Stiglitz Challenge to Higher Education in Scotland – Overview of Talk in Edinburgh

This blog article was published by The Bella Calendonia blog on the 30th of August, 2014.


Stiglitz enlightened challenge to Scottish Education


By Douglas Robertson

Last week Joseph Stiglitz, Nobel Laureate in Economics, set out the case for public, not private funding of tertiary education at the annual Royal Society of the Arts, Angus Millar Lecture, held in National Galleries of Scotland in Edinburgh. Drawing from themes outlined in his new book, co-written with fellow Columbia University economist Bruce Greenwald, Creating a Learning Society, he argued that as learning and knowledge was critical to both economic development and the functioning of democracy, higher education needed to be a public, not a private good. His lecture also set out Scotland’s contribution to that debate within a historical and contemporary context. But what was most striking about his case was not the basic argument, which has been well rehearsed in debates exploring the notion of what constitutes a public university, but rather that it took an eminent American academic speaking in Edinburgh to introduce this agenda. Scottish Universities have been all but silent in the Referendum debate, apart from the occasional self-interested bleat about the income streams derived from either research funding or student fees. Stiglitz, in just over an hour, offered a vision and an understanding of the position Scottish higher education should endeavor to hold at this exiting juncture in the national development. The question arising is whether Scottish higher education is listening or, actually understands his challenge.

Stiglitz’s case is simple. The most rapid and sustained increase in the standard of living, which occurred 250 years ago, was the result of advances in technology brought about by knowledge, rather than the accumulation of capital or the better utilisation of resources. Currently, what separates developed from less developed countries is not just a gap in resources or output, but also a gap in knowledge. The pace at which developing countries grow is thus largely determined by the pace at which they can close that gap. So to understand how countries grow and develop, it is essential to appreciate just how they learn and become more productive. Although Stiglitz is primarily focused on the commercialisation of knowledge, his vision for a learning society is wider.

With increases in the standard of living being based on learning and knowledge, how best to move knowledge forward and how to ensure more people are engaged in both learning and knowledge, are critical questions for the business of government. In fact, virtually every government policy impacts in some way on knowledge and learning, a fact policymakers need to properly acknowledge. Further, government support and promotion of learning is the prime element within any nation’s industrial policy. Stiglitz also noted that too often we assume there is not a national industrial policy, given the criticism of and subsequent demise in national and regional planning. But even when an industrial policy is not explicitly articulated, it is always present, if only by default.

The decision by both the US and UK to de-regulate financial markets, under ‘Big Bang’ in 1986, brought in its wake a transformative switch in industrial policy, from manufacturing to financial services. At the same time, this switch in industrial policy brought with it significant changes in social equality within both states. With eight percent of the US economy in finance (nine percent in the UK), the entire focus of society is now skewed, in that the best brains want to work in finance, given the high rewards on offer, rather than engage in creating new knowledge and learning which would develop other elements of the economy and society. Stiglitz also offered the observation that this emergent industrial policy also helps explain the rise of a strong anti-science agenda across the USA, with climate change denial, opposition to stem cell research and creationism being the most obvious illustrations.

Our ability to learn and do things better brought about the dramatic changes in living standards 250 years ago, transforming the long-term trajectory of stagnation which had existed for the previous 2,000 years. Critical to bringing about this change in learning culture Stiglitz argued was the Scottish Enlightenment. This ensured three changes in thinking: firstly, people recognised that change was possible, for up until then progress was not the accepted orthodoxy; secondly, it ensured authority could and should be challenged, a shift which ties back to the Calvinist groundings of Presbyterianism; and, finally, there was the advocacy and pursuit of scientific method.
The Scottish Enlightenment was, in large part, the result of the countries education system, both at the school and tertiary levels. Basic male literacy levels, at 75 percent, was twice that achieved in England, at that time, while the cost of university education, at any of Scotland’s four Universities, was a tenth of that charged by either Oxford or Cambridge. While it could not be argued that access to education was equal, it did expand opportunities, and that lesson still has a bearings on public policy and the nature and functioning of society today.

Stiglitz then went on to examine knowledge as a product, noting it differs from other goods and services, in that market economies are typically not efficient, in the production and transmission of knowledge. This reality he stated also has major implications for global trade, industrial policy and intellectual property regimes.

The efficient production and utilisation of knowledge requires government input, because there is a marked difference in public and private returns from such production and utilisation, as monopoly practices exercised through restrictive intellectual patents by drug and IT companies ably illustrate. Stiglitz drew an analogy between patents and enclosure, again something Scot’s are familiar with, whereby a public common good is expropriated by powerful individuals, or corporations who then seek to extract value and profit for themselves.
As research is considered to be a risky asset, with highly uncertain and unpredictable returns, its funding is highly reliant upon the public purse. Financial institution are happier with collateralised assets, hence the mass construction of crap housing in the Nevada Desert, and right across the US that brought in its wake the sub-prime mortgage crisis, which all but brought down the world economy. The constant danger is, of course, that special interests then try to capture, or enclose the valuable elements of publicly-funded research for their own financial advantage, something of a recurrent feature in intellectual development as well as history.

Another example of enclosure are universities themselves. Stiglitz expressed surprise that England had sought to adopt the failed US system, whereby a small number of prestigious institutions serve the interests of the powerful elite, while everyone else pays a high price for a medico product. Student loans, another example of the consequences that fell from financial deregulation and their desire to create and exploit new product markets (PFI being another), now acts to impoverish the many. Shockingly, in the US as student debt cannot be discharged, even when a young person dies, their guarantors, typically the parents, are still liable for that debt. While acknowledging that Scottish higher education is not egalitarian, and arguing that tackling that issue demands a greater focus on equalising educational opportunities at an early age, rather than trying to make adjustments at the age of 18, Stiglitz complemented Scotland on resisting the pernicious move to privatise higher education.

Patents and private education, as currently operating across the US, explicitly seek to privatise and enclose knowledge, for narrow interests, and in the process reduce the future capacity of society as a whole to develop new knowledge and learning. To illustrate this Stiglitz pointed out that in the USA, more money is now spent on lawyers upholding patents than is made available to fund new research. This also provides a good illustration of Boltanski and Thévenot’s notion of  the differing values of worth, brilliantly explored in their book On Justification: The Economies of Worth. This explains the clash of personal ambition held by those in public service, who hold civic imperatives, and those in business motivated by an economic imperative.

In concluding his case Stiglitz expressed his strong personal conviction that to create a learning society you also need to have an open society, given the critical link between learning and democracy, again something core to the Enlightenment project. What stood out from this lecture was how Stiglitz sees the symbiotic linkages between knowledge and learning, industrial policy and economic performance, and democracy and social well-being. He does not see them as separate policy silos, but rather as all part of an integrated whole. And this focus ties into his on-going work on social well-being, and just how you build well-being outcomes into public policy objectives, something in which he considers the Scottish Government to be a pioneering world leader.

Building on the arguments outlined by both Wilkinson and Pickett in The Spirit Level, namely, that inequality has a detrimental impact on people’s health and Picketty in Capital in the Twenty-First Century that inequality is also highly detrimental to a nation’s economic performance, Stiglitz adds another dimension, namely, that unequal societies alter the nature of public policy and government. This is surely core to the entire Referendum debate, namely that inequality defines the public policies a government pursues. In the US as Wacquant argues in Urban Outcasts and Prisons of Poverty, this involves the warehousing of the poor within ghettos, their mass incarceration within a brutal and overtly racist penal system, and control and surveillance, via a militarised police force, as recently made evident in Ferguson, St Louis. Britain’s public policy is now on that very same trajectory, as inequality rises with now over a third of the entire population being classed as poor, twice the rate of twenty years ago.

Stiglitz concluded by expressing his view that Scotland was on the cusp of a new period of Enlightenment, given that it had in place an inclusive leaning society, with public universities as a central feature, tied into an emerging industrial policy that seeks to capture and promote renewable energy and address global warming, thus generating both the resources and opportunities necessary to fund an inclusive socially-just society. The challenges this presents to Scotland are quite formidable. How are we to deliver on this broad and interlinked public policy canvas? We need to resist future enclosures, develop educational institutions which fully appreciate and deliver upon society’s expectations of them, secure an industrial policy that draws from new knowledge and learning, as well as encourage a public policy agenda that starts from the basis of promoting equality through well-being rather than supporting self-serving bureaucracies. Within all of this there will also a need to rethink the nature and role of education with a learning society, and better understand what constitutes knowledge, how it is constructed and that everyone has a role to play in that endevour. Higher education is thus not just about student fees and research money.”


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