Niches or clones

by John Quiggin on October 14, 2010

Chris’ post on the Browne reforms[1] in UK Higher Education has prompted me to write a post I’d half-planned a while ago, after seeing this familiar (to Australian eyes) claim.

Too many universities simply state a desire to “achieve excellence in teaching and research” and appear unable to carve out a market niche, Professor Beer said.

The idea that a pseudo-market system (centralised control but with sharper price incentives) will generate diversity is one of many illusions that were exposed during the Australian reform era of the 1990s. Faced with pressure to find a market niche and select a “flagship” program, 37 Australian universities (out of 37) decided that business education and a multitude of specifically labelled vocational degrees were the right niche and that an MBA would be a good flagship. This is scarcely surprising: given the incentives, business degrees were the obvious profit centre.

However, similar choices didn’t produce a homogenous outcome. Rather, the historical hierarchy (century-old sandstones at the top, former teachers colleges at the bottom) which had been somewhat muted when funding flowed a little more freely, re-emerged stronger than ever. At the top, there was enough surplus to maintain, more or less, the full range of disciplines as well as the long-established professional schools (law, pharmacy and so on). The further down the scale you went the less of the arts, humanities and sciences survived. This apparently came as a surprise to the Australian equivalents of Professor Beer (which would be a great name for an Oz Prof, BTW).

Even more bizarre was the shock expressed by some market advocates when they discovered that, with a customer base consisting of 18-year olds who understood their own preferences, and parents who mostly knew very little), the market produced very little demand for anything that was hard and didn’t purport to offer training for a well-paid job. Some of them seriously appeared to think that the market would kill off critical theory in favor of good old-fashioned classical education. In fact, provided the pill was sugar-coated with film studies and pop culture, critical theory didn’t do too badly, at least relative to old-style humanities.

Australia has a long history of importing policies that have already failed in the UK. It’s a source of mild schadenfreude to see the trade going in the opposite direction for once.

fn1. As always, I use “reform” to mean “change in structure” with no implication of approval or disapproval. Given the history of C20, most reforms consist, in large measure, of undoing some previous reform.

{ 24 comments }

1

Steve LaBonne 10.14.10 at 12:25 pm

Faced with pressure to find a market niche and select a “flagship” program, 37 Australian universities (out of 37) decided that business education and a multitude of specifically labelled vocational degrees were the right niche and that an MBA would be a good flagship.

That would be funny if it didn’t make me want to slam my head into a brick wall.

Education and health care are two contexts in which, when I hear the word “market”, I reach for my revolver. Tony Judt should have lived a lot longer; we (of the Anglosphere at any rate) need him more than ever.

2

JulesLt 10.14.10 at 1:03 pm

Given that Browne earned £16,000 per day at his peak, and followed the charmed route from private school to Cambridge to oil industry, it is no wonder that he fails to see how fees might put people off going to University.

And I think that long term it’s going to be disastrous for ‘UK Plc’ as they love to call it – having a workforce struggling with graduate debt, and insane housing and transport costs, is hardly going to keep us internationally competitive.

But then I don’t think they particularly care – it’s evident that ‘the crisis’ is being used to finish off the destruction of public services – and I wonder who will end up profitting best from those privatised services.

And the British public – like the Americans – still votes them in, rather than setting fire to Eton.

3

Tim Worstall 10.14.10 at 2:37 pm

“And I think that long term it’s going to be disastrous for ‘UK Plc’ as they love to call it – having a workforce struggling with graduate debt,”

Sorry, but I just don’t see this. It’s a conditional debt: you only pay it back when you’re earning over a certain amount. Why is that so much more damaging to “UK PLC” than a higher tax rate on high earners….something you only pay when you’re earning over a certain amount?

Running a loan for fees scheme instead of a higher tax scheme isn’t increasing the costs on “UK PLC”, it’s just shifting the costs around. And not even shifting those around very much either. Those who would otherwise pay the higher tax rates are overwhelmingly going to be those who would have enjoyed a university education anyway (a few footballers and luvvies excepted).

There may well be all sorts of other reasons why it’s not a good idea but I just don’t see that particular one as being all that important. The money will, by and large, over the decades, be coming from the same pockets.

4

mds 10.14.10 at 2:54 pm

Sorry, but I just don’t see this.

Someday, a long time hence, this will be Mr. Worstall’s epitaph.

5

Gil 10.14.10 at 3:24 pm

Tyler has this linked on Marginal Revolution today:
http://www.insidehighered.com/views/2010/10/14/edelstein

6

Tim Worstall 10.14.10 at 3:27 pm

And in the interim Mr. Worstall continues to hope that those who do see it will explain it to him in terms that he can understand.

You know, this education shtick.

7

mpowell 10.14.10 at 3:50 pm

To zeroth order, I think Tim is probably correct about the source of the money. But if you think about the incidence on paying those college fees, under a loan system it probably falls primarily on a relatively narrow range of income. I have no idea what the numbers are exactly, but let’s say 50K to 100K in annual income. After a certain income level, you have no marginal loan repayment obligations so it as if your marginal tax dropped to zero. This is why Tim is not correct to even first order. That would require at least some marginal tax along the whole upper range of incomes. To some persons, this would appear a desirable result.

As an American, I think the British subsidized HE loan system is brilliant. But that’s from the starting point of ordinary subsidized loans. From the starting point of progressive taxation funding HE, it looks a lot less appealing.

8

Gaspard 10.14.10 at 3:52 pm

“The further down the scale you went the less of the arts, humanities and sciences survived.”

The underlying impression I get is that the idea of the UK reforms is exactly this, i.e. a reversal of the 1992 conversion of Polytechnics to Universities, and abandoning the idea of a higher percentage of graduates as a policy objective.

Did the Australian policy reduce participation in higher ed or just the subjects studied?

9

JM 10.14.10 at 5:17 pm

Some of them seriously appeared to think that the market would kill off critical theory in favor of good old-fashioned classical education.

Market good! Critical studies bad! Let market make bad thing go! Go thing, go!

Wait. Why bad thing not go?

Nice to see your conservatives are as dumb as ours.

10

piglet 10.14.10 at 7:05 pm

Worstall: One consideration that is typically neglected is the psychological impact of being in debt. You are arguing from a homo oeconomicus standpoint – at the end of the day it doesn’t matter whether you call it loan repayment or tax. That argument is probably not quite correct but even if it were, we all know that real people don’t think that way.

11

Bill Gardner 10.14.10 at 7:25 pm

Keep in mind that John is talking about pseudo-markets, and perceptions of demand. In my view, resources for current US biomedical research are oversupplied to genomics and hoped-for applications thereof, such as personalized medicine. (Much of this research is worth doing, and I am part of a collaboration working writing grants in this area.) These funding allocations are sold to the larger community based on expectations of new medical industries supplying services to be derived from technologies to be derived from this science. And a lot of the sales talk is absurd.

12

Bill Gardner 10.14.10 at 7:27 pm

I apologize for the formatting of the last comment. The first set of strikeouts was unintended.

13

jon livesey 10.14.10 at 7:43 pm

“The underlying impression I get is that the idea of the UK reforms is exactly this, i.e. a reversal of the 1992 conversion of Polytechnics to Universities, and abandoning the idea of a higher percentage of graduates as a policy objective.”

I think the problem with aiming at a higher percentage of graduates as a policy objective is that a “graduate” isn’t a well defined unit. It’s a bit like doubling the number of Soccer clubs and hoping that doubles your chances of winning the World Cup. It doesn’t, of course, and the reason is dilution. The second tranche of Soccer Clubs isn’t equal in quality to the first.

As for “flagship” programs killing off arts, humanities and sciences at institutions that are further down the scale, that sounds terrible until you ask what these programs achieve as you go down the scale. How much harm does it do to teach students an MBA program, if the alternative would be to put them through a very soft arts, humanities or science program only to find they go into business administration as a career anyway?

14

Peter 10.14.10 at 8:29 pm

Let’s compare –
Australia. Population 22.5 million. Number of universities: 37.
United States. Population 300 million. Number of universities: oh my.

15

John Quiggin 10.14.10 at 8:44 pm

Jon @12 That’s why the goals of flattening hierarchies and expanding graduate numbers fit together. If you are going to reserve good-quality education for a privileged few, it doesn’t matter much what you give the rest, or even whether you call it a degree.

16

Tim Wilkinson 10.14.10 at 9:15 pm

john livesy @12 – given capitalism, it rather depends on whether you want those populating a fairly powerful echelon to have had a bit of a think about something other than business jargon, ideological bullshit and inadequate bits and pieces of technical knowledge that give them the illusion of infallibility. My understanding is that this is not a significant exaggeration of the nature of the average MBA course.

17

Hidari 10.14.10 at 9:34 pm

‘fn1. As always, I use “reform” to mean “change in structure” with no implication of approval or disapproval. Given the history of C20, most reforms consist, in large measure, of undoing some previous reform.’

Whenever I hear of people proposing ‘reforms’ of this that and the other, I always think of Cavafy’s poem In a Large Greek Colony, 200 B.C.

‘That things in the Colony are not what they should be
no one can doubt any longer,
and though in spite of everything we do go forward,
maybe—as more than a few believe—the time has come
to bring in a Political Reformer.

But here’s the problem, here’s the hitch:
they make a tremendous fuss
about everything, these Reformers.
(What a relief it would be
if no one ever needed them!) They probe everywhere,
question the smallest detail,
and right away think up radical changes
that demand immediate execution.

Also, they have a liking for sacrifice:
Get rid of that property;
your owning it is risky:
properties like those are exactly what ruin colonies.
Get rid of that income,
and the other connected with it,
and this third, as a natural consequence:
they are substantial, but what can one do?
the responsibility they create for you is damaging.

And as they proceed with their investigation,
they find an endless number of useless things to eliminate—
things that are, however, difficult to get rid of.

And when, all being well, they finish the job,
every detail now diagnosed and sliced away,
and they retire, also taking the wages due to them—
it will be a miracle if anything’s left at all
after such surgical efficiency.

Maybe the moment has not yet arrived.
Let’s not be too hasty: haste is a dangerous thing.
Untimely measures bring repentance.
Certainly, and unhappily, many things in the Colony are absurd.
But is there anything human without some fault?
And after all, you see, we do go forward.’

18

Bruce 10.15.10 at 12:53 am

. . . Professor Beer (which would be a great name for an Oz Prof, BTW).
Probably one of these guys.

19

nony 10.15.10 at 12:55 am

“put them through a very soft arts, humanities or science program ”

What is a “very soft science program” ? Genuinely curious ?

20

Davis X. Machina 10.15.10 at 12:57 am

It rather depends on whether you want those populating a fairly powerful echelon to have had a bit of a think about something other than business jargon, ideological bullshit and inadequate bits and pieces of technical knowledge that give them the illusion of infallibility.

Which begs a rather large question — what do you do in the face of a society-wide, or more precisely decision-making-class wide, consensus that there isn’t anything other than business jargon, ideological bullshit and inadequate bits and pieces of technical knowledge?

I think we’ve developed our own, shiny-new Scholasiticsm….

21

tomslee 10.15.10 at 2:33 am

what do you do in the face of a society-wide, or more precisely decision-making-class wide, consensus that there isn’t anything other than business jargon, ideological bullshit and inadequate bits and pieces of technical knowledge?

Well, I always think of Cavafy’s poem In a Large Greek Colony, 200 B.C. At least, now I will.

22

Gene O'Grady 10.15.10 at 3:25 am

My niece recently received an MBA in Marketing from a fairly prestigious US university and eventually got some kind of a job. According to my daughter her feeling during the process was “Why did I spend my time in a program that teaches you to think like everybody else does.”

23

burritoboy 10.15.10 at 5:24 pm

“what do you do in the face of a society-wide, or more precisely decision-making-class wide, consensus that there isn’t anything other than business jargon, ideological bullshit and inadequate bits and pieces of technical knowledge”

This isn’t any different from all societies everywhere (the details are often different, but the overall situation is the same). What you do is what Socrates showed us how to do: you go out into the agora and make the decision-making-class look like the fools they are.

24

eddie 10.17.10 at 2:04 am

Doctrine of continuous reformation?

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