Before going on to claim that perhaps we shouldn’t be subsiding university courses with tax payers’ finest either through loans or direct grants, I should declare an interest. The Sprog has now decided that he wants to go to University. He will be 24 when the course starts in September and as a mature student qualifies for full grants and loans.
We all benefit from the education of children up to a certain age and level. It could be argued that having a population that is numerate and literate is a public good, not in the strict economic sense, but that we all benefit from our children having the basics that allow them to go on and become fully functioning members of society. We can argue at what age we should stop providing a subsidy for schools but I would argue that benefit should stop when the education becomes specific career training to which the recipient of the education is the major beneficiary.
I started thinking along these lines last year and was reminded of it a couple of weeks ago when this story* first started to be discussed:
Almost a quarter of a million people applying for university this year are going to miss out on a place, university leaders are forecasting.
Spending cuts have reduced extra university places at a time when there has been a huge surge in demand.
Last year and then a couple of weeks ago, I have met some young men (well young by my standards, in their late 20s and early 30s) who are all airline pilots. They paid to get their licences privately rather than go to university. This meant they raised the funds themselves as loans and are paying back the loans at commercial rates. The cost training to be a pilot is around £50k, although sponsorships from the airlines may be available for some.
So, we can read in to this that where highly skilled people are needed training is available at a cost that reflects the long term benefits of gaining the qualification and working in those jobs, funding is available to pay for that training, the jobs pay enough to cover the cost of that training and everyone is relatively happy. A market has duly formed and we can be sure that we are getting supply and demand matched, all without the need of tax payer subsidies. Furthermore, we can be quite sure that taxes aren’t being used to pay for oversupply of pilots, undercutting salaries and proving an indirect subsidy to airlines.
This got me wondering what other industries could be left to the market rather than requiring tax payer subsidies to prime them:
Health – doctors are extremely well paid, albeit at the tax payers expense, so why do we also subsidise their training? Especially as there is no guarantee that the doctors and nurses will stay in the NHS. Of course the argument of many is that we should make doctors, dentists and other health professionals work in the NHS as aprt of their traing costs. This is a form of slavery and anyway, once we have changed the way we deliver health care a real market will develop and there will be enough doctors and nurses to balance supply and demand.
Law – do we really need to provide tax payer subsidies to pay for more lawyers and solicitors? Let the market decide how many we need and their true worth. I appreciate that we may pay more for legal aid but that will be more than covered with the savings in education .
Teachers – another job for life qualification. Schools vouchers will help but why do we need to subsidise teacher training
We could keep going through all the courses that universities provide and make the same arguments. Let those who want to do the course pay their own way, let a market develop and we will soon find the true value of all those courses and lecturers.
The left would put up lots of arguments against this sort of measure, especially the affect on the poor. As we have seen in the USA and even at the university the Sprog is going to attend, there are plenty of bursaries available from many sources. I would be willing to have a bet that if the state got out of the way we would see a growth in local and national charities dedicated to supporting poor people through university, especially if this is matched by vouchers and, dare I say it, for profit schools.
I’ll probbaly return to this subject now I’ve started as it opens up a whole different world of the way we do things.
*Yes,I know that this BBC story is only a few days prior to my post but the subject has been widely discussed for weeks