Ch 3 Exporting and privatising higher education (1985-1986)

Helen Hughes, Professor of economics at the Australian National University in Canberra was one of the economists who presented at the “Withering Heights” conference.[1] Hughes – like many others in the mid-1980s – was very concerned about Australia’s low export ratio. In 1985, a key area of public debate in higher education was a potential fee for foreign students. Helen Hughes saw this issue as higher education’s opportunity to contribute to society through the creation of a brand new export market.[2] The Supplement reported on her paper in July 1985, positioning the economic approach as the radical way forward, hampered by conservative forces in universities:

She said the policy changes that are so urgently necessary to release the export potential of Australian education unfortunately threaten the present tenured academic establishments and the educational bureaucracy. She claimed that those whose interests were at risk were mobilising their defences and because they were protecting past privilege, they were well organised, highly articulate and literate.[3]

Government intentions to create this export market by introducing fees for foreign participants in higher education had tentative support in (and out) of the pages of the Higher Education Supplement, largely for the same reasons as Hughes.[4] Opponents to charging international students fees were in quite a difficult position. It was hard to successfully argue that, except in cases of foreign aid, Australian taxpayers should fund the education of those who will never pay tax in Australia. The argument they found themselves having to use was an argument against privatisation generally, on the suspicion that a foreign student fee was a precursor to large-scale privatisation of the higher education system.[5] Privatisation, in various forms – marketing education internationally, charging domestic students fees and establishing explicitly private institutions – was the topic of discussion in higher education in the mid-1980s and certainly dominated the pages of the Higher Education Supplement for the middle part of the decade.

There was obviously an element of racism that often crept into discussions about international students, because proponents of both sides kept claiming that their viewpoint was the one that wasn’t racist. Helen Hughes claimed that opponents to the establishment of an export market for higher education were racist – they were supposedly worried that Asian students would want to stay in Australia, resulting in “excessive migration”.[6] Opponents to the introduction of (what was initially) an international visa charge for foreign students claimed that imposing international student fees of any sort was a racist act.[7] Helen Trinca, (Supplement editor from late 1982 to mid 1985) in an editorial on the international student visa charge, said that the additional policy of a 10% cap on international student places would silence the racist opinion that foreign students were taking the place of Australians, when in fact they were simply “far brighter than their Australian counterparts”.[8] Opponents to the fee, said Trinca:

…should perhaps be grateful that in the present economic climate – where fees for all students are being touted – that the Government did not go all the way and introduce full-cost fees for overseas students.[9]

Within a short time Senator Ryan, together with the then Minister for Trade, John Dawkins, made a decision permitting institutions to “sell” courses to international students at a price set by the institutions themselves.[10] Trinca said that staff union concerns that this move “could well lead to a private system for Australians as well” was warranted, since:

The question is no longer whether we will have a degree of privatisation in Australia…What we are being offered in the new plan to sell education…is an experiment in privatisation. It is something of an off shore coup for the free-marketeers in higher education, a dry-run for deregulation, if you like, that could well spill over to the domestic system.[11]

Academics from both sides of the debate agreed. This was the “thin end of the wedge”.[12] They disagreed – as can be seen in the pages of the Supplement, and in journals and conference proceedings from the mid-1980s – over whether the wedge was any good, as we will see.

Government was naturally concerned that the quality of the educational export product be assured a distinctive place internationally. A markedly Australian product was needed for international market positioning,[13] In an attempt to ensure one (and also to enhance the relevance of university education to Australia) Senator Ryan commissioned a review of Australian studies, which included reviewing the Australian-focused content of Australian institutions generally.[14]Helen Trinca’s editorials (Trinca was Editor of the Supplement from the end of 1982 to mid-1985) were supportive of this development, seeing it as giving a new national and international value to higher education.[15]At the start of 1986, the Supplement reported the Western Australia Institute of Technology – then known widely as WAIT (and then Curtin University of Technology) – under the leadership of Don Watts, was to take in the first international students on full-cost fees.[16]

Fees for “all students” were indeed being “touted”, as Trinca put it and by the end of 1985 some were suggesting that it was “discriminatory” that domestic students were unable to “buy” a place in Australian universities, as international students were able to.[17] Don Watts at WAIT was one of the most vocal leaders within higher education supporting a reintroduction of fees:

The present catastrophic state of higher education has its origins in December 1972 when the Whitlam government assumed full responsibility for funding tertiary education.[18]

In fact, the pro-fees lobby was so strong in 1986, the Minister for Education Susan Ryan wrote to the Higher Education Supplement to point out to her opponents that advocates of domestic fees “miss the point”. Responding specifically to (yet another) two academic economists, she said:

This paper is a typical product of the ‘free market’ theorists who are either ignorant of or conveniently ignore the cost and range of income support and scholarship measures that were available to ameliorate the charging of fees to tertiary students before 1974.[19]

With a 1987 election looming, Ryan pledged not to introduce fees for domestic students – beyond the $250 tertiary education administration charge, that is – and the Liberal opposition also spoke against fees for tertiary education.[20] Peter Karmel, drawing on 30 years of experience in public policy in education, wrote a detailed analysis of the question of fees for the Supplement[21] – and despite his consistently reasoned approach (even when it supported a position he personally disagreed with[22]) and the level of respect granted to him, it seems likely that Karmel would have been considered to be synonymous with the 1970s bureaucracy that the pro-fees lobby derided, but over which he had presided for so long.[23]Government reticence over fees – as well as support for public education by a senior public servant[24] – was seen to be typical of the self-interest held by the “public monopoly”, according to those who had faith that a deregulated, free-market system would produce a better quality higher education “product”.[25]

The notion that a marketised higher education system would produce an improved “product” was a faith held with vehemence by Don Watts. In 1987 he said:

Education in Australia, in the absence of even a modest fee, provides no real contractor-customer relationship.[26]

He must have been too distracted by government policies in the 1970s to notice the student demands on university governance, for he also said:

The institutions simply are not accountable to a market. Students, the real market, have no incentive to question institutional performance.[27]

Watts was determined to see change in higher education – and a change that would see knowledge determined by market forces, one way or the other. If research commercialisation and the reintroduction of fees was one half of his passion, the other half of it was the development of an explicitly private sector in higher education – such as there was already in schools.[28] It is most likely that his outspoken support of private developments in Western Australia[29] and the determination that students, at least, should be taught to navigate free market capitalism with knowledge[30], earned him the position of Vice-Chancellor of Australia’s first private university. It seems fitting that this private university was proposed, sponsored by and, eventually, named after the notorious 1980s mega-millionaire, Alan Bond.

Bond University embodied the 1980s free-market utopia in higher education. It was naturally therefore also the centre of the debate surrounding privatisation, a debate that raged through universities and in which everyone had an opinion. Bond Corporation proposed the scheme mid-1986 and later that year partnered with a Japanese company, EIE Development, to commit $125 million to stage one, with a view to enrolling 800 to 1000 students in 1989.[31]It was a shocking proposal, to many (most vocally the staff unions), who saw the university tradition being appropriated by one of the corporate sector’s most prominent figures in Alan Bond.[32] This, many thought, had potentially disastrous consequences for the (now economically important) international reputation of Australian university standards.[33] This “entirely predictable” and even “elitist”[34] (according to privatisation advocates) response from the university community, however, was far from universal. However, one self-classified “rational” adherent of privatisation thought it a shame that supporters of Bond University were predominantly “right-wing loonies”.[35]

While some members of the Commonwealth opposition supported Bond University as an exemplar of privatisation[36], the Minister for Education, Senator Ryan and the Labor government were not in favour of the private university – largely because if private funding was to enter the system, it was believed that it should go to public universities[37], relieving the treasury:

The stated aims of the Bond proposal are to attract private money in higher education, to bring industry and education into a profitable partnership and to tap the market for wealthy overseas students. All of these things can be done, and are being done, by our public institutions….The Bond proposal offers nothing new or constructive in these areas.[38]

However, Bond, like every other university, was created by an Act of the State government (in this case Joh Bjelke-Petersen’s Queensland), and the Commonwealth could do nothing to prevent its existence.[39] The Australian Vice-Chancellor’s Committee had a bit more power, in this respect, placing conditions on Bond’s membership to this unofficial body for university accreditation.[40] Watts, convinced that he was inaugurating a revolution that would instate the new-fashioned academic in the high status role appropriate to Australia’s version of Harvard University, declined the eventual offer of membership to the Australian Vice-Chancellor’s Committee – an intentionally provocative sign of his lack of regard for the established system (though the caption has him say “some of my very best friends are vice-chancellors”).[41]

Don Watts unabashedly sought to instate exchange-value knowledge – commodified knowledge – as the coup of higher education:

In commercially-minded societies almost everything has a price and thus a value. There is clear evidence that the Australian society does not understand the value of education. This is not surprising. Goods obtained by gift are difficult to place in an ordered system of values.[42]

The only real way, in Watts’ mind, for higher education to regain its status in Australia was an affirmation of knowledge’s value as exchange value with an explicit price. A gift system would not suffice, despite the gift’s obligation of exchange[43] and the possibilities (as we saw from 1980 to 1982) of some degree of commodification without fees. Gifts are given freely, but attach obligation[44] – in the case of education, it attaches some obligation to the society that gifted it.[45] Teaching and researching also traditionally functions in a gift-culture,[46] placing academics and, to a lesser extent, students in a complex scheme of obligation – an enduring membership in a loose community. Commodities, however, are not given freely, have no obligation attached to them and require those who trade in them to be independent of one another before and after the transaction.[47]

Commodification’s capacity to remove personal obligation from the university community and from the practices of teaching and research is what made critics of the Bond scheme fear for the maintenance of standards. If there is no public obligation, no public knowledge, surely knowledge could be cheapened – cut-price knowledge or knowledge that is obligated to the company that pays for it rather than to the overall efficacy of intellectual honesty. In a similar way to which the free-market faithful were convinced that tenure gave disincentives to academic performance, opponents of the free-market were concerned that commodification gave disincentives to academic integrity.

But the value of the gift is best understood within the gift-culture in which it is coded. As university-based knowledge lost more of its differentiation from other kinds of knowledge its value was only understandable internally, as a kind of incestuous value-system. Because gift-culture makes it appear that knowledge only has value to those functioning within the community of obligation – within the university system – it then appears to have no value beyond it, unless commodified. This type of value is a part of the “legitimation games” Lyotard discussed.[48] In considering Lyotard, philosopher Maurice Charland discusses the ways university-based knowledge assumes the equal status of its participants – that is, each move in the knowledge “game” is directed towards other participants who must be qualified to understand and who are obliged to engage with it.[49] Within Lyotard’s framework, the ongoing destruction of the boundaries between public and private knowledge also delegitimises this culture and the authority asserted within it. The result is that value for university-based knowledge increasingly resides in the growing levels of legitimation granted to those external to the university system – government, industry, the market – probably accelerated by academics’ bad reputation. One of the characteristics of 1980s believers in an educational free-market was their positioning of legitimacy for knowledge outside of the university, resulting in a tendency to consider education and knowledge as intrinsically commodified (since their lens is one of knowledge recipient, now consumer). One especially enthusiastic economist declared:

Education is a commodity and should be treated like one.[50]

Even many of those opposed to commodification were compelled to confess that, in a capitalist system, education did indeed tend to be partially commodified. At the 1986 Comparative Education conference on education as commodity, Kerry Barlow pointed out that while the idea of “public” was widely thought to denote education as part of the welfare state, government interests still leaned towards capitalist, commodity dominated structures, so that education’s “surplus value” benefits only certain segments of the community, systematically disadvantaging others.[51] She saw the emerging privatisation of higher education as an intensification of a long, ongoing process of ever-increasing commodification rather than a sudden disjuncture.

In contrast to this type of gloomy outlook, in January 1987, Don Watts was ecstatic. “After 15 years in which educational philosophy was sacrificed” he said, a “new era of hope” was emerging.[52] Several things made him hopeful. Tax incentives for commercial investment in university-based research was one. The recognition of some colleges as universities was another. A central one was the development of higher education as an export industry – the “recognition” of education as an “exportable commodity”.[53] With the establishment of Bond University, he said:

No single initiative has more to offer education. At last the private alternative will be available. At last the public dominance is at risk.[54]

In particular, he praised the policy initiatives made by the Prime Minister and the then Minister for Trade, John Dawkins, despite “the education bureaucracy’s” attempts to impede them. Watts did not yet know that, after the approaching election, he would get to know Dawkins a lot better.