I completely agree. Another thing that I think universities haven’t woken up to is that these new student consumers will be increasing in their demands for services and products; better computers, increased tutor time, better accommodation- all things that will not happen because fees are there to stop gap funding cuts not increase the quality of education and UK universities don’t have access to this American cash, as you mentioned.

UK universities have been able to do it ‘their way’ for a very long time; dictated term times, minimal supervision time for undergrads, lack of courses, using phd students while lecturers research. This approach to funding will challenge this. I for one know that I would t have suffered endless lectures covered by the phd students of a profession (regardless of experience) if I was paying £9000

To really be progressive the government should allow students to take their loan abroad to other universities better equipped to deal with a supply and demand market such as American or Asian universities, I think we’d soon get a shock then by the mass exodus of students!

“More specifically, how will a marketised ‘supply and demand’ model for arts and humanities funding really function in practice? ”

We’ll see, won’t we? This is the point of a market economy. We don’t actually plan these things. That would be a planned economy. We let those forces of supply and demand (otherwise known as “things people want to do”) work them out.

“The income stream from repayments – which is supposed to form the long term basis for higher education funding – will not come back to the treasury for many years to come. ”

How excellent: so it’s this fiscal stimulus that the economy so desperately needs is it? Borrowing from the future to pay now is indeed fiscal stimulus you know.

Methinks there’s at least one historian who would do well to have a chat with his colleagues in the economics department. Or the philosophers: they are the ones who do logic aren’t they?

Much better that universities open and shut according to the vagaries of government demands?

Education and research institutions cannot be set up, shut down and restarted according to the vagaries of market demand.

don’t this this is a terribly well thought out point. There’s certainly no difficulty shutting them down, and I don’t think academic departments are much harder to set up than, say, a semiconductor fabrication plant. I don’t know how volatile you think demand for history degrees is going to be, but I really don’t think supply would have that much trouble adjusting to changes in demand.

Good point Luis.

We’ve set up how many car manufacturuers in the UK in recent decades? One? Two? (Honda and?).

How many universities? 25? 35?

Ergo universities are easier to set up in response to demand than car manufacturers are.

Good to see the humanities being sidelined because they don’t teach nothing “useful”, soon all will be taught how it is that they can best serve the market.
*Sigh*
Remember the days when the purpose of the market was to serve us?

Me neither.

Cylux use your loaf. Who is it that decides a humanities degree is not worth having, if one has to bear the cost of providing it oneself, if not “us”?

a market is made up of “us” doing what we feel we want to do. It’s just stupid to talk about car manufacturers or food producers or any other supplier in a market as “serving the market” as opposed to serving “us”.

Ironically, the (part of) problem with marketization of education lies with “us” in so far as we fail to internalize social returns and make decisions based on private returns (i.e. will the increase in salary we expect to gain as a result of getting a degree justify the cost of getting it). That’s related to the problem that social returns are not always reflected in wages. Another problem is that providers of education may attract students by doing social unhelpful things, like offering a cushy experience and easy degrees, to attract ‘customers’. There are lots of problems with the marketization of education, and the fact that it’s likely to hurt subjects where social returns are higher than private returns, is one of them.

I do wish that those who want to argue that humanities degrees might be under supplied in the new system would also recognize the corollary that they might therefore also be over supplied in the current system.

I thought my English Literature degree was a waste of taxpayer’s money.

I agree with an independent review. whoever is paying for the review will set the findings they want it to achieve. At the time Labour wanted to higher tuition fees and the Browne review was always going to suggest that. The fact that Ed M favours a graduate tax is in contrast to AJ who introduced tuition fees?

If you want a truly independent report it must be a public review. Will the Tories do it? What do you think?

Actually, the Brown report suggested NO cap on tuition fees. So the Coalition haver watered down what was proposed by this Labour initiated review. What we are witnessing now is the standard left wing knee jerk to anything which demands that people take responsibility for their own well-being.

Yes I was one lucky enough to get free education. I wish we still could. So all of you who want this – tell me how it will be funded. Who will lose out to make your lives easier?

A huge problem concerning humanities degrees and most “book-based” subjects when compared to “lab-based” subjects is the difference in cost. If students are being asked to fund their own education, why should there be one flat fee? Nobody doubts that courses have different costs as well as different benefits. But will universities be able to reflect this fully? And if not, why not?

If a student is expected to choose a course according to market returns, it’s unacceptable that they pay for returns that won’t accrue to them.

Taking it even further: if the state is holding student loans and has to eventually pay them off should a graduate fail to earn over a certain amount, should a university bear some liability for this? Students at age 18 make a choice according to what they think will be beneficial in the future, but rely upon the university to provide an adequate education in that area. Some graduates will always fail to repay their full loan – death, disability, fecklessness, whatever – but a large number of non-repayers suggests a poor level of education. Given that such information may take a long time to filter through to new students, and the cost to the state remain for a long time, should there not be a mechanism in place to ensure that universities are directly affected by their outputs?

A university could then decide to demand a certain percentage upfront to prevent their liabilities becoming too large, or reject all candidates that require loans. Likewise, as with the first point, they will be incentivised to not overcharge for tuition fees, as it only creates a larger future liability.

A partial market is a distorted market, and we can’t expect efficiency gains unless we free universities more completely.

@7
Some things work with a market system, some things don’t. If trying to shoehorn every single aspect of society into a market system of some form isn’t being beholden to “the market” I don’t know what is.

Plus, would your writing be as incisive and your arguments as well thought out if you hadn’t taken that course?

“There are lots of problems with the marketization of education, and the fact that it’s likely to hurt subjects where social returns are higher than private returns, is one of them.”

Well it might be if the full “marketization” was what was happening.

However, as I have been criticised for consistently pointing out, if the private return to your degree is low (specifically, below 21k pa) you won’t have to pay anything.

Result.

“Everything is worth what its purchaser will pay for it” – Publilius Syrus

If humanities courses are worth less to students than science subjects, then universities will have to reflect that in the fees they charge.

If there is true demand for these courses then a market economy will likely provide the supply, at a price to suit both. Much better that than someone sitting in Whitehall deciding on a whim where money can be justifiably spent.

@11 Cylux

“Some things work with a market system, some things don’t”

A few examples of things that don’t, and also explain for those that don’t work in a market how government does it better.

Why do I even bother arguing with those that know the cost of everything and the value of nothing?

@14 Well, healthcare systems certainly perform considerably better when there’s a good deal of governmental oversight, restraining the damaging parts of market based solutions. Unlike say the US healthcare system that has had to be overhauled.
Plus we don’t exactly seem to be moving toward green energy production by whim of the market alone now do we?
Also google “sexual marketplace” to have a good look at those who take the “markets solve everything” meme to it’s logical conclusion.

14
I can’t think of one product or service that does not have government involvement, so it’s not possible to make any comparison between the free-market and government production.

I didn’t think there was a problem with humanities – I can’t remember hearing about humanities departments closing down, by contrast maths and science graduate numbers (which are a genuione source of comeptitive advantage) are plummeting.

On your other point, I really can’t see why the market shouldn’t dictate education policy, the needs of the market was the basis of Mr Blairs 50% graduate target wasn’t it ? If the market wants computer scientists then whats the point of an education system that churns out PPE graduates ? If you want education to be about self actualisation, rather than wider economic benefits, then it’s hard to defend public subsidy for it

@2 et al

That is a load of Hidden Hand tripe.

Market fetishists miss the whole point that if education is to be effective then it must be diverse and, somewhere, there must be a plan!

It’s the markets that have brought us lower science uptake and a profusion of daft subjects and modules that provide easy degrees. After all, if a degree is a degree why choose a tough one? Meanwhile, in India, China etc you can bet there are plenty of bright kids learning to be engineers, scientists, mathematicians, economists…

The notion that the market will decide, that the Hidden Hand will magic it all better, should be thoroughly discredited by now. After all, if you’re having a party, building something, whatever, you need a plan. How is education different?

@15 “healthcare systems certainly perform considerably better when there’s a good deal of governmental oversight, restraining the damaging parts of market based solutions.”

Really? I was under the impression the NHS came out towards the bottom of international league tables, and those systems that were the most market oriented (consumer choice, competing providers) were those that came out on top. The US system has its own issues (big business can be just as damaging as big government when it comes to monopoly of supply, which is why you need trade to be as free as you can, to prevent monopolies).

If we’re not moving towards mass green energy production by whim of the market, perhaps that’s because consumers don’t want it. Green energy production is the desired goal for one special interest group only. The general population (i.e. the ones that pay for the energy) want cheap energy. If you could make wind power cheaper than nuclear then you’d find a big move towards it. The one area where green energy is making a decent strides in is at a local level though. People do quite want solar panels and turbines on their homes to generate their own power, because once its in, the power is cheap. Here the market is working – every day people, through their own self interest, are ‘greening’ up their home because it can save them money. As new technology makes the installation cheaper and thus the payback time much shorter, you’ll find a huge move towards this local level green production.

Curious that you didn’t choose education in your list though, as that’s the point of the article.

@19 “If we’re not moving towards mass green energy production by whim of the market, perhaps that’s because consumers don’t want it”.

Exactly, but since when have the Islington elite cared about what the plebs want ? There is an estimated $44 trillion in grants and aid up for grabs to producers of “green” energy technology , paid for of course by joe public, either directly as in taxes on fuel/travel, or indirectly through climate change levies, carbon trades and all the parapenalia of vested statist interest that is going to make *everything* a lot more expensive in the next decade. Anyone who protests will of course be shouted down as a denier who should just accept that their needs are less important than the wishes of the international neo-liberal elite to ostentatiously assuage their gargantuan guilt complexes. Just look at Bono, all that concern for Africa, and has his own hedge fund, for an example of the sort of hypocracy we are up against.

@19 I shouldn’t need to, turning education into the newest part of the service economy should be blatantly obvious to be a disaster. Plus lets not forget that the main end users of this economy would be not-yet educated teenagers, not exactly the greatest force for logical long-term economic decisions now are they?

It would be, after all, the only part of the service economy where you pay someone large sums of cash in order for yourself to do lots of hard work. With no guaranteed pay-off at the end of it. Not exactly going grocery shopping is it?

Now if there was a device that could shunt knowledge directly into your brain, for which you paid a fee, I would be right behind you in declaring that education is a sensible thing to leave to the whims of “the marketplace”. But there isn’t.

I assume those on the political right who are so enamoured of Coalition policy on HE will be advocating higher fees for lab based subjects?

After all these subjects cost considerably more don’t they?

Just to follow up on the healthcare point, we have this story in the Telegraph today (http://www.telegraph.co.uk/health/healthnews/8165583/Death-rates-at-19-hospitals-alarmingly-high-says-report.html).

Is this the price of keeping the market out of healthcare, and is it worth paying?

@22 Galen10

“I assume those on the political right who are so enamoured of Coalition policy on HE will be advocating higher fees for lab based subjects?

After all these subjects cost considerably more don’t they?”

In my mind that’s all down to how universities want to charge for courses, but yes why not? If it costs more to provide the course then why shouldn’t students pay more for it?

24

Because of course they don’t have a coherent or well thought out policy. This is indeed what “should” happen by the lights of their own beliefs, but it won’t happen because they haven’t got the guts to follow their ideas through to the logical conclusion. Having made the ideological decision that humanities are worth less, they are quite happy to see humanities subsidise lab sciences.

Interesting to see that their free market principles only extend so far…..

@19
Hold up, I just reread this bit “big business can be just as damaging as big government when it comes to monopoly of supply, which is why you need trade to be as free as you can, to prevent monopolies”.

You actually believe, that companies that currently control the vast majority of resources would lose out in a fully free market system? And not in fact be best placed to further cement their grip on the markets?