20 May, 2022


Education Is Not A Commodity: But It Is And It Should Be Negotiable

By W. A Wijewardena

Dr. W.A Wijewardena

Students claim that education is not a commodity

‘Education is not a commodity’ has been a popular view almost universally held by Sri Lanka’s student community in higher learning institutions. For them, it is non-negotiable. Even some university academics at the country’s state universities have been ardent proponents of this view.

This view held by them is now a public commodity found everywhere. It could be found on the placards which students wave at people when they stage streets demonstrations. It is also demonstrated during television discussions on education issues in which both students and academics participate. Or simply, it is stencilled in bold letters on the walls of state universities. All this points to a synthesis – now formed into a common opinion – created by those who have a stake in the country’s education system. But what is missing in this synthesis is a lack of a careful analysis of whether education is a commodity and if so why it is and if it is not a commodity, why it is not.

A society cannot supply all the commodities through a system of community funding The objection to education as a commodity comes from the general dislike which many harbour in them about markets. A commodity is demanded by its users and supplied by producers at a price in the market. Those who are unwilling or unable to pay the price are denied the opportunity for using the commodity, however much it is essential for their existence or wellbeing.

For the continued existence of societies this should be the rule, since it calls for equal sacrifice by both users and producers making it a fair exchange.

A society cannot continue to allocate resources for the production of the commodities needed by its members unless they are paid for by somebody. If the user cannot pay for it, the whole society should get together and pay for it as a community. But this cannot be done for all the commodities in use, since it amounts to collecting money from each member of society, creating a pool and then, using the resources in the pool to pay for the production of the commodities that are demanded.

To administer such a system, society has to set up systems at a cost. Money spent on those systems is a waste. This is because the resources so spent too could have been used for producing other needed commodities. But when the user pays for it, there is no need for such systems and the entire payment and exchange process is decentralised to an individual level with no additional cost to society.

Such a system is thus both effective – because it delivers what it intends to deliver – and efficient – because it is done at the minimum cost to society. Hence, societies have to decide clearly which commodities should be produced on a community basis and which commodities should be produced on a personal basis. Accordingly, the selection of community production of commodities is done after a careful analysis of the essential nature of the commodity from the viewpoint of the general welfare of the members of a society.

Community funding is necessary for public goods

For long, such community production has been done in case of commodities of which the market system fails to collect payments from users and make them available to producers. This arises in a very special situation where a person cannot be denied the opportunity for using a commodity whether he pays for it or not. A common example often mentioned is the eradication of an epidemic.

For instance, with the dengue epidemic which has hit Sri Lanka today, the eradication of the dengue causing mosquitoes will benefit everyone living in a particular area irrespective of whether they have paid for it or not. Hence, no producer will step into taking measures for eradicating the epidemic.

As a result, society should get together and finance the production of this commodity on a community basis. These commodities are known in economics as ‘public goods’ and there is no question about the Government intervening in the production of such commodities for the benefit of all citizens.

Education provides additional social benefits

But education is not such a commodity where the market system would fail. That is because the user of education can be denied the opportunity for using it if he does not pay for it. Hence, the market system can produce the commodity called education and supply it to society.

But there are some reasons for society to get together and finance education expenditure on a community basis. That is because education provides additional social benefits to societies which are not counted by individuals when they choose to spend their own money on education.

Education improves human capital

First, when everyone in society is educated, skilled and competent, it improves the production capacity of society enabling it to continue to create wealth and prosperity. Such qualities are commonly known as ‘human capital’ and the existence of quality human capital is a prerequisite for creativity, inventiveness and innovativeness of societies – a must for progress in a highly competitive global environment.

Societies that lack them, as the Sri Lankan writer Munidasa Kumaratunga once remarked, will not rise in the world. Hence, the continued advancement in societies will be dependent on the level of education attained by all members of society.

Education is a way to narrow inequality

Second, education helps societies to narrow the income gap by facilitating the members to attain what is known as ‘social mobility’. Social mobility is the opportunity afforded to members of society to break away from family, caste, ethnic or racial constraints and move up on the social and income ladder according to his desire and ability.

Hence, it is the gateway for people to move to a higher level of social stratum thereby automatically narrowing the income gap or inequality in society. If inequality persists, it breeds social, political and economic disorder leading to an eventual break-up of even strong and advanced societies.

Education creates good citizenry stocks too

Third, while improving the human capital stock, education also improves a society’s good citizenry stock as well. When educated people are numerous in society, it boosts art and literature. It also develops more responsible citizens who are capable of self-governing and participating in democratic processes in a more effective and responsible manner. It also helps societies to keep a check on the breeding of crime. In a nutshell, education elevates a society from a primitive level to an advanced level where there is better social interaction and social collaboration. Creating such an advanced civilisation is the wish of all modern societies.

Education is a merit good warranting public production

However, these social benefits arising from education are not taken into account when individuals decide on the level and type of education. They take into account only their private benefits which are lower than the social benefits. Hence, the demand for education by private individuals falls short of what society desires as its optimal level. Thus, though education can be produced and supplied as a private commodity, it merits being produced as a commodity financed by the community on a collective basis.

Such commodities are known as ‘merit goods’ in economics. Thus, education still remains a private commodity that could be produced by the private sector, but societies have chosen to supply it as a community financed commodity on meritorious grounds.

This is the only reason for saying ‘why education should not be a commodity’ but it is not non-negotiable as claimed by university students in general and supported by a select group of academics.

Education model is freaky

This is because education has a peculiar property when it is produced either as a commodity traded on the market or on a community basis by society. It is different from the normal commodities that are produced in an economy as shown in the chart.

In a normal commodity, the market system itself assures the quality of the commodity being traded in the market. In this case, the person who places the orders for the commodity in the market is the person who pays for it. Hence, he has an incentive to demand value for the money and if the producer supplies him with a substandard commodity, he has the right and incentive to reject it. If he continues to reject it on the grounds of substandard quality, the producer goes out of business. Knowing this risk, the producers too have an incentive to produce and supply quality products.

No incentive to ask for quality

But in the case of education, as the chart shows, the order is placed by parents for the education of their children. In the case of public education where funding is done by community, payment is made by the Government which in turn collects the needed money from members of society by way of compulsory taxation.

But the production is done by the school or university system, as the case may be, engaged by the Government for this purpose. Schools hire teachers and lecturers as inputs to produce education.

Students are a throughput anxious to get a certificate

Students are simply throughputs who go through the education machinery. They spend a given number of years inside the machinery, roughly 13 years in schools and a further three to five years at universities or technical colleges. They are expected to acquire wisdom, skills and competencies whilst going though the machinery. Since the students are simply a throughput, they have no incentive to insist on the quality of education they receive.

Similarly, though it is parents who place orders for education, they too have no incentive to ask for the required quality standards from the institutions that produce and supply education. Both parents and students just need a certificate to give signal to prospective employers who will hire those throughputs that have come out of the education machinery.

Thus, at this level, teachers and university academics have no compelling reasons for maintaining the required quality standards.

Employers too cannot ask for quality standards

The users of the output arising from education are the prospective employers who will hire the throughputs. But since they do not pay and they enter the scene only at the last lap, it is too late for them to ask for the quality standards in education. Since they will hire a substandard product, they will simply be victims who have to spend extra money for bringing the hired throughputs to the required quality levels.

Students and teachers have allowed the system to rot

Hence, in the public education system, students will do everything – demonstrating on the streets, ragging fresh students and attending funerals of relatives of colleagues and so on – except studying. And also, university academics too do not have incentive to insist that students should be in classes. Thus, a perennial epidemic in Sri Lanka’s university system has been the absence of students from classes.

This was eloquently presented by Professor Sunethra Weerakoon who retired recently from the University of Sri Jayewardenepura having served that university as a mathematics-don for 40 long years.

In a paper she presented at a seminar held at the university recently under the title ‘Institutional and Cultural Corruption within Public Universities: an Urgent Policy Challenge for the Government’, she has documented the pathetic situation at state universities in Sri Lanka as follows: “A primary indication of the flaws in the student culture is poor attendance at lectures. At my own university, the Dean of the Faculty of Social Sciences and Humanities reported to the Senate in October 2016 that over 200 students had zero attendance at lectures. Furthermore, after perusing their grievances, 108 were permitted to sit the final examination. When asked whether it is proper to allow students to sit the examination without attending a single lecture, he said, ‘If we didn’t give permission for them to sit the examination, they wouldn’t allow other students to sit it’. Not only does this example illustrate the low levels of commitment of many students to their university education, it also illustrates the unacceptable laxity of university authorities to the problem,” (p 16).

Education as a merit good being supplied by the state has been betrayed

Thus, the production of education as a merit good in Sri Lanka has been betrayed through a destructive cultural practice adhered to by students and lecturers. The only way to bring back the required quality standards to educational institutions is by forcing them to face competition from privately produced educational institutions in where parents would place the order, pay for it and demand quality assurances from the respective institutions.

In other words, state sector educational institutions, while performing the major role in producing education, have to be supplemented by private sector educational institutions that would provide effective competition to them.

Education as a commodity is negotiable

Hence, education is certainly a commodity irrespective of whether it is produced by the state sector or the private sector. Hence, the students’ claim that it is non-negotiable has no foundation.

*W.A. Wijewardena, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at waw1949@gmail.com

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Latest comments

  • 2

    Education is a commodity paid for by tax payers or parents. Money is exchanged from kindergarten to the basic degree and even further. Uni students made duds by ragging and slavery have only one expressive outlet and that is to street march shouting the written slogans on papers given to them by their task masters who swell in hero worship. The ragged have become dehumanized. What expectation is there of a future healthy and prosperous nation from these insane morons. Does nobody care? Imprison rotten rebel leaders spoiling all the mangoes.

  • 0

    Mr Wijewardena,

    With respect, there is nothing new in what you are saying in so many words. For you and others (who may or may not have a degree or two in the dismal science of Economics), we should sell everything including our grand mothers if there are takers and we can get the best price.

    But we need to move away from this evil thinking and go back to basics of taking countries as groups of people living together, collectively taking care of their common needs (defence, health, education) and care about each other’s personal needs along humanitarian lines.

    The sad thing is that the germ of Economics operating in the brains of people who were mediocre students at high school level have got on to politics, central banking and academia, and begun to spread this germ to the rest of society,.spreading the evil capitalist value system.

    Why does a country that can find mega millions at a moments notice to buy more luxury vehicles for politicians spend enough to maintain our education system. Throw away your central banking hat and think about it as a human being.

  • 2

    Thanks for bringing this issue up. But Education should NOT be considered as a commodity. Instead of it shuld be considered as a societal need and a human need. I wouldn’t say it is a basic need as food,sheltor,meicine etc are grouped in this category. Pursuit of knowledge and understanding through education and their application is a noble activity compared to the production of other goods such as food,milk, clothes,building materisls,tea. Nurturing young minds to reason and not base decisions on pure emotion is important. Also, certification at the end of learning is important for any society. It reflects the extent of one’s engagement in education,scholarship, pursute of research etc. Those who aspire to these ideals need to be encouraged rather than discouraged by charging exhorbitant fees. A humane society and its leaders should facilitate education,teaching and learning through publicly funded institutions within its means.

    Once education is treated as a commodity whose price is negotiable as suggested in this article, it not only diminishes the value of education (broadly definied as teaching,learning, research) but also make it inaccessible to bright minds without the capacity to pay. It is also noteworthy that some international universities sell their degrees to unquestioning potential students from the developing countries at a very high price. This a postgraduate student in Australia pays $25,000 per year in course fees alone. Add another $4000-7000 for health insurence for a family. Add another 10-000-15000 for living expenses. Add another $2000-5000 for text books, travel to home etc. The list goes on. Some fairly new universities from the English speaking world advertise as World Class universities in Colombo.

    So, education is and should be a social good rather than a commodity. If one says someone has to pay for education, surely the State should do so. If they got the money to import Benz cars, BMWs, for each and every MP plus allow them to make money by selling them in the open market, it shuld be able to afford spending some money on children’s education. After all the free education concept does not mean it is free. It means that it shuld be free to those who are not able to meet the costs if costs are imposed. Though no fees are charged by public universities, there are other costs such as for living expenses that means a lot to a child from a poor family. In a just society, there shuld be a level playing field.

    However I agree on other points made about the state of our University education. Large sum of money is being spent on maintaining it but the benefit of this exercise to the society can be better organised. If students dont attend lectures or the lecturers are not doing quality research and publications, the system is rotten. Management of education need to take drastic steps to correct. But that is not how the system work in Sri Lanka. Teaching in universities is a privileged enterprise. Instead of critical exploration of subjects for societal benefit, it has become customary to engge in imparting of knowledge often acquired from Western/global sources in the disciplines. Apart from small pockets, no genuine effort is made to either encourage the new generations to be brave and go hard in acquiring cutting edge knowledge or to conduct research and come up with breakthroughs. The educational hierarchy is just managing the system with all its loopholes. This is why I believe that a Commission of Inquiry is necessary to investigate the internal dynamics of our education institutions and how to make them better for national needs?

    PS. I had some spare time before starting to mark student assignments on Education and Social justice here at the University of New England, Australia. Enjoy reading these creative articles whichever the position the writers take. A topic can be examined from many different points. At leaast that is how our gurus at Peradeniya taught us then.

    • 3

      This is statiism where state provides everything- Communism- Marxism But we are a democracy as all our elections have proved. So let those who want to pay for their education do so and let the others get their ping padi and all its other consequences. But learn to keep your hands off people about how they want to use their own money. When you have extracted enough money from state, jump out of your Marxist bandwagon and spend for your children’s education in private uni. in anyway you want commodity or not. Education needs freedom and liberty of thought and not enslavement to failed political thought

  • 0

    Dr. Wijewardena,
    Most of what you say is true from an economist’s standpoint. Primary and secondary education should be free and compulsory, But I think University education needs some tweaking. I propose some radial changes. These may seem Gota-like to some, but will improve the atmosphere in the campuses.
    1. Raise University admission age to 24 minimum.
    2. All school-leavers who have qualified for admission should find whatever employment they can get,for 5 to 6 years, or the government should provide non-clerical work for them at a nominal wage.
    This will give the students an idea of the real world plus respect for the dignity of labour, and we will have no political layabouts entering campus. They should be encouraged to work in places like the Garment industry, where there are thousands of vacancies. That will result in better export performance, so good all-round for the country. Three-wheeler driving should not qualify as a job.
    Once they get to University, only the ones who can prove poverty should get free services. The rest should pay a nominal amount. After isn’t our Per capita income supposed to be $4000?

  • 0

    At the end it comes down to this: what will our/a country look like WITHOUT a public education and/or health care system. Governments everywhere tend to try and INVEST the minimum they can get away with. When the common good is compromised, up jumps the opportunist capitalist to create a private system that will create a ‘higher’ class and maintain the status quo. Enlightened societies work towards reducing/minimising that divisive state of affairs.

    • 0

      To see what our country looks like without public education and healthcare, don’t scan the horizon. Look at Parliament, 94 without O/L and MPs fly to Mt. Elizabeth hospital in Singapore, ambulance style. Be realistic about your non capitalist brain washed Marxist attitudes. We are still here in spite of communist threats.

  • 1

    Primary education and secondary education given free to all citizens, funded by government (tax payers money) can be considered as good way of educating people since the free education benefits are reaped by all the people in country.

    But University education received by only small percentage of people and it is not fare it to burden entire tax payer population to fund free university education. So better approach is while a small population of university students are funded by tax payer money, rest should be on paid basis, run by government or private sector. For those who make noise about the quality of private run university education, government could establish a regulatory mechanism to monitor quality of private university outputs.

    It is time to stop make politics out of major issues like education.

  • 2

    Education in uni is for those who want to study. Those who want to street march should be given training in political dramas and a quick BA and allowed to change the thinking of society in SL which is also a high calling. If they are able to change the thinking of others, they should get nominated by political parties so that the genuine students can get on with their lives and build up society for the future.

  • 2

    A commodity is widely distributed and exported to other countries. In SL, the doctors are trained and paid for by the state with tax money, but when they go to other countries without serving SL, they collect the pay packet for themselves and do not pay back the commodity price for their education in SL, becoming crooks

  • 0

    The Higher Education of USA ,UK, France, Japan ,India Australia New-Zealand and ,Singapore are engaging lucrative business oriented of earning millions of US $ dollars from foreign students.

    No doubt about that Education under Capitalism is commodity as other commodities as well.

    Dr Wijerardana want to released new commodity market to address New Liberal capitalism by the aim of to the served for USA led Old World Order . We are well aware of that. He want tow that USA line of Economy in area of Education in Sri lanka.

    After paying millions of Dollars foreign students has been awarded Degree of this and that and further enlarge to Post-graduate students has pay the double the amount of money .they paid in past .That is also most new lucrative business in stock market as well.!

    Indeed USA ,UK and Western countries has an open all universities as pure commodities of New Market Liberalism to serve for their system of hegemonies to dominated world order of economy and politics of by remain as their Global power politics of economy .

    Needless to say DR Wijje ……. want that Sri Lankan under the UNP-Ranil W.. CBK and MS regime has carry forward that similar mission to earn Millions of capital for new lucrative Business deal for emerging petty-bourgeoisie an Island.

    In his point of view selling new commodity of Education is nothing wrong– by Wijer…’s -Education line of politics in school be contributed to emerging Economy of an Island !!!!!

    In fact proposed deal of selling Education commodity that need new local market by scrapping Free Education system and by declined Govt . funded allocation for higher Education expenses dropped firstly , then cut funding step by step for ever .

    The ,University become commodity market for selling for Rich .without accepts standards by World Universities ..
    The result of that poor and poverty driven students will be dropped out by system of Commodity market Higher-Education will turn into new form an Economy of Neo-Liberalism.

    Dr Wije is working for Neo-Liberalist political-economy system of “governances” by discarded Free Higher Education in Sri Lanka to abolished once and for all Free Education .?.

    Indeed Dr Wie….line of school of Economies thoughts are promoting commodities market has come to totally failure in USA as the center in Globally .

  • 0

    Not a commodity but an investment.

  • 2

    A commodity is an undifferentiated product or service. When there is competition, the competitors do their best to differentiate. Else, they cannot survive in the market. The best way to differentiate is to improve the quality of their service. Hence, competition will, in the long term, improve the overall quality of the service/product. In a monopoly situation, there is no incentive to differentiate through improvement of quality. As such, competition is absolutely essential. The market will decide which succeeds and which does not. Having said this, the government’s duty is to ensure that there is some sort of regulation of the industry. That is the best way forward.

    Supply and demand governs the equilibrium price and the overall market. The demand at the moment is quite high, but the supply is low. Increase competition, and the equilibrium price comes down. In the case of medical education which has long enjoyed a monopoly, the current stock of medical graduates supply is quite low in relation to the demand of the nation – hence they demand and obtain higher privileges than other sectors. This is the reason why they are trying to prevent competition from coming in. They will lose their privileged position thereby. They are careful to couch it in terms of quality and social injustice, but the reality is quite different.

    • 2

      Agree. Their low quality monopoly will automatically expose their bankrupt arguments of quality and social justice which cannot stop other’s education. All people have rights, not just those concocted Z scores and district quotas. We reached the season of exposure. No more cover up. Leaders up for elections too

  • 0

    Education should be free, to the maximum extent possible. Private education should be limited to professional school, such as medicine, where a shortage of workers can adversely impact the well-being of society.

    There needs to be a paradigm change in the entire educational model. Look how efficient technology has become over the past 50 years. Smaller, faster, and cheaper, those have been the guidelines. Unfortunately, public education has not followed a similar trend. We have information overflow, overcrowded classrooms, and quality often in proportion to price. What needs to be done is to teach people only what they need to learn, at an optimal speed, and an affordable price. Technology can be integrated to streamline and enhance the process.

  • 0

    Refer to the Commenter of S.S Dissnayake

    The issue is that not ‘competition of market economy’, is really crux of matter is that addressed for the social injustice for have not will be eliminated for Education on merited grounds by ruling party alliances of UNP-Ranil W… led “compromised” government of current Regime center in Colombo-Sri lanka .

    The Sri Lankan system of Free Education has contributed lot for ours social-justice between balance of rich and Poor . Ours gap was narrows by FREE Education from Kindergarten to University Education has played vital role National development of economy and social progressed of our society.-Sri lanka.
    I want you read History of Education theses wrote by KHM Sumatipala for Master Degree in University Ceylon -Peradeniya.>.

    The mode of capitalism and their teaching masters, who want only one- way development of Capital market for emerging bourgeoisies by selling commodity of Education become vital income of cost of millions of poor masses.-Sri lanka. The SAIAM is one of that .

    In a result of that mode of operation in Education will created that ruthlessly exploitation masses by RICH become Few, by very short period of history .This is new proposals commodity of education has guided to whom it may concern for that How to become rich for New Irrational bourgeoisie -in our society !!!!

    This new line of services oriented -Economy, which that classes of parasites want market acclumanations of capitalization of Market for the become RICH that New Liberal Capitalism alliances with Foreign Capitals exploiters an open model of New market Economy by under UNP ruthless management of state of an Island..

  • 0

    Commodity or not, the people have to bear the cost.Allowing 108 or 200 students who did not attend a single lecture is playing the tax payer short.Those students does not deserve to be allowed to sit that examination.The best solution, from the point of view of the tax paying public would have been to prevent them from sitting the examination.They might have disrupted the others from sitting the examination.Then the peer power should act to counter balance the illeffects. if the genuine student has no backbone to stand up to principles and guidelines deprive them too of the degree.

    Counterbalance all this by conducting all lectures and examinations in English and also ensure that the graduate on passing out of the university, pays back to the Govt the cost of the education he had obtained, from the salaries they earn.In the case of the 200 students mentioned, they should pay it back immediately or face prosecution over robbing the state – apparently a non bailable offence.

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