The False Philanthropy Of Azim Premji

Azim Premji has made news with his $2 billion endowment to education. But let us not forget that the Tata Institute of Social Sciences is "socialist"; and, that the library at the Delhi School of Economics bears the Tata name.

Azim Premji has donated his money to the Azim Premji Foundation. Further, both houses of the Karnataka legislature passed The Azim Premji University Bill earlier this year. According to this news report, this State-approved private university will begin by offering three Master's degree programmes - MA in education, MA in teacher education and MA in development studies. It is also noteworthy that the postgraduate course in "development studies" has nothing whatsoever to do with "development economics"; rather, it consists of "child and mother health, welfare, livelihood, governance and ecological sustenance issues."

There is more: "This is not meant for the elite. We will give preference to people from rural areas who will go back to work in those places," said Dileep Ranjekar, CEO, Azim Premji Foundation.

To me, it sounds like further miseducation of our misguided rural population.

Economic theory indicates that institutional, formal education is NOT required for the economic betterment of the poor. Since the division of labour in The Market Economy is based on the fragmentation of knowledge, each specialized economic actor operates within a sphere of "rational ignorance." In other words, each actor is the "master of his own trade," while remaining rationally ignorant of all others. All marketable knowledge comes in specialised fragments. Every actor has to choose just one to specialise in. He can happily ignore all the rest - and rely on others whenever the need arises for such goods or services.

Thus, a successful guitarist will hire an architect and a contractor to build his house, a skilled mechanic to repair his car - and so on.

If the concept of rational ignorance is clearly understood, it becomes obvious that 12 years of "generalised" schooling is completely useless. It is a waste of time, money and effort. Not so long ago, such an educational "system" was unthinkable. All the education that was imparted to children then comprised the essential 3Rs - i. e., reading, writing and arithmetic. After that, each child was encouraged to "find a calling" - and then go out in search for hard knowledge relevant to that calling; and this, in almost all cases, was acquired through paid apprenticeship.

You will find millions of smart, poor kids in India still following this old idea. They never attend school. Instead, they shift to a city or town and apprentice themselves to a mechanic, or a dhaba-owner, or a chai-shop, or a tailor, or whatever.

Once, on a holiday in Kasauli, near Simla, I encountered a little boy named Tinku single-handedly running an establishment called the Jain Tea Stall on the Mall. I regularly gave him custom - chai and samosas - and we became quite pally. One day, I asked him for his story - and he told me that he had come to Kasauli from Delhi, where his parents lived. He hated school and told his father of his ambition to run a tea-stall. His father, a good and wise man, took him to his friend in Kasauli, the Mr. Jain of the Jain Tea Stall. And that is how Tinku's real "education" began.

Chacha Manmohan's "Right to Free and Compulsory Education" will spell doom for millions of smart kids like Tinku - and probably jail their loving fathers as well.

Azim Premji should stick to business. If he invested his $2 billion in enterprise, he would produce useful products, serve customers and create jobs. He would also generate further profits to invest in more businesses.

I once watched a John Stossel documentary in which a philosopher compared Mother Teresa to Michael Milken - concluding that Milken with his "junk bonds," which had financed many companies and created many jobs, had done more for humanity than the Missionaries of Charity ever could. Indeed, poverty remains stark in Calcutta - and the only cure is private investments in businesses.

The expression "false philanthropy" was first used by Frederic Bastiat in his essay The Law (1844). Here, he says that the schemes of the socialists of his time consisted of nothing but false philanthropy - accompanied by "legal plunder." Legal plunder is inevitable under socialism, because they disregard the individual's right to his own Property. Bastiat made the water-tight case for Liberty and Property.

Chacha Manmohan's "education" - and, indeed, all his "welfare schemes" - are nothing but false philanthropy.

Even genuine charitable "social work" like that of Mother Teresa achieves nothing in terms of actual reduction of poverty as compared with private investments in businesses.

If businessmen stick to building businesses, that will be for the best.

PS: I am grateful to Stephen Mauzy who, in his excellent article titled "What's so Great about Representative Government," has included a footnote that provides a link to clinching evidence that "Bill Gates is a statist buffoon when it comes to philanthropy."