Higher Education Green Paper

It has been an extremely busy past week. Between the release of the Higher Education Green Paper and the Autumn statement the political system is in top gear just before the holiday season. While we are also quietly creeping towards an inevitable vote for airstrikes in Syria. So I am going to look at part 1 of this past week which is the Green Paper. I have no choice but to be interested in this really as I am a student in university, so I feel it is an obligation (some reason I highly doubt most other students will sift through the document, but rather attach themselves to the headlines and staunch opinions).

Firstly, this paper was undeniably needed, student satisfaction and fees has been a volatile issue prompting the need to provide a new look. The OECD just came out with figures suggesting on average the fees at U.K. universities are higher than those of the U.S. With this particular headline just being more fuel to a fire of sensationalism around the issue of fees. It has to be appreciated that while paying £9,000 a year an individual has access to the preeminent British institutions of education such as Oxford, Cambridge, and the rest of the Russell Group. While in the United States at a typical Ivy League university take Yale for example you pay £30,000 a year, as a domestic student. Admittedly both countries take advantage of you when you are an international student (good I got my British citizenship before I went to university).

The first part addresses teaching excellence and quality. The main concept behind this is that students will m0ve towards identifying their university of choice based upon the teaching rather than the reputation. On this basis this is a good idea, pushing forward the teaching excellence framework (TEF). However, it is the following part in the paper which is of concern. Increasing levels of the TEF would enable universities to increase tuition fees. Now the inequality that may create is relatively clear, my biggest concern is what the benchmark for performance is. The top universities in the UK all already charge the full £9,000. If the university performs well with TEF could they then charge across the board higher tuition fees for all their course? In which case could someone justify paying something like £15,000 for an English degree knowing the average salary that such a degree leads to in terms of a career after university?

Supposedly a newly formed Office for Students is meant to overlook that targets are set sufficiently high, and to bring into enforcement the desired goals. There is also the inclusion of needing “widening participation”. Yet I am always cautious of such friendly phrases such as widening participation. On an initial view it looks like a firm trying to maximise profits. Perform well on a set criteria that students might not actually have such a powerful say in, have higher fees, bring in as many students as possible, and then profit. Now obviously this is a considerable simplification with undeniably a skeptic’s view. However, there is an issue to address here and one of those is the longevity of universities in a sense they cannot be subject to the current whims or social leanings of a new set of students every year, as well as the challenge of managing expectations.

Regardless of its perceived shortcomings it is a step in the right direction, realising that students are paying for a service and there must be quality in that.

The following section was with regard to the education sector as a whole. Namely the idea to enable the creation of a universities in that rewarding institutions with degree awarding powers. An example is A.C. Grayling’s New College of The Humanities, which while a full education institute can only award degrees through the University of London external program. The idea here is to bring more competition in the market, and undoubtedly to challenge the institutions which have been comfortable with their awarding powers up until now.

This sector is going to become more dynamic and less antiquated which I believe is the main goal. While not agreeing with every notion in the paper, I feel it was an important step towards improving the industry as a whole. I am unsure of the impact it has on those in research roles and the funding they may get, so I will look into that further.

Education is always a complex issue, with teaching quality being quite a precarious variable to measure. Personally I have felt that the larger issue amongst U.K. universities is that of spirit. Compared to the U.S. counterparts a large part of student satisfaction is derived from the university identity, sports, music, and other inclusive events. It will always be a hard sell when the product is a two hour lecture on statistical theory even with the greatest teaching quality, so this is just another area to consider.

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The Economy, Money, & Politics

Three of our favourite things, well at least mine. The election is in full swing here in the United Kingdom, and there is currently the build up to the primaries in the United States.

In the case of the United Kingdom we are facing an election of considerable uncertainty, the outcome of a coalition is highly expected considering current polling. But it will undoubtedly come up to post election day to see who can craft this arrangement.

In the liberal air of university one may find incredible support for the Green party, on the premise that a vote for them is a vote for the beginning of change in parliament, even though they themselves have basically stated it will be near impossible for them to have a serious impact on decisions or push through any of their manifesto ideas. So the disillusionment with the two party system has become ever-clear. The general distaste for austerity based policy is also extremely clear.

The question is should we do a u-turn right now? Krugman says yes, undoubtedly. He was ferociously battling Austerity based policy 5 years ago, and in this last week released an article which is his parade lap of saying he was right and still is right.

http://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerity-delusion

The only issue is, is that he is not necessarily right. We don’t get the opportunity to test out economic policy in isolated environments, he is basing his success by noting the apparent failure of austerity. Yet we lack an example of any economy which didn’t pursue austerity after the financial crisis. Fiscal based stimulus may have equally failed, but we will never be in the position to know for this occasion.

I am not defending austerity in any manner but I would be cautious to jump onto the other boat, Krugman himself noted while yes a deficit can be managed for a long time there is a point where it is undoubtedly damaging to the health of the economy. Austerian economics is by no means popular or in the post financial crisis economy that effective. However it does highlight a period in which we have explored unconventional policies. The main issue with austerity has been the inequality which it has helped perpetuate, this can be seen in regards to the year on year increase of millionaires and billionaires, but an increasing rate of poverty in developed economies. One may ask who the government is serving, the people as they should be? or the special interests of large corporate institutions? As it is clear that the growth that we have achieved has not been felt by the marginalised factions of society.

I mentioned earlier the upcoming primaries in the United States, I have taken this example specifically due to the data available in regards to where the money that supports candidates comes from. Take the sample below between two democratic primary candidates Hillary Clinton (who has just recently launched her campaign with an advertisement showing how she supports the “regular” American) and Bernie Sanders.

GovMoney

Hillary Clinton has received donations from Citigroup, Goldman Sachs, Morgan Stanley, J.P. Morgan, Credit Suisse, etc. The list goes on. Obviously this does not mean that she will enact policy specifically to disadvantage the people while supporting the financial industry. However, there is a distinct conflict of interest. In comparison to Bernie Sanders he has mostly received contributions from workers unions, and manufacturing related companies. If one was to argue who is more likely to serve the peoples interest, from a financial standpoint it would be Bernie Sanders. But even in this case I believe that campaign contributions to some degree cause a conflict of interest. How can we expect politicians whether they are in the United States or the United Kingdom to make economic policy decisions without an appreciation of the influence that arises from campaign contributions, party contributions, and the coaxing of lobbyists.

The reader will have no doubt that I lean towards the right in regards to political and economic policy. However, I believe that governments have betrayed their ultimate purpose – “serving the people”. With a smaller government I would argue there is less room for financial pressure on elected politicians. As well as the issue of career politicians who get to enjoy the warm cushion of contributions for their entire lives. This is not a comment on the lifestyle or pay of politicians, but how their position is compromised due to the nature of money in politics.

This is critical when we come to assess the type of economic policy whether fiscal or monetary that countries push through. Austerity can seem like a valid decision on the basis that the government would not be crowding out investment, while offering expansionary monetary policy on the side. This has not helped the integral strength of the economy, but specific sectors. While we clearly understand the failures of over-specialisation regardless of how developed the economy.