CERC's Electronic Book

Doing Comparative Education: Three Decades of Collaboration


Part IV: Communist Education

Soviet Education's Unsolved Problems
Communist Schooling
Education, Employment, and Development in Communist Societies
The Economics of Education
Financing Elementary and Secondary Schools in the Soviet Union
The 'Unproductives' Labor of Soviet Teachers
China's Vocational and Technicial Training

 
Source: Harold J. Noah, "The Economics of Education," Problems of Communism, XVI (July-August, 1967) pp. 42-52.


THE ECONOMICS OF EDUCATION


People have been so accustomed to regarding education as a cultural enterprise, concerned with inculcating in youngsters the great values of Truth, Beauty, and Goodness, that the niggling questions of the economist ("What does it cost?" "What does it return?" "Is it distributed efficiently?" "Is it correctly priced?" "Is it being overproduced?" "Is it being underproduced?") smack of sacrilege, suggesting the laying of technocratic hands upon eternal cultural sanctities. When only a favored minority went through formal education, there was perhaps some justification for this unwillingness to examine the supply of and demand for education in the light of economics. The quantity of resources devoted to education was relatively small, and the entire scholastic exercise could be justifiably regarded as related more to the consumption than to the production aspects of the economy. However, the modern economy can no longer support this approach, for the processes of education absorb large and increasing fractions of the Gross National Product. Indeed, in the modern economy education takes on the aspect of a major investment industry, the product of which, in the current jargon, is "human capital."

In the Soviet Union, as in other societies, recognition of these economic facts has come slowly. While education in the USSR has been the object of an enormous amount of study both within and outside the Communist camp, to date investigation into the economics of the Soviet educational system has been limited. It is with this subject that the present paper will deal, concentrating discussion on three topics: (1) Soviet attitudes toward and applications of the relatively new "economic" approaches to education; (2) characteristic structural features of the Soviet educational system that cry out for treatment using the economist's box of concepts; and (3) a number of specific problems that have long troubled educational planners in the Soviet Union and that show no sign of quick solution.

Concepts and Courses

As it has developed to date, the economics of education comprises three major branches. The first, and oldest, is most conveniently described by the German term, "Betriebswirtschaft" -- that is, economics of the enterprise. For our present purposes, the "enterprise" is the school, or school district, and the questions asked by the economist are those concerned with financing, techniques of production (teaching), efficiency, techniques of cost-and-quality control, and the smooth integration of various parts of the educational enterprise. Soviet economists have shown a keen interest in one aspect of this branch of the economics of education. There is a voluminous literature in Russian on matters of budgeting, costing, and administering education.1 But for the most part such study displays a slavish concern simply to explain official regulations, abjuring any theoretical discussion or critical approach. There is virtually no recognition of the problem of providing education efficiently, except in crude terms of how to keep expenditures per unit (per pupil, or per class) below the norms set by the central authorities. Discussion is almost totally absent concerning the desirability of substituting relatively cheap inputs for relatively dear inputs in the schools, or about ways of doing this, or about the limits to which substitution should be carried.

The second branch of the economics of education is concerned with attempts to relate the output of the educational system to the needs of the economy for educated labor. Of course, this too is an old concern of governments. Peter I established many schools of navigation, mathematics, and the industrial arts in order to lessen Russia's dependence on expatriate skilled manpower, although his educational and training innovations were hardly comprehensive in scope. When this is done on a broad scale, covering most of the manpower needs of an economy, we can talk about an "education and manpower plan." The Soviet regime inherited from the Tsars a population which had been making rapid strides in educational attainment, especially in the cities.2 Ideology and economic interest both pointed in the same direction -- toward an ambitious program of eliminating illiteracy and building an educated proletariat and peasantry from one end of the Soviet Union to the other. With the advent of the "planning era" in 1927, the first conscious attempts in history were made to relate the output of school graduates to the labor needs of developing industry on a comprehensive scale. The Soviet planners estimated not only in terms of raw material and intermediate product "balances," but also in terms of "labor balances." It was all done pretty crudely -- for that matter, it still is done pretty crudely -- but it was a beginning.

These first two branches of the economics of education are intensely practical in nature. They have direct applications to the enterprises which constitute the schools, and the value of studying them is immediately apparent to working administrators. The third branch of the subject presents a different aspect. It arises out of the attempt to estimate the importance of the educational factor in explaining such empirically observed phenomena as differences in pay and earnings, differences in unemployment rates, patterns of migration, demographic variations, occupational choice, economic growth, and so forth. The last ten years have seen an impressive growth in this branch of the economics of education in the West. If we designate the first two branches as the "engineering" aspects of the economics of education, this third branch is the "science" of the subject. It seeks causal explanations of observed phenomena, and is only indirectly concerned with practical applications and the making of educational policy.

In Russia development of this aspect of the economics of education has been hesitant and incomplete. It began early, in 1896, with the publication of a collection of articles which investigated the relationship between literacy and factory workers' earnings and between education and promotion to higher skill-grades, the ability to master new skills, and so forth.3 The authors of this collection showed that they were not only acquainted with the preliminary work in the field that had been undertaken in the United States, England, France and Germany, but that they were quite able to carry these studies further in the context of burgeoning Russian industrialization. After 1896 there occurred a 20-year hiatus in such work. Then in 1924, S. G. Strumilin published his famous article, "The Economic Significance of National Education," in Planovoe khoziaistvo.4 The opening paragraph skillfully combined the practical and theoretical implications of the research he reported:

The work launched by the State Planning Commission on a ten-year plan for expanding the network of schools of the National Commissariat for Education, with a general view to reconstructing our national economy and with the parti- cular aim of satisfying the needs of the country by improving the degree of skill of the labor force, has again presented us, though in a different guise, with the problem of the more important factors in the degree of skill of labor.
Strumilin then went on to report the results of empirical investigation into the relative importance of age, length-of-work experience, formal education, and on-the-job training for the skill-level of a group of Leningrad workers in the metal trades, and to estimate the returns which the country as a whole might expect from investment in universal primary and secondary education. The calculations of returns made no provision for discounting the value of future returns back to the date when the costs were to be incurred, nor did Strumilin make allowance for the probable intercorrelations between additional education and greater intelligence, better health, and parental and class factors -- all of which must give an upward bias to his calculated figures of returns to education. But the article stands as a signal contribution to the development of the economics of education: it stood virtually alone in Soviet economic literature until the contributions of V. E. Komarov in 1959,5 and it was paralleled nowhere in the West until T. W. Schultz's contributions in the late 1950's and early 1960's.6 The intervening 30-35 years witnessed a gigantic expansion of Soviet education,7 but as far as the published record goes, this was accomplished without the benefit of economic analysis of the alternative routes which expansion could have taken and of the set of routes actually followed.

As the economic problems of providing education multiplied and as the demands made by the planners upon the educational system increased, interest in the economic analysis of education finally revived in the Soviet Union. This coincided with an increased political acceptance of empirical studies of social phenomena (witness the recent mushrooming of empirical sociological research) and led in 1964 to the establishment of a "laboratory" at the Lenin Pedagogical Institute in Moscow devoted to the "socioeconomic problems of education" and dedicated to pushing forward with empirical study.8 A couple of conferences have been held, and a book containing papers read at the first conference has been published under the general editorship of V. A. Zhamin,9 an economist who also happens to be Rector of the Institute. One can safely forecast that the laboratory will have much work to do, for despite Soviet insistence on planning both educational and economic development, the study of the economics of education has been as neglected in the Soviet Union as it was until quite recently in the West. At last, however, the need for study seems recognized. After all, the Soviet Union is not a country with resources to squander, and in trying so hard to reach and overtake the advanced countries of the West, the planners have created a host of competing demands upon its wealth. Education secures a formidable slice of these scarce resources,10 and is therefore expected to make the best use of what it is given and to help as much as it can in solving some of the pressing economic problems of Soviet society.

The Structure of Education: Assets and Liabilities

Turning from these general remarks to some of the characteristic structural features of Soviet education, let us try to determine where economic analysis might be applied with profit.

In the educational system of the United States the unit of control is usually quite close to the unit of production. Thus, there are thousands of relatively independent local school boards, each running one or two schools and each with its own taxing powers, salary schedules, and administrative rules. (There are exceptions -- for example, the huge New York City school network and the state-administered system of schools in Delaware -- but these are not typical.) In higher education, too, there is not one system but a multiplicity of systems, each composed of a single institution or a very limited number of separate institutions.

By contrast, the outstanding administrative and economic characteristic of the Soviet educational system is the degree of central control over the more than 220,000 producing units that make up the system, enrolling in all about 53 million students.11Although there is formal decentralization of control from Moscow to the Union-Republic ministries of national education and of secondary specialized and higher education, in practice the republic-level ministries are little more than executive arms of the central ministries and exercise only minor policy-making powers. Again, although financing of the schools is formally arranged through Union Republic channels, in all matters of budget and finance federal prescription and control is predominant.

Now this bears directly on one of the most critical areas of the economics of education: the problems occasioned by the external capture of returns to education. In the United States, with its myriad of small school administrations, any particular school board knows that a large fraction of the returns to the schooling it provides will be captured in the future by other areas. The children at present in the schools will move out of the district during their adult lives, and those other areas will become the beneficiaries of their schooling. Some school boards can hope that what they lose on the swings of outmigration they will gain (or more than gain) on the roundabouts of inmigration, but there can be no guarantee that this will be so. There is thus a considerable incentive for an area which believes it will be a net loser on account of migration to reduce its commitment to education, and to follow the precept that returns which it will not capture will not be considered when fixing the size of the investment to be made. Although each area of the country has a tangible interest in the level of educational provision of all other areas, to date only the most rudimentary apparatus has been devised for expressing that interest in the form of incentive grants, federally-impacted area grants, equalization payments, and so forth.

In principle, one of the great economic advantages of any centrally administered and financed system of education, such as the Soviet system, is that it can deal with the problem of externally-captured returns. It can take the long view and the broad view. Although young people in the rural areas of the Soviet Union display as intense a desire to move to the towns as do young people in the West, no rural oblast or raion education authority has a fiscal incentive to cut back on its provision of schooling. All returns can be regarded, and it seems are regarded, as going into one big collective pot. In consequence, no single authority need think in terms of equating costs and returns on its own separate investment. Indeed, this writer's research seems to indicate that the Soviets have succeeded in reducing the differences in elementary and secondary education from one republic to another (as measured by expenditure ratios) far below the level of the differences between states in the United States 12 -- which is no mean achievement, if one recalls the gross differences between levels of school provision in the various provinces of the Tsarist Empire.

Centralized control of the Soviet educational system goes far beyond the regulation of enrollment totals at all levels and the standardization of admissions, curricula, textbooks, graduation examinations, and teaching qualifications and conditions of service. It extends from these types of "physical" planning controls to some interesting aspects of pricing. All-Union legislation sets forth uniform salary schedules according to which all school teachers and university instructors in the Soviet Union are paid. There are the usual provisions for increments, for additional years of training and pedagogical service, but these provisions do not meet the common problem which has to be faced by any wage system based upon a relatively small number of arbitrary wage-differentials -- the problem of ensuring not merely equilibrium of supplyand-demand in the aggregate, over the entire market, but also in each separate section of the market. The Soviet Union has an extraordinary number of somewhat unpleasant (or at least unpopular) and remote places in which teachers are needed but to which they are normally reluctant to go. To meet this problem, teachers (like all other workers in the Soviet Union) who elect to work in the less favored areas are eligible for nadbavki (supplements), which are calculated as percentage additions to their total pay. These supplements can go as high as 100 percent for work in the Far North and on the Sakhalin Islands. But even these incentives can prove inadequate, so that one device has been retained long after its general abandonment in the labor market: that of assigning newly-minted graduates, for periods of two to three years, to jobs which they would not voluntarily undertake.

Pricing policy for teachers' labor affects not only the total supply of labor offered in teaching and the geographical distribution of that supply, but also its sex composition and "quality" distribution. Soviet teachers are heaped with honors and praised in the mass media. They serve in the Soviets of Deputies at all levels of government, and represent their country abroad. But they are paid very poorly. Average earnings in school teaching do not exceed average industrial earnings. 13This has its inevitable effect on recruitment into the profession, which is overwhelmingly female and heavily weighted towards the humanities. Science and mathematics teachers, who have good opportunities for better-paid work outside the schools, are exceptionally scarce. Uniform salary schedules for all Soviet teachers produce the usual result associated with rigid, administered wage systems: while it is not too difficult to ensure equilibrium between supply and demand in the aggregate, it is very difficult to achieve a balance within the important submarkets of the teaching profession.

In higher education, by contrast, even though there are similar all-Union regulations governing rates of pay and hours of work, earnings are much more flexible. The university teacher has available a potentially wider array of sources of supplemental income: royalty income from writing (especially textbook writing), consultation work, extra teaching and, most important of all, the "personal supplements" which can be paid to him quite unrelated to his formal income from employment and which may double, treble, or quadruple his official base pay. In consequence, most of higher education seems to suffer from few of the labor supply problems of the schools. Not only does the instructor in a VUZ (higher educational institute) receive his full measure of praise in the contemporary Soviet social hagiography, but the economic value of his services is recognized in cash to a highly satisfactory degree. Or at least this is so in all those branches of higher education that enjoy high planning priority -- the natural sciences, mathematics, engineering, and the medical schools. Teachers in pedagogical VUZs and those concerned with training language specialists, economists, lawyers, and social scientists are much less generously treated.

Centralized regulation of rewards for the labor inputs of teachers into the educational system is paralleled by similar controls over the "price" of student labor inputs. Over 80 percent of all students enrolled in secondary specialized and higher education are supported by public grants.14Most of the remainder are on paid study-leave from enterprises or farms. Very, very few students are supported at VUZs entirely by their parents' contributions. Thus, in the Soviet Union a student's further education beyond secondary school takes on the aspect of a job (albeit an exceptionally ill-paid one) in the service of the state. Now, although teachers of different subjects do not, in principle, receive different rates of pay, students of different subjects do. Students planning to enter the high priority areas of the economy receive more favorable treatment than those who wish to spend their lives in archaeology, linguistics, or school teaching, for example. And not only are stipends higher, there are more places available in the natural sciences, mathematics, and engineering departments.

Moreover, students and their families make the decision about what line of training to enter not just on the basis of the level of current student stipends ("pay for study"), but also by reference to future awards ("pay for work"). The still considerable degree of centralized control over wages and income gives the Soviet planners a means to make their preferences felt directly in the labor market -- and indirectly in all post-elementary education, through the influence exerted on the student's choice of career field.

In the Soviet education system, therefore, not only is the supply of schooling in all its separate parts "administered," but the shape and structure of the demand for education is controlled to an awesome degree. Nevertheless, recent concern expressed about the shortage of students for pedagogical training, and the massive imbalance that has developed between the number of graduates from higher education and those from secondary specialized institutions (on which more later), are evidence that the manipulation of supply and demand does not always operate smoothly, even when most of the levers for regulating the system are in the planners' hands.

Soviet education planners have certainly not yet adopted linear programming techniques, and give no sign of even preparing to do so, though they are clearly in a unique position to make the experiment. Once one agrees to examine education as if it were an industry, interesting constructs analogous to production coefficients in industry appear. Pupil/teacher ratios, pupil/classroom-space ratios, pupil/equipment and textbook ratios all present themselves as the required production coefficients for deriving solutions to problems aimed at optimizing the allocation of resources under given constraints. Although there is even less likelihood in the Soviet Union than in the West that prices of inputs will reflect relative factor-scarcities at the margin, techniques of shadow-pricing are available to deal with that problem. Now, one of the brute facts about the production of schooling is that the most important input into the process, the children, is normally very immobile. Thus, even if we know that it would be immeasurably more efficient to close down all the village and small-town schools and collect the children together for concentrated education in a well-staffed, magnificently equipped central "educational plaza," this solution is excluded for other reasons. Education, like retailing, tends to be dominated by small-scale units located more or less where the customers are. In a vast territory such as the Soviet Union, which embraces a multitude of cultures and languages, and which ranges from densely populated urban areas to great stretches of empty wasteland, it is quite clear that not only will the optimum pattern of distribution of educational resources differ from locality to locality, but even the target variables (what one is trying to maximize or minimize) will almost certainly differ.

A quick example must suffice. One of the most important inputs into the educational process is the energy, interest, and eagerness of the students -- all those intangible but vital factors we include under the term "motivation." Levels of motivation are linked to culture patterns, which differ markedly even in small homogeneous countries, to say nothing of vast nations with heterogeneous populations. A systematic planning approach to education would want to take these differences into account, by feeding into the decision-model data describing the different quantities of other inputs (teacher time, equipment, school time, homework time, etc.) that have to be combined with different groups of pupils in order to achieve a given level of educational output. It is fair to say that not only is no approach being made to this mode of decision-making in Soviet education, but that the very existence of the problem is not even recognized. Instead, one uniform set of regulations governing the principal "production coefficients" in education is applied across the entire country. Lip service alone is paid to "local differences." This is most evident in matters of curriculum. Each year since 1931, a single curriculum has been enforced for all schools of general education, whether they serve town children or rural children, Russians or Kirghiz, young workers or old, and day students or correspondence students (apart from some relatively minor variations to take care of language problems).

It is inevitable that variations in students' ages, aptitudes, and abilities as well as differences in their vocational and personal goals make such a straightjacket curriculum highly wasteful of effort and resources. But the very term "individual differences" has been highly suspect in the Soviet Union. Orthodox opinion has held that all children have within them what it takes to succeed through secondary school: failure is attributed to environmental factors (neglectful parents, poor teachers, unhelpful classmates, or temporary and remediable personal failure to meet specific stresses during the process of growing up). Systematic testing of children and especially intelligence and aptitude tests are dismissed as bourgeois frauds, inventions designed to lend an appearance of science to a cynical policy of denying working-class children equal educational opportunities by labeling them "less intelligent."

It is highly interesting that during the last two years there have appeared the first small hints that Soviet educational planners are prepared to accept the idea that individual differences exist and should be provided for. A vast curriculum reform is currently being worked out for every level of Soviet general education, and for the first time in 36 years there will be electives, beginning at present in the upper grades, but possibly extending halfway down the general-education schools in later developments. If this should lead to the development of significant regional variations of curriculum, it will mean a long step forward toward a more efficient use of resources.

In this section on characteristic features of Soviet education, one last point should be touched upon briefly -- the treatment of education in Soviet national income accounting.15 Soviet national income accounts distinguish between the "productive" and the "unproductive" spheres of economic activity. Broadly defined, "productive" activity is one which is directly concerned with the output of material goods. Therefore, most services (freight transport and business communications are the usual exceptions) are deemed "unproductive." In Marxist terminology, they do not create a fund of value out of which they are paid, but instead they are remunerated out of the value created in the "productive" sector. The entire education industry in the Soviet Union is thus allocated to the "unproductive" sphere. The interesting point is that in an advanced society where labor power is itself a produced means of production, and where education plays a vital role in preparing people for productive work, a correct interpretation of Marx's own writings on this subject would lead to the inclusion of the value of most education (certainly all secondary-specialized, vocational, and higher education) in the total of produced wealth. As early as 1925 Strumilin offered cogent arguments for treating teaching services as a productive activity,16 yet there is no evidence to suggest that his ·views have had any influence whatsoever on Soviet · national income accounting.

Some Economic Dilemmas

Let me now turn to three specific problems that have long plagued Soviet educational development and that hold special interest for the economist studying the Soviet system. ù The first problem concerns the correct allocation of resources to education and within education. It is not irrational for a community to decide that there is a given minimum of education which all citizens will receive, irrespective of the narrowly financial returns to be expected. Thus, the achievement of seven or eight years of compulsory, free and universal education has been a Soviet social goal now mostly attained. However, there comes a point when flat assertions of universal rights must give way to a more prosaic calculation of costs and benefits. As far as the total allocation of resources to education is concerned, there is every indication that while huge strides have been made, it would have been worthwhile to devote more resources to the schools -- even if it meant smaller allocations to the development of physical capital.17 The best evidence of this is the amount of costly capital equipment lying idle, underutilized, or even damaged for want of cadres with appropriate skills. There is no indication that Soviet planners are doing the kind of calculations required to determine what is the optimum allocation of resources between education, other forms of human capital investment, and physical capital investment. Instead they work, as do planners in all other countries, by rule-of-thumb and in response to a congeries of inchoate political, social, and economic pressures -- and in the Soviet case, without the benefit of a system which, however imperfect, allows those with resources to invest to choose their individual goals for investment, thereby creating a capital market in which resources are allocated in relation to some criteria of profitability.

The situation is equally unsatisfactory when it comes to the allocation of resources within the educational system, especially in the case of postcompulsory education. There has been a vast overproduction of specialists trained in the VUZs relative to the numbers trained as semi-professionals in tekhnikums.18 The Soviet aim has been to match each professional worker trained through higher education with an average of three semi-professionals. This target has never been met; indeed, current enrollment and graduation trends are taking the Soviet labor force farther and farther away from the desired 3:1 ratio. Moreover, there is no evidence that either the overall target ratio or the specific ratios established for different industries are the result of calculations of relative costs of training and returns from employment. The consequence is that while Russia has startled the world with sputnik triumphs, shown significant achievements in a few branches of basic science, and undertaken monumental projects in civil engineering, the quality of output in many vital sectors of the economy is still exceedingly low. Best Soviet theory is too often startlingly different from average Soviet practice, which gives rise to the suspicion that the "head" of Soviet education may be too large and its "abdomen" too small.

A second problem of interest concerns the incorporation of economic considerations into plans for pedagogical reform. One of the prime motivations for school reform in every industrialized nation is itself economic: the shortage of teachers. The labor supply in education has become relatively more and more expensive. As labor productivity in other sectors of the economy increases, while the technology of the classroom remains unchanged, the cost (in terms of alternatives forgone) of keeping a teacher in front of a class of children, rather than employed elsewhere in the economy, rises inexorably. Movements in the relative wage rates of teachers and industrial workers tend to reflect these differences in rates of productivity growth. The result in the Soviet Union (and elsewhere) is that primary and secondary schools are now facing a phenomenon long familiar in the West -- a shortage of teachers. Throughout the 1950's, while the reduced age cohorts born during 1935-1945 were working their way through the schools, the problem of a teacher shortage was masked. Now it is these smaller age cohorts themselves that must begin to bear the burden of staffing the classrooms, when a greatly increased number of children are enrolled. Presumably one rational way to deal with the problem is to try to introduce pedagogical techniques which are relatively more capital intensive (for example, mechanical and electronic teaching machines, programmed learning systems, and television teaching). Soviet education experts are pursuing such possibilities vigorously, though no estimates have been published of the prodigious amounts of capital that effective action along these lines would require in the short or long run.

The history of Soviet education has been characterized by only one really radical change in direction. In 1931, the progressive, relatively unstructured educational methods of the 1920's were officially abandoned, and the schools were clamped into the rigid, highly codified system which has lasted to this day. But within this second period some experimentation has taken place, mostly on a small scale, although in one or two instances reforms have been major. Thus, in 1958, Chairman Khrushchev announced that Soviet education was to be rebased on the polytechnical ideal, and after a half-year of vigorous debate in the professional and general press, the school reform law of December 1958 was passed. Apart from the extension of the length of general secondary education from ten to eleven years, the most spectacular feature of the reform was the requirement that all pupils in the three senior grades of secondary school were to be occupied for one-third of their school time (two days a week out of six) working in factories or on farms. Pupils were required to master two different production trades during the three-year period, and without these qualifications they could not expect to receive their attestat zrelosti (high school diploma). At the same time, it was emphasized that most young people of 15-16 years of age would in any event be expected to stop full-time schooling after Grade 8, and to complete their secondary schooling on a part-time basis.

While in the Soviet Union there was only one (official) explanation given for this upheaval -- the desire to "bring the schools closer to life" -- in the West it was suspected that pressing manpower shortages also had something to do with both the nature and the timing of the reform. The suspicion was no doubt justified -- but this does not mean that the educational reforms of 1958-59 represented carefully thought-out plans based on a considered view of the economic needs of the country. On the contrary, the discussion at the time, as well as subsequently when the reforms were abandoned, showed them to have completely ignored important economic aspects of education. V. A. Zhamin, who has already been mentioned, had this to say:

It is no secret that because of lack of system and the episodic character of economic calculations, reforms in education have led in many cases to serious errors which have caused great material loss to the state. Let us take, for example, the question of production training for students in senior grades and the introduction of 11-year education in secondary schools. It was decided upon without any serious preparatory calculations of any kind. . . . According to survey data in Moscow, Kiev, Lugansk, and Sverdlovsk, only 11 to 12 percent of graduates from schools with production training actually entered work in production. Moreover, only a quarter of them were employed in those specializations for which they had been trained in school. Plans to train pupils for specific trades did not correspond with the needs of the national economy for those types of personnel. . . . From 1959 to 1963 almost as many workers were trained as sewing-machine operatives as would be needed for the complete replacement of the labor force currently engaged in this specialization. . . . It is impossible to estimate even now how much was wasted because preparatory economic work in the reform of education was neglected. Not only in individual schools or localities, but in the country as a whole, there were no data concerning the cost of the lathes, tools, production and instruction shops which were allotted to, or were especially constructed for, the production training of school children.19
These charges are not merely the familiar standard Soviet denigration of the fallen leader. They pinpoint a very important weakness of Soviet educational planning, with roots deep in Soviet society: while the literature and official statements emphasize that foresight, planning, cost-consciousness, and social priorities are built into Soviet educational planning, in practice it has been characterized by a well-nigh breathtaking spirit of "voluntarism," improvisation, and wastefulness. Clearly, the educators must play an important part in finding a remedy, but the job will not be theirs alone; in particular, the economists should find plenty with which to busy themselves in the next few years.

The final problem to be considered concerns the costs of education. The Soviet government exercises strict control over every detail of school expenditure. Administrators are hedged around by a thicket of regulations, budgeting procedures, and audits which make it very difficult indeed to spend extravagantly. Yet during the whole of the 1950's, when enrollments in schools of general education fluctuated quite widely, ruble outlays per pupil rose remorselessly. Specifically, between 1950 and 1961 money outlays per pupil in the schools rose by 56 percent (this in a period when prices generally fell) ; in terms of constant rubles, expenditures per pupil rose by no less than 79 percent. In higher education, the cost picture was brighter, but only because of the widespread introduction of correspondence and evening instruction. This meant that although costs per student enrolled in higher education declined by about 10 percent in real terms during the decade, lower success rates caused costs per student graduated to follow the same sharp upward path as in the elementary and secondary schools.20

All the signs point to a continuation of these trends. The Soviet school system is one of the of most labor-intensive in the industrialized world.· This is reflected in the low average pupil/teacher ratio (about 19:1) and in the high fraction of the total budget for the schools which goes to pay wages and salaries (about 73 percent in 1960).21 If the government is intent on maintaining this high staffing ratio, it is going to have to raise teachers' salaries substantially above the rates in force during the 1950's. Indeed, at the end of 1964 teachers received a raise generally increasing their pay by about one quarter, and this in itself will do much to keep the cost-curve of schooling on an upward path. One may speculate that the Soviet authorities are just at the beginning of their difficulties in trying to keep the schools staffed with an acceptable number of well-qualified teachers, while also managing to keep costs within bounds.

In the United States there may be some justification for the hope that new techniques of education, using relatively less labor and relatively more capital, will keep costs down. The writer sees no hope that this will be so in the Soviet Union, where it can be assumed that the relative scarcities of labor and capital are just the reverse from the situation in the United States. Substituting capital for labor in the Soviet Union is still likely to mean replacing scarce resources with still scarcer resources. This can never be a cost-reducing process in real terms, whatever the accounting benefits may be -- for the latter are the wholly misleading consequences of the failure of prices and incomes to reflect relative resource costs at the margin.

The main "cost-raisers" in the Soviet system are the small, so-called dwarf schools for Grades I-IV in the rural areas, each with about 30-40 pupils. In 1962-63, there were still no less than 105,000 of these tiny schools, enrolling 4.3 million children out of a total rural enrollment of 10.4 millions in Grades I-IV. These figures mean that every other institution for education in the Soviet Union is a tiny rural elementary school, which is very expensive to maintain in terms of costs per pupil. It is upon the elimination of these "dwarfs" that the economists concerned with school costs in the Soviet Union pin their hopes. Thus V.A. Zhamin contends:

It is evident that it is worthwhile substituting wherever possible large schools (with a 500 to 1,000 enrollment) in place of small schools, and organizing the transport of the children. In those localities where good roads do not exist, it is necessary to build boarding schools.22
This writer is by no means convinced a consolidation of schools would in fact reduce costs under Soviet conditions. A consolidation program would mean substituting one bundle of costs for another, and there is no guarantee that the combined total of extra costs for transport and/or boarding schools would be less per pupil than the present wasteful use of pedagogical labor and resources in the dwarf rural schools. What consolidation might do (though nobody has proved it) is to improve the effectiveness of instruction, in which case the Soviets would be getting more for their money. But per pupil costs could still be as high, if not higher, than before, and if the Soviets should decide to try to solve the cost problem by resorting to boarding schools, the costs could go very high indeed.23

Conclusion

Soviet educational policy -- in line with Soviet social policies in general -- is entering a new phase of development based upon an empirical orientation. Soviet planners and policy-makers in education are finally throwing off the blinders of simple ideology. Increasingly they are prepared not merely to take the brute facts of Soviet society into account when framing their plans, but also to acknowledge publicly that those facts must be diligently searched out, whether or not they correspond neatly to the textbook categories of orthodox Marxist-Leninist theory. Thus, part-time and correspondence training is now acknowledged to be an unacceptably costly way of producing skilled workers for the national economy, whatever the ideological benefits may be of integrating the student into the world of work and the worker into the world of study. Similarly, it is recognized that neither propaganda nor incentives have succeeded in raising the ratio of semiprofessionals to professionals to the desired level. Soviet education faces the prospect of a critical labor shortage in the coming years, and it is clear that no amount of pedagogical rhetoric based on Marx or Makarenko will be a substitute for the required massive investment in developing laborsaving educational techniques. Meanwhile, Soviet educational costs have been exhibiting a distressing upward tendency; the late 1950's marked the end of the halcyon period when the Soviet planners could still count on a relatively cheap and adequate supply of good-quality teachers. In such circumstances, we can expect in the future to hear much more about the economics of education from the Soviet Union.

NOTES

  1. See, for example, P. I. Zubok, et al., Finansirovanie prosveschcheniia: sbornik zakonodatelnykh materialov, Gosfinizdat, 1946; N. A. Pomanskii (comp.), Finansirovania prosveshcheiia i zdravookhraneniia: sbornik postanovlenii, rasporiazhenii, i instruktsii, Gosfinizdat, 1949; E. I. Selina, Finansirovanie kulturno-prosvetitelnykh uchrezhdenii, Gosfinizdat, 1954; L. Potekhin, et al., Planirovanie raskhodov na soderzhanie uchrezhdenii prosveshcheniia i zdravookhraneniia, Gosfinizdat, 1955; and the second edition of this work, published under a slightly different title in 1962. [BACK]

  2. This is a fact that has been much ignored, overlaid as it has been by Soviet figures of illiteracy and lack of schooling under the Tsars, especially in the rural and Moslem areas. The census figures of 1897 reported a literacy rate of 21 percent; this had risen to about 40 percent by 1914. "Another decade of the same rate of development would have solved the problem of illiteracy and would have placed Russia amongst the most progressive countries", Nicholas Hans and Sergius Hessen, Educational Policy in Soviet Russia, London, P. S. King & Son, Ltd., 1930, p. 7. [BACK]

  3. I.I. Ianzhul, et al., eds., Ekonomicheskaia otsenka narodnovo- obrazovaniia St. Petersburg, 1896; 2nd edition, 1899. [BACK]

  4. S. G. Strumilin, "Khoziaistvennoe znachenie narodnovo obrazovaniia," Planovoe khoziaistvo, No. 9-10, 1924. [BACK]

  5. V. E. Komarov, Ekonomicheskie osnovy podgotovki spetsialistov dlia narodnovo khoziaistua, lzd-vo Akad. Nauk SSSR, 1959; and V. E. Komarov, "Ekonomicheskie problemy vosproizvodstva kvalifitsirovannykh spetsialistov," in Problemy politicheskoi ekonomii sotsializma, M. Rabinovich, ed., Gos. izd-vo politicheskoi literatury, 1959. [BACK]

  6. See Theodore W. Schultz, The Economic Value of Education, New York, Columbia University Press, 1963, for a summary of Schultz's own contribution and a survey of the contributions of others.[BACK]

  7. By 1960, there were 36.2 million enrolled in formal general education, 2.1 million in secondary specialized education, and 2.4 million in VUZs, compared with 12 million, 189,000, and 169,000 respectively in 1927. Narodnoe khoziaistvo SSSR v 1964, p. 667, and Cultural Progress, loc. cit.[BACK]

  8. G. Vokhmianin and V. Ermolaev, "Ekonomiki obrazovaniia," Uchitelskaia gazeta, Oct. 29, 1964, p. 2.[BACK]

  9. V. A. Zhamin, ed., Aktualnie voprosy ekonomiki narodnovo obrazovaniia, lzd-vo "Prosveshchenie, " 1965. This work will be published in English by F. A. Praeger, New York, in December 1967 (tr. & ed. by Harold J. Noah). [BACK]

  10. In 1962, schools of general education alone cost the state 3.9 billion rubles. This was a sum large enough to cover the annual salaries of 3.75 million Soviet teachers. (For the US in 1966, the comparable figure was 3.6 million teachers.) The state spent 9.1 billion rubles in 1962 on all formal education activities -- or about 11 percent of the entire state budget. Narodnoe khoziaistvo v 1964, pp. 636-47. [BACK]

  11. Ibid., pp. 668,678. [BACK]

  12. Harold J. Noah, Financing Soviet Schools, New York, Russian Institute of Columbia University, Teachers College Press, 1966, pp. 142-52. [BACK]

  13. Average earnings of professional school staff in the year 1959-60 were between 784 and 831 (old) rubles a month, compared to the factory workers' estimated monthly average of 800 rubles during the 1950's. Noah, op. cit., pp. 178-79, and Leon M. Herman, "The Seven-Year Haul," Problems of Communism, March-April 1959, p. 14. [BACK]

  14. Komarov, "Ekonomicheskie problemy...," loc. cit., p. 163. [BACK]

  15. For a fuller treatment, see Harold J. Noah, "The 'Unproductive' Labour of Soviet Teachers," Soviet Studies, October 1965, pp. 238-44. [BACK]

  16. S. G. Strumilin, "The Economic Significance of National Education," Ekonomiki Truda, 1925. English translation in E. A. G. Robinson and J. E. Vaizey, eds., The Economics of Education, New York, St. Martin's Press, 1966, pp. 276-323. [BACK]

  17. This point is interestingly discussed in Branko Horvat, "The Optimum Rate of Investment," Economic Journal, December 1958, pp 754-55. [BACK]

  18. Nicholas DeWitt, "High-Level Manpower in the USSR," in Joint Economic Committee of the US Congress, New Directions in the Soviet Economy, Part III, pp. 808-811, US Government Printing Office, 1966. [BACK]

  19. V. A. Zhamin, "Aktualnye problemy ekonomiki narodnovo obrazovaniia," in Zhamin, op. cit., pp. 10-11. [BACK]

  20. G. Vekhmianin and V. Ermolaev, op. cit. [BACK]

  21. Noah, Financing Soviet Schools, p. 131. [BACK]

  22. Zhamin. op. cit., p. 17. [BACK]

  23. Boarding schools are very expensive relative to day schools. In 1960, for example, the average annual cost to the state of boarding school education amounted to 6,450 (old) rubles per pupil, seven times more than the annual cost per day-pupil. Capital outlays are no less burdensome proportionately. Construction per place costs four times more than the construction of a day school place. For details, see Noah, Financing Soviet Schools, pp. 108-09. [BACK]


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