Universtities need to be set free

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Lord Mandelson’s policies of economic interventionism that have accompanied his latest return from exile have had much support from many on the left of the political spectrum. However, the chickens are now coming home to roost, as the recent case of universities makes only too clear.

The oft-stated analogy of a government trying to control the price of bread is as pertinent in the case of universities as all other examples where those in power try to control the prices, supply and demand of any good. The real and disastrous consequences of this fatal conceit have been repeatedly proven in the annals of history. At present the government is unable to keep up with the demand for subsidised university places, while being fairly accused of both engendering elitism and funding ‘Mickey Mouse’ courses. At the same time the universities are complaining that government cuts are driving them to the wall. Higher education is in a mess that only the private sector can solve.

Rather than admit defeat, Madelson is instead dolling out more advice to the inheritors of Labour’s debt. Apparently, those that cannot find a place at university should “take up an apprenticeship or college place”, because “the traditional three-year after school honours degree should no longer be a focus for future growth”. What happened to higher education as social engineering? Now its higher education as economic engineering.

Policy Exchange's latest report points the way, but in calling for top-up fees limited at £5,000 does not go far enough to set universities free. It also fails to fully address the iniquitous fact that the state subsidies offred to universities are in effect a transfer of money from the poor to the rich.

It is time to get government out of higher education. This is exactly what a soon-to-be-published ASI report by Dr James Stanfield of the EG West Centre will set out. If you have an interest in the findings of this report, do get in contact with me at: philip@old.adamsmith.org, and to find out about the launch event of this publication click here.

Political correctness over progress

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Since the 1990s, charter schools have sprung up across America. Set up by non-profit groups such as parents, teachers and universities, they receive public money but are freed from certain rules and regulations, possessing greater autonomy than regular state schools. They two vital things: choice and competition. However, they have been criticized in a recent UCLA Civil Rights Project report for the racial segregation that they cause.

Original critics of charter schools worried that they would ‘cream off’ the brightest, more wealthy and predominantly white students. However, this never happened. 54% of charter school pupils qualify for free or reduced lunches, and black students account for 32% of charter school enrollment: twice their share of enrollment in regular public schools. Throughout the USA, ethnic minorities and low earners have been moving their children into charter schools. Dissatisfied by the one currently handed to them by the state, parents have been seeking to give their child a better education. Because of this, the concentration of particular ethnicities has risen. The UCLA’s study found that 70% of black charter students are in schools where over 90% of the student population is non-white- in comparison to only 36% black pupils in regular public schools.

According to UCLA this is a cause for concern. Professor Gary Orfield, co-director of the Civil Rights Project insists that "the vision of a successfully integrated society…ought to be a defining characteristic of charter schools. Federal policy should make this a condition for charter school support”.This type of political posturing is not only infuriating but potentially damaging. Studies show that charter schools have been very successful in helping minority students. As many charter schools cater to their local community, the ethnic mix of pupils often reflects racially exclusive neighborhoods, not prejudice.

Threatening a school’s future just because they cannot attract the right mix of skin tones would be far from progressive, and would hinder those who require a decent education the most. Interfering in charter schools through politically motivated and discriminatory legislation undermines the very concept of an autonomous place of learning. charter schools should continue to focus on providing quality teaching to whoever walks through their door regardless of colour; their job is education, not integration.

Still no free lunch

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There’s no such thing as a free lunch. Nor, is there such a thing as a free degree. From the moment that government started subsidizing higher education, it has been those at the lower end of the socio-economic scale who pay without benefiting.

Although many make the case that poorer people can’t afford a place at university under the current system, they seem to overlook the other ways in which university could be paid for. To answer this question we need only look overseas.

Through a combination of higher fees, loans and philanthropy, American universities are able to offer poorer students the opportunities within a system of private universities. For example, a student whose parents earn under £30,000 would find themselves fully funded at Harvard. Even those with a family income of £90,000 would only pay £9,000 per year in tuition.

This goes some way to explaining why so many intelligent British students are crossing the pond in search of a superior, cheaper degree. The British university system has a lot to learn. If universities were delinked from state subsidies they could become more dynamic and student focused, forced to improve or face a loss of students, and eventual closure. Given that students already want be treated as consumers – protesting at places like Manchester University when they feel they aren’t being given value for money – the time is right for change.

Students that complain about having to pay for degrees have a very shortsighted view. Their argument that they don’t want to come out of University with £20,000 of debt seems to pale into insignificance when the education received could result in significant future earning. Yet the students are asking for those without this future privilege to pay for their education. It is time they stopped eating from their table.

An education in education

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Having read his superlative The Beautiful Tree, I have been working my way through Professor James Tooley’s E.G. West: Economic Liberalism and the Role of Government in Education. Stunned also by E.G. West’s magnum opus, Education and the State, I was thus keen to read Professor Tooley’s analysis of the great man and his work. It did not disappoint. In thoughtfulness it put shame to my scribbles in the margins of my copy of Education and the State.

Although unknown to far too many people, E.G. West’s work was, and remains, groundbreaking in scope and depth. Using the lessons of public choice theory he convincingly explains how and why the state came to dominate schooling. The initial usurpations in the 19th Century can be broken down in to six stages:

1. 1833 – The Committee of Council encouraged private schools to take money in exchange for being regulated.
2. The Committee of Council then produced dubious statistics to argue that there were deficiencies in the population’s education
3. Through the elaborate pupil-teacher system, the Committee of Council aligned teachers’ interests with those of the Council’s.
4. Churches were restricted from helping the poor and strict building codes were introduced.
5. 1870 – The Education Act set up the board school. This increased the domain and influence of the Department of Education.
6. 1878 – Board schools given the right to supply deficiencies ahead of voluntary establishments, who were now ineligible for any subsidies.

It is important to note that most, if not all, of this happened without ill intent; yet it is still best explained by the self-interest of bureaucrats through public choice theory. Disturbingly, despite this increase in government expenditure, these policies lead to a decrease overall in spending on education. West calculated that by 1882, 27% of private investment had been crowded out by the state.

In light of West's and Tooley's works it is odd that so many people who are open to free markets in so many functions of the state are still remarkably statist with regards to education. It is not only that they fail to make the ‘leap of facts’ to support a system with no, or almost no, government intervention, they are even averse to anything that goes beyond the limited terrain of Friedman’s voucher system, despite all the state controls that would still be left in place. As such, I can do no more than suggest they read West and Tooley, required reading for anyone that requires an education in education.

Will we get for-profit schools?

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Cameron and Gove have fleshed out their education policy a little, and I have to say, I’m not quite as excited about it as James Forsyth over at the Spectator. There are a couple of useful announcements, but if this is what the manifesto will look like, then one thing stands out that should worry any parent lacking the spare change to send little Johnny to Eton: We will not be getting new for-profit schools.

In the Draft Education Manifesto it is explicitly stated on page seven that the new academies will be run by “charities, parent and teacher groups, trusts, voluntary groups and co-operatives." The 'radical' Conservative education policy wouldn’t be so radical without education companies. This draft manifesto claims to be “[d]rawing on the experience of the Swedish school reforms and the charter school movement in the USA", but in both instances for-profit schools are both an option, and I would argue, vital for their proven success.

If Cameron and Gove really are to give every parent access to a good school (as they claim), then unleashing competition into this shackled marketplace is vital. Without the profit motive and all the attendant drivers for excellence, a great part of the radical reform will be left in the paddock. But surely Cameron and Gove don’t need to be told that, why else were they busy championing the Conservative cause when Margaret Thatcher was busy liberalising huge swathes of the economy from the dead hand of the state in the 1980s?

I hope to be proved wrong on this point. Last year Frazer Nelson – who has incidentally done an excellent job with the Spectator – suggested that Gove’s schools would be run for a profit. At the time it appeared that he was privy to information that likely future Prime Minister had accepted the logic of Anders Hultin – an architect of the Swedish government’s voucher system – that profit was the key to success in Swedish schools. We will see...

Stop 0xC0000218: Policy Error

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One of Labour’s early campaign pledges is to provide £300 million worth of laptops to provide computers to 270,000 families.

Given the state of the public finances, it hardly seems appropriate to make new unfunded expenses. There are around 30 million income tax payers, so this scheme averages £10 per head. As for the educational merit of this scheme, a lack of laptops is not at the root of our falling standards. Rather than just chucking more of our money at the declining system, when education is already well funded, the government should instead attempt to reform the education sector to empower the users (parents and children), and deliver value for money.

Doing basic computation shows that this scheme costs over £1100 per laptop. This is a ludicrous expense for laptops. Private philanthropy through the one laptop per child project since 2007 has been delivering £62 ($100) laptops for children in developing countries and a new and perfectly capable windows laptop, as I myself use, can easily be acquired in the UK for under 300£. In the profit making private sector the Alienware M15X, the “universe's most powerful 15" gaming laptop", starts at £1158. Perhaps the government wishes to equip children for state of the art gaming? No doubt the government provided computers will be much less potent than those that can be purchased at the same cost in the private sector and like most government IT projects, this one will not only start with ludicrously high figures, but end horrendously over budget.

However, even if one supported the principle of the government spending more rather than tackling the deficit, and even if one believe that laptops were the best way to improve education (rather than transforming the sector, allowing money to be directed by the choices of parents and pupils), this scheme is terribly flawed. Why must government administer it? Instead, if the government gave families a £300 laptop voucher, this would not only vastly reduce costs but also allow parents to decide where to spend the voucher, which brand to buy, and what type of laptop they desire.

The government’s education policy is in desperate need of a reformat and reboot, but before doing so, this shallow vote seeking pledge should be sent to the recycling bin.

Competing schools

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I stopped reading The Economist a while back, but yesterday by chance I happened upon a blog on their website that reminded me why I was so keen to cancel that subscription.

It is on education and gives undue credit to a thesis set out in the abstract of this paper and endorsed by Matthew Yglesias in a blog here. It is perhaps best summed up in the following statement by Mr Yglesias’:

Colleges and universities compete with one another largely by trying to attract the best applicants. That lets you screen and have the best students. Which then helps ensure that your students go on to be successful, thus improving your reputation. Missing from the circle of life is any thought that you might have to actually do a good job of improving the skills of your students.

And so, for Mr Yglesias, the solution is to limit school choice. The Economist follows this logic stating that:

One tricky part about introducing competition into schooling is in setting up the market to reward high quality teaching rather than reputation.

And goes on to argue that:

We want teachers to do their best. But if the most important thing in education is to be around the right people in the right place, then parents with the financial ability to do so will opt out of the system, reducing the average ability of the students remaining in the system, and making teachers' task harder.

The principal mistake is these authors’ failures to acknowledge that we currently have the very problem that they are wishing to avoid. An education system with profound social, economic and qualitative differences of schooling, determined by a postcode lottery. Thus, positing the fear that a free market will lead to these problems is misleading. As such, the question needs instead to be asked would a free market be less or more equal than the current system (if equality is your aim).

Also, in dealing with the issue, no consideration is taken as to why teachers in schools don’t teach well. The chief answer is an absence of competition. The key to creating this does not lie in another distorted market that will invariably bring its own unintended consequences, but to set schools and parents free.

For this we can turn to Adam Smith. Although he was in favour of some taxation to help fund schools, let it not be forgotten that he also endorsed and saw the merit of parents additionally paying school fees directly to teachers to ensure that teachers' positions and careers are garnered, secured and advanced by the quality of what goes on inside the classroom.

Schools surpluses

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Despite government plans to teach children ‘money management’ lessons from the age of five, thousands of schools that have effectively controlled their finances are facing unpleasant repercussions. The Department for Children, Schools, and Families has released the expenditure of our schools and seeks to ‘name and shame’ those that have amassed significant surpluses. Headteachers of such schools have been warned that they should return ‘extra’ money to their local authorities, and might well be forced to do so under law.

This is an absurd idea: punishing schools for prudence and careful budgeting will simply lead to a further degeneration in the quality of the country’s education. Most schools control spending and generate surpluses in order to invest in large projects or improved facilities, such as a new science lab. Compelling schools to spend their entire budget each year creates little incentive to take a long-term view to investment for either the school or its pupils. By frittering away money for the sake of it, this creates an even greater waste of taxpayer’s money.

While we rightly don't like the idea of schools hoarding public money for the wrong reasons, the best way to combat this (and solve many other problems) would be through educational reform. With vouchers Parents should be free to send their children to the school of their choice, with the money following the child. In this way, schools which appear to stockpile funds yet make scant improvements would see themselves very short on pupils and money.

School accountability

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A report released today by the Children, Schools and Families Committee, entitled School Accountability, paints a highly uncomplimentary picture of the government, Ofsted and the regulations and impositions upon the schools of this country.

It is the same old story. Despite the best of intentions, “the Government has continued to subject schools to a bewildering array of new initiatives". The disease is simple enough to diagnose. But it could get worse with the government’s 21st Century Schools White Paper signaling “even greater complexity in an already overly complex system of school accountability and improvement initiatives".

The report is highly critical of the government:

The complexity of the school accountability and improvement system in England is creating a barrier to genuine school improvement based on the needs of individual schools and their pupils. We support the message in the 21st Century Schools White Paper, that schools should be empowered to take charge of their own improvement processes. However, the Government’s continuing tendency to impose serial policy initiatives on schools belies this message and the relentless pace of reform has taken its toll on schools and their capacity to deliver a balanced education to their pupils. We urge the Government to refrain from introducing frequent reforms and allow schools a period of consolidation.

Ofsted is also given a firm and fair wrap on the knuckles:

We note that Ofsted has a duty to encourage improvement in schools. However, we do not accept that Ofsted necessarily has an active role to play in school improvement. It is Ofsted’s role to evaluate a school’s performance across its many areas of responsibility and to identify issues which need to be addressed so that a school can be set on the path to improvement. Ofsted has neither the time nor resources to be an active participant in the improvement process which takes place following inspection, aside from the occasional monitoring visit to verify progress.

 It acknowledges the unintended consequence of the inspectorate system:

[M]any schools feel so constrained by the fear of failure according to the narrow criteria of the Tables that they resort to measures such as teaching to the test, narrowing the curriculum, an inappropriate focusing of resources on borderline candidates, and encouraging pupils towards ‘easier’ qualifications, all in an effort to maximise their performance data.

And even sketches out some enlightening conclusions:

We are persuaded that self-evaluation—as an iterative, reflexive and continuous process, embedded in the culture of a school—is a highly effective means for a school to consolidate success and secure improvement across the full range of its activities. It is applicable, not just to its academic performance, but across the full range of a school’s influence over the well-being of the children who learn there and the community outside.

There is also some good stuff about localising power away from central government, but despite an accurate diagnosis of the problem the report delivers no meaningful cure. Even with all the failure, they are still ‘satisfied that schools should be held publically [read governmentally] accountable for their performance as providers of an important public service’. Yet unless the state school system is returned to the free market, we will never see any real and lasting improvement. Whatever the frequency or nature of testing, Ofsted will only be measuring relative levels of failure.

The report should follow the logic of its own conclusion:

It is time for the Government to allow schools to refocus their efforts on what matters: children. For too long, schools have struggled to cope with changing priorities, constant waves of new initiatives from central government, and the stresses and distortions caused by performance tables and targets.

Teaching right and wrong

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Teachers have been instructed in some areas to teach their pupils the wrongs of "file-sharing," but apparently they don't seem to be getting anywhere. According to an article in the Scotsman teachers are finding it hard to explain why illegal downloading is bad and even what it means.

In a 2003 Gallup Youth Survey, only 15 percent of youngsters aged 13 to 17 thought that "in general" downloading music was "morally wrong". Yet 81 per cent agreed cheating in tests was morally wrong.

As the article properly points out, its not a clear cut issue. The consequences are hard to explain because there is unlikely to be any outcome should a child admit that they are illegally downloading.Considering many teachers have a hard time teaching children the difference between right and wrong, asking them to explain the intricacies of file-sharing illegality might just be too much to ask.