Putting the Mass University Out of its Misery

The cost to students of a social science degree in Australia will double from 2021. At least it will if the Senate crossbench approves the measure. The mooted change in the federal government’s pricing schedule has been greeted with predictable foot-stamping. Critics almost uniformly suppose that the universities are a kind of Socratic paradise which is under threat. In reality this paradise is more like a Benthamite nightmare. Far causing the sky to fall, the price change in fact opens up some possibilities for the future of the social sciences in Australia.[1]

Price signals are designed to alter consumer behaviour. From 2021, the price paid per year by new students enrolling in a social science degree will rise from $6804 to $14,500. The government subsidy will fall from $11,015 to $1100.[2] The total value to universities of a social science degree will drop from $17,819 to $15,600 a year. All of these figures are in 2021 dollars. As a point of comparison, economics and law degrees already cost students $11,355 per annum. These will rise marginally to $14,500 with an accompanying reduction of $1137 in government subsidy. Commentators assume that enrolments in the social sciences will shrink in step with the price increase. Normally if the price of a good is increased the number of persons purchasing the good will decline. That is true of most goods. But university places are not most goods.

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The correlation of higher price and lower consumption tends not to apply to three kinds of goods. The first exception is status goods—where the higher price is the good because the higher price is a symbol of higher status. The second exception is scarce goods—where the demand for the good habitually exceeds the supply of the good. The third exception is where a person commits to pay for a good but the actual payment is delayed for a long time. Many Australian students fall into the third category. Australia has a loans scheme for delayed payment of university fees. The scheme ensures ready access to Australian universities irrespective of means. The consequence of delayed payment though is that the price of a degree has substantially less effect on degree choice than might be first thought. So it is difficult to predict whether fewer enrolees will opt for social science degrees in the future.

In Australia in the 1950s a social science degree was a status good and a scarce good because few persons went to university. In retrospect people tend to think that this was because individuals had to pay up-front for their degrees. That explanation is misleading. Sixty per cent of students in the 1950s were supported by university scholarships. Moreover, the real price of a degree was much lower than today. Consider the cost of a degree measured as a percentage of average earnings. In 1955 a four-year Arts degree cost individual students $22,090 in 2019 dollars. The same four-year degree today, given the government’s 2021 price schedule, will cost a student $58,000—2.6 times the 1955 cost.[3] That 2.6 multiple is almost entirely explained by the ballooning of university administration and infrastructure costs over time. It has virtually nothing to do with the (strictly-defined) teaching and research component of universities.

Yet there are some like me turn gladly home 
From the lush jungle of modern thought, to find 
The Arabian desert of the human mind, 
Hoping, if still from the deserts the prophets come…
                                                 —A.D. Hope, “Australia”

University education in the 1950s was scarce but cheap. Today it is abundant but expensive. Its scarcity in the 1950s was generated by the fact that high scores were required to enter a university. The percentage of intellectually gifted and motivated persons in any given population is limited and cannot be expanded. The abundance of university education today is not a function of lower real prices but of lower entry scores.

From the 1960s onwards, governments, beginning with the Menzies government, intervened in the university sector to subsidise prices. The effect of this invariably was to increase prices, not reduce them. The aim and outcome of these subsidies were to feed a massive rise in administration and infrastructure expenditures in order to expand the post-industrial economy that replaced Australia’s shrinking manufacturing industries.

When they work well, markets do two things simultaneously. They reduce prices, and they increase the quality of products. The mass university did the opposite: it increased prices and reduced quality. Prices rose as universities added taxpayer-funded post-industrial administrative and infrastructure leviathans to satisfy the view of governments that these institutions were key economic drivers. As universities grew in size, the aptitude and motivation of students and academic staff inevitably declined. The milieu for serious thought and work was watered down, and a vacuum was created that was quickly filled by romantic “studies”.

What is a university?

The university began as a vocational institution. It was conceived nine hundred years ago to train lawyers, doctors and priests. Vocational education is procedural in spirit. It teaches students techniques, protocols and rules for carrying out professional or quasi-professional operations. It is methodical, meticulous and schematic by nature. It has intellectual content but its body of knowledge is “circumscribed” (as Michael Oakeshott put it).[4] Its knowledge is reducible to handbooks and manual-style textbooks.

That universities developed as a crucible for the classical mind as well as the vocational mind may have been an accident. Immanuel Kant implied as much when he described philosophy—the wellspring of the classical mind—as the “lower faculty” in the university compared with the “higher” professional faculties.[5] From philosophy eventually descended the cohort of classic social science disciplines including economics, political science, classical sociology and psychology. By the 1950s these disciplines had acquired their mature form. The classical mind tended to be sceptical, intellectual, wry, pithy, unemotional, hardy, positive and objective.

To be objective means to inquire into things that exist objectively—outside of one’s own self. The classic mind instinctively looks to things that are external rather than to romantic representations of how we think the world ought to be, must be or should be. I remember well teaching Aristotle to first-year undergraduate students forty years ago. Aristotle methodically compared regimes and constitutions. He thought that there were better and worse ones. But his judgment was not unhinged from the reality that he patiently set out. And no regime or constitution was perfect.

Objectivity extends to politics. Universities today are heavily biased to the political Left—especially (but by no means exclusively) in the humanities and social sciences.[6] It is no accident though that, of all the social sciences, economics and political science are least skewed to the political Left.[7] This is because, in these very old disciplines that have been built up over centuries, judgments—whether of the Left, Right or Centre—are more inclined to follow reality rather than attempting to lead it. This doesn’t preclude intellectual moralicing and political neuroticism but it does tone it down. Underlying this is the classic precept that social realities, many of them large-scale in nature and effect, shape human behaviour much more than the will of governments or social groups or any single individual can. The classic mind prefers observation to engagement and distance to participation.

The converse is true of the romantic mind. It emerged at the end of the eighteenth century. Unlike the classical mind, the romantic mind is engaged, redemptive, passionate, loquacious, brittle, obscurantist and negative. In its eyes, society is bad, nature is endangered, and change is the supreme value. As it evolved, the romantic mind endorsed numerous political movements on the Left and Right, including socialism, progressivism, populism, fascism, communism, nationalism, safetyism, environmentalism, and numerous ever-mutating varieties of identity politics. Dating from the “socialists of the chair” in nineteenth-century German universities and social liberals in Australian universities and the adult education movement at the turn of the twentieth century, the romantic mind has long been a major force in higher education. After the 1970s university romanticism was routinised with the massive proliferation of “studies” programs. These institutionalised, on a large scale, courses whose curricula awfulised society and catastrophised nature.

The most important of the classic social science disciplines are political science and economics. The first of these has a 2000-year history; the second has 300 years of history. These are not only old but also demanding courses of instruction and inquiry. Numerous kinds of “studies” now compete with them. On the margins of political science emerged development studies and legal studies. International relations was squeezed by international studies, peace studies and conflict studies. Vocational journalism became colonised by media studies. Evangelising business courses (like marketing) grew to overshadow vocational majors like accounting and the classical discipline of economics. Identity (class, status, race, ethnicity, gender, sexuality) courses almost entirely swamped classical sociology.

Intellectual quality deteriorated as the classical disciplines were marginalised or colonised by romantic evangelising. Empirical inquiry became chained to social advocacy. Narrative fantasies negated intellectual objectivity. This is not to say that the classic disciplines were without their own problems. Some used increasingly sophisticated mathematical techniques to pursue ever-more shallow inquiries, which often produced interesting data and insights at the cost of screening out the larger economic and social picture. The effort to produce a synoptic view of entire economies, for example, is now largely left to undergraduate macro-economic textbooks.

Unsurprisingly then, over the fifty years since 1970 the amount of serious research produced by the social sciences has declined sharply and measurably compared with the period between 1900 and 1970.[8] This is not to say that no serious work is produced, but its incidence has declined markedly compared with the 1920s or the 1950s. This shift mirrors the chances of a university student getting a serious social sciences education. It is still possible. But as time progresses it is less and less likely.

The multiversity

The mass university that emerged after 1970 developed as a multiversity. The multiversity indiscriminately incorporated vocational, classical and romantic education. This evolved as an unstable and incoherent mess. That incoherence is reflected today in political views of higher education. Take the case of Australia’s Liberal Party. It pioneered mass higher education in the 1960s. By 2020 it was split three ways between the Morrison–Tehan preference for vocational education, the Turnbull–Bishop advocacy of social-liberal evangelism and the Howard–Abbott desire for classical education.

The multiversity has no way of reconciling, resolving or deciding between these competing views except to allow its courses to become a blobby melange of them all. Vocational courses take on romantic ideologies and barely digested bits and pieces of classic frameworks. The classical mind flirts with romantic angst. The romantics generate endless Baroque pseudo-theories in the vain hope of reaching the pinnacle of the classic mind. The large managerial class in the universities looks on all of this with a mixture of indulgence and cynicism. In its eyes the world is composed of child-like academics who have to be coddled and government ministers who have to be courted and feted.

Australian governments and universities at least agree on one thing. The question of “What is a university?” must be ignored as far as possible. It is much better to fight about the price of degrees. Yet the gnawing question of what a university is will not go away just because managers or government ministers happen not to like it.[9] If anything, the way degrees are priced makes that question ever more salient.

The price of a social science degree, like all degrees, is politically engineered. For its projected 2021 schedule, the government decided to price courses in line with national labour market priorities and the cost of delivering courses.[10] The latter method is a slick version of Marx’s labour theory of value updated for the big Keynesian public sector. The value (or price) of a good is determined by the cost of its input. This is a form of bureaucratic pricing. Market prices work differently. A market price reflects what consumers think the value of the good is and what they are prepared to pay for it. As there are millions of consumers, this is both an individual and a social judgment.

The Commonwealth government administers the price of university degrees by bands. The social sciences band is instructive.[11] The current price paid by students is $6684 rising (if the Senate approves) to $14,500 per annum. That price includes courses with a huge variety of average salary outcomes ranging from those of a youth worker ($46,000), journalist ($53,000) or social worker ($65,000) to a policy analyst ($78,000) or an economist ($77,000). In other words, government officials arbitrarily set prices that have no relationship to the life-time economic worth of the courses.

The same arbitrariness is evident in the case of commentators who try to compare a “society and culture” degree with a “science and mathematics” degree. Such labels disguise a multiple of earning realities (high, moderate and low) and include numerous kinds of degrees. What makes a political science degree something of fairly high worth is not only that the degree-holder has a likely prospect of earning a relatively high life-time income but that society has decided this person’s skills are valuable, rare and useful, and thus worth paying a higher than average rate. The same judgment is made about doctors and dentists.

The rationale of government education planners (the political price setters) for the price schedule changes is that universities are producing too many social science graduates and not enough nurses and mathematicians compared to labour market demand in the foreseeable (ten year) future.[12] The government’s labour market analysis is almost identical to what I observed in 2017 in Auto-Industrialism.[13] There is increasing demand in Australia (also globally) for vocational professionals in the health industry and for mathematically or statistically-based computational occupations ranging from logistics and architecture to computer network, materials and telecommunication engineering to finance industry managers.[14] The local Australian twist on this is the short-term rise in demand for teacher training due to the demographic rise caused by Peter Costello’s 2002 baby bonus tax break.[15]  

The federal government is fiddling with its central-planning degree price schedule to get the universities to produce more graduates of a specific kind over the next decade and get more students to enrol in these courses. This ambition has coincided with the COVID-19 recession. To avoid unemployment during recessions, persons park themselves in university courses. What the government is signalling through administered pricing is: park yourself in certain vocational courses but not others (not in accounting or law for example). The government (reasonably) expects domestic student numbers will grow in Australia in the next two or three years due to the recession. At the same time that recession means tight budget constraints. By artfully reconfiguring the 2021 degree price schedule, the government expects to increase university places without additional spending on its part.

The projected price hike for social science degrees is a deliberate attempt to achieve a better equilibrium between university output of graduates and labour market needs. Whether the administrative setting of prices can achieve what an actual market can achieve though is doubtful. Nevertheless we can expect fewer students to enrol in social science subjects in Australian universities in the next decade if the mooted price schedule is implemented. An optimistic reading is that these students may prove to be more motivated and able than the current cohort of enrolees. Possibly fewer students will graduate from hyperventilating “studies” or those vocational social sciences that lead to market-saturated lower-tier careers. That said, it is not easy to predict the outcome of changes to bureaucratic pricing.

In any event, none of this will fix the galaxy of problems tearing away at the soul of Australian universities. Revising a price schedule will not reverse the blurring of the distinction between vocational, classical and romantic education. It will not change the bloated costs of higher education. It will not eliminate the prevalence of “studies” programs. Beginning with Menzies in the 1960s, governments created the monster of the mass university. Like Dr Frankenstein, they now cannot undo what they created. Governments induced universities to become vehicles to prop up regional economies and inner-city service sectors and keep persons off unemployment rolls. Serious higher education has become incidental to all of this.

A microversity

The federal government’s plan to double the price of a social science degree is a prosaic technocratic measure. Nevertheless, it could have a beneficial effect well beyond what the government intends. For the variation of price expands the practical possibility of creating a small private university in Australia dedicated to the classical social sciences. If it was done well, such an institution could help abate three problems: the bloated cost structure of universities; the need to separate vocational, classical and romantic education; and the related need to decouple the more sober “disciplines” from the awfulising “studies” programs.

The idea is not to replicate the mass university—quite the reverse—but rather to create a “microversity”. That is, a small boutique selective institution for motivated and high-performing students that controls costs and is dedicated to serious teaching and research. Such an institution would not be simply “another” university. Every university created in Australia since 1950 has been a pale imitation of those that have come before. We do not need an even paler imitation of what already exists.

Doubling the price of social science degrees opens up the possibility of a new type of university because it forces potential enrolees to ask the question: Is this degree worth it? That is a good question. For what exactly is the worth of a social science degree? What is the worth of a degree that costs a student $6804 compared to a degree that costs a student $14,500? What do graduates get for their money? The simple answer to this question is “it depends” on where the degree leads in life. In fact we know a lot about that.

One of the things we know is that a social science degree is not a single thing. Where such a degree leads in life and how much a person subsequently earns depend on whether the degree holder has majored in a “discipline” or has majored in one of the “studies” programs or in a vocational program. Those who major in economics or political science do very well because these are arduous courses of study rooted in obdurate realities.[16] And because these courses are demanding, few people succeed in them, and consequently they graduate with scarce abilities. Society rewards scarcity with high salaries and interesting jobs.

This means that a $14,500 social sciences degree is worth it in certain circumstances and not in others. It is worth it for a talented and motivated person who is capable of doing demanding subjects that have some combination of abstract, mathematical, empirical, quantitative, pattern-analytical, conceptual, morphological, synoptic, structural and theoretical components with a deep anchor in objective reality. This is not for most students, or for most academic staff. Yet it does suit a small minority of prospective university enrolees. So why not create an institution—a microversity—tailored to them? Those students today are largely at sea in the mass university, awkwardly positioned in an institution that pays lip-service to serious study and inquiry but in practice tends to shun it or is ambivalent about it—or else overwrites it with social evangelism.

What would a social sciences microversity look like? To answer that question I am going to sketch a model of one. In its pilot form it would be based in either Melbourne or Sydney. It would have an enrolment of 500 students and an academic staff of thirty, a staff-to-student ratio of 1:16, the standard American ratio rather than Australia’s 1:24+. It would offer an undergraduate degree with three majors—in social science (theory + quantitative), public policy, and economics.  It would control costs by limiting administration and curtailing infrastructure spending. It would be a selective institution, dedicated to students who have performed well in a combination of state exams, school assessments and an interview. Academic staff would be hired on the basis of a renewable ten-year tenure subject to simple research and teaching performance requirements. The microversity would be a self-managing collegiate body composed of partners much like in a legal firm.[17] It would have a legal charter committing it to serious classical social science objectives.

Is such an institution viable? The answer to this question is outlined in two fiscal tables. One is the budget of a conventional mass university (Table 1). This budget is modelled on an existing university but it doesn’t matter which one—the pattern of expenditure is broadly the same across the sector. Table 2 is the hypothetical budget of the microversity.

The microversity differs from the mass multiversity in a number of key ways:

1/ Salaries and related expenses are costed similarly. However, the multiversity allocates a staggering nearly 50 per cent of salary costs to administration. The microversity curtails this. It allocates most of its spending to academic salaries, a reflection of its purely academic focus. The mass multiversity was a product of the post-industrial era. It was seen, first, as a “job creator”—which meant white-collar and pink-collar administration. Second, it was a way of boosting various micro-economies including the inner-city property market, suburban nodal micro-economies and the economies of major regional towns. Along with government subsidies this post-industrial social engineering led to a massive explosion in the costs of the multiversities.

2/ The second big driver of bloated costs in multiversities is their provision of services through campuses. In the twentieth century campuses evolved into small cities that promised enrolees all the services of cities—from sports facilities to car parks to landscaped gardens to eating venues to medical practices to residences to theatres to high status buildings. Cities are normally financed by commercial rents and municipal rates. Universities turned to student fees and government subsidies to finance their city-building fantasies. The microversity eliminates any pretension to being a city within a city, and limits its urban horizons to renting good commercial office space in the metropolitan inner-ring suburbs that are serviced by excellent public transport, commercial parking, high-quality inexpensive eating, gymnasiums, sports clubs, iconic places, cultural institutions and entertainment.

3/ The multiversities have been very reluctant to digitally automate their enterprise. They are one of the last hold-outs for needlessly labour-intensive administration. Most university administration is very routine in nature. Any routine human activity can be auto-industrialised, as fintech is showing banks. The multiversities resist this because their self-image is that of a post-industrial “job creator”. Likewise academics have been very resistant to online lectures. There is no good pedagogic reason for this.[18] It is simply technophobia. The annual cost of needlessly filling lecture theatres is large. The microversity eliminates this. All lectures are online. At the same time there is good reason to have intense interaction between professors and students. There are a variety of ways of achieving this, which include both traditional and online tutorials.

The microversity model in Table 2 assumes physical tutorials but also, crucially, small class sizes (ten per tutorial) and academic staff with plenty of time outside formal classes to talk with students. Academics in this model carry a third less student load than is now conventional in Australia and teach no more than two subjects a year. This represents markedly higher-quality teaching for students and staff alike than any Australian university currently offers. Another kind of microversity might stick with the conventional 24+ full-time student load per academic. If so, degree costs would revert to 1950s levels. What the entire government subsidy pays for is post-industrial administration and infrastructure.

Barriers and apertures

Naturally, there are barriers to creating a microversity. The first barrier is regulatory. The Australian universities regulator is TEQSA, the Tertiary Education Quality and Standards Agency. It has six criteria for registering a new university.[19] Three of them—academic governance, teaching and research—are unobjectionable and what you’d expect. Two of them are pure post-industrial social engineering. One says the university must “provide an extensive range of support services”. The tacit assumption is that a vast number of non-academic staff will provide that support. The microversity would replace this with automation and support provided by academics whose time would be freed up to do so. The second asks for a record of “engagement with local, regional and professional communities”. The tacit assumption is that universities are pivots of post-industrial micro-economies—something that was long ago discredited in the research literature and something that has as much credence as the idea of recuperating a local economy by building a sports stadium. Finally, TEQSA expects “government support” (state ministerial approval) for a new university. This explicit political hurdle reinforces the other hurdles that are designed to entrench universities as post-industrial economy drivers.

The second barrier to the creation of a new institution is the set-up cost. Higher education is expensive. Establishment costs are large. Development costs for a microversity would be something in the order of $25 million, covering planning, recruitment, building fit-out, equipment purchase, and staff costs before the project became economically self-sustaining through fee income. Achieving a highly proficient automated administrative system would require another $25 million in software development. Though, if (as advisable) this was done in conjunction with a major tech company, that up-front cost could be recouped by future licensing of the software to other microversities. Finally, there is the need to kick-start an endowment for the university, another $25 million. While all of that might sound quite a bit, Australia has forty billionaires. It is well within their capacity to finance.

A microversity for the classic social sciences is just one example of many imaginable different microversities. In addition, it does not take much to conceive of various possible mid-scale “mesoversities” such as specialist medical-health universities. The multiversity is spiralling down. It staggers from one fiscal crisis to another and from one restructure to the next. It has no vision beyond getting more funding. It has become little more than a giant lobby.

At the same time the multiversity is unreformable. Governments sit on the sidelines, largely powerless or uncomprehending. They decide (here) a price change to encourage a particular vocational course, (there) the elevation of a romantic national research priority, and (everywhere) toss in the occasional lament for the dumbing down of the classic mind. Sometimes the same retail politician will offer all three views simultaneously.

All the while the multiversity is floundering like a beached whale. Governments can’t and won’t put it out of its misery. The mass university schtick remains attractive to voters, though that is gradually decreasing. The one useful thing that a government could do is to rewrite the regulations to facilitate the establishment of micro and meso-scale universities. If a minister for higher education wishes to be remembered, all that is necessary is to nullify three brief sections of the TEQSA regulations. Leave the rest to private initiative.

Peter Murphy is the author of The Political Economy of Prosperity and Universities and Innovation Economies. His latest book, to be published in October, is COVID-19: Proportionality, Public Policy and Social Distancing.

Notes

[1]              I am excluding from consideration here those disciplines like history or sub-disciplines like cultural sociology or social theory that cross over between the humanities and the social sciences.

[2]              Department of Education, Skills and Employment, Job-ready Graduates

Higher Education Reform Package 2020, Australian Government, Canberra, 2020, pp. 20-21.

[3]              Comparing 1955 and 2019, the relative value of the higher education commodity (the Arts degree) was calculated using a “labour value” measure (the multiple of the average wage that a worker would need to use to buy the commodity).  https://www.measuringworth.com/

[4]              Michael Oakeshott, “The Study of Politics in a University” in Rationalism in Politics and other essays, London, Methuen, 1967 [1962], p. 309.

[5]              Immanuel Kant, The Conflict of the Faculties (Der Streit der Fakultäten), 1798.

[6]              For a quantitative analysis of the party-political biases of academic faculty in American universities by area of inquiry and political party affiliation, see Christopher F. Cardiff and Daniel B. Klein, “Faculty Partisan Affiliations In All Disciplines: A Voter-Registration Study”, Critical Review 17, nos. 3–4, 2005, pp. 237-253;  Daniel B. Klein and Charlotta Stern, “Professors and their Politics: The Policy Views of Social Scientists”, Critical Review 17, 2005, nos. 3-4, 257-302; Daniel B. Klein, Charlotta Stern and Andrew Western, “Political diversity in six disciplines”, Academic Questions 18, 2005, pp. 40-52.

[7]              Cardiff and Klein, “Faculty Partisan Affiliation”, Table 4; Klein and Stern, “Professors and their Politics”, Table 6; Klein, Stern, and Western, “Political Diversity”, Table 2.

[8]              Peter Murphy, Universities and Innovation Economies, Farnsworth, Ashgate, 2015, Table 1.2.

[9]              One voice who thinks it is time for the diversification of higher education in Australia is Glyn Davis, the former Vice-Chancellor of the University of Melbourne. In The Australian Idea of a University (Parkville, Melbourne University Press, 2017) Davis argues against the massive uniformity of Australian higher education and in favour of a diversity of kinds of institutions, though he doesn’t make a case for any alternative institution in particular.

[10]             Job-ready Graduates Higher Education Reform Package 2020, p. 24.

[11]             Australian Government, Department of Education, Allocation of units of study to funding clusters and student contribution bands according to field of education codes 2020.

[12]             Job-ready Graduates Higher Education Reform Package 2020, pp. 28-29, based on Department of Jobs and Small Business, Australian Jobs 2019, Canberra, Australian Government, 2019.

[13]             Peter Murphy, Auto-Industrialism, London, Sage, 2017, pp. 8-10.

[14]             Australian Jobs 2019, pp. 45-50.

[15]             Department of Education, Skills and Employment, Job-ready Graduates Higher Education Reform Package 2020, p. 16.

[16]             Universities and Innovation Economies, pp. 196, 200.

[17]             Peter Murphy, “The Platform University:  The Destruction and Resurrection of Universities in the Auto-Industrial Age” in R. Barnett and M. Peters (eds) The Idea of the University: Contemporary Perspectives, New York, Peter Lang, 2018, pp. 483-500.

[18]             A live audience sometimes generates performative energy that contributes to a good lecture. But if we take the example of music, live performance is not inherently superior to a recorded performance—and often is considerably less good.

[19]             TEQSA, Application Guide for Registration in any University Category, Version 1.4, effective from January 2017, pp. 11-14.