Education as a Tradable Service : Prabhat Patnaik

UNDER the General Agreement on Trade in Services (GATS), education is to become a tradable service. In August 2005, India had made a market access offer in the sphere of higher education under the GATS; this offer will become a firm commitment later this month at the Nairobi ministerial meeting, which is set to bring the Doha Round of WTO negotiations to a final conclusion, unless India withdraws from it. And if it does, then we shall find ourselves trapped in a situation where the higher education system in the country will be governed by world trade and investment rules rather than by our own national considerations.

The fact that our education system is getting commoditised, with potentially serious consequences for the future of the nation, has been much discussed. But being governed by GATS rules goes much further than just commoditisation. Education under the new arrangement will not only be a commodity, but one that is internationally freely tradable under rules laid down by the WTO. The WTO has a Trade Policy Review Mechanism (TPRM) whose job is to review ever year all the policies by national governments to see whether they conform to WTO stipulations, and to suggest changes if necessary; and member countries are then duty-bound to accept such changes. If India’s higher education sector comes under GATS, then this would mean that decisions on higher education will effectively pass out of the hands of the elected government of the country and into those of an outside agency.

GATS in other words means more than just commoditisation. It means that the commodity which the private providers would be selling is something whose shape, size and texture will no longer be determined within the nation itself. This entails of course an obvious loss of national sovereignty; but it also has a number of specific implications.


The first relates to the exclusion of the vast majority of students from the ambit of higher education. Commodities are produced for profit. If education becomes a commodity under the supervision of the WTO, then the profit-making private providers of higher education will naturally charge higher prices for what they sell; and any interference in this by the national government will be ruled out of court by the TPRM as violating trade rules, as will any attempt to impose policies of reservations for SC/ST or OBC students, or others from deprived backgrounds. At the prices charged for higher education, only those from relatively affluent backgrounds will be able to afford it; the bulk of the population will simply be excluded.

Neo-liberal spokesmen used to advance the argument that even if the fees charged were high, the poor students could still afford higher education by taking student loans. This was an absurd argument to start with. In an economy where there is massive unemployment, including of educated youth, incurring a loan to purchase education runs the risk of the borrower never being able to pay back, and this very fact acts as a deterrent against such borrowing. Additionally, even if perchance education is purchased on the basis of borrowing, then the prospects of student suicides in the event of inability to pay back open up, exactly like the spate of peasant suicides we have been having.

But now even the banking system in India, by its own admission, has stopped giving student loans because of the poor prospects of repayment. So, even this fig-leaf of “all-can-access-higher-education-through-student-loans” is now removed. The fact that commoditisation of education, and that too under the watchful eye of a supra-national body like the WTO, which is outside of the jurisdiction of the national government and hence free of the pressures that a democratic polity exercises upon such a government, will lead to wholesale exclusion, has now become incontestable.

But this is not all. Since the GATS rules, like those of the WTO, frown upon protectionism in any form, if the government of India decided on the nature of what this commodity called higher education should be like, then that is likely to be considered a form of protectionism, and hence objected to. Willy-nilly therefore, the course contents and the curricula in higher educational institutions in all countries coming under the jurisdiction of the GATS would have to be internationally standardised so that education as a commodity becomes a sphere in which any institution, domestic or foreign, can freely offer its wares. If education does become a tradable service, then it seems inevitable that what is taught in India and what is taught in the United States or elsewhere will have to be identical. GATS in short necessarily entails international standardisation because education under it becomes an internationally traded commodity.

This however puts paid to any role of education not only in “nation-building”, but also in making students genuinely aware of the roots of the predicament in which their societies find themselves. Education as an internationally standardised commodity is bound to reflect the hegemony of the dominant entity in the contemporary international scenario, namely international finance capital.

This is already clear from the example of the WTO itself. The guiding perception behind the WTO, under which education is sought to be made into an internationally tradable service, is provided by the argument that free trade is beneficial for all. This is an argument which is pushed by international finance capital even though it is palpably wrong, as anyone, with an iota of familiarity with the historical experience of the “deindustrialisation” of the Indian economy in the colonial period, knows. Under the internationally standardised course contents and curricula, therefore, “deindustrialisation” or the “drain of surplus” under colonialism, which lie at the root of the “underdevelopment” of our economy, will not even figure among the topics that an Indian student would learn; and nor for that matter the names of Dadabhai Naoroji or Romesh Chandra Dutt, or M K Gandhi or B R Ambedkar. (The latter two may perhaps just make it as names that Indian students would come across in passing).

These consequences which follow from commoditisation, it would be argued, would have occurred anyway irrespective of whether India came under GATS. But now they would be “fast-tracked” and taken out of the ambit of possible interference by national governments, and hence of possible “mischief” by them in the form of throwing sands into the wheels of commoditisation. The higher education system would thenceforth be geared entirely to the goal of providing suitably employable persons, free of any “ideas” or “thoughts” or “critical opinions” of their own, for the needs of international capital. They would not necessarily be actually employed, given the current context of the persisting world capitalist crisis when unemployment is running high. But they would all have to come from upper-caste and upper class backgrounds, even to qualify to join this army of labour, whether active or reserve, for international capital.


They would also have to have another important quality, of being self-seeking, self-absorbed individuals, totally concerned with their own interests, and without a care for anyone else in society or for society at large. This is because the commoditisation of education necessarily entails also a commoditisation of its products, ie, of those who are its recipients. The commoditisation of education under the strict supervision of the WTO, it follows, would rob it of its ethical content, its social concerns, and any authentic understanding of the social reality.

Needless to say, such products of the higher education system would also be bereft of any regard for the world of knowledge, for the grandeur of ideas, for the need to question what is given. They will be ill-suited for the project of advancing knowledge as distinct from acquiring skills. Such commoditisation therefore will be inimical even to the cause of research and the advancement of knowledge.

Whenever such concerns are voiced, the standard response of the votaries of commoditisation is: what is the alternative, given the abysmal state of higher education in India? The first point to note however is that this itself is no alternative, since it does not provide any solution to the problem of higher education in the country, but rather substitutes something else altogether for higher education. It amounts in effect to throwing the baby with the bathwater on the grounds that the bathwater is too cold for the baby’s comfort.

The second point is that the higher education system in the country can be improved, to become what it should be in a society like ours, to meet our social needs. This would require additional public resources, because any such higher education system must be primarily the responsibility of the State. But it will require more than just resources. It will require several other steps, and above all a commitment towards improving the state of higher education.

The typical neo-liberal response here points to the lack of public resources. But, ironically, the paucity of public resources is itself an outcome of the neo-liberal policies which inter alia have handed over enormous tax concessions to the corporate-financial oligarchy over the years. In fact as an article by Anand Teltumbde in the Economic and Political Weekly (December 5) points out, the tax-revenue foregone (over $100 billion) through concessions to the corporate rich in a single year, 2012-13, is more than half of what the Knowledge Commission estimated to be the total investment requirement ($190 billion) for achieving a 30 percent Gross Enrolment Ratio in higher education by the year 2020. Hence neo-liberal spokesmen complaining about the lack of public resources is like a murderer lamenting the death of his victim!

But, denuding the public exchequer of resources and then using that very fact as an argument for foreign investment, and then endorsing a commitment to GATS as a means of attracting such investment, is a carefully crafted neo-liberal strategy. Its impact on higher education would be to perpetuate the oppressive social inequality that has been a part of our historical legacy, to enfeeble our democracy by violating the most elementary requirements of equality of opportunity, to thwart the project of “nation-building”, and to institutionalise imperialist hegemony in the realm of ideas. It is important to resist any capitulation by the Indian government at Nairobi.