One of the more curious claims made in submissions to the higher education review is that markets will drive homogenisation rather than diversity. In my submission (pdf), I identify four market design problems that I believe limit diversity:

* access of foreign-owned providers to the FEE-HELP loan scheme is made very difficult (I expand on this here)

* Commonwealth-supported places are not available to most private providers of higher education

* student contribution amount regulations means that all public universities have to operate at the bargain-basement end of the market (though the effect of this has been alleviated somewhat by international student fees)

* a rigid quota system of allocating student places limits the scope for disciplinary specialisation
Read the rest of this entry »

One popular theme in the submissions to the Bradley review of Australian higher education policy is that scholarships paid by universities ought to be exempt from Centrelink income tests. The problem is that if the scholarship gives a student on Youth Allowance more than $118 a week it will be caught by the YA income test, and so the scholarship saves the government 50c in the YA dollar. The universities reckon that this provides a disincentive to provide income-support scholarships.

While the frustration of universities is understandable, there should be no special treatment of scholarship income. The main function of scholarships is positional competition between universities. Mostly they compete for the very bright students. Often these students come from privileged backgrounds, but even when they do not their high intellectual ability means that they are likely to do very well in life whether they get a scholarship or not. The public policy case for sending special extra financial rewards their way, through exempting them from welfare reductions that all other students must suffer, is very weak. Indeed, exemption would be a particularly egregious example of the generally regressive nature of higher education subsidies. Read the rest of this entry »

In response to my implied criticism of Andrew Leigh for assuming that increases in inequality are bad and decreases good, but never specifying for what level of inequality would satisfy him, commenter Leopold responds:

one could turn the criticism around. Liberals believe in liberty - but how much liberty, exactly?

Leopold’s argument (I am paraphrasing here) is that preferences for greater equality or greater liberty are rules of thumb to be applied to specific circumstances, but there are cases where social democrats could accept less equality and liberals accept less liberty. We can’t always precisely calculate the final overall result of all these complex trade-offs to say what is the exactly right amount of equality or liberty. But this doesn’t invalidate the initial assumption that, all other things being equal, more equality or more liberty (depending on your philosophical position) is desirable.

I think Leopold’s point is reasonable. For example, I say that there should be less tax, and while I have clear pet hates among government spending programmes (eg FTB) that I think should be cut to reduce general tax rates, I never say exactly how much tax I think should be levied or what tax rates I would be happy with.

High-level political abstractions gives us intellectual tools that help organise our understanding of the world, but they don’t necessarily provide answers for specific problems. That requires far more detailed analysis.
Read the rest of this entry »

Using data from four surveys over a 40 year period, Andrew Leigh’s latest paper (pdf) argues that father-son intergenerational mobiliity is stable in Australia.

In his conclusion, as reported by The Australian, he says:

“On one view, the absence of any significant rise in inter-generational mobility might be regarded as surprising,” Dr Leigh says in the study report.

“Increases in healthcare coverage, the banning of racial discrimination, the abolition of up-front university tuition fees and an increase in the number of university places are among the policy reforms that might have been expected to increase inter-generational mobility.

“Yet there were also trends in the opposite direction.” These included rising unemployment during the study period and the removal of inheritance taxes in 1979. Dr Leigh said a rise in inequality had been well-documented with the distance between income groups greater in the early 2000s than in the mid-1960s.

I know conclusions are where they let academics off the referee’s leash, but some of this seems a bit odd to me. I’m not sure why improved healthcare coverage would make much difference; in any case claimed ‘disability’ is much higher than it used to be. Nor are bans on racial discrimination likely to have influenced the figures much; such laws are easily evaded and many migrant groups were doing fine long before discrimination was outlawed.

Inheritance taxes, as Andrew L’s own research shows (pdf), took only about 30% of the largest estates - something unlikely to affect the salary data he’s using (though it may affect investment income). And rising inequality is consistent with high mobility (if the poor and the rich swapped places each generation, ie complete mobility, inequality would be unchanged because it is a static, snapshot-in-time measure).
Read the rest of this entry »

In his publication Is the Middle Class Shrinking?, Clive Hamilton writes ‘there does not seem to be any survey evidence on identification with class terms’. We all know Clive is no ordinary leftist, but it is remarkable that he became a leading ‘progressive’ thinker despite clearly having read very little about class. There is lots of research on this, going back nearly 60 years.

This research suggests that the long-term answer to Clive’s question is ‘yes’. Though the proportion of people identifying as ‘middle class’ has been trending upwards since the early 1990s, most of the surveys on class identification between 1949 and 1984 found more middle-class people than a 2005 survey. The one exception was 1965, but it was just 1% lower than the 2005 figure of 50% ‘middle class’.

The curious thing about the apparent shrinking of the middle class is that it occurred while many of the sociological markers of the middle class, such as education and professional or managerial occupations, were showing long-term increases. For example, in 1947, just before the first class survey I have, 12% of workers were in professional or managerial occupations. But in 1949, 54% of people thought that they were ‘middle class’. In the mid-1990s, 31% of workers were in professional or managerial occupations, but overall only 45% of people considered themselves to be middle class.

One possibility is that though compared to the past a higher proportion of people have professional occupations, university education and high income, the relativities have moved with them and so the middle class has not grown. Read the rest of this entry »

It’s election time, the season of celebrities and worthies adding their names to open letters and political advertising. A range of them have put their names on an ad designed to pressure Environment Minister Malcolm Turnbull to change his mind on Gunns’ Tasmanian pulp mill. And why wouldn’t they? When it comes to this kind of thing the Fairfax press especially is as starstruck as Who magazine’s celebrity-obsessed readers, with The Age giving their opinions prominent front page coverage this morning. According to The Age,

Among the signatories are film director Phillip Noyce, actors Bryan Brown and Rebecca Gibney, playwright David Williamson, celebrity chef Kylie Kwong, Fairfax Media deputy chairman Mark Burrows, Rowena Danziger, a member of the Publishing and Broadcasting board, and Leo Schofield, a former director of the Sydney Festival.

But why should we care what any of these people think about this issue, or indeed on anything else except on things related to their narrow area of achievement or expertise (and perhaps not even that)? Would-be serious papers like The Age should show far more scepticism than they do.

The only signed advertisement I have liked appeared in the SMH a month ago. It was a full-page memorial for Ken Dyers, leader of the wacky Kenja cult, who killed himself rather than face (yet more) charges of sexually assaulting under-age girls. No need for too many tears in this case, I expect. But the signatories were, I thought, unwittingly but amusingly subversive of the whole signed ad phenomenon. Take these examples: Simon Winn, qualified carpenter; Linda Beachley, receptionist; Stevana Geurreiro, Dip, Make-up Artistry; Shane Grant, baker; Chloe Pape, hair stylist; David Pilkington, refrigeration tech; Eoin McGettrick, locksmith. All good, if unintentional, satire on the idea that occupations confer authority on opinion.

If leftists support “political programmes that seek to eliminate status differences or moderate their impact” then the best way to reduce the left’s opposition to free markets would be to sever the link between income and status.

Don Arthur, 10 June.

But how strong is the existing link between income and status? This issue can be approached from two directions. We can ask people what weight they give income when assessing the status of another person - I am not aware of research on this, though I’m sure somebody must have put the question in a survey. We can also ask people how they perceive their own status and compare that self-assessment with their income. A question in the Australian Survey of Social Attitudes 2005 asks:

In our society there are groups which tend to be towards the top and groups which tend to be towards the bottom. Below is a scale that runs from the top to the bottom where the top is 10 and the bottom is 1. Where would you put yourself on this scale?

Overall, whatever others may think of them, most people do not think they are on the ‘bottom’ of society. Only 2% rate themselves as ‘1′ and only 18% below 5. If we thought of society as having 10 status deciles, 40% should rate themselves below 5. Consistent with an egalitarian ethos, few rate themselves too highly either. Only 3% of respondents put themselves in the top 20% of society.

Low income is, however, associated with lower status. Read the rest of this entry »

A week after the Group of Eight launched its higher education reform package, we start to get a backlash, as the anxieties of other universities appear in the media.

From University of Sunshine Coast VC Paul Thomas came a variation on that old favourite of protectionists, the infant industry argument, except his infant institutions would be approaching middle age before they could face competition:

younger universities needed to be given the same opportunity as their Go8 counterparts to build up over decades.

So a generation of students should miss out on choice in the (unlikely) hope that the University of Sunshine Coast can become like the University of Queensland. But why should USC be like UQ? It is one of the mysteries of Australian higher education that universities would rather open themselves to ridicule as implausible would-be research institutions than be good teaching and regional institutions.

From (somewhat surprisingly) Greg Craven of Curtin University comes the same preoccupation with university hierarchy: Read the rest of this entry »

One of the central ideas of modern leftism is that all human beings are entitled to equal concern and respect. This is why most leftists oppose racism, sexism, ethnocentrism and homophobia.

…leftists don’t automatically see difference as a matter of status. Some groups of people recognise one set of virtues while others recognise another. Leftists want to see a society where everyone can pursue their own ideals of excellence without being judged or looked down on. This is a vision they share with many libertarians.(emphasis added)

- Don Arthur at Club Troppo.

The sentence I bolded is not, in my view, 100% right. It is an area in which leftists and libertarians will often have shared social practices, but important if sometimes subtle differences in their underlying philosophy.

Libertarianism (or classical liberalism) does not require equal respect, or even any respect, of other people’s ‘ideals of excellence’. What it requires is tolerance, the virtue of putting up with the things that you don’t like. It isn’t so much equal respect as equal indifference.

For a liberal, equal respect demands too much and more than is necessary. For passionate religious believers (and liberal ideas of toleration began with the problems they cause) it is very hard to hold other faiths in ‘equal respect’ without calling into question their own beliefs. But all it requires to tolerate them is to hold off from intimidation and violence.

Indeed, the shift from liberal tolerance to leftist acceptance, the logical result of equal concern and respect, takes us back to where we started before the idea of tolerance took hold. Tolerance challenged the idea that everyone must fit in with a common set of norms, and replaced it with the idea that everyone must abstain from certain behaviours.

The practical differences between these two views came out in the reaction to the decision to allow The Peel hotel to exclude women and straight men. Read the rest of this entry »

Though leftism is diverse, a common thread is a concern with equality. This makes it in part an ideology of status, with political programmes that seek to eliminate status differences or moderate their impact. This is one reason leftists remain concerned with income inequality long after absolute poverty has been eliminated, try to obstruct institutions that reproduce status differences (eg private schools), and favour anti-discrimination and affirmative action laws for groups that have historically had low status.

Almost everyone is status-conscious to some extent, but levels of concern with it vary a lot. Politically, I suspect that people with relatively high levels of status concerns are disproportionately attracted to leftism and to hierarchical conservatism (in Australia, conservatism tends to be populist, but in countries with more aristocratic traditions status-oriented individuals could go left or right). On this theory, those with relatively low levels of status concern would be disproportionately on the liberal/libertarian right, in which individual freedom is prized - who cares what other people think, I am going to do what I want, either alone or with like-minded people.
Read the rest of this entry »