Higher Education and the Market

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Edited by Roger Brown, Routledge, £24.99

Discussions of the cuts to university funding have, understandably enough, focused on the dramatic increase in tuition fees. Though this aspect of Con-Dem policy is obviously incredibly important, the move to the almost complete marketisation of the higher education sector is arguably of much greater significance. As this important new book shows, this process, which has roots going back at least as far as the Margaret Thatcher years, will embed structures that are guaranteed to foster further fragmentation of the sector in a way that will reinforce existing class divisions in higher education.

It is not just that the burden of payment will become more regressive as it shifts from the taxpayer to the individual student. It is also that competition, far from acting to push down prices, is most likely to lead to fee increases to the maximum level the market can bear. This prediction flows directly from an analysis of the problems attendant on any attempt to introduce markets into an arena of human life where even the staunchest pro-marketeers have great difficulty showing that they might work. For markets to work customers must be able to make rational choices between products: given two more or less identical tins of beans marketed at different prices the rational consumer will buy the cheapest. But how do prospective students compare courses at different universities?

Higher Education and the Market shows that it is almost impossible to make meaningful comparisons between courses, and the various methods used to give "transparent information" to "customers" are worse than useless: not only do they fail to compare courses, but they actually create masses of waste in the system (lots of time is spent generating meaningless data) and this pseudo-data is then used by managers to distort academic decisions (for instance, about the closure of individual courses).

Roger Brown shows that the data generated by Britain's National Student Survey (NSS), a key mechanism of course comparison in this country, is more or less worthless to prospective students. It (unsuccessfully) tries to measure what has happened in the past rather than what will be the case once these students go to university. It ignores the different needs and characteristics of different students; it is wide open to fraud; contrary to all intelligent discussions of how people learn, it assumes that students are passive recipients of their education; and it assumes, against all the evidence about students adapting their behaviour to circumstances, that students are in fact the fantasy of neo-classical economic theory: the "rational" consumer.

If prospective students generally don't (and shouldn't) use the NSS when choosing a university, there is evidence aplenty of the real basis of student choice in market systems. They choose universities on the basis of "prestige" (and, as Brown points out, there is a very close association between an institution's prestige and its wealth). Irrespective of all the paraphernalia of the market, we all "know" the approximate position of individual universities in the university pecking order. Or, more to the point, middle and upper class parents know this and try to make sure their children apply to the "right" university.

In this situation, far from competition increasing "efficiency" by forcing prices down, it actually leads to price rises. Just as house prices rocket in the catchment areas of so-called "good" schools, in free market systems university prices tend to rise to what the market will bear. Rich parents will pay whatever it takes to get their child into the most prestigious institutions, while other students have to settle for the most prestigious institution they can afford. The logic of this situation is a prestige hierarchy of universities for a class hierarchy of students.

In the US, for instance, a market in higher education has led not only to a massive stratification of the sector, but also to massive increases in prices. While the consumer price index rose by 119 percent in the quarter century after 1980, tuition fees in that period increased by 543 percent - with absolutely no evidence of a compensating increase in quality. And against the rhetoric that bursaries help low income students, the evidence is that "institutions invest their resources in wealthier students". Because these awards are given on the basis of "merit", and because educational performance is shaped primarily by class location, when these institutions give financial support it is overwhelmingly to members of the middle class.

So while there is no evidence that educational markets work to increase quality, they are guaranteed both to reinforce the already alarming stratification of education generally, and higher education more specifically, and to push up prices. In this situation the rich will fix their hold over the most prestigious institutions, the poor will become even more excluded and the rest will fill an increasingly expensive hierarchy of universities in between.