The Morrison government recently announced plans to overhaul the pricing structure for university courses (Duffy 2020). The government’s proposal can be understood as operating at four levels: first, the ideological level where abstraction hides the personal significance and social impact of the proposed changes; secondly, the level of the political-economic theory that provides the basis for the proposals; thirdly, the level of policy instruments; and finally, the level of impact and effect, weighing the measured outcome of participation in the higher education system and the alleged benefits to the individual and society.
In the early days that followed the Dawkins revolution, Simon Marginson (1993: 235) described the policy conflict in higher education for the last 30 years as between educational liberalism and the ‘greed is good’ individualism of the free market model; which pitted academic elitism against economic rationalism. It is a narrative that extends back to Friedrich Hayek’s skepticism of state-determined economic rationality. It came with the twist that market reforms required ‘a plan to end all plans’ (Marginson 1997b: 286; cites Michael Oakeshott). As Marginson argued (1993: 232 quote, and see 119), the ideological failure is to close possibilities “to move outside economic rationalism altogether”, and that education is reduced to matters of efficiency and industrial production.
The ideology appeals to the public in two ways, first, in the language and ideas of ‘Equality’, ‘Inequality’, and ‘Opportunity’; and secondly, that of ‘Jobs’ and ‘Employment’. The ‘Equality of Opportunity’ sought “a scheme that provides for universal access and completion and discriminates economically in favour of those with least capacity to pay, who gain the most from participation in higher education…”, but it had failed (Marginson 2016: 198 quote; see also 178, 177, 153). To take one measure, Group of Eight universities have failed in maintaining participation from persons of low SES backgrounds (McCaig 2012: 40; cites Universities Australia 2008, 12-13). The impact, though, is widespread with the mismatch between education and careers in an amalgamated view of market statistics. Marginson recently stated,
Many jobs are general jobs capable of being filled by graduates from any field, so that level of education reached may be more significant than field of study. More remarkably, some highly specialized positions become filled by persons trained in a different field, because employers believe they can ‘do the job’ (or because no specialist is readily available) (2016: 174).
The statistics tend to divert from the basic problem in employers’ understanding of ‘jobs’. Ideology trumped the quality of lived experience between the few and the many.
Marketing theory has been too optimistic about what advanced vocational education could deliver (Marginson 2016: 168; Marginson 1997b: 293). The theory, driven by commodity production, offers false promises in a fee-based postgraduate market and the marketisation of HECS-based premier undergraduate courses. Economic rationalism works from the desirability of competition, the undesirability of collusion, and judgements about risk in an open market. Still, there are those who see the economic system as ‘a fixed game’ and for very good reasons. In the American Tuition Fees context, Gary-Bobo & Trannoy described it this way:
The presence of bright students may be especially desirable for a university. They generate positive externalities for other students and teachers and may be detected by means of tests or entrance examinations. In the presence of competition among universities to attract the best students, the existence of demand rationing may be explained as well. Universities exercise control over the quality of enrolled students by generating an excess demand, combined with selection of the most desirable applicants. (2008: 1212).
Gary-Bobo & Trannoy do offer an alternative explanation in the double-sided asymmetric information in the university enrolment process, but it still comes to the same conclusion: competition often rigs the system for the benefit of a certain type of person. Then at the outputs, it becomes easy to see, “why some among the professional middle class are hired rather than others” (Kupfer 2012: 20). Competition has had nothing to do with alleged efficiencies, but about giving positional advantage for the already-established elite. Governments have not been honest in facing up to Marginson’s challenge:
If competition was focused on the quality of teaching, or value-adding during instruction, or the level of research, the greater competitive pressure might improve responsiveness, performance and efficiency in every institution. However the main competition is not focused on absolute performance and learning outcomes. It is focused on relative standing, on institutional reputation. One institution’s position is gained only at the expense of another’s failure. Positional reputation bears no necessary relationship with learning quality. (1996: 33)
Governments have ignored the challenge through an over-optimistic belief that those who succeed are risk-takers, willing to gamble on their own investment. And yet the evidence is against marketing theory: “individual specific risk aversion acts as a deterrent to higher education investment” (Belzil & Leonardi 2013: 35). Equally, the belief in the theory has not worked at the institutional level: making “admissions policy more transparent … had actually made traditional institutions more ‘risk averse’ and thus less likely to admit applicants from under-represented groups whom they believed would be less likely to complete their courses” (McCaig 2012: 39).
The pragmatics in the philosophy do not work either. Price and cost are the basic elements and are assumed to work on costs saved and value in the return against the price. The evidence is that educational markets do not work in this way (Marginson 2016: 173). The cost-price assumptions “were more plausible in relation to graduates in certain professions than to others, and to credentials rather than to learning per se” (Marginson 1993: 182). The cost-price mechanism works in favour of the pre-existing positional advantage. Only a smaller segment of a student cohort (44%) had ‘aligned’ educational ambitions with the cost and the amount of education required by their intended occupations (Schneider & Stevenson 1999). These days it is not uncommon for careers to be built from fragmented patterns of education and employment, but with serious damage in the lived experience, and where economic managers and statisticians wish to keep their blind-spot.
The mechanisms of tuition fees as practised in the United States, and voucher schemes as originally proposed by Milton Friedman, are the alternatives to balance out cost and price in a way that suggests the best economic benefit for all. Australia opted for a different model, the HECS scheme originally designed by Bruce Chapman (Marginson 1993: 51). There is general agreement that the Australian system is fairer than the alternatives, however, there is no real evidence that deferring debt payments has brought the wider public benefit, as promised by employers and industry groups.
Participation as a measured outcome is the final judgement on the government’s proposed course price overhaul. Market reforms have only increased “the role played by economic cost and reduce the role of academic merit as the determinant of participation” (Marginson 1993: 78). The system has worked against widening participation, “with a lower propensity to take on debt for among some of the under-represented groups” (McCaig 2012: 42, cites Adnett and Tlupova 2008 and Osborne 2003).
Marginson’s recent book, The Dream Is Over (2016), compares Clark Kerr’s California Idea of Higher Education with what he describes as an East Asian model that has put the benefit of higher education in the hands of elite families. Confucian thinking has reinforced hierarchical family structures & benefits, and state paternalism, globally. “So where do poor families go?” Marginson asks, “The dream of upward mobility through vocationally smart private colleges has been a bigger, costlier, and more deceptive disappointment” (2016: 181, 183). It is time to stop dreaming, and it is also time to stop blaming people for their career ambitions. Governments, policy makers, and statisticians have failed to be honest in the unfair economic ‘game’. It is time that the public holds all players accountable, especially those who set the rules.
Adnett, N., & Tlupova, D. (2008). Informed choice? The new English student funding system and widening participation, London Review of Education, 6 (3), 243-254.
Belzil, C., & Leonardi, M. (2013). Risk Aversion and Schooling Decisions. Annals of Economics and Statistics, (111/112), 35-70.
Catharine B. Hill, Winston, G., & Stephanie A. Boyd. (2005). Affordability: Family Incomes and Net Prices at Highly Selective Private Colleges and Universities, The Journal of Human Resources, 40(4), 769-790.
Chattopadhyay, S. (2009). The Market in Higher Education: Concern for Equity and Quality, Economic and Political Weekly, 44(29), 53-61.
Duffy, Conor (2020). University fees to be overhauled, some course costs to double as domestic student places boosted, ABC News Online [posted Friday 19 June 2020].
Gary-Bobo, R., & Trannoy, A. (2008). Efficient Tuition Fees and Examinations. Journal of the European Economic Association, 6(6), 1211-1243.
Kupfer, Antonia (ed; 2012). Globalisation, Higher Education, the Labour Market and Inequality, Routledge, London, and including:
Berggren, Caroline. Gender equality policies and higher education careers, 179-200 [Chapter 9].
Herman, Chaya. Elusive equity in doctoral education in South Africa, 201-222 [Chapter 10].
Kariya, Takehiko. Credential inflation and employment in ‘universal’ higher education: enrolment, expansion and (in)equity via privatisation in Japan, 91-116 [Chapter 5].
Kupfer, Antonia. Towards a theoretical framework for the comparative understanding of globalisation, higher education, the labour market and inequality, 5-28 [Chapter 1].
McCaig, Colin. Trajectories of higher education system differentiation: structural policy-making and the impact of tuition fees in England and Australia, 29-49 [Chapter 2].
Pabian Petr, Sima, Karel, & Kynellova, Lucie. Humboldt goes to the labour market: how academic higher education fuels labour market success in the Czech Republic, 117-140 [Chapter 6].
Powell, Justin J. W. & Solga, Heike. Why are higher education participation rates in Germany so low? Institutional barriers to higher education expansion, 71-90 [Chapter 4].
Strathdee, Rob. Educational reform, inequality and the structure of higher education in New Zealand, 49-70 [Chapter 3].
Wang, Qi & Lowe, John. Young people’s management of the transition from education to employment in the knowledge-based sector in Shanghai, 141-162 [Chapter 7].
Marginson, Simon (1993). Education and Public Policy in Australia, Cambridge University Press
Marginson, Simon. (1996). Competition in Higher Education in the Post-Hilmer Era, The Australian Quarterly, 68(4), 22-35.
Marginson, Simon (1997a). Imagining Ivy: Pitfalls in the Privatization of Higher Education in Australia, Comparative Education Review, 41 (4), 460-480.
Marginson, Simon (1997b). Markets in Education, St. Leonards NSW, Allen & Unwin
Marginson, Simon. (2016). The Dream Is Over: The Crisis of Clark Kerr’s California Idea of Higher Education, Oakland, California: University of California Press [attention has been given to Chapters 14, 17, 19-22, and Epilogue].
Meyer, H. (2002). Universal, Entrepreneurial, and Soulless? The New University as a Contested Institution, Comparative Education Review, 46(3), 339-347.
Osborne, M. (2003). Increasing or widening participation in higher education? A European overview, European Journal of Education, 38 (1), 5-24.
Rothschild, M., & White, L. (1995). The Analytics of the Pricing of Higher Education and Other Services in Which the Customers Are Inputs, Journal of Political Economy, 103 (3), 573-586.
Schneider, Barbara, and Stevenson, David. (1999). The Ambitious Generation: America’s Teenagers Motivated but Directionless, New Haven, CT: Yale University Press.
Stephenson, Nick (2011). Education and Cultural Citizenship, Washington DC: Sage.
University Australia (2008). Participation and equity: A review of the participation in higher education of people from low socioeconomic backgrounds and Indigenous people, Centre for the Study of Higher Education, University of Melbourne.