makes it the only option, except surrogate advertising through appearance on tv shows etc). And that is its main purpose. The “ethics” argument is just that – an argument. (emphasis mine)

Certainly a ban on advertising serves to “protect the establishment” (helping those who are already entrenched at the expense of newcomers). But is that all? I don’t think so. I think there is a deep fear of commercialization in most people’s minds that allows the establishment to create rules that prevent commercialization. The “protecting the establishment” is merely a consequence, though perhaps a welcome one for some in the establishment. There is a belief even among “liberals” (in the classical sense) that some professions like medicine, law, media etc are special and cannot be left to market forces. This belief is rooted in a distrust of the bania (merchant) and more generally the profit motive. As an example, anytime we happen to get an inferior product from some shop, my mother says: “He is a bania, after all”, refering to whoever the product was bought from. But why is the profit motive distrusted? Because it is selfish and the morality of altruism says that selfish motives are amoral at best. The profit motive is therefore viewed as an inevitable but unfortunate aspect of human nature, to be regulated by force for the general welfare. This leads to the perverse paradox of people believing that every individual is driven by an ignoble profit motive to perform harmful actions, but that these same individuals as a part of a collective can overcome these ignoble motives by force. In essence, this is the argument that man is too depraved to be left free. In practice, the creation of collectives to “temper” the profit motive always results in providing a platform for those who actually believe they can prosper by cheating others to set the rules. This is inevitable because when force is accepted as a proper way to produce desired outcomes, the winners are necessarily the most ruthless and unscrupulous.

The distrust of the profit motive and self interest is probably the result of a malevolent universe premise  (I have yet to reach a conclusive position about this, but I am sure they are linked), specifically the idea that man is short sighted, irrational and immoral by nature. But even among some who do not view self-interest as immoral and regard force as wrong, a variant of the malevolent universe premise applies. Consider Aristotle The Geek’s comment for example. If the main purpose of the ban on advertising is to unfairly protect the establishment, then, given the fact that similar rules in one form or the other exist in most of the world, evil can win (and has won) on its own strength. This is just another side of the malevolent universe premise, specifically the idea that immoral men can win through their immorality. If this is so, any attempts to change the status-quo are necessarily doomed, and posts such as these are merely cathartic. But it is not so. The universe is not malevolent in any way. Laws such as the ban on advertisement are a result of a bad ethics (altruism) and bad premises. The crooks who cash in on such laws are merely parasites, not the originators. Their power stems not from their ruthlessness or lack of scruples but from the willingness of the establishment, most of which actually believes it is protecting their profession from destructive commercialization.

Council bars Hafiz Contractor

Fridays edition of The Times of India reports:

In its letter of March 24, 2009, the council, an autonomous body of the Central government, has ruled that Contractor be suspended from practice for one year “from the date of issue of letter conveying the order’’. During the suspension period, Contractor must surrender the certificate of registration issued to him by the council, and is not permitted to undertake any work.

The council, which is empowered by parliament to take action against erring architects, commenced its inquiry after a complaint against Contractor by Delhi-based architect Sudhir Vohra last year. The complaint related to professional misconduct by Contractor for advertising his work as an architect, his “skills and philosophy as an architect’’ and for proclaiming himself to be “India’s favourite architect’’.

But architects, like many other professionals, including lawyers, chartered accountants and doctors, are not allowed to advertise their services. (emphasis mine)

Why are certain professionals not allowed to advertise? Because their professions are seen as essential to society and so

Update: This post got published by mistake and I did not notice until it was too late. I will finish what I had in mind in a later post.

A couple of good posts

I intended to comment on this ugly piece which appeared in The Times of India, but Aristotle The Geek has done it already and his piece has a lot more to say than I usually have the energy to. Read the whole post. Since that saves me some time, I will spend it dissecting some of the writings that he linked to. Since what I want to dissect is quite important, I will do it in separate posts.

Eric Lippert has this great post on recruiting for Microsoft. I am glad there are people like him working in an organization on which I heavily depend for a lot of my work.

Economics in one unlearnt lesson

I recently found the time to read Henry Hazlitt’s book “Economics in One Lesson” (available online here). The book conclusively demonstrates that any attempts to coerce the free market can only result in the short term gains of special interest groups at the expense of everyone else and that even these short term gains are more than canceled out in the long term. The value to me in taking the time to read it was not in learning anything particularly new but in knowing that a detailed and very well-written explanation of a number of statist ideas exists in one place. Hazlitt writes that all statist fallacies essentially consist of considering only the immediate and visible consequences of a particular policy while ignoring the secondary and not-easily-visible consequences – an idea that was expressed by Bastiat long ago in 1850.

More than the book itself, what is interesting to me is the fact that the fallacies in statist ideas have been exposed long ago (Hazlitt’s book was published in 1946 and Hazlitt himself takes no credit for being original) and yet these ideas continue to be widespread among the general public as well as among trained economists and policy-makers. In fact, the financial crisis we are seeing at the moment is the inevitable result of some of these same fallacies (more on that in future posts) and the alleged cure is more of the same. The inescapable question then is: Are statist ideas really fallacies or mere rationalizations? Are they really held out of genuine ignorance and/or confusion or is there some other explanation? Hazlitt seems to think that they are genuine fallacies caused by the fact that the immediate consequences of interventionist and coercive policies are all too obvious while the secondary and long term consequences are not so obvious. I think that is a far too charitable view. It is inconceivable to me that simple arguments cannot be grasped by trained economists or intelligent laymen. Hazlitt also mentions how the paid spokesmen of special interest groups are able to drive out “dis-interested” writers simply because of their dis-interest (a mechanism also discussed by Zakaria in his book The Future of Freedom). While this is certainly part of the reason why special interest groups can control the government, it does not explain the support for statist ideas among the dis-interested public.

As an example, a few days back, I had a long and futile argument with some colleagues about the ineffectiveness of statist policies. Now these colleagues are certainly intelligent enough to grasp the fallacies inherent in statist ideas. Moreover they have no reason to support such ideas for any special interest. Yet they continue to defend them. And inspite of any concessions they may have made during the argument, I am sure that the same points will come up in the next argument. As one of them put it, (paraphrasing) “I am not opposed to capitalism, but I am a socialist at heart.” To me, that is the source of the persistence of these fallacies. Altruism is totally incompatible with the working of the free market. But as long as it is accepted, no amount of rational argument (such as the ones in Hazlitt’s book) can genuinely convince a person that collectivist and socialist ideas always achieve the opposite of their stated purposes.

Hazlitt shows how raising prices of a particular product (whether by tarrifs or other methods) to create employment penalizes all the consumers of that product (the public interest?), how lowering prices of a particular product drives out all the marginal producers (the disempowered?) and also creates shortages so that only those with more purchasing power can afford the product, how minimum wages cause unemployment by preventing people whose services are worth less than the minimum wage from being employed at all (the most needy?), how rent controls raise the rents in new buildings enormously (housing for the poor?) while simultaneously removing all incentive for (or even ability to) improve/repair existing buildings, how inflation – necessitated by deficit spending to fund all the welfare programs – essentially acts as a tax whose impact is felt highest by the poor etc, etc, etc… not to mention that all these measures also reduce the total product of the economy (the public interest?)

But the point is that the cure suggested by all these fallacies – regardless of any evidence – the free market, where every individual is free to pursue his own interests and is not legally responsible for the “welfare” of others is morally unacceptable to the altruists, and no amount of merely economic arguments can change that.

Laws vs Regulations

Recently Diana Hsieh (of NoodleFood) raised the question “What is the difference between laws and regulations?” Since I consider myself opposed to all regulations but firmly believe that laws are necessary, this is an important question.

Before I get to law or politics, the first thing to note is that the word regulate derives from the word regular as in regular behavior, regular schedules etc. Anything that is regular is easier to understand, easier to predict, easier to work with. Regularity therefore is a desirable state. But it is not desirable in itself. It is not an end. It is desirable because it usually makes the achievement of actual ends easier. Consider an example. Fixed (or regular) office timings make it easier for people to collaborate, to plan their work, to plan their personal lives etc. But there can be any number of good reasons to break the regular schedule. And the decision to adhere to or ignore a regulation is based on a lot of narrow context. Laws on the other hand are inescapable. Consider the laws of logic or the laws of physics for example. They are general principles inherent in the nature of reality. In a legal or political context, laws are the principles that are necessary for men to live together in a society – necessary because of the very nature of man and society. Without laws, society would break down.

Since the role of a government is to preserve men’s rights and since rights only have meaning in a social context, it is the role of a government to establish laws. Since laws are general principles, there can’t be too many laws. Moreover they rarely need to change over time. Unless a fundamental change occurs in the nature of man or of society (it is conceivable that advances in technology might lead to such changes) laws do not need to change. This is the reason for measures such as checks and balances, separation of powers etc.. in good political theory.

Since regulations (a set of rules intended to make things regular) are highly dependent on context (both in their formulation and in their use), a government is completely unsuited to either formulate or enforce them. Regulations are best created and enforced by the particular set of individuals who need them. More importantly, when a government enforces regulations, it necessarily violates the rights of men to judge what is in their best interests.

Finally, there were some comments on Diana’s post to the effect that “Once Congress passes a law, agencies must write regulations to put the law into effect”. This is a badly wrong idea. It is like saying that the laws of physics are implemented by using rules of thumb. What is needed to put a law into effect is an interpretation of the law to specific cases. That role belongs to the judiciary, not to the executive.

Seasteading

I happened to find this website quite by chance. From their introduction page:

Seasteading means to create permanent dwellings on the ocean – homesteading the high seas. A seastead, like in the picture above, is a structure meant for permanent occupation on the ocean

Currently, it is very difficult to experiment with alternative social systems on a small scale. Countries are so enormous that it is hard for an individual to make much difference. Seasteaders believe that government shouldn’t be like the cellphone or operating system industries, with few choices and high customer-lock-in. Instead, they envision something more like web 2.0, where many small governments serve many niche markets, a dynamic system where small groups experiment, and everyone copies what works, discards what doesn’t, and remixes the remainder to try again.

Thoughts?

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