Wednesday, June 23, 2010

Myth Busting - UK Higher Ed Edition

by Daniel L. Bennett

Thanks to my friend George Leef at the Pope Center for adding another book to the my summer reading list. Leef reviewed James Stanfield's new book, The Broken University, for today's Clarion Call. Stanfield is a scholar at the E.G. West Centre in the School of Education at Newcastle University, which bills itself as the only research centre located at a UK university that is dedicated to developing a better understanding of the role of choice, competition and entrepreneurship in education. In other words, the E.G. West Centre sounds like a friend and ally of CCAP.

In The Broken University, Stanfield sets out to bust the myth that the subsidization of higher education has economic benefits that outweigh the costs by stating that:
After taking into account the costs and consequences of government intervention outlined above, it is clear that not only is the £14.3 billion public subsidy to higher education not providing any economic or public benefit, and not only is it transferring income and resources from low income families to families with higher incomes, but it is also disrupting, distorting and preventing the growth and development of one of the UK’s most important service sectors. In short, the government’s annual £14.3 billion higher education subsidy is doing much more harm than good. It can therefore be readily compared to those government subsidies which over the previous half-century supported a variety of national champions, and which also resulted in the exact opposite of their original intention.
In his review, Leef draws parallels of Stanfield's observations about the UK to the U.S. higher education system:
That sounds exactly like the pitch that is made on behalf of colleges and universities in the U.S. Stanfield shows that the claims are overwrought.

Consider the argument that universities are a vital part of the economy because the money they spend economically supports their communities. It’s unquestionably true that in Britain (as here and everywhere else) universities create many jobs and pump lots of money into their localities. That supposedly makes them a key “investment” and one of the most valuable sectors of the economy.

Stanfield retorts that such thinking is an instance of ignoring the unseen. All the higher ed spending merely transfers resources; money has been taxed away from some people (taxpaying individuals and firms) and devoted by politicians to higher education. It’s foolish to look only at the benefits of that spending without considering the loss of value to those who were taxed and the benefits that would have accrued if they had been able to spend the money on their own purposes.

University research is another example showing the similarities between the sales pitch for higher ed in Britain and America
I'll have to read the entire book, which is available for free download or purchase from the Adam Smith Institute, to judge for myself whether Stanfield has in fact busted the myth that subsidizing higher education has great economic benefits. Stay tuned.

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