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The Free SHS: The Devil Is In The Details
From: Kwaku Adu-Gyamfi (Voice of Reason)          Published On: December 13, 2012, 22:46 GMT
 
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   The Free SHS: The Devil Is In The Details
Will the scarcity and allocation of our limited resources make the Free-SHS proposition possible in this day and age?

When politicians say they want to bring tuition- free SHS education to the masses without comparable increase in taxes, they’re only using political calculations, without any economic principles because everything has a cost or price.

One reason for the popularity of ‘free- education’ is the confusion between “prices” and “costs” of SHS education in particular and all levels of education and other social amenities in general. For example, when politicians say they will give “free- SHS education”, they almost invariably mean that they will eliminate the costs of SHS education.

That also implies that the actual costs of SHS education---resources and the years used in training teachers, the resources used in buildings and equipping the schools, the resources used to develop textbooks, etc—are all likely going to be eliminated or controlled. But, these things are not likely going to be addressed by politicians at all. They don’t want to be bothered with any economic principles which will likely put a big hole in their proposition.

What they mean by “free-SHS education” is reducing just the price of SHS education, but the cost of SHS education is not affected at all. I’ll explain it to you in a minute so just stay with me a little longer.

Once the distinction between Prices and Costs is recognized, then it’s not very surprising that “price control “or elimination of price of SHS education has the negative consequence because price ceiling or elimination means a refusal to pay the costs of SHS education.And, those who supply learning equipment, food, or innumerable other goods and services for the SHS education system are unlikely going to keep supplying them in the same quantities and qualities require.

This may not become apparent immediately, which is why the elimination of the price for SHS education or providing a Free- SHS education is going to be popular, but the consequences are going to be lasting and will become worse over time. The SH schools’ buildings and equipment will not disappear immediately, when tuition free is introduced, but they will deteriorate over time without being replaced by sufficient new buildings as they wear out. People who want free-tuition education seem not to understand that what they are really asking for is for the prices of SHS education to misstate the relative scarcities of things and limited resources the government has and the values that we as citizens put on them.

From the standpoint of the allocation of resources (capital, land, labor, etc) the government cannot give free SHS education without trade-offs and substitutions. It’s easier to understand that the real meaning of costs of SHS is the foregone opportunities to use the same resources elsewhere. Because an economy deals with scarce resources which have alternative uses.Every benefit has a cost in the alternative uses that could have been made of the same resources that created a particular benefit. In other words, the money needed to fix our pot-holes ridden roads and hemorrhage hospitals is going to be used to provide free SHS education so we may have to make a choice.

From political standpoint, however, politicians win votes by proposing special initiatives and incentives to please special interest groups or doing something for whomever or whatever might be popular at the moment. But, all this takes time to unfold and memories may be short for most people to connect the bad consequences they see to the popular polices they supported some years back.

Free-SHS will survive in the short run, but there won’t be enough colleges and businesses to absorb the rapid SHS graduates the system will produce. The money and other resources needed to build new universities won’t be there anymore. There will be no money to build new hospitals or provide other social amenities because of scarcity and allocation of resources.

From economic standpoint, producing unmarketable SHS graduates can create huge problems for Ghana when large number of young people with SHS schooling but without economically meaningful skills or jobs will increase the “educated” unemployment rate astronomically. Since the marketplace has little to offer such people that would be commensurate with their expectations, the government has to create swollen bureaucracies to hire them, in order to neutralize the potential for political disaffection, civil unrest or insurrection.

Inturn, these bureaucracies and the voluminous and time-consuming red-tapes they generate can become obstacles to others who have the skills and entrepreneurship needed to contribute to the nation’s economic advancement.Do you has any experience with the bureaucracies at the Register General or Tema Harbor? I rest my case!

This is why this free-SHS education mambo –jumbo should be handled judiciously because the oil money won’t be enough to go around fixing all our needs and soaring expectations.

No, I’m not anti-free SHS education; I’m anti-unrealistic expectations and decisions only made out of political calculations, without the application of economic principles.

I know I have ruffled some feathers by punching holes in such a national darling proposition, but I just want to bring all the facts out so as to generate a healthy debate about the issue so that Ghanaians won’t get disappointed. We must be careful what we pray for.
Kwaku Adu-Gyamfi



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