The age of profound ignorance

The age of profound ignorance

We find ourselves in the midst of a huge transition, from the analogue world of today to the digital world of the future.

The institutions that worked in the past are losing their relevance in an accelerating and rapidly changing world economy. This change is more radical than that during the transition from a primarily agricultural to an industrial economy.

The future is not what it used to be. As we humans become more powerful in controlling our present, the future becomes less predictable. The boundaries of our ignorance and the range of uncertainties expand beyond human cognition. Our “unknowledge" of the future is unbounded.

It took thousands of years to go from the invention of the wheel to powered flight; it took only an additional 65 years for humans to walk on the moon. Just 50 years ago, IBM’s 5MB disc drive was state of the art. It cost (in today’s dollars) approximately $250,000 and was as big as a fridge. Today 5GB—a thousandfold more storage—costs a dollar. Each year, more information is created than was created in the entire history of humanity.

Technological advancement can no longer be plotted on linear graphs; they require logarithmic scales. This implies that no individual is capable of comprehending the entire technology, leave alone controlling it in any meaningful sense. Nobody knows how to build, say, a modern commercial jetliner. One may know a bit about avionics, another may know a bit about jet turbines, and yet another about advanced composite materials, and so on. But no one knows it all.

Human ignorance manifests itself in three other dimensions in the production of goods and services. First, no one knows what the future goods and services will be. Second, no one knows who will produce those. And finally, what their impact on human society will be is a mystery. Take the Internet. Could anyone have predicted any of the services we take for granted today even 25 years ago? Could anyone have picked the winners? Young people are doing jobs today that did not exist when they were born.

How do we prepare to meet an unknowable and uncertain future? Not surprisingly, the answer must lie in the same forces that actually create the future. Every advancement in human technology—which is essentially embodied knowledge—is the result of entrepreneurial activity. The innate drive to build ever higher upon the existing base of knowledge finds its full expression in economically free societies. Economic freedom and the freedom to organize lie at the core of humanity’s remarkable successes.

It was possible in the static past to organize society under dictatorial authority. The feudal lords, and later kings and emperors managed to control relatively primitive society to some extent.

But progress imposed enormous informational demands which no central authority could even theoretically possess. Communism’s fall is evidence that even a slightly complex economy cannot be controlled because even if one has the power of coercion, no one has the knowledge to do so. Free enterprise created the complex modern world of today and free enterprise alone will not only continue to shape the future, but will also provide us the means to meet that future.

To prosper—indeed merely to survive—in the future would require skills that we cannot fully imagine. Certainly, a small percentage of the people will continue to be engaged in occupations that have existed for generations, but the majority, especially in advanced economies, will be in jobs that require high degrees of specialization and years of training. Those who are entering the educational system today will retire around 2070. That world is as hard for us to imagine as our world would have been for a caveman. This imposes some very special requirements on the educational system.

The current educational system is geared to a world of the past, a world where command and control was still not entirely impossible. In India, that system served the needs of a very small segment of society and achieved only a very qualified success. It is impossible that the present system can ever meet future needs and for the population at large. Innovation in India’s educational system is absolutely essential. Continued state control will condemn not only the educational system to irrelevance, but the entire economy as well.

So, how do we get an educational system that works for the present and the future? Private enterprise and innovation are conjoined twins, sharing the cardiovascular system of economic freedom.

Entrepreneurship creates immense wealth that permeates healthy economies. Entrepreneurship alone has the capacity to create innovations in education that no bureaucrat or centralized planning authority can ever hope to achieve. Yes, central control can control, but it cannot create.

In an age where each of us is immensely ignorant relative to the sum total of human knowledge, the skills that the individual acquires over a lifetime of learning cannot be imparted by an educational system that was created for a different world. The resources for building that educational system are already there. All that society has to do is keep the state out of it so that private enterprise can do its job—which it invariably does. The role of the state is limited to light-handed regulation.

Liberalization of the educational system from the political-bureaucratic nexus is absolutely necessary. Without economic freedom, we cannot expect the entrepreneurial innovation required to make the educational system in step with the dramatic changes that the future has in store. It would be profoundly ignorant to not liberalize education.

Atanu Dey is chief economist at Netcore Solutions in Mumbai and author of the Rural Infrastructure Services Commons (RISC) model. Comments are welcome at