An inappropriate model

Adjust for population, GDP and funding, and US dominance disappears, Howard Hotson argues. And so does the case for neoliberal university reform

October 6, 2011

The crucial question this year in university policy worldwide is not how individual universities stack up against one another: it is how whole university systems compare. In North and South America, Eastern and Western Europe, Southeast Asia and the Indian subcontinent, plans to privatise, part-privatise, "marketise" and "corporatise" established public university systems are being aggressively pushed forward, often in the face of passionate student protest. Here in the UK, a "radical shake-up" of the way in which the entire English university system is funded and regulated is under way. Everywhere, the theoretical justification of these radical measures is more or less the same: replacing direct public funding by increased tuition fees and introducing private for-profit universities will ease the strain on public finances and stimulate market competition, which in turn will drive up standards and drive down prices, raise national competitiveness, and offer better value for money to everyone.

On the eve of this global gamble, it's time to check this theoretical justification against some basic empirical data. Does market competition actually increase value for money to students and taxpayers, as neoliberal economic theorists so confidently maintain? One rough and ready means of exploring this question is to put this year's Times Higher Education World University Rankings to the new purpose of ranking whole university systems in terms of value for money.

The simplest way to do so, which is set out in detail in the graphs [see link to story, right], is as follows. If we consider the number of top universities in a country in light of its population, its gross domestic product and its higher education spending, we can get an indication of how many top-quality institutions each university system manages to produce relative to its human and economic resources. If private-sector competition drives up standards and drives down prices, then the US - with its top tier of private non-profit universities and its new league of private for-profit universities - should outperform the world's more or less purely public universities systems with ease.

In absolute terms, of course, it does. The combined quality of America's top-200 universities vastly outstrips that of any other country, with only the UK standing out from the rest of the pack. Hence the prima facie credibility of the market fundamentalists' argument.

But if we correct for size, this credibility instantly vanishes. If we divide the number of top universities for each country by its population, the US plummets to 14th place on the international league table of university systems. If we divide the number of top universities by each country's GDP, the wealthy US still manages no better than 14th. And if we divide the number of top institutions by total spending on higher education to measure value for money, then the US - which spends more of its national wealth on higher education than any other country - drops into the bottom quarter of the table: to 16th of the 20 countries for which we have relevant data.

Examining UK performance in the same way is no less instructive. Relative to GDP, the UK is in third place, behind only Hong Kong and the Netherlands. Relative to total spending on higher education (for which we lack data for Hong Kong and Switzerland), the UK claims first place, offering six times better value for money than the US. And in terms of value offered for public spending on higher education, the UK is in a league of its own: offering a 50 per cent better return on public investment than the nearest rival, and far more value than the other countries that fund higher education partly through relatively high tuition fees.

More work is urgently needed to convert this and other data into reliable guides to the relative performance of whole university systems. But this straightforward analysis already provides clear empirical grounds for concluding that current English higher education policy is reckless, misguided and self-destructive.

It is reckless because it attempts to improve the value for money offered by the world's most efficient university system, not through cautious, incremental improvements, but by a "radical shake-up": the unprecedented privatisation of an entire university system at the stroke of a pen. It is misguided because the only major university system marketised and privatised to a remotely similar degree - that of the US - offers far less value for money than the almost purely public university system we already have. And it is ultimately self-destructive because the specific American innovation that it intends to introduce - the for-profit private "university" - is now widely regarded by students, the media and the highest political, judicial and educational authorities in the US as offering terrible value for money to students and taxpayers alike.

The previous Labour government allowed bankers to gamble away our savings on a misplaced faith in the wisdom and efficiency of markets. The current coalition government is gambling away one of the best university systems in the world on the basis of the same, demonstrably false assumption. It is of the utmost importance to the future of Britain's university system that the coming months see the assembly of a new coalition of forces that is capable of forcing a fundamental rethink of this reckless, misguided and self-destructive policy.

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