Monthly Proposal No.3: extend compulsory education for the sake of freedom and wealth

A democratic market economy theoretically achieves the highest possible level of freedom and wealth. Focussing on our country, this concept indeed worked out not too badly. However, we are still far away from the perfect world stated by the theory. Furthermore, for a few years we seem to be stuck in an economic as well as a democratic crisis. Though, when the theoretical conclusions are derived by the compelling logic of mathematics, how can they fail?

The answer is pretty simple: They don’t. The differences between theoretical and empirical outcomes are caused by the differences between the models’ underlying assumptions and real social and political conditions. In this regard, one important assumption for efficient democratic as well as economic behaviour is sovereignty. It can be understood as the power and possibility to make a rational choice and force its proportional consideration by others.

Among others, in the real world sovereignty therefore requests sufficiently informed and well educated people as consumers, voters and all kinds of democratic and economic agents. Therefore, it is not just about merit goods and external effects when a government establishes compulsory education. It rather is an essential foundation for the successful operation of a democratic market economy.

In the younger past the quality and effectiveness, or at least the average outcome of our educational system seems to be decreasing. Simultaneously, our youth possesses more and more self-determination. To this effect, teenagers have to make decisions about their path-dependent future, while they just do not know how strong the latter will depend on their capability to acquire and use knowledge. For knowledge itself is power. A certain proportional amount of power definitely is a necessary condition for sovereignty. Finally, sovereignty determines individual and aggregate outcomes in a democratic market economy.

Therefore, besides several other arguments from labour market and institutional economics, already the basic theory of democracy and the market economy justifies an extension of compulsory education. The empiricism finally recommends it for today. Of course, there will be costs in the short run, financially as well as politically. However, the alternative upcoming social costs arising in the long run would be many times higher. So be paternalistic today, in order to save democratic and economic freedom in the future!

3 thoughts on “Monthly Proposal No.3: extend compulsory education for the sake of freedom and wealth

  1. Liberals in general have indeed struggled, and from what I can tell continue to struggle, with the dilemma that the highest degree of personal freedom is essentially their core goal, while at the same time recognizing that achieving this goal requires (sometimes significant) infringements on the very personal freedom they want to achieve. Your argument somewhat reminds me a lot of some of Hayek’s ideas like those on “transitional” dictatorships, which makes me personally uneasy even though I see the logic behind them.

    It is undeniably true that a lot of our models fail to describe reality due to real economic actors behaving weirdly, one might even say stupidly. But would adding a couple of years of going to school really make a difference? Isn’t the kind of education that makes for a strong democracy imparted elsewhere, including through the very culture of a country? And how realistic is it to instill this knowledge through conventional means (i.e. in the classroom)?. I generally like the idea of a sort of “civil education” class in schools, for instance, but am skeptical it can achieve what it aims to achieve.

    PS: I unpublished my newest post, since I’m not sure at the moment its a good idea to have more than one new post per day and had somehow missed yours.

  2. I don’t think there is such a dilemma in liberalism. Liberals reject the idea that individuals must be forced to do what is best for them. In the case of compulsory education they will insist that the individual knows best how much an additional year of education is worth.

    I think fans of paternalistic government intervention have a much bigger dilemma. If individuals must be forced to do what is best for them in one area (education), how can they be trusted to do the right thing elsewhere? Look at all those fat people who have a much higher risk of dying from a heart attack! Why not let the government (informed by academic nutritionists, of course) cap the fat content of each citizen’s daily meals? Or let’s make a law forcing every citizen to devote 30 minutes a day to do sports and work out. Come on, everyone has 30 minutes! Our citizen’s reading comprehension is bad? Let’s require everyone to read one book a week (no, comics don’t count).

    I better not go on, because I have the feeling Timon will support all these policies 🙂

  3. Yes, I would like to see those studies.

    The problem is this. It is true that the mean income increases with the level of education. But that does not imply that the marginal expected net benefit of education is positive for everyone. My expected future income depends not only on my education but also on my abilities and my labor-leisure preferences. And both abilities and preferences vary across people, so different people will have different expected future incomes. Second, education has opportunity costs which are again different for different people. Now you say, people don’t consider all that when they decide how much education to get, so government has to force them to go to school for 9, 10 maybe 12 years. But that means you are claiming that the marginal expected net benefit of the 12th year is positive for everyone. Otherwise you would be forcing people to waste their time at school.
    How do you know that?

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