Education: state or private funding?

In this past issue of The Economist there was a huge feature on European universities. Something that really hit me was the central thesis of this feature was that European universities need to adopt the American model of privately funded two-tier higher education.

The premise on which this conclusion is based is the debatable assertion that US colleges are generally better than counterparts in European nations. The support for this is pretty flimsy. The magazine states that "America boasts 17 of the world's top 20 universities" based on the Shanghai Jiao Tong University rankings, which use strange criteria such as numbers of Nobel Prizes and Field Medals awarded to alumni and staff and research output, while ignoring things like quality of education for students, average class size, accessibility, diversity, and social responsibility. These other criteria are arguably as important, if not more so. (see Vilas Rao's article)

To fix the supposedly substandard European universities, they say, universities should be "set free from the state", meaning start charging fees so that universities can pay more for better talent. While this sounds fine in theory, it of course means less social mobility for a society. When university is beyond the means of the disadvantaged, they won't go. It is that simple.

The article dismisses this concern:

Higher education is hardly a monopoly of the righ in America: a third of undergraduates come from racial minorities, and about a quarter come from families with incomes below the poverty line.

Unfortunately the data does not support this statement:

Source: Anthony B. Carnevale and Stephen J. Rose, Race/ethnicity and Selective College Admissions, in Richard D. Kahlenberg, ed., AmericaÂ’s Untapped Resource: Low-Income Students in Higher Education (Century Foundation, 2004). From Inequality Matters Conference Briefing Booklet

I'm all in favour of improving education, and I think, though only from anecdotal evidence, that many European nations do need to seriously look at the status of their higher education, there are many many alternatives to free market education! Increase state spending, for example. When universities are turned over to the market, they soon realize that liberal arts are not as profitable as technology and the nature of the offerings changes. Access by disadvantaged populations decreases. Contrary to the business press's favourite line, privatization and free-marketization are't always the answer!