Education and Innovation in Developing Countries—Posner

Rapid advances in technology are nothing new; what is new in recent decades is rapid advances in the kinds of technology that require intellectual skills. This has increased the returns to people who have high IQs and good technical education. In addition, fulfilling Max Weber’s prediction that modernity would see ever more activities regulated by rational methods rather than by authority or personality, even low-tech activities, like management and marketing, have become ever more scientific, requiring a high level of intelligence.

 

High IQ and technical education are complements. But people who have modest IQs also benefit from education, as does society. Education even at its lowest levels helps to instill good work habits, respect for knowledge, simple communication and analytical skills, social skills, and civic values.

 

Every country, therefore, can benefit from having a good educational system, including pre-collegiate, collegiate, and postgraduate education. How to organize such a system and what the optimal level of resources to allocate to it is are of course difficult questions. There probably are diminishing returns to providing higher education, because IQ provides a ceiling beyond which educational effort is wasted on students. The United States may be in that position today. Many colleges offer what amounts to a remedial high school education, postponing the students’ entry into the work force. If we had better high schools, we might have fewer colleges (or more—if better high schools improved intellectual motivation and performance). With ever-increasing specialization of the workforce, there is an argument for making education increasingly vocational.

 

Developing countries face a chicken and egg problem in education policy. Until there is a highly educated stratum in a nation’s population, there will not be an adequate pool from which to draw teachers of technical subjects. But without such teachers the nation will be unable to create such a stratum—internally. Presumably the way for a developing country to proceed, therefore, is to send its brightest young people abroad for advanced education. Some will remain abroad but those who return to their native country will supply the elite teachers of the next generation. This by the way suggests that the teaching of English should be a priority for pre-collegiate education in developing countries, since the best universities are in English-speaking countries.

 

Developing countries, wisely from their perspective, are notoriously casual about enforcing intellectual property rights. They don’t produce much intellectual property themselves, and of course consumers of intellectual property would prefer not to pay for it as long as it continues to be produced in quantity despite their free riding. (Producers of intellectual property can actually benefit from free riding if IP “thieves” become a paying market for follow-on and complementary products, as often happens.) Appropriation of intellectual property becomes a means by which technical workers in developing countires can enlarge their technical knowledge and set the stage for innovation. So the priorities should be: first education and imitation, second innovation.

 

I would particularly stress the importance in developing countries of education in instilling civic values in a country’s youth, values that include honesty, respect for knowledge, tolerance, and, of perhaps greatest importance, loyalty to national institutions. Intense family and clan loyalties increase the cost and reduce the efficacy of government, foster nepotism and other forms of corruption, reduce social mobility, and undermine commercial values, which depend on impersonal markets. Modernity, which centrally entails a weakening of family and clan ties, is a precondition of economic progress, and education an important factor in promoting a modern outlook, quite apart from education’s role in developing technical skills.

 

Many developing countries are authoritarian, and their rulers may worry that education will loosen their grip on the population. On the contrary, it is more likely to strengthen it, by weakening family and clan loyalties that compete with loyalty to the regime. Prussia, the Soviet Union, Communist Cuba, and now China are examples of authoritarian regimes that emphasized education for the masses without undermining their authority.

Comments

[John David Galt]

Nearly all "developing" (poor) countries are poor because they have a ruler who is not merely authoritarian, but is simply out to enrich himself and doesn't care about the people he rules. The countries stay poor because everybody (including potential foreign investors) knows that if they create any wealth there, the ruler will simply grab it for himself.

I can't help the world would be better off if some capitalist would just offer these dictators a large pension and a home on the beach on some tropical island in exchange for abdicating, so the capitalist can take over, impose the laws of Hong Kong or Taiwan, and make everybody rich in two generations.

And don't let the environmental movement tell you it can't be done. They're a bunch of Luddites who consider mankind "a plague upon the earth" and will make us all poor if we let them. Anyone who feels that way should begin by killing himself and do us all a favor.

[Nancie Parmenter]

Interesting comments about the effectiveness of college education in USA today. Since you seem to believe that most colleges are remedial high schools, how do you propose to change this, or do you seven believe it is necessary? Or should the goal of education in really be vocational in nature?

[Steven Mueller]

I agree with what Mr. Galt said in the first part of his comment! I would also like to add that these rich rulers try to avoid that the people they rule get proper education, as this could endanger their leadership position!

[Jim]

Two points:

1. Mortimer Adler recognized that technical education is not helpful without underpinning it with liberal education and cultural understanding and development. Otherwise the "technical advancements" do not solve problems and may even create more problems. Texting while driving might be a good example.

2. Mexico is a rich country. It has physical beauty, a costline on both sides, fish, gold, silver, oil, incredible agricultura assets, inherently friendly and talented people and yet it is considered to be a "poor" country with no jobs. I wonder why. Could it be that a very few families own most of the capital assets and control the power structure? Why would they want to provide advancement education to the masses?

[Christopher Graves]

Nepotism and other face-to-face business relationships can be beneficial since one knows the character and ability of the people involved in a family business or within a network of kinship and friends. These personal relationships foster a greater sense of accountability. People feel more obligated to do a good job for their family as they fear the most severe forms of retaliation if they act irresponsibly.

Modernity brings with it, as Judge Posner notes, more depersonalization to life. This aspect of modernity leads to less emotional investment in the success of a family enterprise, less accountability to customers and workers, and a more sterile social environment to inhabit.

[Fred Harwood]

Jim:

1879, Progress and Poverty.

[Jim]

Dear Fred,

Thank you for the suggested read of George's book. I have read parts of it but worry that the social-political nature of man prevents that kind of logic from prevailing. I also worry that in a so-called wealthy society like ours, we are self dividing into separate strata which have sort of given up on the future. I believe that the very wealthy have taken the attitude of acquiring wealth to insulate themselves from the rest and to be able to "buy" their way out of society's dangers. The largest middle group is either clueless or believe that they can analyze and react their way out of the way and the last group are the survivalist types who believe that they will be able to shoot their way to safety. The common element is the absence of confidence in the status quo and the future in the hands of venal politicians and in some cases, academics. The leadership quality most required to create a more ordered and just economy and society in my humble opinion is the inherent ability to transcend (not deny) one's human nature in the interest of others. Once power lust or ideology takes over, forget it. And it may be too late anyway.

As an aside, you might want to read Friedman's column in a recent NY Times.

http://www.nytimes.com/2010/09/12/opinion/12friedman.html?_r=2&src=me&ref=homepage

Thank you again for the suggestion to review Georg's book. Asx I recall it was a huge best-seller.

Jim

[ffxiv gil]

Presumably the way for a developing country to proceed, therefore, is to send its brightest young people abroad for advanced education. Some will remain abroad but those who return to their native country will supply the elite teachers of the next generation.

[Rishi Sidhu]

Most of the world lived and still lives by placing higher importance on ties of kinship and family. These are meaningful and age-old cultures, and will not be changing overnight. As non-western cultures continue their development, I hope that they find a way to keep the rich traditions and values of their cultures, and perhaps forget the things - such as the devaluation of women, which should be left behind. To encourage every other nation to be another western replica of modernity is at best, boring, and mortruthfully, arrogant.

[Jim]

Rishi,

Well said. We in the US have some good answers but by no means all of them. We should not be trying to introduce our values into other cultures unless asked to do so and then only very carefully. As a matter of fact there is a great deal we could learn from other cultures.

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[citizen1]

In his article, Mr. Posner complains about other countries which he believes are too casual in enforcing the hegemony of so called "intellectual property." In a just society, all would benefit from the scientific discoveries of others. Some scientists to their credit have actually recognized this moral principle. Should persons who are suffering from illness be held hostage to greedy "businessmen" and "investment bankers"? Should government aid those who would deny relief and a cure of illness? Should government allow the patenting of the human genome, seed corn and other information which is nothing other than information found in nature? Those such as Jonas Salk, one of our greatest citizens, recognized such injustice. After discovering the vaccine for polio, he was asked who owned the patent? He responded: "There is no patent. Could you patent the sun?" Why should a person such as Bill Gates reap billions of dollars from the most defective product ever created and which relies upon a system of communication which was developed by the government at the expense of the taxpayers? Who is entitled to reap the benefit of the education system which is funded primarily by taxpayers? Who is entitled to reap the benefit of so called "intellectual property" when it is developed from research funded in part or entirely by the taxpayers or by tax credits and deductions benefitting private interests? Should "poor countries" wo do not possess American "dollars" be denied the benefit of medicine and technology which can benefit their citizens while richer nations manipulate their economies and rape their resources? The assumption that all "intellectual property" should be protected is nonsensical and belies an educational indoctrination and blind adherence to learned propaganda. As a corollary, why are certain bankers and private interests entitled to manipulate the supply of money through the Federal Reserve? Does anyone honestly believe that this system is fairly managed for the benefit of all citizens? There are many such propositions which are set forth in "intellectual" discussions in our scciety as assumptions which need to be challenged if we are to move forward rather than backward. An "education" which consists of mere brainwashing of citizens is no real education without a full discussion of ethical principles. Otherwise, as currently proposed, most "education" involves nothing more than the training of an animal, similar to training a dog.

[Hesus Fish]

I enjoyed reading your article especially the part about stressing the importance in developing countries of education and instilling civic values in a country’s youth, values that include honesty,respect for your fellow man, respect for knowledge, tolerance, and loyalty to national institutions. Only look at Wall street and you get the answer where we are today.Great article.

[Roger]

Excellent point! For companies in emerging economies (including Cyprus) to face up to the big multinationals from the developed world (who enjoy first-mover advantages), innovation is key. This could come in the form of new products or processes or even business models. But for innovation to take hold, a climate of innovation must first be developed inside organisations. This is the responsibility of senior management in every company. Waiting for Government to “help” is a defeatist strategy. Senior managers must rise to the challenge now.