Market shocks

January 11, 2018

If it were not so sad, it would be amusing to learn that one of the principal designers of the current market regime for English universities appears to be surprised at the report that there is an increasing convergence in the entry grades being sought by institutions (“Reforms see universities fishing in the same pool”, News, 4 January).

One of clearest messages from what we know about the various attempts to “marketise” the provision of higher education is that increased competition and lower entry barriers nearly always lead to a lowering of institutional, subject and course diversity – and, as an ironic consequence, a reduction in student choice. The reason is that in what is in effect a status market – where everyone (students, institutions, employers, even governments) is competing for position – the usual rules of economic competition do not apply (hence also the virtual absence of price competition). There is competition, but it is competition through emulation.

It is now well over a century since Thorstein Veblen first drew our attention to goods for which demand increases with price, what have been known since as “Veblen goods”. It is more than 40 years since Fred Hirsch argued that in conditions of increased abundance, status competition would become more important than competition for resources. It is a pity, if not a tragedy, that those responsible for the current higher education regime have still to catch up.

Roger Brown
Former vice-chancellor, Southampton Solent University and former chief executive, Higher Education Quality Council

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