Lessons from American university education

I sometimes "relax" by logging on to PalTalk, a system designed for real-time voice chat, finding rooms where I can debate important issues related to politics or economics. I'm not always successful, as it's surprising how often those forums descend into free-for-alls where individuals take turns at the mic throwing insults at one another. It makes one wonder how us humans manage to tie our own shoes.

One day I was involved in a discussion on health care. It was a rather conservative room, and one individual kept coming to the mic to dismiss "slackers" who want other people to pay their way through life. He made very clear that he had never taken public money, working hard to pay his own way through college.

When I was at the mic, I asked him what college he had attended. "The University of South Dakota" was the response. The University of South Dakota is, of course, a public university, which means that he HAD taken public money, albeit indirectly, because public university costs are heavily subsidized by the state.

That memory returned to me as I read an article in the June 7th edition of The Economist, titled "Under threat of change." American University education is at the top of global rankings, taking 17 of the top 20 spots in the Shanghai Jiao Tong University's global survey of top universities (Europe took only two of the slots (Oxford and Cambridge), and Japan squeaked in at number 20).

Strong universities offer tremendous benefits to the nation that hosts them. Not only are graduates easy pickings for companies who want the best and brightest in the world (or rather, would be, if our own government wasn't so intent on sending them back to their home countries), but they create opportunities for private money to assist in university-level research. More nobel prizes are won by Americans (or those working at American universities) than in any other region, and according to the article in the Economist, Europe's share of the honors is declining.

Europe wants to change that, hoping to inject more dynamism into a system that is almost 100% paid for by the state. The European Union offers some help, pushing states to harmonize European degrees in hopes of making national universities more head-to-head competitive with those in other European countries. It it is hoped that this might attract more students to shop for universities across borders, though the wrinkle in all of this is that Europe speaks many languages. British students are less likely to consider an Italian university unless they speak the language...

...though that could change. The new Toulouse School of Economics (in France) is English-only, the better to attract students from around the world. There is some precedent for universities that don't teach in the language of the country in which they operate. Top-ranking Oxford and Cambridge, in the middle ages, used to teach everything in Latin, at the time the one truly "international" language in the European area.

More European universities are starting to charge tuition fees, something students have greatly resisted, but, oddly enough, might help to boost attendance. Only 24% of "working-age" Europeans have degrees, compared to 39% in the United States. That might partly be due to the fact that the United States does not require as rigorous a university testing system to serve as a control valve on the number of people who attend what is an essentially free university system in Europe. It certainly might help to bring more money to European schools. Europe devotes only 1.3% of GDP to university education versus America's 2.9%, which is likely due to the fact that almost the entire burden is borne by European taxpayers.

But as implied in my discussion with the University of South Dakota graduate, the comparison between Europe and America's education system is not one of complete state-management versus a wide-open education free market. Rather, it's more of a comparison between an overly state-managed model and one where public universities are forced to compete with private ones.

Most Americans attend a public university due to cost, which is a key reason for the US government to play such a strong part in American university education. In so doing, they make it affordable for a larger segment of the population to afford college. This is why governments get involved in education in the first place. Education is a core competency in capitalist economies, as people who can't read or write make poor capitalists, and really smart people, properly educated, build companies that employ lots of people.

Fees are charged even to in-state attendees at state colleges, which is important, as people who pay money are more likely to take their education seriously. It also lifts some of the burden for funding education from the state.

Some public money, however, does flow to private universities, in the form of federal grants for needy students as well as loan guarantees. This creates an environment where public universities truly compete with private universities (and the Shanghai Jiao Tong rankings prove it, as there are public schools in that list). Granted, private universities might attract the best professors in the world. However, public universities do attract their share, and state governments are forced to maintain funding levels at reasonable levels in order to keep state universities competitive.

In other words, shifting to a more "American" model does not mean that most of the money driving the education system in Europe must come from private hands. That isn't the case in the United States, which by most standards is considered the best university system in the world. Rather, it means that more effort must be exerted to ensure that public universities compete, both with each other, and even with private schools. Government has an interest in ensuring its citizens can afford higher education. That shouldn't be an excuse, however, for protecting those which it funds from competition.

Now, if only the United States would apply the lessons of its successful university education system to primary schools (grade school through high school) and public health care.