Time for more economics teaching in schools

During a less than complimentary Twitter exchange yesterday about the qualifications needed to be Chancellor of the Exchequer (with the present incumbent providing the context) I made a serious point about the lack of economics teaching in schools, and rather surprisingly got a negative response; it would just mean pupils learning (I paraphrase) more of the neoliberal stuff being spouted by the political class.

I disagree.  I worry when I read that economics is in decline in schools (although there seems to have been a small recovery in the number of A-level candidates in the last few years), and that there are almost no newly-qualified economics teachers: an understanding of economics seems to me to be really important in a democracy in which the key political issues of the day are economic as well.  And I think it is wrong to assume that it must be neoliberal in nature.  Certainly as an A-level student in the late 1970s and as an undergraduate in the early 1980s I ingested a good deal of Keynsianism; but, more importantly, I learned about the fallibility of economics.  Richard Murphy, in The Courageous State, describes eloquently the disillusion that encountering academic economics produced, as he realised that what were being presented as iron laws of the market were actually based on axioms that were really little more than unsupported generalisations about human behaviour.  I had a similar experience; Murphy’s book aroused a strong feeling of sympathy.

Moreover, you do not need to have studied economics at a particularly advanced level to understand the fallibility of many of the economic propositions that neoliberal politicians proclaim as unchallengeable fact.  Much has been made recently of the Reinhart-Rogoff debacle, in which the argument that high deficits lead to reduced growth has been found to rely on dubious assumptions and unchecked spreadsheet data; but there are more obvious questions that need to be asked about markets and about choice.  For example, influential constructs like public choice theory  rest on assumptions that are really open to any non-specialist to challenge.

Most of all, the issue that Keynes raised – about how decisions in economic policy can be influenced by politicians, and that, far from the elegant inevitabilities of the cruder kind of market theory, economic policy is messy and human – need to be exposed.  Politicians get away far less with proclaiming that There Is No Alternative (or its more subtle contemporary variations about deficits and debt) when people understand a bit of basic economics; a well-functioning democracy is one in which no politician could get away with describing the deficit as “maxing out the nation’s credit card”.  People need to understand the basic concepts, in a way that the current business studies curriculum simply doesn’t achieve.  And I’d argue that it’s perfectly possible to grasp those concepts at GCSE level.

It is almost impossible to imagine the current government making an intelligent decision about the school curriculum.  But the point remains that, at its best, economics opens the mind.  It means that, as part of their general education, people are equipped with the tools to challenge what politicians and advocates of big money want to present as fact.  It’s not obvious that increasing taxes means people move abroad, or that cutting the public sector increases confidence; people need the equipment and the confidence to question these sorts of proposition and to understand that the issues are not clear cut, and that the propositions of the neoliberal (or any other) economic consensus often rely on debatable social and psychological assumptions.  And in that sense a proper study of economics is a pretty good foundation for aspects of life going well beyond economic policy.

Two brains or no brains?

Universities Minister David Willetts – a man whose intellectual achievements (in the context of the Tory Party, anyway)has led to him being known as “two brains” has given an interview to the Guardian in which he claims that the current system of student funding means that students are “a burden on the taxpayer”.  The context is that the new coalition government appears to be setting the scene for a huge hike in student tuition fees.

There are two approaches to this issue: the economic and the social.  I’ll look at each of these in turn.

From an economic point of view, it’s difficult to know what Willetts means by “burden”.  I live in a city with two universities.  Several thousand students, supported by loans, live here, rent homes here, spend their money in our supermarkets, and, yes, in pubs and clubs.   The two universities directly provide thousands of jobs, and indirectly many more.  While you get plenty of moaning from the usual gangs of reactionary miseries in the letters columns of our local paper, there’s no doubt that the funding behind these students plays an important role in sustaining the city’s economy.  While it’s quite possible to see how a government fixated with cutting expenditure might come to the conclusion that this is a “burden”, I’d argue that this was an ideological rather than an empirical conclusion.

Secondly, the social issues.

Tony Benn has consistently argued – and I agree with him – that recent trends in student funding, leading as they have to situations where students leave university tens of thousands of pounds in debt, ensure that graduates become good, compliant employees.  When you’re immediately burdened by huge debt you have to get your head down, accept corporate values, and work.

Willetts says in the interview I’ve referenced above that students should see student debt as a down-payment on higher tax, rather than a debt.  But that presupposes that graduates will earn more; not an assumption that stands up in many cases (which is why there is a desperate shortage of well-qualified science teachers).  In an society in which a first degree is becoming a default qualification the marginal value of that first degree is declining.  Many of the most lucrative jobs remain in sectors like the law and finance where there remain crucial financial barriers to entry – periods of unpaid internship or pupillage which ensure that only those backed by substantial parental wealth get the opportunity to participate.  And of course an increase in tuition fees at a time when the marginal value of a degree is falling will have the inevitable effect of pushing those who are not backed by parental wealth away from the more prestigious educational establishments – or out of higher education at all.

The only conclusion one can draw is that this approach – whether intentional or not – is to entrench yet further a situation in which higher education is based on parental ability to pay.  The coalition philosophy of higher education – at least – appears to be encapsulated by Ivan Illich’s comment about how formal education seeks to institutionalise the head start as achievement.

The effect of pushing up tuition fees will be to widen even further the gap between rich and poor, and to deny young people from poor and middle-income backgrounds access to the education to which  – on the basis of their ability – they would be entitled (let’s not forget that the average wage in Britain is £25,000 per year, and middle income is a long way from where the right-wing press pretends it is).  It means more Old Etonians at Oxbridge and the Russell Group universities taking the most lucrative (if perhaps not the most useful) jobs, and persuading themselves it’s because they’re cleverer.

It looks very much as if what is in effect a piece of social engineering is being dressed up as economics.