The false market in degrees is ruining higher education

In case you haven’t noticed, UK university staff are on strike again this week, as part of a sequence of industrial action that began in 2018. The proximate cause is rising workloads, falling salaries and pensions, and declining real education outcomes. But let’s think like academics and look for deeper structural reasons as to why this is happening.

UK universities compete to offer education as a service product in a market system. Metrics – league tables and National Student Survey scores – provide feedback, so that market forces can motivate efficient production and product excellence. What could go wrong with healthy competition to deliver a quality service to discerning and motivated customers? Unfortunately, quite a lot.

To see why, let’s perform a thought experiment. Imagine we have 100 identical junior programming positions to fill from among 5,000 applicants, all of whom are 21 years old and just entering the workforce. How do we proceed?

The candidates don’t have track records; we can’t see, touch, smell, or weigh their education; and interviews don’t scale and can be unreliable. For better or worse, to get one of these 100 positions, a candidate will likely need a certificate affirming that they studied well enough to earn a degree.

Universities control the supply of these certificates by definition, and they operate in a competitive, metrics-based framework to efficiently provide them. However, metrics are rather loosely coupled to real educational outcomes and rather tightly coupled to students’ self-reported satisfaction. Metrics may even go up as product quality goes down – because what students really want is a comfortable campus, easy exams and a degree certificate, so that is what the metrics-based approach encourages.

Thus, teachers are forced into setting smaller, simpler exams to larger groups. In a classic tragedy of the commons, it is best for any particular student in any particular year not to grumble that less teacher attention and course content underwrites their grade. And how can students fully comprehend how badly they are being short-changed without adult hindsight and without having been educated in what education could be? Especially when investments in marketing and in the student-facing parts of campus infrastructure put a gloss on this intrinsically diminishing product.

Moreover, though universities compete to supply degrees, they do so within an oligopoly rather than a truly free market: a small group of providers have a collective monopoly over delivery and are protected by high barriers to entry. Thus it is hard for a disruptive competitor to step in with innovative education and certification models – and hard for students to substitute other products for their education-as-a-service – because the university sector has monopoly power over that transition from school to young professional.

The provider of a service sees everything not captured by the metrics as a cost. It sees no value in the non-financial or intangible benefits of actual education. Indeed, in a competitive metrics-based system, the provider would be remiss if it did. In particular, if experienced, talented lecturers can be made to work harder for less pay, then efficiency improves. If they leave, efficiency improves even more, since they can be replaced with cheaper labour on temporary contracts. It’s not personal; the market is just doing its job, to increase efficiency.

In my time in the sector, workloads have tripled, fees have risen, wages and pensions have fallen, and students are living at home to minimise the debt they run up, struggling to juggle studying with holding down poorly paid jobs. No good can come of this: not for young adults’ mental and financial well-being, not for education and not for the commercial and cultural activities that depend on it, which underpin the quality and competitiveness of the country and its economy.

Contrast this with the current energy market. There too, prices are rising, and you can’t stop buying energy because you’ll freeze if you do. But the energy market is regulated as a utility. No UK politician would dare argue that keeping babies and old people from freezing to death is a service, to be priced and dispensed according to market forces.

Even if we ignore the moral, philosophical, and economic debate about what “real” education could and should be, “education-as-a-service” fails on its own terms. University education is an intangible, and delivering it is a natural oligopoly, so it cannot be sustainably delivered through a market-based framework. Recent decades have proved, and continue to prove, the moral and economic harm of trying to pretend otherwise.

And that is why university staff are on strike.

Murdoch Gabbay is an assistant professor in the School of Mathematical and Computer Sciences at Heriot-Watt University.