- Kato Hidetoshi's Data Base -

ECONOMICS OF EDUCATION AND TECHNOLOGY

Publication Date:Submitted to AAOU Annual Conference Hong Kong, November 1993
Publisher: Unpublished


1. RELIGIOUS AND STUDIOUS

By historical reflection, it is interesting and worthwhile to observe that the origin of education can be traced back to religious training throughout the world. For example, in Islamic culture, from 7th century, small children were sent to the institutions called "Kutab" where recitation of the Koran was taught. Those who finished this primary course and wanted to take sacred position, for their further training, "Madrasa" was instituted. In many "Madrasa" within Islamic domain, intensive education of theology, history, astronomy, and other subjects were conducted. The graduates of "Madrasa" were called "Ulma", meaning scholar and religious leaders. Indeed, it was 1936 when Islamic universities were separated from mosque. In other words, education was inseparable from, or synonymous with, religious training.

In Christianity, too, children were encouraged to attend schools affiliated with churches where Bible was taught, and for advanced studies in sacred vocation, monasteries and convents were established. Here again, schools were under the jurisdiction of Christian church for more than 1000 years. As a matter of fact, until Francis Bacon, followed by Comenius, made strong criticism in 17th century, education was essentially religious education. Even today, in most of the countries, there are numerous private schools from Kindergarten through graduate school, where certain religious practices, including prayers, are compulsory. Situation was similar in Buddhism, Hindu, Confucius philosophy, and other major religions. Needless to say, modern pedagogy and educational institutions were rather new product of 19th century in most parts of the world.

These historical implications are extremely important for us. In the first place, religion emphasized literacy. A Buddhist priest must be able to read voluminous scripts, mostly written in Sanskrit, and Chinese elites, both sacred and secular, were obliged not only to read and write, but also to study classic literature. Religious leaders, regardless of sects, were, and had to be, the most literate and knowledgeable people. The students, young and old alike, were given instructions in reading and writing as their basic skill. In pre-modern period, in other words, various religions performed important role to let general public literate, even though many of our contemporaries may criticize such religious education as the means of intentional indoctrination from liberal and democratic viewpoint. It should be reminded here that the term "indoctrination" is still used today among us when we come to educational philosophy and practice of certain countries, especially communist nations. And one may argue, on purely theoretical basis, that liberal education in the "free world" is also another form of "indoctri- nation" of democracy of American version. In this sense, religion, or religious education, in the past and present, gives us a good challenge to deepen our thoughts on the "neutrality" of education.

In the second place, and I feel it most significant, religions are, by definition, are non-profit and non-commercial area of human behavior. Sacred places such as Jewish Synagogue,Buddhist temple, Christian Church, Islamic Mosque, are the places where worshippers visit and pray. Devoted believers (and sometimes tourists these days) should follow strict religious rule once they are inside of these special places. Needless to say, in order to keep these religious institutions, huge amount of money is needed. Construction and maintenance of gigantic temple is costly, and the priests and clergyman must survive. In that sense, religion is not free from "economy", and religious institutions accept donations, in cash, in labor, in materials. But nobody discussed "economy of religion", because religion has nothing to do with economic transaction in ordinary sense of the term. As a matter of fact, within my knowledge, religious organizations and institutions are unconditionally income tax exempt throughout the world. Money, and other "secular" economic terms are alien in religious "sector" of the society. Above all, there is no fixed "price" system. In Christian church, after clergyman's preach, donations are collected, but you may not donate if you do not have money. A person may donate $100, while another person put $1 in the box. In Thailand and elsewhere, you will find many Buddhist monks in major cities soliciting donation. If you feel that way, you may donate cash, rice, flowers, and other items as the token of your belief and appreciation. If you have nothing to donate, you may just give them sincere bow. The grace of God is equal to everybody regardless of your social status, wealth, and donation. The relationship between the God, Prophet, Buddha, and other absolute and ultimate power, and secular human beings is fundamentally spiritual. Sacred spiritual being will accept one million dollars from a millionaire, but the being will not give special favor to the wealthy donor. That is the essence of "economy of religion", if any.

The same has been true is education. As mentioned before, religion was the hotbed of modern education, but in the past, there was no prescribed tuition fee and other education related fixed "price". In China, students of Confucius philosophy learned writing and reading at their master's classroom. To reciprocate and to thank to the teaching, students used to bring something, which was called "a bundle of dried beef", literally translated into English. In Japan, too, until mid- 19th century, in numerous "temple schools" throughout the country, the parents used to bring rice, vegetables, and whatever was available to the teachers' home as the token of appreciation. When the household was very poor, a teacher never expected any gift. In other words, until very recently, education inherited great tradition of religion in terms of its non-profit nature and equal grace and generosity. According to Ruel Denny's historical reflection, until the end of 19th century, both clergyman and university professor were provided with free lodging and meal when they travel in the United States.

In most of the countries today, elementary and secondary school education is compulsory and free. The fundamental reason is that these education are vital to reserve necessary manpower toward the future, and this principle is a part of national educational policy. At the same time, it seems that, even unconsciously, both policy makers and educators look themselves as having "sacred" mission. As a matter of fact, as far as Japan is concerned, there has been a long and serious discussion among school teachers as regard to whether their profession is "sacred vocation" or simply a "job".

In modern nation-state, it is natural that national budget for education is appropriated. But it is very rare that this particular item faced with serious cut, especially in Asian countries. At least, people do not discuss about education as they do with construction, finance, trade, and other "secular" budget items. And to be "studious" is an unconditional virtue like to be "religious". Both adjectives are positive, admirable, and noble.

2. EFFECT UNASSERTIVENESS

Another important reason I discussed so extensively about the resemblance of education and religion is that in both areas where ordinary economic theory and computation does not work. In the world of business, manufacturing industry for instance, executives are always cost conscious, and accountants are busy in cost accounting. When a new automobile factory is planned, the amount of capital investment, and running cost, labor, interest rate, and many other money factors are carefully calculated, and market research is thoroughly conducted, so that the business can be profitable in long range operation. Otherwise, the business will bankrupt for sure. In other words, in ordinary economic activities, "input" and "output" are exactly measured. If a retail merchant ordered $1,000 worth commodities from a wholesaler and succeeded to sell them for $1,500, the difference between input and output is $500, and the difference is usually called rough "profit". Bookkeepers are always conscious about their balance sheet, either they belong to multi-national gigantic trading firm or he is a one man operating small street corner grocery store. These are common sense business practice, and economy, both macroscopic and microscopic, is working on the basis of figures of input, output, and balance sheet.

The question, then, is if "education" as an "industry" where such clear calculation is possible. The answer is "no". Let me illustrate the situation by a concrete example. In a classroom, an instructor gives his lecture on history to his students. The knowledge given by the instructor is, metaphorically and realistically, intellectual "input". The knowledge students absorbed and stored in their heads is "output". Knowledge, by definition, is intangible and not measurable in ordinary economic terms. If one of the students is brilliant and imaginative,deeply impressed by the lecture, he may decide to be an historian of next generation, thus "reproduction" may be possible and visible. But for most of university students, history is simply one of liberal arts curriculum, and if they take their job in banking, retail shops, and thousands of business enterprise, several years after graduation, what they learned in history class usually fade away. If that is the case, seeming "output" is simply a "waste" from economic viewpoint. In addition, there may be a group of students who hate to attend history class. In that case, "output" is negative and minus.

In other words, education, generally speaking, cannot prove its "effect" or "output". Barbers, who are responsible for outside one's head, can prove their "effect" visibly. The money you pay to your barber has visible "return" which you can see yourself on the mirror. In contrast, university professors who are supposed to be responsible to change inside of one's head, cannot show how students nervous system have changed by their "input". Likewise, religion also is "effect unassertive" human endeavor. The preach of a priest may move the minds of some audience, but, at the same time, it may have nothing to do with others. I personally suspect, in this context, that the reason why medical school law school, and engineering department in any university are more highly regarded than social science and humanities is that, in these practical disciplines, the "output" is visible and the effect is certain and assertive.

Moreover, there is a problem of "matching" in any practice in education. For instance, a world famous scholar may be an ideal teacher for some students, but not for others, not only because of capability and competence on the part of students, but also because of their personal likes and dislikes. Anyone who has experience in university education knows that there are too many human variables in successful (and unsuccessful) teaching, or instructor-student communication and relations. "Effect unassertiveness" in education seems to be inevitable.

Interestingly enough and importantly enough, it seems that "input""output" relationship is most significant and visible in elementary and secondary level of education. The basic training of literacy enables young children to read signs on the streets, and the basic logic of mathematics gives them how to calculate change when they shop. Without these basic skills, an individual person cannot be a part of society, and from our experience, we are confident that compulsory elementary and secondary education has been a great success. Though there are few dropouts, they are almost negligible both in number and ratio in most of the societies, and that is the reason why every developing countries are eager to promote literacy, not only among the young but also in adult population at large.

As a matter of fact, back in 1960s, a group of scholars in the United States explored to prove economic gains of education (for example, "Education and Economic Development" by A.Anderson and others, University of Chicago Press), and these efforts must be appreciated. However, it should be reminded that the papers included in this volume were concerned only in elementary education with special emphasis on literacy.

However, in post-secondary education, the skepticism about "effect unassertiveness" is more apparent. For those who are seeking for academic and professional jobs, highly sophisticated training of university level or even graduate school level is vital from obvious reasons. But for ordinary young citizen, the effect of higher education is uncertain, at least nobody can prove the effect on empirical and scientific basis. In a word, the value of the outcome of huge public "investment" in higher education is not measurable in purely economic terms. University diploma may promise better job opportunities and higher status with happy days in future. But one may ask basic question "university education for what?", especially at the age of mass higher education. Indeed, in some countries in Europe, North America, as well as in Japan and others, we discover "intellectual unemployment" or "intellectual under employment" in such a way that a person with Ph.D is taking a job of taxi driver. Is it a "waste"? Nobody can give immediate answer.

It should be remembered that at the time when economists were working on "economics of education" in 1960s, a book titled " The case against college" by Caroline Bird also was published in which she indicated that high school graduates often earn more than college graduates in their life time.

3. CONSUMERS' ECONOMY OF EDUCATION

Apart from the viewpoint of macroscopic public policy, there seem to be economic considerations from learners' viewpoint. It was reported very recently that the richest businessman in Shanghai is a former school teacher who, after quitting his job, started a private English school in the thought that there were considerable number of Chinese youth who were planning to study abroad, especially in the United States. His hunch was correct, and some 20,000 students are now studying in his school with many branch campus. The parents did not hesitate to pay huge sum of tuition fee. Consequently, the man made big money which was invested to real estate and development business. The price of land he purchased went amazingly high, following liberalization of Chinese economy. Thus, a self-made new success story was born in China.

This story is suggestive in many ways. In the first place, it proved that education can be a good business. Of course, not all these 20000 students can study abroad, but if fortunate and capable, some 1% of the young people may have their dream come true. And some of them may be able to complete their degree after which excellent top positions are waiting. The probability is not high, but today's "investment" may mean a fortune in future. It would be impolite and inappropriate to say that education is an intellectual "gamble", but because of "effect unassertiveness", school is free from "product liability" so to speak.

The Shanghai case is extreme, but similar expectation and sentiment is shared by millions of young people and their parents throughout the world. In an affluent society like the United States, to send a child to a college means some $5,000 household expenditure per year, at least. If you have two children in colleges and universities, and if they are studying in top private institutions, the amount will easily exceed $20,000, which is more than a half of typical and average American middle class family income. In Japan, where annual tuition fee of national universities is 410,000 Yen (equivalent of U.S $4,000), that amount accounts for 10% of middle class family income. Other than tuition fee, of course, a student needs money for commuting, for the purchase of books, meals at cafeteria, and so forth. As the result, according to a survey, parental "investment" per student per year is over one million Yen(U.S.$ 10,000), which means one-quarter of annual family income.

If that investment "pays", you cannot predict. As a matter of fact, after 4 years' college life to which at least $40,000 is spent, a young university graduate will discover that his initial monthly salary is mere equivalent of U.S.$1,600. In contrast to this student, his peers who went to work immediately after graduation from high school already earned more than U.S.$120,000 in four years, and being paid almost equal salary. As mentioned before, university diploma does not mean much at the age of massification of higher education.

Against this context, one may argue that higher education today is the object of "consumption" rather than that of "investment". It may sound bold, but many people today tend to "consume" higher education just like they consume automobiles, electronic gadgets, and overseas travel. Such shift from investment to consumption is dramatic in the area of adult education and/or continuing education. Especially in a society like Japan where aging coupled with affluence and increased leisure time, it is not surprising to see 70 year's old man taking courses in French literature, or to find a hospitalized person enthusiastically working on poetry. They can be off- campus students of a universities. The question, then, is whether these people are contributing to economic growth of the society. Obviously, they do not. If you compare those people with other off-campus students who are taking computer science as a part of their on-job training, the difference will be more than obvious. In other words, along with traditional perception of higher education as an investment, we are now seeing an emerging new kind of learners who look at education as a new object of consumption. They are willing to learn spontaneously in the expectation of individual intellectual enrichment while investors in education are anticipating social and monetary "output". The consumers are noble in their spirit, but their economic contribution to the society is simply in terms of tuition fee, textbooks, and other purely academic expenditure. And this brings another problem, that is to say, their educational expenditure may not meet with the expectation and planning of economic policy. In concrete terms, a government invests, for instance, $20,000 per student from which the revenue of $5,000, tuition fee, can be deducted. Still the difference, $15,000 exist as a "deficit" on the part of the government, which essentially sees higher education as means to feed future manpower and productivity. Under this calculation, it may be wise to ask a profound question if these consumers are causing any "problem". From the viewpoint of public finance, it is apparently a waste, but officers in charge of social welfare may say that the seeming waste is compensated by providing people with intellectual satisfaction and richer spiritual life. Etiologically speaking, in the West, the term "economy" is derived from Oikos in Greek, meaning household management, and in East Asia the term came from "planning the state and relieve the people". In modern society, where balance sheet accounting, both in public and private sectors, is dominant, we tend to neglect the essential meaning of economy. And what has been described above may give us the opportunity to reconsider the relationship between education and economy as a subject of social philosophy.

4. TECHNOLOGY AND EDUCATION

In recent years, thanks to contemporary technology, we can have easy access to higher education, especially distance education. It is not necessary here to introduce each individual educational technology since the audience is a group of experts on this particular subject. Indeed, some of major papers read in this conference were focused on technological aspect of distance education and its promising future. Computer-based instruction, Compact Disk Interactive (CDI), teleconferencing utilizing satellite or ISDN, and many others are being practiced by many institutions and individuals engaged in distance higher education. As a matter of fact, at NIME in Japan, we had experimental ISDN teleconferencing with our European colleagues who are working on their DELTA project under EC few weeks ago. We are also conducting weekly regular multilateral teleconferencing with scholars in Thailand, Indonesia, Papua New Guinea, Fiji, and Hawaii to exchange information. Every year, we conduct on-job training programs through communication satellite, and last year, this program attracted more than 5,000 engineers at 400 ground stations throughout Japan. These were novelties until few years ago, but we can work with these technology on almost everyday basis.

From public administrators' view, these technologies are not cheap, because the cost for satellite transponder, antennas, and other equipments require quite huge amount of initial capital investment. Communication infrastructure is a big national project. But from users' point of view, a computer terminal is not expensive. Telephone bill is easy to cover. The price tag of CD-ROM as an interactive media is affordable. And here again are the same problems and questions. Essentially, the question is does education "pay".

My own answer is positively yes, though others may disagree. As a matter of fact, if you take pure economists' model, to put several millions of dollars for "effect unassertive business" is nonsense. But users' or consumers' viewpoint, education, in any form, is desirable and valuable, and the values thus acquired are not measured in monetary terms. The more convenient, the more effective, the better. And technology gives you better and more advanced means of learning. For instance, working with a computer terminal for information retrieval in your living room will save time, money, and energy in comparison with library work. Taking university lectures through radio and television is more convenient than attending classroom. Listening or watching taped instructive materials provide you with much advantageous opportunities to study important subjects repeatedly. CDI is a wonderful device for self study. We are living in such a great technological environment for learning.

And at this point, it would be necessary to emphasize that the education in future should be "learner oriented" rather than "teacher oriented". As far as Japan is concerned, the Ministry of Education, which used to use the term "life long education", decided to replace the wording to "life long learning", and the implication is very profound. Many people today still think that "education" and "learning" are synonymous. But that is not true. In my personal opinion, everybody, regardless of age, sex, and culture, has intellectual curiosity, or will to learn. The subject matter of these spontaneous learning impetus shows incredible variety. A group of people are interested to learn about botany, while others are eager to learn philosophy. And the mission of education is to prepare varieties of subjects of study and to assist these learners.

Metaphorically speaking, education should be a big intellectual smorgasbord where learners, or customers, are free to pick up anything, anytime they want to have, and educators are waiters who are at the service to their clients by giving advises and suggestions when asked. Traditional higher education, in contrast, has been a small restaurant where only few old fashioned cuisines were served on menu, often as "set menu", to the customers disregarding their tastes and choices. In other words, "education" must be defined as supporting mechanism for learners, not as one- sided knowledge-giving institution. If this redefinition of education is correct, then technologi cal innovation in education is more than remarkable. Indeed, what is happening around us today is technological revolution rather than innovation.And the revolution is most significant in the field of education, especially in distance education.

In fact, it would not be an exaggeration to say that distance education in contemporary stage is a product of such technological revolution. Above all, those who are engaged in distance education are benefitted by technology in terms of interactive devices. Traditionally minded people often show their skepticism about distance education, saying that teaching by distance dose not provide opportunities of face-to-face interaction both for instructors and learners. But as we know, such criticism has no basis today. As a matter of fact, distance higher education at present stage provides, often, much better and more sophisticated two-way communication between instructors and learners, and among learners than conventional university classroom.

They can communicate each other through computer network, audio-visual devices, and tele- learning, and these means of communication are more flexible than classroom instruction. For example, a question from a learner sent by Internet and other network, can be responded by the instructor in charge, and such exchange of information is time-space free. It is no wonder that our colleagues in Europe recently began to use a new terminology "Flexible and Distance Learning" abbreviated as FDL. ISDN can bring compressed picture of an instructor with clear digital voice to most of the terminals, and responding voice can reach to the ears of the instructor. Fax transmission is very easy and inexpensive. Indeed, when a system is well designed, individual teaching is possible by these electronic means of communication, and sometimes such individualized instruction cannot be expected in traditional classroom.

Though some of these technologies are still in their experimental stage, we are assured that the promised will be materialized in another decade in most of the countries, and we are looking forward to seeing the days when everybody, either formally registered student or common citizen, can have easy and inexpensive access to higher education through telecommunication.

Furthermore, as suggested before, "distance" can be expanded across national boundaries in the years to come. As a matter of fact, in Europe, AEDTU ( Association of European Distance Teaching Universities) is trying to make arrangements in such a way that students of different countries can have credit transfer and other international collaborations. In Asia, too, international cooperation among distance teaching universities has been done in terms of exchange of teaching materials, collaborative research, and joint seminars, and that is the basic reason why AAOU was established. With technological advancement, it is expected that international cooperation and collaboration in Asia and the pacific region will be more active and substantive in 21st century.

By saying so, however, it should be kept in mind that the key to the success of distance education is "social technology" which enables open universities more promising and rewarding institutions. Technologies in terms of electronics and communication devices are simply a means to achieve the goal of open universities. And it is human wisdom which makes full utilization of numerous technological possibilities. Indeed, modern distance higher education is still a new baby in the history of human intellectual history, and we must admit many shortcomings and difficulties. But we are happy to have many problems, because these problems are left as our challenge, and , for sure, our efforts can solve the problems eventually.



Kato Hidetoshi's Data Base
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