Dimensions of Marketisation in Higher Education

Peter John, Jo?lle Fanghanel

• Publisher: Routledge
• Year: 2015
• ISBN:
  9781317542605
• Edition: 1
• Topic: Education
• Subtopic: Higher Education

Dimensions of Marketisation in Higher Education is a critical analysis of the various dimensions of marketisation in a global context, exploring governance, policy, financial, ethical and pedagogical aspects. Bringing together a selection of influential authors who draw on the work of Roger Brown, the book is a timely examination of the impact that policies regulating cost, entry and practices in higher education can have on universities, students and academics.

This book explores the tensions and dilemmas marketisation brings into the educational environment for academic leaders, managers and students, arguing that they can be managed through rebalancing the relation between the market and the educational dimensions.

Key topics include:

• 
  
  

• The economics of higher education

• 
  
  

• Students in a marketised environment

• 
  
  

• Regulating a marketised sector

• 
  
  

• Marketisation and higher education pedagogies

• 
  
  

• Universities' futures.

Unveiling nuanced and multifaceted perspectives and providing readers with collective and forward-thinking critical analyses, Dimensions of Marketisation in Higher Education will be an authoritative reference book on policy and practice, appealing to higher education leaders, managers and scholars worldwide.

Part I The economics of higher education

1 Private commodities and public goods Markets and values in higher education

Peter Scott

DOI: 10.4324/9781315728339-1

Introduction

Roger Brown has been one of the most terrier-like opponents of the introduction of an untrammelled market in English higher education since the publication of the Browne Report in the autumn of 2010, and the then Coalition Government’s enthusiastic if uneven implementation of (the spirit if not the letter of) that report (Committee on Student Fees and Funding, 2010; BIS, 2011). But he has also been one of the most penetrating analysts of the effects, intended and unintended, of such a market through a stream of publications, from a full-length book through articles to more polemical pamphlets (Brown, 2009, 2011a,b; Brown with Carasso, 2013). To his political interventions he has brought an unremitting vigour, and to his intellectual analysis a commendable rigour.

‘Marketisation’ has now replaced ‘massification’ as a one-word characterisation of the general condition of higher education in England. One rather ugly neologism succeeding another, critics will say, and, like all one-word characterisations, it conceals as much as it reveals. But what it does reveal is important, and even scary – a shift from a largely publicly funded system to one now highly dependent on student fees (albeit one that is perhaps even more dependent on public funding in the short and medium term), that may lead to fundamental changes in the character of higher education – its institutional architecture, its organisational culture, its professional practices, even its normative foundations. For alerting us to the enormity of this change, the major credit must go to Roger Brown and a small number of fellow scholars (Marginson, 1997). Whether his interventions have succeeded in changing the political weather since 2010, or whether his analysis of markets in higher education has been convincing as well as compelling, are both secondary questions. Quite simply, he has put markets on the map of higher education.

This focus of this chapter is not initially on markets in an operational or even definitional sense, although in its final section it will consider whether it is right to characterise the post-Browne funding regime as a market.

Its primary focus is on the long, but still unresolved, debate about the extent to which modern higher education systems should be seen as predominantly conferring private benefits on their students, and graduates, in terms of improved earnings and life-chances more generally, or whether they should be regarded as producing public goods of which students are only one of a number of beneficiaries. To some degree, this is a technical debate based on economic calculations – but not entirely. This discussion makes up the first section of the chapter.

The second focuses on the characteristics of markets in general. No markets, of course, are pure; all are to some degree indirectly shaped political and social action and often directly regulated by the state. This raises the question of whether it is possible clearly to distinguish between markets and other instruments, notably state action as expressed through public policy, or whether it is more accurate instead to think in terms of a fuzzy spectrum made up of many different types of markets, more or less controlled, and many different forms of public policy, more or less market-like. The special characteristics of higher education, which may inhibit market development, are also considered.

The final section of this chapter considers whether the reforms of English higher education since 2010 can truly be characterised as a deliberate process of marketisation (perhaps so in terms of political ideology, but perhaps less certainly in terms of the implementation of these reforms). Are they best regarded as a ‘paradigm shift’, as Lord Browne himself claimed at the press conference introducing his report, or a further stage in a long-running process of more pragmatic evolution and adaptation?

Private benefits and public goods

The debate about the balance between the private benefits conferred and public goods produced by modern higher education is as old, and perhaps as unresolvable, as the rather similar debate about whether investment in higher education makes countries rich or whether only rich countries can afford elaborate higher education systems. The answer to both questions, of course, must be ‘both’.

First, graduates enjoy enhanced earnings in most but not all cases. But they also pay more taxes, while not necessarily consuming equally enhanced shares of public services supported by taxation. On average, they are healthier and more law-abiding, even when corrections are made for gender, social class and ethnicity (New Economics Foundation, 2011). More broadly, the impact of higher education is felt not just on the character of individuals (and their life-chances) but also on the tone of society. The UK has become in powerful but intangible ways a graduate society. Next, universities themselves are key institutions within civil society, occupying the space between the state and the market – while, of course, also being part of both. As a result they help to underpin the idea of an open society and to procure public goods of the highest order, such as law, liberty and democracy as well as science and civilisation. But universities are also key organisations within ‘clever cities’, those urban or suburban sites of creativity and enterprise that generate wealth in a twenty-first-century knowledge economy. Finally, OECD calculations suggest that for every pound (or euro or dollar) of public investment in higher education, three pounds of economic benefit are produced – although it can be counter-argued that only rich economies can afford such investment but also that only developed countries have the social, economic (and maybe political and cultural) arrangements necessary to enable such investment to be realised (OECD, 2012).

Disentangling private benefits and public goods, therefore, will always be difficult (Psacharopoulos, 2009). Economists focus on the balance between them and struggle to calculate their respective proportions. Some argue that public goods constitute the value left when all possible private benefits have been apportioned: in other words, a minimalist interpretation that probably overstates private benefits. Others argue that the inevitable confusion between private benefits and public goods makes strict apportionment too difficult and also that there are private benefits that may need to be curtailed for the public good: a more open, and expansive, interpretation of public goods (Marginson, 2011). The debate among politicians is rather cruder. Its focus is whether private benefits or public goods are the predominant outcome of higher education because of the policy relevance, and ideological resonance, of this single (simplistic?) issue. If private benefits predominate, then students are rightly charged fees; if public goods, the funding of higher education is properly a responsibility of the state. As a result, current ideological fashions may be more influential than any economic calculations (although even economists are not immune from ideological influences). The encroaching hegemony of neo-liberal ideas since the 1980s has contributed to a demonisation of the welfare state and public sector – and, consequently, perhaps also a devaluation, and so an understatement, of public goods.

The problem for both economists and politicians is that the balance between private benefits and public goods is both volatile and variable. It is volatile because calculations of this balance depend crucially on how specified outcomes are defined – and also, an obvious point, because the same outcomes generally both confer private benefits and produce public goods. The balance is variable because, whatever aggregate calculations may produce, the outcomes for specified individuals are very different and also because public outcomes are of variable value to different individuals, social groups, communities, regions or other categories. Only a small number of public goods really satisfy the two standard, and strict, economic tests that are often applied. The first test is ‘non-excludability’ – in other words, that they can be enjoyed by everyone, which is a test that can be satisfied in many circumstances (at any rate in formal terms), but also in equal measure, a much more difficult test to satisfy. The second test is ‘non-rivalrous consumption’ – in other words, that their value is not reduced by the number of people who have access to them; most goods are in some important senses positional, even if the relationship between scarcity and value is far from linear (or even predictable).

These difficulties have been compounded by two larger factors. The first is the evolution of the welfare state, preoccupied with social well-being and social justice, into what has been labelled the ‘market state’, in other words a state that regards its primary function as the promotion of economic growth (which, according to neo-liberal ideology, can only be done by giving freer rein to the market). As a result, the state as provider has tended to be succeeded by the state as regulator. Even when the idea of the market state has not been embraced with as much ideological enthusiasm as it has in England, the state has had to cope with a number of structural challenges – increasing demand, notably the rising cost of ‘welfare’ (especially pensions) and healthcare; and declining supply, as tax bases have shrunk. This ‘hollowing-out’ of the state has led to an explosion of pri-vatisation and, less dramatically, outsourcing. Even when public services have not been privatised or outsourced, quasi-market mechanisms have been employed in their delivery. It is against this wider background that the growth of markets in higher education has been encouraged.

The second new factor is a far-reaching change in the organisational culture of universities themselves that is evident on a number of dimensions:

• The rise of the so-called entrepreneurial university
• The increasing emphasis on research impact, and even the popularity of notions of’mode 2’ knowledge (Gibbons et al., 1994)
• The shift from (collegial?) academic self-government to so-called managerialism
• The emergence of consumerist behaviours focused on satisfaction and the ’student experience’
• And intensified competition powerfully promoted by league tables

These cultural changes have tended to emphasise that the effects of higher education are best judged in terms of instrumental outcomes. They have brought higher education closer to the market, in the sense that these outcomes seem to be more readily defined as private benefits than public goods (which, being more difficult to calculate, tend to get downplayed). But the idea of public goods has also shifted as a result of both sets of changes, in the state and in higher education. Not only has it become almost routine for public goods to be produced through markets, there has also been a blurring of once distinct notions of the public and the private (Scott, 2015).

Markets . . . and post-markets?

The question therefore arises of whether, in the light of these changes in the nature of the twenty-first-century (neo-liberal?) state and in the characteristics of higher education institutions and systems, the rationale for predominantly public funding has been eroded to such an extent that some form of market must inevitably be introduced – despite the technical difficulties of distinguishing adequately between private benefits and public goods. This is best answered in two dimensions – first, the characteristics of markets in general; and, second, any more specific conditions that may restrict the development of markets in higher education.

It is important at the start to recognise that there are no perfect markets; all markets are flawed if judged against some ideal theoretical standard. So it is not sufficient for opponents of the marketisation of higher education simply to point out that markets in higher education are bound to be imperfect. So are all markets. However, markets are generally seen as having a number of defining characteristics. Roger Brown himself has set out these characteristics in considerable detail, placing particular emphasis on accurate and transparent information for consumers. Others have identified up to eight essential characteristics, four for the consumers and four for the providers (Jongbloed, 2003). But, to simplify, three are perhaps truly foundational characteristics.

The first is consumer choice. Are potential students able to choose between courses and institutions? This is not as self-evidently a superiority of market systems of higher education as it may appear. It may even be that students are freer to choose within public higher education systems that guarantee access for all successful secondary school graduates. League tables and rankings may also have had the perverse effect of restricting choice because institutions struggle to improve their standing by recruiting ‘higher quality’ students. It is important not to confuse the increasing paraphernalia of consumer information for enhanced student choice.

The second characteristic of markets is an effective price mechanism. Yet most of the markets that have been created out of formerly public higher education systems, notably in England and Australia, have defined tuition fees not as a true reflection of the cost of higher education but simply as a contribution by students (really, graduates) to that cost. But defining fees in this way as a contribution rather than as a full cost has sharply reduced the incentive, and the case, for charging differential prices – even without taking into account the reputational incentive t...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of illustrations
• Notes on contributors
• Foreword
• Acknowledgements
• List of abbreviations
• Editors’ introduction : ’Fearful symmetry?’: Higher education and the logic of the market—PETER JOHN AND JOËLLE FANGHANEL
• PART I The economics of higher education
• PART II Students in a marketised environment
• PART III Regulating a marketised sector
• PART IV Marketisation and higher education pedagogies
• PART V Universities’ futures
• Editors’ conclusion: Higher education and the market: Thoughts, themes, threads—JOËLLE FANGHANEL AND PETER JOHN
• Index