Moalims

Regulate this market

Even the earliest proponents of the free market – right from the Adam Smith days – advocated active government oversight to prevent the market from going too far. The invisible hand of the market, in other words, was to be allowed to run loose only so long as a very visible mechanism could watch out for excesses. But it is little surprise that such safeguards were only employed after mega crashes like the Great Depression of a hundred years ago (almost) and the more recent credit squeeze that dried markets on both sides of the Atlantic. In saner times, though, the market readily allows monopolistic behaviour and cartel formation, at the macro and micro level.

That, precisely, is what the debate about expensive education is about. On the face of it, private enterprises – be they schools, hospitals or animal farms – are within their legal right to demand whatever price they deem fair for their services. That is why the essential narrative about oversight has been lost to the dustbin of history. But societies have learnt from frequent breakdowns caused by cartel-like behaviour to amend pertinent rules and regulations. And that is why governments tend to intervene in case of grave excesses.

The government here has rightly tried to decide on the matter of excessive school fees. And while most institutions have come round to accepting the logic behind the protests – and subsequent official action – some of the bigger institutions have apparently decided to fight off the official intervention. Some of the biggest brands have simply asked clients to either agree to frequent fee increases or take their children elsewhere. It is now for the government to employ a fitting response. True, there are limits to official jurisdiction in the private sector. But certain rules need to be set for society to function smoothly. And this matter seems to deserve serious official attention.