The overarching ConDem belief is that the state cannot do things as well as the private sector.
They're wrong, of course. The private sector is great — but the sad fact is that for the last thirty years it’s been largely bereft of really big ideas (even the internet started in the public sector) — and has in the main concentrated on catching public revenue for private gain.
The consequence has been inflation in the cost of many fundamentals, which moves such services beyond the reach of some — if not many — who would benefit from them. The following graph is indicative of this, showing inflation in the cost of a university education in the US from 1979 to 2010, with comparators:
The bottom line is the average wage.
The top line shows that university education is being priced out of the reach of families on average wages.
Is that a chance? I don’t think so. I think that’s deliberate. I think this is the ConDem’s policy too — to deliberately widen the wealth and opportunity gap in the UK. Would you expect anything else from such an elitist government?
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That is fascinating and depressing. I would be interested to know however how much the pay of university staff has increased. I would guess somewhere between average hourly wages and books and supplies.
“The top line shows that university education is being priced out of the reach of families on average wages.”
Your analysis is too simplisitc and completely misses a fundamental factor in the funding of higher education.
A vast majority of college students do not pay the full cost of their education, thanks to a combination of fee breaks (for instance for state residents in CA and FL), subsidized loans, financial aid/grants, scholarships, etc.
Interestingly most of these subsidies are only available on a means-tested basis, and only a minority are based on academic achievements.
The only categories of students who pay full tuition fees and expenses are (i) those from relatively wealthy backgrounds, and (ii) most aliens.
I don’t think it is deliberate. I think the truth is rather simpler: that it was clear in the 1970s (I don’t remember them) that the status quo did not work and that unionised labour in the US and UK had got too powerful and was stifling economic growth. So freeing up the market was the solution.
Just as it is now equally clear that a free market leads to all sorts of inequalities. Above all, it leads us to attach an unreasonable degree of importance to wealth. Everything becomes an economic decision, from the multi-millionaire structuring his wealth to avoid tax to the unskilled person making the calculation that he is better off staying on the dole than working.
And of course, everything becomes an opportunity to exploit. So you have to pay to park anywhere. You are not allowed to take food and drink into events so that you are forced to pay exorbitant rates inside.
Everyone of course has to go to university as it would destroy our sense of self-worth if we ever confessed that our jobs could be carried out by any committed person with a degree of common sense. And because graduates allegedly earn more, they can pay for it. So everyone comes out of university owing £20k in order to compete for jobs against other graduates. The only difference is that unlike intelligent school leavers, who used to be able to compete for most jobs, the graduates can only compete for the narrow range of jobs their degree qualifies them for. So a disproportionate number then decide to qualify as lawyers or accountants as its all they can tink of that might pay off their debt.
Worst of all, none of this makes anyone happy.
If you made it up, people wouldn’t believe it.
“the internet started in the public sector”
Rubbish. The Internet (packet switching networks) was first conceived by the RAND Corporation and developed by a combination of BBN (a subsidiary of Raytheon) who produced ARPANET/Telenet and later work at Xerox Parc (Ethernet/TCP).
You can blame the ConDems for a lot of things but blaming them for the large increase in college tuition fees in the US since 1978 probably is a little unfair.
This is just all wrong.. see the data here
http://krugman.blogs.nytimes.com/2010/05/22/down-the-memory-hole/
@Will
I’m not
I’m suggesting it’s what might happen
That’s all
@mad foetus
“in the 1970s … unionised labour in the US and UK had got too powerful and was stifling economic growth”
Reducing the bargaining power of labour doesn’t do much good in the long run. When the share of production going to labour is squeezed by profits and rent (what has happened since the 70s) workers feel forced to maintain their standard of living by borrowing, which fortunately for capitalists and landowners also maintains aggregate demand. In the end, of course, this all ends in tears.
What is needed is a system which returns to labour its full reward (less tax!). But that means cutting out the middlemen.
“but the sad fact is that for the last thirty years it’s been largely bereft of really big ideas”
In full Monty Python tone, apart from CDs, camcorders, medicine, world wide web, mobile phones, digital camera, memory cards, plasma TVs, high definition screens, walkmans, energy-efficient cars….what has the private sector ever done for this in the last 30 years?
Why are you refusing to answer my post pointing out that most of the higher education in the US is provided either by states or by not-for-profit institutions?
Are you embarassed?
@Ted G.
a) Because you’re not worth engaging with
b) Because comments you and others have made (all copied from Worstall as far as I can make out – do none of the rest of you have a brain cell between you?)are all obviously utterly wrong.
So what the state owns 90% of colleges when a government sets out to deprive them of funds so that what was accessible for all becomes inaccessible because of increasing fees, loans and other obligations
So the inflation is real
And the reason is the deliberate policy of right wing governments to increase the burden on those accessing it
But you don’t want to see that