Archive for January, 2009

Is the rise of private schooling due to ‘neoliberalism’?

Three pages into School Choice: How Parents Negotiate the New School Market in Australia, its authors tells us that in developing their argument ‘we are responsive to two books by Michael Pusey’. This is not a good start. As usual in discussing ‘neoliberalism’, the views of those who might plausibly be described as ‘neoliberals’ are not discussed in any detail, with passing mentions of arguments from the CIS and the Menzies Research Centre, accompanied by a grudging concession that the Howard government never followed the logic of these organisations’ arguments to ‘the end’.

Pusey has long argued that ‘economic rationalism’/ neoliberalism was an essentially alien ideology imposed on unwilling citizens. And the authors of School Choice – Craig Campbell, Helen Proctor, and Geoffrey Sherington – pursue that logic to some extent in noting parents who felt that they had had to make a school choice, when really they would have preferred just to send their kids to a ‘quality’ local school.

But a much stronger case can be made that school choice has deep roots in Australian history and politics, and that while there is a distinctive ‘neoliberal’ set of arguments these are not what has given this issue political momentum.
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GDP and well-being

One irritating feature of the subjective well-being research is its preoccupation with GDP, or rather its preoccupation with what it thinks is our preoccupation with measuring production. It’s there again in the new economic foundation‘s recent National Accounts of Well-Being: Bringing real wealth onto the balance sheet.

The proposition that GDP cannot be used as an all-purpose proxy for societal well-being is a banality, not a critique. Nobody who believes that it is such a proxy is cited in this publication, and for good reason: nobody of any intellectual or political signficance (and quite possibly nobody at all) believes this to be the case. It is one of a vast number of statistical series collected and used in policy. Government policy is more likely to reduce than increase GDP through regulation and taxation steering resources away from their most productive uses.

The main point of National Accounts is to call for more regular collection of statistics on well-being, broadly defined. They’ve made a start with (in conjuction with Cambridge University) an interesting survey taking a multi-faceted look at well-being around Europe.
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Is trust in goverment declining?

After the troublesome nature of the last few Howard years and systemic problems in several ALP state governments, these days public trust in government is a rare commodity.

In his quest to restore such trust, this year Faulkner not only intends to rewrite the Freedom of Information Act to free up government information, he has indicated that he also wants to change key elements of Australia’s electoral system. [emphasis added]

Ross Fitzgerald in this morning’s Australian.

Like Jamie Briggs, Fitzgerald is inferring public attitudes from his own perceptions. And like Jamie Briggs, he gets public opinion wrong. As with questions on satisfaction with democracy and the role of big interests, a series of questions on trust shows that it is improving rather than declining.

A question in the Australian Election Survey asks,

In general, do you feel that the people in government are too often interested in looking after themselves, or do you feel that they can be trusted to do the right thing nearly all the time?

From its low point of 9% in 1993, 15% of people in 2007 said that people in government can usually be trusted (equal with 1996 and 2004). ‘Sometimes be trusted’ is on 28%, the second highest result (after 1996) since this question started being asked in 1993. While in absolute terms these numbers show the usual cynicism about politicians in general, there is no evidence of decline. (And some of this seems to be just empty stereotyping, since individual politicians – even those relentlessly portrayed as untrustworthy like John Howard – do better in surveys on trustworthiness than politicians in general).
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Educational apartheid?

In yet another of her articles attacking private schools, Jane Caro puts the shift to private schools as down to:

largely anxious middle-class parents who want to separate their kids from the mad, the bad and the sad (and, it seems, the ethnically diverse)

Having a somewhat traditional view of what constitutes good parenting, I think wanting to shield kids from the mad and the bad is worthy of praise rather than condemnation. (And if Caro thinks that a selling point of public schools is the opportunity to spend 5 days a week with mad and bad kids she is not the greatest advocate for her cause.)

Caro’s evidence for concern about ethnic diversity is a re-hash of last year’s white flight stories about white kids leaving schools with large Indigenous enrolments. As I pointed out at the time, if this is happening it probably has more to do with actual social and educational dysfunction among Indigenous students than prejudice.

But what of ethnic diversity in schools more generally? Since the white flight post last year, I have examined 2006 school attended census data on this issue. I used language spoken at home rather than ancestry as a proxy for ethnic diversity, to focus on the groups most likely to be weakly assimilated.
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Voucher confusion

According to a news report in this morning’s Higher Education Supplement, the head of the National Centre for Student Equity in Higher Education, Trevor Gale, believes that vouchers may concentrate educational disadvantage:

Professor Gale argued notice should be taken of schools research from the UK regarding choice. “When the rule that students had to attend the local comprehensives was lifted, students from lower SES didn’t have the mobility or resources to exercise the choice,” he said.

“It suggests when you introduce market choice imperatives into the policy agenda you increase the concentration of disadvantaged groups in some schools and make it hard for students to access most elite schools. I think we will see more disadvantaged students represented in newer universities and less in the Group of Eight.”

There is an obvious mistake here, though one which highlights that vouchers in higher education are less radical than vouchers in school education. While in schools systems it is common for both demand and supply to be regulated (ie the state tells parents where to send their kids to school and controls the school), in higher education supply has been regulated but not demand. Prospective university students can apply anywhere they like. Indeed, the effects of a voucher system will not be obvious to applicants for public universities (prices would drop at private providers, so the change would be noticed there).

So any relative unwillingness of low SES students to travel is already built into the current applications system and won’t be changed by a voucher system.

Of course I would like to see proof that this unwillingness exists for higher education. The kids who have survived unfavourable social circumstances and the public school system, and have reached the point that they are candidates for university entry, are likely to be very different to the parents who are too lazy or incompetent to find their child a decent school.

What’s going on with science applications?

Back in October, early Victorian university applications suggested that demand for science was well down, despite the government cutting the cost of science courses. But reports in today’s media say that science applications finished 19% up on last year. With overall applications up only 6%, that endangers my prediction that a price change would have little effect. The history of applications data is that it is rare for a discipline to gain or lose more than 1% of market share in a year.

The complicating factor this year is that several University of Melbourne undergraduate courses that draw on science-related interests and aptitudes – computer science, information systems, dental science and medicine – were offered for the last time in 2008, and we would expect that people aiming for those professions would now enrol in the new science or biomedicine undergraduate courses. And both show significant increases in applicants.

My other prediction of little supply-side response is also complicated by changes at the U of M, but without Melbourne offers are up 4% on last year. That is consistent with normal year-to-year movement.

ENTER scores are stable at Monash and Melbourne, the two big Victorian players in undergraduate science. Monash’s clearly-in ENTER was up 0.2 to 75.2, and Melbourne’s was stable on 85. So added demand is not doing much to push up the ‘price’ in ENTER scores of science courses.

I think my prediction that final science commencing enrolments will fluctuate within the normal range is looking ok. But if we see a similar pattern of increasing demand for science in other states, which do not have the U of M complication, then maybe the cut in price did affect demand.

Atomistic progressives

Communitarians sometimes criticise liberals for supporting ‘atomistic individualism’. In a Cato paper, Tom Palmer gave examples:

[Classical liberals] “ignore robust social scientific evidence about the ill effects of isolation,” … I am quoting from the 1995 presidential address of Professor Amitai Etzioni to the American Sociological Association …

More politely, Sen. Dan Coats (R-Ind.) [has] excoriated libertarians for allegedly ignoring the value of community. Defending his proposal for more federal programs to “rebuild” community, Coats wrote that his bill is “self-consciously conservative, not purely libertarian. It recognizes, not only individual rights, but the contribution of groups rebuilding the social and moral infrastructure of their neighborhoods.”

Yet in current politics, it is ‘progressives’ who put individual rights above the contribution of groups – especially if those groups are not politically approved by the left of politics. Victorian Attorney-General Rob Hulls this week gave the strongest signal yet that single-sex private clubs would become illegal, unless they received a specific exemption from the Victorian human rights commission:

“Ideally, all private clubs should demonstrate they are set up in a manner which is consistent with the equal opportunity … (so) clubs like the Athenaeum should have to demonstrate that they are set up in a manner which promotes equality.”

On this view, it is not enough that there are significant opportunities in society. Every formal institution within that society has to ‘promote equality’. And any organisation of people based on some characteristic the flipside of which makes people with any of wide variety of characterstics ineligible for membership is not permitted unless approved by the state. It is in effect a draconian attack on freedom of association and civil society.
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Is Coles branding misleading?

Yesterday in its ‘essay’ section, the SMH published an article by Robert Laughlin criticising how easily patents are granted, thus locking up knowledge that in Laughlin’s view ought to be available for others to use. I have some sympathy for the view that intellectual property rights have gone too far, with the benefits (and there are some) not being sufficient to compensate for the costs. This is why I am inclined to think that parallel book importation laws should be relaxed.

So it was a little ironic that the lead news story in the same paper was an attack on Coles for supposedly misleading consumers by using a tick symbol on its products (which I notice Coles has trademarked, with a circle around it), which it is alleged is too similar to the Heart Foundation tick for healthy foods. While Coles is changing the tick, the paper claims that this is in reaction to “alleged misleading and unethical practices.”

But surely a tick is common sign for something being correct or good, which hasn’t been (and shouldn’t be) appropriated by any group or cause for its exclusive use?

The argument against Coles seems to be that in its contextual use on food it is too easily confused with the Heart Foundation tick. But in the context of a Coles supermarket it’s pretty clear that it is part of the store’s branding, and not a sign that the product is good for the heart. On a quick wander around my local Coles this morning, I noticed the Coles tick on laundry detergent, toilet paper, and an iron. Few customers are likely to think that consuming these products would be good for their hearts.

While the SMH did find an 84-year old who says he was confused by the tick, I don’t think this is enough to justify forcing Coles to change its logo or to give it a page one beating up.

How much will Bradley vouchers be worth?

In an article I wrote for the Higher Education Supplement last week, I estimated that the per student funding increase from the Bradley review could be as low as 1-2% for most disciplines. I now think that this is an underestimate.

The difficulty is that though prices for student places are a critical element of a voucher scheme, the Bradley report doesn’t recommend either actual prices or a price-setting mechanism. The only specific proposal on prices is that teaching and nursing courses get the 25% increase in student contributions they missed out under the Nelson reforms in 2005.

So any estimates of prices rely on inference and assumptions. The committee recommends a 10% increase in teaching and learning funding, but also two clawbacks on teaching and learning funding. 4% of teaching and learning funding would go to social inclusion programs, and another 2.5% to a ‘performance’ fund that could include the results of teaching surveys, graduate outcomes etc. Because these clawbacks would be distributed based on criteria either than student enrolments, I take the view that this funding should not be counted towards voucher values.
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Who should receive university economic rents?

In the Higher Education Supplement this morning, Griffith University economist Ross Guest considers what should be done with ‘economic rents’ that prestigious universities can extract by charging high fees. Rather than imposing price control as the Bradley committee suggests, Guest says that:

The efficient way of dealing with economic rents is to tax them; this is how we deal with resource rents earned by mining companies, for example. So why not tax any excessive economic rents earned by institutions and use the tax revenue to offer means-tested subsidies to students?

I think it is pretty clear that some universities charge fees for full-fee students that are well in excess of the cost of delivering the course. In my submission to the Bradley review (table 6) I showed that sandstone universities charge international students $6,000 to $10,000 a year more than Dawkins universities for similar courses. Some of that is probably genuine quality differences – better academics and facilities. But I think we can assume that there is some ‘economic rent’ here.

There seem to be three broad options:
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