21 November 2006

More on remoulding degrees

Further to my earlier post on Gabriel Rozenberg criticising students in The Times for complaining about having to pay for their degrees.

I suggested that turning the university system over to the market, with people having to borrow to finance their degrees, was not necessarily the best outcome, although perhaps unavoidable in a mediocracy. In a mediocracy it cannot be permitted that only a minority get subsidised to develop their intellectual skills. Therefore no one gets subsidised. (There is an intermediate stage in which a lot of people get subsidised, but it doesn't last long since it's not economically viable.) I posted a summary of my comments on the Times website.

Rozenberg replied as follows to readers' comments:

I'm struck by how many of those who disagreed with me think that the answer lies in going back to an elitist concept of higher education for the top 2-5% of the country. My view is that such a system would damage the chances of millions of young people who will need advanced skills to get ahead. ... By calling mass higher education a "mediocracy", Dr. Tassano, you're saying they shouldn't get a chance to succeed.
Actually I didn’t call mass higher education a mediocracy. I said we live in a mediocracy, implying that mediocre standards prevail.

How does criticising the British university system for becoming dumbed down equate with saying people “shouldn’t have a chance”? Rozenberg's comment seems to me to reveal much about the tone of contemporary conservatism. It’s little different from the standard left wing comeback to criticisms of intervention, that “you don’t care about the unfortunate”. If the changes Rozenberg advocates stop clever children who don’t want to get into debt from going to uni, then it’s people like him who are (effectively) denying them a chance.

The claim that “people will need advanced skills to get ahead”, and therefore need to go to college, is pure Blair-speak. Even if it’s true that totally new skills will be needed, where is the supporting argument that what is taught in degrees actually supplies these skills?


Gabriel Rozenberg said...

Where is the supporting argument that what is taught in degrees actually supplies these skills?

Eh? Given your keenness for liberal economic theory elsewhere on the blog, I presume you believe that market choices indicate rational appraisals of trade-offs. In which case, the onus is on you to provide evidence that the hundred thousand or so students now paying £3,000 a year for their degrees are irrationally wasting their money.

Your main point is topsy-turvy: that "mediocre standards prevail" because of the expansion of higher education. Since when did competition for a service drive down its quality? Just as big businesses complain about red tape while simultaneously colluding with their regulators to block out new market entrants, so too are anti-competitive arguments like this now heard from representatives of a befuddled university as an excuse for rent-seeking.

Thankfully, in the future, students will more and more wield the power of their wallets. It's the only way Oxford will ever get better.

Best wishes


Fabian Tassano said...

Dear Gabriel

1) The fact that lots of people are willing to pay £3000 to study for three years doesn’t prove much about the value of what they are taught. The process currently has very little in common with a typical consumer purchase decision. Though conceivably if we went down your route it would become more like that.

2) I have never said, nor do I believe, that free markets are perfect in the sense of resulting in the best possible outcome, in terms of what people want. I merely reject the idea (in almost all cases) that anyone else’s paternalistic decisions – experts, or the government – would be better.

3) As I said in my original comment on your article, I don’t think forcing marketisation, particularly partial marketisation, into a previously un-marketised area necessarily yields positive results - it seems to me you haven’t addressed that point. That was one mistake of Thatcherism which I thought the Tories might have learned by now. A completely free market is one thing, a pseudo-market another. (See e.g. NHS internal markets, railway privatisation, public finance initiative, etc.) I am also open to the idea that some things don’t work best on a free market at all (e.g. postal delivery), and I am prepared to consider universities under that head. In that sense, I am a conservative – I think, for instance, that Oxford’s priority at this stage is not to “get better” as you suggest, but to stop getting worse.

4) Following the massive expansion of higher education, it's now extremely rare for anyone from a middle class background not to go to college. A degree has therefore become more or less a sine qua non, without which the average employer would regard your CV rather dubiously. That, I would have thought, is in most cases enough to make people think they cannot afford not to go, regardless of whether they will enjoy, or otherwise benefit from, what they actually do there. If I were 18, that’s what I’d think.

5) You may be familiar with Michael Spence’s model of college education, which suggests that the function of a degree is largely as a signal of minimum ability. To quote Wikipedia, “employees signal their respective skills to employers by acquiring a certain degree of education, which is costly to them. ... For the model to work, it is not even necessary for education to have any intrinsic value.”

6) Your argument about increasing competition seems muddled. In what sense does increasing the number of universities from 50 to 100, or increasing student numbers from one million to two million, increase competition? Would you expect increases in quality if the number of soft drinks manufacturers went up from 50 to 100? By the way, I didn’t actually say that mediocre standards prevail because of expansion, just that they prevail.

Kind regards

Gekko said...

Interesting blog but I do have a couple of points.

1) Do you consider yourself libertarian or conservative generally? The blog seems to have a libertarian theme but you describe yourself in this article as conservative (at least for this issue).

2) With regard to university education I don't understand why student subsidies would be necessary. If a further educational establishment decided it wanted to return to being a true centre of excellence rather than attempting to keep the unemployment figures down by extending schooling for 3 years, then it could choose it's own students and set it's own standards and fees. The graduates of the education it provides would be sought after by employers who value such quality. It's services would be sought after by students with enough ability to make raising the fees worthwhile. Why wouldn't such a market process be at least as acceptable as having state subsidised institutions? Apologies if I have missed something.

Fabian Tassano said...

I’m more libertarian than Conservative, in theory. In practice I would have called myself a Conservative during the heyday of Thatcherism, but I’m reluctant to do so under the present leadership. I was being tongue-in-cheek saying I’m “conservative” (small c) on the student loans issue, in order to contrast my position with that of Rozenberg who seems keen on radical change.

The issue about marketising universities is a complex one. One point I was trying to make is, given the situation we have now (or at least, the one we had twenty years ago) it might be better not to tinker at the margins with semi-marketisation e.g. loans, because that may only get you the downside of markets without the benefits. By now, given how crap the whole system has become, I may even agree with Rozenberg in practice, that your only recourse is to marketise the whole damn lot. But I don’t think one should sound too triumphalist about it. Forced marketisation may be unavoidable in certain cases, but that doesn't mean it isn't going to have negative fallout. (See e.g. former Soviet Union.)

It’s the “problem of the second best” in economics. If you’re off the Pareto optimum, the only change you can be sure is desirable is an actual jump onto the optimum. You cannot be certain that an apparent move in that direction will get you nearer to the conditions of optimality; paradoxically you may be moving further away.

If I were building a model society from scratch (a slightly pointless issue, but since you’ve kind of raised it), I suppose I wouldn’t get the state involved at all. So I suppose that means, students would have to be self-financing. But then also, in my perfect society, people wouldn’t have half their income confiscated by the state. People might end up borrowing to finance their degrees, rather than getting their parents to pay, but they wouldn’t be being encouraged/pressured to do so by a state-sponsored lending scheme.

I think one also shouldn't forget in these debates that enhancing one's appeal to employers is not necessarily the only purpose of a degree. There should be a place in society for intellectual activity which doesn't necessarily have easily demonstrable benefits. Which is not to say the state should subsidise it.