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University and Community Futures

October 9th, 2014

Universities, Academe and Managerialism

Universities contribute substantially to the community through research and teaching and to economic gains as well as to the individuals who graduate. University reforms in developed countries over the last thirty or so years has brought managerialism and corporatisation  without matching gains in quality of undergraduate teaching, now often assigned to graduate students. Market economics has reduced the overall spread of courses offered and commercial sponsorship and partnerships have sometimes severely compromised independence.

The contribution of universities to significant innovation through multilateral relationships with government and business, enhanced by geographic location and funding from philanthropic organisations and alumni attracting high quality staff is not always understood, not least in Australia.

As in all other areas of public policy there is much nonsense written about alleged threats that are not really the major issue: those are ignored. In a well argued opinion, one-time journalism student and now business commentator Rob Burgess wrote in early October 2014,  in Business Spectator, “The brainwashing of students, I would suggest, is far less dangerous than the mis-selling educational products to young Australians. It keeps them out of other kinds of work-based learning for three years, lumbers them with a HECS debt and releases them into a jobs market that doesn’t want them.”

Burgess was responding to a report that “university lecturers were ‘indoctrinating’ journalism students to hate some media and gravitate toward some others”. As Burgess points out, “Young journalists often argue with their jaded bosses over idealistic views of society, but each, with time, finds their own map of reality.”

One of the theoretical requirements for the operation of a free market is perfect information. Students making a choice about which university to attend or which course to enrol in, like everyone else, lacks such perfect information. Indeed Nobel Prizes are awarded for studies into this asymmetry. So large numbers of students enrol in journalism courses for which there are few jobs and few enrol in actuarial studies where there are many jobs.

This all has relevance to recent proposed reforms.

Australia’s Universities: recent proposals for reform

The first Abbott/Hockey budget proposed major changes for Australia’s universities. Whilst there has been very substantial opposition, the larger universities have promoted the changes. (So has the Business Council of Australia.) Prominent commentators have accused Minister Pyne and the larger universities’ Vice Chancellors of not understanding the actual situation or the recent history of the microeconomic reforms proposed.

Deregulation of higher education fees is proposed with interest on the debt incurred through HECS funding of the fees being adjusted to the government bond rate and private providers allowed to offer courses. Significant cuts will be made to funding including to the Research Grants scheme. The argument is that the outcome will be enhancement of diversity and choice and lead to the older established universities being able to increase their revenue and attract the best students.

The assertions are considered on analysis to be wrong by comparison with the experience in the US and the recent history in Australia.

Senator Elizabeth Warren (Dem, MA) was interviewed recently on the website Several paragraphs refer to the college and university situation in the U.S. They make chilling reading:

Three of four kids in college are in public universities. A generation ago three of four dollars of the cost came from government: it is now one in four and the family or student has to make up the rest. “The state universities are the backbones of access to higher education for the middle class ..

One in 10 kids in college is in a for-profit university: “those universities are sucking down 25 per cent of federal loan dollars and they are responsible for 50 percent of all student loan defaults. So the federal government is subsidizing a for-profit industry that is ripping off young people. Those young people are graduating-many of them are never graduating-and of those that are graduating, many of them have certificates that won’t get them jobs, that don’t produce the benefits of a state college education.”

It is far from certain that the changes will pass the Senate. They most certainly should not! The Labor Opposition is running a major campaign against them.

Read more  on universities generally and more on recent developments in Australia.

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