Why Unis Shouldn't Play The Economics Card


Around budget time, every sector wheels out whatever weapons they think will bludgeon the Treasury into sending the odd scrap of cash their way. Higher education put a lot of resources into that effort this year, once again it was to little or no avail.

For a while now, university leaders have tried to speak the Treasury’s lingo, attempting to show that funding universities is in the Treasury’s self-interest. Giving the universities money will actually increase your own reserves, they argue. One day this approach might yield more than the scraps it has produced for the last 20-odd years. But even if it does, it won’t help higher education as much as leaders of the sector hope it will.

Not surprisingly, Universities Australia published a report that was able to show that investment in higher education would have substantial economic benefits. Its media release even argued that higher education would reduce health costs since obesity and smoking are rarer among educated people. All in the hope that the Government will say, "Well, we do want to grow the economy, and we want to fight obesity too. Okay, let’s invest in higher education." But it clearly doesn’t work that way.

One problem is that this information is not exactly new. While it might not have had exact figures before, the Government knows about the link between higher education investment and economic growth. A few years ago the Prime Minister’s Science, Engineering and Innovation Council warned the (Howard) government, that, based on its research, failure to invest in higher education would mean Australia would be rapidly overtaken economically by the countries that do (pdf). The smallest of the consequences of current levels of international investment, especially throughout Asia, would obviously be the loss in Australia of the international student market, as its own local universities gain strength.

It is an argument used repeatedly, as if saying it again will produce another dribble of cash. One of Australia’s most eminent higher education researchers, Simon Marginson, told a recent conference that he had redirected his research efforts to showing the link between knowledge and the economy. Since the only way to improve the situation in higher education was more money, and the only thing Treasury understands is economics this appears to be the only argument worth making.

Even Rashmi Kumar and Nick Irving — who don’t believe economics should drive higher education policy — gave the Universities Australia economic argument in their recent article on newmatilda.com.

The idea of using economic arguments to justify adequate university funding emerged in the 1980s when universities failed to convince government that the value of tertiary education should not be measured by its short-term economic output. That failure led to increasingly drastic cuts. Universities decided that if they hoped to persuade government of their worth they needed an economic argument government could understand.

The problem is, that argument also succeeds in persuading government, the public, and even sometimes universities themselves, that economics is what universities are about. And that has very unfortunate consequences. If universities are focused on producing wealth for the economy, they will be expected to measure university performance on the basis of those economic values. Which, to a large extent, has already happened.

We get the higher education system that we pay for. If we pay for a system that is for the economy, we get an education system that focuses on utilitarian economic outcomes. It would be far better if advocates of higher education explained to government what universities are really about, giving government reasons to fund the system properly.

Universities actually have quite a lot of functions. One of them is the education of society — something the current Government cares about. The Government knows that if we expand the proportion of the population with tertiary education we will also help address a range of social issues (health and obesity might be some of them). But addressing the social issues is the benefit, not the substance that universities really work with.

The substance of the university is knowledge. Universities need to start to talk about knowledge and the ways that it underpins a safe, civil, ethical, healthy and prosperous democracy. Knowledge of the highest quality can only be produced in a free, collegial environment — and that is the type of university that should be funded. Looking for the benefits knowledge creates without fostering the environment in which it is created is an obvious — and expensive — way to fail.

Universities do also have an economic function. They influence the economy through providing skilled graduates, innovations and research, and through their very existence: they are large consumers of stuff people make, are major employers and of course are classified as a significant ‘exporter’ by educating students from other nations. But we should not confuse their economic function with their purpose. If they are funded for their economic function alone, they will fail to do the things for which they are actually needed.

It was difficult, in the 1980s, to really communicate these needs. Academics’ reputations had declined. The public tended to see them as cosseted public servants — lazy, elitist and arrogant. They were accused in the media of wasting public funding — precious after the 1970s oil shocks — in irrelevant, useless "hobby" research. Their critics hoped that the harsh realities of internal competition for scarcer resources would lead to greater efficiencies. In a phrase that could only belong to the 1980s, the goal was "more scholar for the dollar".

Advocates of this approach were warned that this would commodify knowledge — substitute its inherent value for a financial one that is useless in the long run. To critical ears it sounded like pathetic bleating by a selfish intelligentsia.

The result is that now we gather together some of the most qualified people in the country and waste their time competing for scraps of funding. Most grant applications are the size of a novella and take nearly as long to write — time that could be spent finding how to stop bushfires, cure diseases, new ways to think about classic works, make society fairer, the planet cooler.

Universities need to show that academics love their work, are inspired to do it and want more time to get on with it. They have already learned the importance of communicating what they do; now they just need to learn how to explain the kind of environment that makes good knowledge possible.

Really good knowledge can’t be made in a place where highly trained people need to count every minute and measure every ounce of their ideas. Doing so inhibits knowledge and makes higher education seem like a fight rather than a delight. Since research deals with the unknown we can’t know what we’ve missed out on. But we do know that it has been made too hard for its own good, or the good of the country.

The current focus on economic outcomes might seem like a smart way to persuade the Government to part with some cash, but it prevents Australia’s universities from being everything they so easily could be.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.