| UK house prices 'see 3.6% fall' House prices fell by 3.6% in September compared with the previous month, according to the latest figures from the Halifax. bbc.co.uk |
Universities suit a market approach | Matt Grist The left's instinctive apathy toward markets disregards how they can be a force for good. Higher education is a case in pointThere are a lot of people on the left crowing about the Browne report into funding higher education. Unfortunately, commentators like Jonathan Freedland who have spoken out against Browne's recommendations have become reactionaries: their knees jerk instinctively at the very mention of markets and choice. Perhaps they are reacting against some of New Labour's markets-at-all-costs approach to policy. But that is to throw the baby out with the bathwater.Rather than ideologues for and against markets we should be pluralists about them. We should recognise that in our democratic culture, markets are very often a force for good. As the Austrian economist Friedrich Hayek observed, markets are a bulwark against centralised bureaucracies that want to dictate how we should behave. This is because markets are messy places where people are trusted to use their own initiative to make the right choices. This is desirable because people are closer than governments to the facts. What's more, a lot of knowledge about markets is hard to articulate: it is stored in habits and "common sense", and so not at all amenable to standardised interpretation.So to trust markets is to trust the wisdom of the public to run their own lives. In the case of higher education, this is to trust students and parents to work out whether a university is any good or not, as opposed to trusting central government or vested interests to do so.Of course, it is true that markets are not always the best means for ensuring quality, efficiency and fairness, which is why we should be pluralists about them. The railways in Britain are a case in point. Where there is no effective competition, how can there be a market? I can't choose between train operators if only one can get me from London to Manchester. Similarly, until bad schools are allowed to fail and good schools expand, it is hard to see how a market for schools can work. A crucial element here is a mechanism for closing down failing schools without harming pupils' education. In this area the Browne report is strong: it outlines a workable strategy for failing universities, including looking at how mergers might be achieved.There are also behavioural, as well as structural, factors involved in making markets effective. The kind of information that is available has to be the kind that the public can use. If it is too complicated, or too specialised, then without intermediaries to interpret it, people will struggle to make informed choices. They will then just plump for an option, as sometimes appears to be the case with hospitals, where the most popular reason for choosing one over another is said to be the availability of parking spaces.A second behavioural factor in making markets function well is that choices be important enough to ensure they are worth the effort. This is why universities are good candidates for being part of a market. Which university one goes to, or whether one goes at all, is a life-changing decision. The importance of the decision is thus commensurate with the level of effort required to make an informed choice, meaning the public will be sophisticated consumers. Of course, all this depends on high-quality information being available, as well as excellent advisers in order to level out the differences in ability and knowledge of consumers. This is why the Browne report is right to focus on boosting the quality of information and advice available to prospective students.Finally, it is often argued by commentators on the left that poorer students will not embark on expensive courses of study because they are less likely to countenance the financial risk, so that a market in higher education would be unfair. This is patronising. As long as high-quality information is available, poorer students are perfectly capable of weighing future earnings against the debt they are prepared to take on. And anyway, top-up tuition fees have had no dampening effect on university attendance by the less well off.The Browne report does deal with this issue of the ability to take on debt. It recommends retaining maintenance grants for the less well off, which is to be applauded. It also suggests raising the point where debts are repaid from £15,000 to £21,000, so that graduates in low-paid work are not crippled by repayments. It might be worth adding to this welcome suggestion a tapered level of payback that reaches the highest level at £30,000, and adjusting these figures yearly for inflation.As long as all these considerations are dealt with, there is reason to think a market for universities will work well. Obviously there must still be regulation, statutory rights and contracts, but then there are many examples of markets that have such regulatory elements. The important point is to focus on the particular features of the potential market, not the fact it is a market at all. And once we clear our heads of instinctive anti-market dogma, higher education seems to have plenty of potential.University fundingHigher educationTuition feesEducation policyStudentsMatt Gristguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |
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