Who would have thought that an article by a Group of Eight vice-chancellor in the Kalgoorlie Miner last week would get to the nub of the debate over higher education reform?  Paul Johnson, the Vice-Chancellor of the University of Western Australia, asks an elementary question when he says: “Government does not decide what businesses can charge for a loaf of bread, a litre of milk or any other product or service.  Why should universities be any different?“

Paul’s ideas presumably have the support of the other Group of Eight vice-chancellors because the article was sent out widely by their Secretariat (and I confess, I might not have seen this gem had it been confined to the normal readership of the Kalgoorlie Miner).

That our leading universities even need to ask the question may be a sign the Group of Eight have lost a moral compass or understanding of their legal and social role, but I will provide my own answers anyway and perhaps the readers of this newspaper will add theirs.

A bread-seller has not been granted legal protections in a market whereas we have been granted the privilege to use the title “University”: a word which is protected in legislation and greatly desired by other higher education providers.  This protection – a quasi-monopoly in some senses – carries with it correlative obligations to the society which licenses us.

A milk-seller has had to raise the capital to run her or his business.  Most Australian universities have reached their current market power after decades of taxpayer funding: for infrastructure, research, special programs, and so on.  They should not be allowed now to cash in aggressively and gouge students as much as they can. I suspect that the desperation with which some are advocating fee de-regulation, publicly and privately, may be because they know a future government will have to put the lid back on, as Obama is now trying to do in the US.  The Australian electorate will be unforgiving when their sons and daughters cannot raise a mortgage because they already carry too much student debt, and political pressure will mount.  I suppose there is one similarity.  The milk-seller also makes hay whilst the sun shines.

A widget-maker in a competitive market must please the customer.  Sometimes a university must displease the customer, by awarding fail marks.

A supplier of a commodity may do as they wish unless there is a prohibition in place, for example against misleading or deceptive conduct.  A university is under a positive obligation to promote the public good, locally and generally.

A milk-seller is not expected to do anything other than sell good milk for consumption at the appropriate time.  The university tackles problems, creates knowledge and generates ideas which change and improve civilisation in ways which may not be apparent for a long period.  Would the world really be taking climate change seriously (outside Australia at least) were it not for university scientists and their findings?

The producer of commodities no doubt contributes honestly to our quality and diversity of life, but a university is here to transform people’s lives, through giving them opportunities they could not otherwise afford, taking an interest in how and what they learn and doing more than any contract for sale is going to be able to capture. Put differently, universities are here to make the world a better place: as their direct purpose, not a by-product.

I could go on, but it is worth speculating where this is all going to end.  The market will ultimately fail in higher education because students will not keep paying through their fees for the public good component expected of universities, and because some will drift to the institutions who have more tax-payer funds under their belt already, leaving other institutions unviable, particularly in our regional areas.   The public good component will diminish painfully, some institutions will go into crisis, electoral politics will kick in, ad hoc rescues will be required, and someone will come up with the bright idea: why not design a higher education system and regulate it?  In the long run, this will happen.  But as John Maynard Keynes famously said in 1923, in the long run we are all dead.

One comment on “Article in The Australian

  • Absolutely love this article and have shared with my colleagues in other universities who are wondering why their VCs have so lost their moral compass on this issue. Really proud to be at UC 🙂

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