Higher education: Public good or private commodity?

Authorswhoclaimthathighereducationisapublicserviceareoftenconcernedaboutequity:theyaremakinganormativecasethatlikealleducationitshouldbeavailableforeverybody.Othersstresstheexternaleconomies:asocietywithlargenumbersofhighlyeducatedpeopleismoreefficienteconomicallyandbetterinmanyotherways.Finallythereistheargumentthat‘knowledge’isa‘non-rivalrous’commodity;oncesomethingisknownitisinprincipleavailabletoallatverylowcostandshouldbeorganizedsothatitis.Opponentsarguethat highereducationneedsresources,sosomeonemustpayforitanditismoreequitableforthe coststobebornebythosewhobenefitmostfromit.Knowledgemayintrinsicallybefreeonceithasbeendiscovered,buttheacquisitionorcreationofnewknowledgeisveryexpensiveandthosewhoacquireorcreateitneedtobereimbursed.Itisalsoarguedthatcompetitionbetweenindependentcreatorsandpurveyorsofknowledgeisinherentlymoreeffectiveintheexpansionofknowledgethanmonopoliesofanykind,publicorprivate.Thisarticleclaimsthattheargumentsonbothsidesareessentiallyaboutfinanceandconcludesthatneitherpublicmonopolynorunrestrictedmarketcompetitionarebythemselveswaysprovidingthebesthighereducationforall.


Introduction
In the past quarter century higher education has shifted from being treated by governments as essentially a public service to one that is largely bought and sold as a private commodity. This was most dramatic in Eastern Europe but it was also evident in much of the Englishspeakingworld,andChinaandmostcountriesintheOrganisationforEconomicCo-operation andDevelopment(OECD)havemovedalongwayinthisdirection.Howhasthiscomeabout andhowbeneficialhasitbeentosocietiesandtheirindividualmembers?Obviouslytherehave been massive ideological changes in societies and the economy generally. However, in higher educationtherehasalsobeenthetransitionfromelitetonearuniversality,whichasMartinTrow perceptivelypointedoutoverfortyyearsagowouldinevitablybringaboutgreatchangesinits provision: Growth affects the size of the national system as well as its component units, and here the effectsareprimarilyeconomicandpolitical.Asasystemgrowsitemergesfromtheobscurity of the relatively small elite system with its relatively modest demands on national resources, andbecomesanincreasinglysubstantialcompetitorforpublicexpendituresalongwithhousing, welfareanddefense.Andasitdoes,highereducationcomesincreasinglytotheattentionoflarger numbersofpeople,bothingovernmentandinthegeneralpublic,whohaveother,oftenquite legitimate,ideasaboutwherepublicfundsshouldbespent,and,ifgiventohighereducation,how theyshouldbespent.Therelationofhighereducationtothestatebecomesincreasinglycritical thebiggerthesystemofhighereducationis. (Trow,1974:4) In1990inareportfortheOECD,obviouslyinfluencedbyTrowandtheharsheconomicclimate ofmuchofthe1980s,Iwrote: Therearenoeasilyappliedcriteriatodeterminethetotallevelofpublicexpenditureonhigher education,andinpracticemostgovernmentshave,untilrecentlyusedsomeformofincremental funding which was uncontroversial when their higher education systems were expanding.All the bargaining and political judgement was concentrated on the size and distribution of this increment.…Incrementalfundingisthemostconvenientbasisforthepublicfundingofhigher education institutions but it is almost impossible to implement rationally if resources are not growing. (OECD,1990:13) This was written at the end of the 1980s, when communism was collapsing and in several countriespoliticianswerebeginningtoaskwhysomuchpublicfundingwasbeingdevotedtoan activitymanyofwhosebenefitsaccruedtoprivateindividuals. For more than three decades after the end of the SecondWorldWar in 1945, higher educationexpandedinbothscaleandscope,andwasusuallyabletomakecredibleclaimsfor increasedresourcesfrompublicfunds.Inafewcountries,mostnotablyJapanandtheUnited States,tuitionfeespaidbystudents'familiesmadeasignificantcontributionbutevenhereitwas recognizedthatthestatehadamajorresponsibility.Initiallythemaindriverofexpansionwasthe demandresultingfromtheincreasednumbersofqualifiedstudentsemergingfromsecondary educationandthebeliefthatgreateraccesstohighereducationincreasedsocialmobilityand hencehelpedreduceinequality.TheRobbinsReportintheUnitedKingdom (Robbins,1963),and similarstudiesinmanycountries,demonstratedconvincinglythatlargenumbersofyoungpeople withtheabilitytobenefitfromsomeformofeducationandtrainingbeyondsecondaryschool wereunabletodosoforfinancialreasonsorbecauseofinadequatecapacityintheuniversities andcolleges.Althoughsuchargumentsarestillbeingmadebyadvocatesandlobbyistsforhigher education,theyhavebecomelessconvincingas,touseTrow 'sterminologyanddefinitions,'elite' highereducationhasgivenwayto'mass'and,inmanyeconomicallyadvancedcountries,'universal' highereducation(Trow,1974).
From the 1960s economists have also been showing that universities and colleges make a significant contribution to economic growth, both because most graduates became more productivethantheywouldhavebeenotherwise,andasaresultofthecontributionofuniversity researchtoimprovedeconomicefficiencythroughtechnologicalandorganizationaladvance.By the1990sthiswasbeingtakenupbyhighereducationlobbygroupsandsomepoliticiansand hasbecometheprincipalrationaleforcontinuedexpansioninthe1990sandearlytwenty-first centuryinmanycountries.
From the 1990s onwards there has been growing disillusionment, at least among the politicallyactiveclasses,aboutmanyoftheconsequencesoftheincomeandwealthequalization policies that had held sway for several decadesafter the end of the SecondWorldWar (see Piketty,2014).ChangesinmanyotherEuropeancountrieshavenotbeenasdramaticasinthe UnitedKingdombutinthepasttwodecadestherehasbeenamarkedshiftawayfrompublic provisionofmanygoodsandservicesinmostcountriesoftheOECD.AsTrowforesaw,mass highereducationcannotexistinanivorytower,isolatedfromthepoliticalandculturalcurrents ofsocietymoregenerally.
Thesethreepressures,thefinancial,thesociopolitical,andtheideologicalhaveallplayeda partinbringingabouttheshiftofhighereducationawayfrombeingtreatedasapublicservice towards becoming a marketable commodity subject to the laws of supply and demand by individualsandorganizedgroups.
The case for higher education as a public service Educationhasalwayspresenteddifficultiesforthosewhoadvocateasimpleindividualisticliberal view of society, in that its purpose is to bring about a transformation in the knowledge, the thinking,andthecapabilitiesofthoseundertakingit,whetherthatbelearninghowtooperate heavy machinery or internalizing the truths of the Qur'an or the Bible.The individual who undergoesaneducationalexperiencebecomesadifferentperson,withanunderstandingof,and oftenanabilitytodo,somethingtheywerenotcapableofbefore.Theprominentnineteenthcenturyadvocateofliberty,JohnStuartMillhadtoconcedethat: Itisbettertobeahumanbeingdissatisfiedthanapigsatisfied;bettertobeSocratesdissatisfied thanafoolsatisfied.Andifthefool,orthepig,isofadifferentopinion,itisbecausetheyonlyknow theirownsideofthequestion.Theotherpartytothecomparisonknowsbothsides. (Mill,2013:13) Educationisthemechanismbywhichtheenlightenedandknowledgeableofeachgeneration have been able to pass on their wisdom to their successors. Intheideologicalclimateofthemid-twentiethcenturyitwasrecognizedinmostcountries thatanindividualisticapproachtohighereducationprovisionresultedinconsiderableunfairness, in that many people who could undoubtedly benefit from it were unable to do so because of inadequate earlier education or lack of financial resources (e.g. Robbins, 1963). It became plausibletomakethecasetoextendtherationalesthatwerewidelyacceptedfortheeducation of juveniles to the further and higher education of young adults. Public provision of higher educationbecamethenorm(thoughthereweredifferencesbetweencountriesabouttheextent towhichthiswassupplementedbyprivateinstitutionsofvarioustypes).However,when,asin manyOECDcountries,themajorityofpeoplebegantoundertakesomeformofhighereducation andhighereducationinstitutionslaidclaimtoalargeshareofalleducationandtrainingofadults, itbecamemoredifficulttojustifycomprehensivepubliclyfundedprovisiononthesegroundsfor reasonsofbothcostandencouragingdiversity.Whichofthealmostinfinitenumberofpossible highereducationactivitiesshouldbeincludedamongthosepubliclyprovidedandwhoshould decide?To give a single example, there have always been considerable differences of opinion aboutwhetherlearningaboutalternativeandcomplementarymedicineshouldbeavailableasa publicservicealongwithmoreorthodoxmedicaleducation.
There is also the argument made by some economists in their theories of endogenous economicgrowth(seeRomer,2011).Thebasisoftheirargumentisthatgroupsofwell-educated people working together are more productive than they would be if they were all working individuallywithlesswell-educatedpeople.Emailandtheinternetareanexampleofthis.Atatime whenfewpeoplehadaccesstothem,andfewerstillknewhowtousethem,theyhadvirtually noimpactonoverallproductivity.Nowthatverylargenumbersofpeoplehaveaccessandgood knowledgeofhowtousethem,theireffectonoverallproductivityhasbeenphenomenal.
Such arguments, combined with those ofWilletts, justify claims that the overall public benefitsfromhighereducationaregreaterthanthesumoftheindividualbenefits.

Theoretical issues
Theimportantquestionfortodayisnotwhetherinpracticetwenty-first-centurymasshigher educationispublicorprivatebutwhetheraconvincingcasecanbemadebythosewhowould prefer the tide to turn and its public service features to be recognized more widely.Three principalargumentshavebeenmade. Firstitmaybethathighereducationissomethingtowhicheveryoneshouldhaveaccess. Therearepossibleanalogieswithhealthorjustice.Noteveryonewantstomakeuseofthese servicesatanyparticularpointintimebutitisreassuringforeverybodytoknowthattheyare thereifneeded,onsomethinglikeequaltermsforeverybody.Someauthorsgofurtherthanthis and argue that because all education is transformative for the better, everybody should have accesstoitwhethertheywantitornot.Theanalogyherewouldwithcompulsoryeducation ofchildrenorcompulsoryvaccinationagainstsmallpox.Howfararewepreparedtogowith this analogy? In the twentieth century some ideologies in positions of power, Nazism and Communismamongothers,madeessentiallythisargument. AslightlylessstrongversionofthiscaseisonethatwasmadebytheRobbinsReportin 1963butthathasratherfallenoutoffavourintheinterveninghalfcentury.Thisisthathigher educationhelpstopromoteacommonculture: … there is a function that is more difficult to describe concisely, but that is none the less fundamental:thetransmissionofacommoncultureandcommonstandardsofcitizenship.Bythis wedonotmeantheforcingofallindividualityintoacommonmould:thatwouldbethenegation of higher education as we conceive it. But we believe that it is a proper function of higher education,asofeducationinschools,toprovideinpartnershipwiththefamilythatbackground of culture and social habit upon which a healthy society depends.This function, important at alltimes,isperhapsespeciallyimportantinanagethathassetforitselftheidealofequalityof opportunity. (Robbins,1963:7) Inanageofmulticulturalismandwhendiversityisatleastanimplicitaimofdecisionmakersfor highereducation,itisdifficulttoseethisasajustificationfortreatinghighereducationasapublic service.Canweagreewhatthecommoncultureshouldbein2016?Insomecountriesfaith-based universitieswerecertainlyfoundedontheideaofabelieftheywanttopromulgate.Patriotism isanotherpossiblesetofunderlyingbeliefsthatsomepeoplebelievejustifiesconsideringhigher education as a public service, at least in some respects. But in general, modern democratic societiesexistinanenvironmentthatlikestoconsideritselfpostmodernandnotsubjectto overridingabsolutevalues.Academicfreedom,diversity,andtolerationwithintheconstraintsof thelawandavailabilityoffinancearenowgenerallyseentobeessentialaspectsofanyhigher educationsystem. Forsomepoliticiansandauthorsonhighereducationissues,equalityisclosetobeingthe commoncultureofthetwenty-firstcentury.Forexample, Nixon(2015),inawide-rangingreview oftheliterature,claimsthathighereducationshouldcontributetothepublicgoodbypromoting the reduction of inequality in its own activities and in society generally. Much of the debate is about whether equity between individuals and groups should be the underlying constant andwhethertheevaluationofanysystemshouldbetoalargeextentaboutwhetheritpromotesequality.Manypoliticiansandotherobserversgofurtherandclaimthatnotonlyshould greaterequalitybeaprincipalaimofhighereducationsystemsbutthatitshouldalsoapplyto allindividualinstitutions.Butisthisarealisticmissionforhighereducationandisitanadequate basisforconsideringhighereducationasapublicgood?
Anotherexpressionofthegeneralwillisthe'democraticmajority'.Asfarashighereducation asapublicserviceisconcerned,thisraisesquestionsabouttheresponsibilityofthemajority towardsminoritiesthatexistinthesamegeographicalarea.Inmanycountriesthesemanifest themselves in linguistic, cultural, and ethnic differences.A very real practical issue is whether thedemocraticmajoritycanlegitimatelyimposeitshighereducationontheminoritiesinthe pursuitofacommoncultureornationalunity.Often,separatehighereducationinstitutions,and sometimes separate higher education systems, are permitted and encouraged. In the United Kingdom, England, Scotland,Wales, and Northern Ireland now have distinctly different higher educationsystemsandsimilararrangementsexistintheUnitedStatesandmanyothercountries.

Research in higher education institutions
Muchofthedebateabouthighereducationasapublicgoodisconcernedmainlywithuniversities andcollegesasteachinginstitutionsandtheextenttowhichthebenefitsoflearning,directand indirect, go beyond the private benefits acquired by their graduates. Many higher education institutions also create knowledge through their research, which has important public and private consequences, and the relationship between the public and the private is particularly difficulttodisentangle.Knowledgecanbedividedintotwobroadcategories:thatwhichonce discoveredcanbecodifiedandstoredonpaper(orindatabanks);andthatwhichisembedded in individuals who possess the knowledge or capability and cannot be separated from them. In the case of the former, once the knowledge has been codified it can be stored and made widelyavailableatrelativelylowcostandoftenwithcomparativelylittleeffortonthepartof theuser.Itbecomesnon-rivalrousandintrinsicallynon-excludable.Embeddedknowledgeofthe secondtypecanbetransferredfromoneindividualtoanotherbutitsacquisitionrequiresas mucheducationortrainingfromeachnewgenerationasthosewhoacquireditintheprevious generation. Knowledge that needs to be embedded in individuals is intrinsically private; the Londontaxidriver,forexample,acquires'theknowledge'ofroutesthroughthecitystreetsand isabletoearnalivingfromit.Amedicalpractitionerlearnshowtocurepeopleorpreventthem becomingillandisabletoprofitfromthisknowledge.Bothtaxidriverandphysiciantakeseveral yearstoacquiretheknowledgeandtherearefewshortcuts.Ontheotherhand,anewdiscovery thatmaytakealargeamountofresourcestomakecanoftenbecodifiedandmadeavailableto allatverylowcost.TheWorldWideWebrequiredgreatingenuitytocreate,asdidtheplaysof Shakespeare,orthemusicofBeethoven,butoncecreatedandwrittendownorcodified,they canallbemadeavailabletoothersatverylowcost.Thusitcanbearguedthatmuchresearch shouldbetreatedasapublicgood.
As already indicated, the emergence of mass, and later near-universal, higher education (Trow,1974) Thelogicofmarketsisthatindividualspayforwhattheywantorwhattheywillbenefitfrom. Thisrunscountertothewishforhighereducationtobedistributedwidelyandfairly.However itisfinancedandwhateverregulationsareinplaceaboutstudentadmissions,potentialstudents donotallstartfromthesameplace.Somehavebeenabletohaveanexcellentprivateeducation thathasbroughtthemuptoveryhighlevelsofeducationalachievement;othershavebeenless fortunateintheirearliereducation.Somedonothaveaccesstotheresourcestopaythefees and maintain themselves while they are studying. But most importantly, the sum of individual choices may not add up to the best contribution that universities and colleges can make to economicandsocialprogressmoregenerally.Ifreductionofinequalityandeconomicandsocial progress are to remain two of the main drivers of higher education, interventions by public authoritiesremainnecessaryeveninafullyprivatizedsystem.
Inthelastanalysis,highereducationcannotbeunderstoodexceptinthecontextofthe widersocialandpoliticalenvironmentinwhichitislocated.Asinallsocialactivities,thereisan inherenttensionbetweenthecollectivepublicandindividualprivatebenefitsandresponsibilities. In the long term, the ideological climate tends to swing from one to the other.At present, individualcostsandbenefitsofbothsuppliersandusersofservicesareintheascendant.
Undoubtedly, higher education has many of the attributes of both a public and a private good.Thatitusuallybringsconsiderablebenefitstomostindividualswhoundertakeitisbeyond question.Thatitshouldbeorganizedinsuchawayastoallowallwhocan,tobenefitfromitis avaluejudgement,butonethatissowidelyheldastobealmostbeyondquestion.Individuals enjoy the benefits of their higher education and as many people as possible should have the opportunitytoenjoythem.Atthesametime,therearemanywiderbenefits.Asocietyinwhich highereducationiswidelydistributedbenefitsbotheconomicallyandsocially.Asocietypeopled by well-educated citizens is in general more aware of the range of life's possibilities and is thereforemorelikelytotakewisecollectivedecisionsthanonewithlesswidespreadawareness ofhumanpotential.ThisisanempiricallytestablehypothesisandtheworkofMcMahon(1999) madeastartinshowingthis.

Notes on the contributor
GarethWilliamsisanemeritusprofessorintheCentreforHigherEducationStudiesattheUCLInstitute of Education, University College London. He has worked on the economics, policy, and management of highereducationformostofhiscareeratOxfordUniversity,theOECD,theLondonSchoolofEconomics, LancasterUniversity,and,forthepastfortyyears,attheInstituteofEducation.Herecentlypublishedan editedvolume(withOuraniaFilippakou):Higher Education as a Public Good: Critical perspectives on theory, policy and practice (NewYork:PeterLang).