The first time we met, Yazad asked me how I became a capitalist. I could give no clear answer, because I couldn’t recollect any single event that turned me to capitalism.

Now I can give him one. This is how.

The linked article is an NDTV expose of private engineering and medical colleges. They’ve caught principals of these colleges on camera auctioning off the “management seats”, which amount to 15% of seats (which the management has the discretion to allot, subject of course, to the provision that no capitation fees are charged, and other guidelines that the government may issue from time to time)

A decade back such an expose would have given me the fond hope that something would be done about it. I’ve realised now that this “something” would amount to more stringent guidelines and some more jobs for bureaucrats.

A decade back I would have amused myself trying to devise a perfect system that an engineer would have been proud of – a set of checks-and-balances which would ensure that the system would correct itself.

But then I entered IIT Bombay and there I saw the strangest thing. The institute gave its own degree. Its professors were free to set their own syllabus. They graded as they wished, with no oversight from anyone.

And it worked!

It worked because my alma mater was concerned about its reputation in the market (which in this case, happened to be the international market). Of course, it recruited good professors, admitted good students and was paid huge amounts in government grants. But somehow the system held together without falling prey to the wolves of corruption.

So I had this idea. Why don’t we let every college admit whoever it liked, set its own syllabus and charge whatever fees it wishes, provided the college issued its own degree? Why should the college hide its own uselessness behind its university affiliation? Let the degree compete in the job-market or the higher-education market.

When the college finds that its students aren’t doing well, perhaps it would think of actually teaching something useful. It would also start wondering how to attract good students to its rolls, and if it finds that fees are the problem, it would start arranging for loans and scholarships. It would also plough back the fees it charged into more facilities for its students rather channel the usurious capitation fees into the pockets of its promoters.

Colleges would no longer be money-spinning enterprises run by politicians with access to the required permissions, but would turn into places where you actually learnt something.

It wasn’t the first step or the last, but the realisation that a simpler, but imperfect system could produce better results than a perfect, but over-engineered one was a crucial step in my conversion.

The irony of finding the virtues of the free market in a government run institute and the vices of socialism in private colleges hasn’t escaped me.

This is not meant to be my current master plan to transform India’s education system. I just wanted to describe the insight I got.