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What I'm reading, and more

February 15th, 2004

Off Course: From Public Place to Marketplace at Melbourne University by John Cain and John Hewett, which I was alerted to by a couple of critical reviews from people close to recently-departed VC Alan Gilbert, the book’s main target. Andrew Norton’s was the better of the two, but still consisted largely of quibbles. As Norton says, the book doesn’t contain much that is new, but it certainly provides convincing evidence for several of the main propositions put up by critics of the university reforms of the past fifteen years or so.

First, the idea of ‘the enterprising university’ has been a failure. All of Gilbert’s big commercial visions – Melbourne University Private, the University Square development, Universitas 21 and so on – have come to nothing, or almost nothing, after chewing up tens of millions of dollars of public money. The same is true of the grandiose plans for international expansion that led to Monash claiming to be the world’s first “global university” and to the establishment of money-losing overseas offshoots by many others. As far as I can tell, the only successes have been those that have operated as low-cost feeders for fee-paying students to the parent campus.

Second, the managerialist thrust of the last fifteen years, while inevitable in some respects, has failed to deliver the goods. A really striking instance of this is the gradual re-emergence of discipline-based departments and the increasing reliance on (largely unpaid and sometimes unofficial) department heads to run the actual business of the university, while a proliferation of deans, deputy vice-chancellors and so on pass paper between themselves and the government

Third, increased exposure to market forces has not produced diversity among universities, a renaissance of liberal arts, or freedom from centralised government control. In fact, we have seen a proliferation of low-cost, high margin business courses, and increased homogeneity in organisation, teaching style, research orientation and almost everything else. Meanwhile, a shrinking public contribution is still sufficiently critical to be levered into absolute control that can be exercised at any level the Minister chooses (witness the recent fuss over ‘capuccino courses’, most of which were created in response to the very market forces that are still a central theme of policy).

The good news, in my view, is that, in important respects, the worst is over. Its generally recognised that universities are a lot worse off now than when the reforms began, and some of the worst cuts have been restored. Moreover, while the managerial class has not improved much in competence, it has gained in humility. Of course, given the record of the past decade or so, university managers have a lot to be humble about.

I also went to see Dogville, about a fugitive woman (Our Nic!) taken in by a town which then turns on her. I went despite bad reviews, which turned out to be justified. Adding to my difficulties with the film was a narrator who sounded identical to the one in Hitchhikers’ Guide to the Galaxy

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  1. Dave Ricardo
    February 15th, 2004 at 20:25 | #1

    Well, I suppose Norton would argue that universities have been insufficiently exposed to market forces and that having a half-market combined with central government control gives you the worst of all worlds.

  2. John
    February 15th, 2004 at 20:45 | #2

    I’ve made precisely this same argument in a number of contexts, such as Telstra. The corollary is that in situations of this kind, unless you have a coherent and politically feasible plan for complete marketisation, you shouldn’t introduce small instalments of pseudo-market reform.

  3. February 16th, 2004 at 08:17 | #3

    I’ve told people before, universities started out as gatherings of like minded scholars. Their purpose was learning, not teaching (except insofar as the latter is incidental to the former). They gathered together infrastructure to help their purpose, or moved on, teaching to pay their way since it shared overheads with their purpose. I’ve actually seen this process in action, watching the Peter Dixon mob roaming around just like the gangs of itinerant scholars of the Middle Ages.

    Anyhow, this all means that a managerialist approach is fatuous since it implicitly overrules the whole object of the exercise, learning, which combines both research and transmission (curatorship is a lost skill – the Sydney coin collection was ripped off and it took amateurs to point out the losses). Focussing on what universities provide, whether that lets students cope with unknown unknowns later when they encounter them by being flexible (education), or vocationally with known unknowns by rendering them familiar and known (training), is like arguing whether cattle are “for” milk or meat. That is the farmer’s purpose for them, not the cows’; if anything, cows are “for” little cows, and the purpose of dons is more dons. Anything else is incidental, regardless of the benefits to others, and forcing things beyond what comes naturally is abandoning the cost sharing of a common overhead and incidental overlap between learning and teaching.

  4. Andrew Norton
    February 16th, 2004 at 12:55 | #4

    Dave – That’s partly my position. Talk of a market in higher education is grossly exaggerated. There is a market for overseas students and coursework postgraduates. All else is controlled at the centre, either rigidly (price) or loosely (places). After 2005, it will be rigid places and loosely controlled prices. Only in the strange world of Australian leftism can price control and quotas be consistent with a ‘market’.

    However, though fee-paying students are a minority, the universities are so dependent on them that they have helped prompt greater concern with students’ interests, which is reflected in student satisfaction surveys. There is a long way to go though.

    Professor Q also exaggerates the U of M’s problems. Melbourne Uni Private did not go to plan, as Professor Gilbert conceded some time ago, but is working fine on a different business plan and much smaller scale. The commercial part of U21 only started trading in July last year, so it is very premature to write it off. University Square has helped the university expand its floor space by 40% since 1996, substantially lessening overcrowding and providing two faculties with massively improved facilities.

    None of the money to do any of these things came from the public sector. Public sector grants do not pay the full cost of the services delivered for them, much less provide money left over to spend on other things. If it did, it is unlikely that universities, which hate change, would ever have tried to make money themselves.

  5. John
    February 17th, 2004 at 08:30 | #5

    I don’t think it’s premature to write off Universitas 21. The non-commercial aspects have gone nowhere. UQ, which is a member, has the logo on its front page (more than some members), but it is almost invisible in the operation of the University (search the website and you’ll find almost nothing).

    On the commercial side, a project allegedly budgeted at $US100 million, and which has certainly consumed many millions has so far produced an online MBA to add to the hundreds already on offer. There is still a promise of a Master of Management Information Systems, but that looks further off now than it did two years ago – for example, the Universitas 21 site no longer contains an outline of the proposed course.

    Even if the MBA is modestly successful, there’s no serious prospect of a positive NPV on this project.

    Finally, the claim that no public money went into these projects might be true in an accounting sense, but is clearly not true in an economic sense – given the fungibility of money, the surpluses accrued by Melbourne Uni from its publicly funded operations, publicly-gifted landholdings etc are just as much public money as the annual operating grant.

    If these projects were entirely funded by new, specific-purpose, private money, the claim that were not a drain on the public might stand up. This was originally the plan for the University Square/MUP setup, but, as with most such PPP arrangements, the reality turned out differently.

  6. Andrew Norton
    February 18th, 2004 at 10:30 | #6

    On Professor Q’s logic, the University of Melbourne would have been written off in its first year of teaching, 1855, when it had only 16 students. Sixty years later there were still only 1,200.

    Universities are not public institutions in the way Professor Q describes. Governments do not appoint a majority of council or senate members. The Commonwealth government has no constitutional power over universities; they pay for particular services (attaching brutal conditions). The University of Melbourne has a large investment portfolio which comes from private donations over many years. This is not public money in an accounting or any other sense.

  7. John Quiggin
    February 18th, 2004 at 11:12 | #7

    Looking at the history, I find

    On 15 December 1852 the Auditor-General, Hugh Culling Eardley Childers, moved in the Victorian Legislative Council that a select committee be appointed to establish the principles on which a University should be established. The bill subsequently drawn up by Childers and Attorney-General Stawell, modelled in the main on the Sydney University Bill of 1850 and therefore on the Act which established the University of London in 1836, received Royal assent on 22 January 1853. The University thus established was state-funded, urban, secular, non-residential and open only to men. (emphasis added)

    Whatever may be the case elsewhere Australian universities are and always have been public sector institutions and money spent by them is public money.

    To respond to Andrew’s other point, I very much doubt that the capital endowment of the university was anything like the 1855 equivalent of the $US 100 million supposedly allocated to U21.

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