Three unrelated reports caught my attention this week, two emanating from Australia, the other from the UK. Unrelated they may be, yet there is a connecting theme: the purpose of universities.

Report number one was commissioned by Universities Australia, the body that represents the country’s 39 universities. Economic Modelling of Improved Funding and Reform Arrangements for Universities was drawn up by consulting firm KPMG Econtech.

The report, in UA’s words, finds an overall 14.1% rate of return on funding higher education, “which means it is an investment, not a budget haemorrhage”.

“The report suggests that full and ongoing implementation of the increase in public funding and structural reform into the future will increase productivity by 5.6%, labour force by 0.8% and living standards (household consumption) by 5.8% by 2040.

“Universities can help to restore a budget surplus quickly since university graduates expand the work-force, pay high taxes and begin repaying their HECS after graduation. Many also work and pay tax during their studies.”

You can read my previous post querying the logic of the KPMG report here.

The second is from Professor Steve Smith, president of Universities UK and vice-chancellor of the University of Exeter.

Professor Smith finds it strange that the three major parties contesting the UK General Election have made little mention “on some of the most important issues facing one of the UK’s greatest assets – our universities”.

“Since all the parties are talking about ‘getting the economy moving again’, it is disappointing not to see more detail on how they will support one of the instruments for the UK’s long-term economic strength.”

The Universities Australia argument – that higher education is a vital element in stimulating economic growth – is also familiar in Britain, with, for example, Universities UK contending that

“our universities are uniquely well placed to help ensure we all grow and prosper in an uncertain world … in difficult economic times spending on higher education is not a cost to the nation but a vital investment in our ability to meet the challenges of the future.”

If Universities Australia and Universities UK are correct, why is it that the economic benefit of universities has rarely been mentioned in the UK election debate, especially since the UK economy is in such a parlous state?

Does it mean that politicians do not believe the economic benefit argument?

Do politicians believe that no one outside of universities believes it, thus it is not worth spending too much time on?

Is it such a self-evident, universally acknowledged truth that it does not need to be mentioned?

I suspect that politicians and the wider public believe the economic value argument may be true to an extent, but that it fails to tell the whole story about what universities are for.

And here I come to the third article, this one by Professor Simon Marginson, of the Centre for the Study of Higher Education at the University of Melbourne, and which I think shows why the economic benefit argument, though by no means spurious, has little traction outside of the higher education sector.

Marginson contends that universities are riddled with paradoxes. They are neither one thing nor the other; they are many (sometimes contradictory) things.

The university, he argues, is at once “the high temple of modernity”, thriving as the cauldron of innovation while simultaneously being steeped “in an older style of bureaucracy and a mediaeval-clerical culture”.

Universities may be business-like, he says, but they are not businesses: they belong to the “gift economy” not the market economy in that their “goods’ – knowledge – are “given to society, in the main, without an explicit promise in return of immediate, or even future, reward“.

For Marginson the various paradoxes make it certain universities can never be reduced to a singularity with one primary aim: for example, making the country wealthy.

And to attempt to “resolve these paradoxes would be to start to unravel the university”:

“Any such ‘resolution’ is bound to reduce what the university does and is for to the creation of value, thus narrowing its social and political base … in each paradox, one side of the paradox provides the conditions of possibility for the other. To chop off one side is to leave the other swinging free, without any visible means of support.”

Marginson’s report is worth reading in full, which you can do here.

Why is it that the economic benefit argument has little traction among the wider public and many politicians? Is Marginson right: are universities too complex to be reduced to a singularity?

- Steven Schwartz