Friday, October 15, 2010

How to revive the economy by closing down universities

Robert Skidelsky has a nice article making the argument against fiscal retrenchment (alternative link here). At least someone is making the argument. Whether or not Ed Miliband will sign up to to a real opposition view is still an open question: in a sense he doesn't have to: if the Con-Dem cuts destroy the economy, he will benefit anyway, because he was proposing slower cuts. But this does mean that almost no-one in public life (except Skidelsky and a couple of other FT columnists, in fact) is making the case that cutting government spending could make both the recession and the deficit worse.

Today the newspapers were trailing a leak suggesting that 80% of the government's funding for university teaching could be cut. It's to be hoped that this doesn't happen because either we will have to give lectures in football stadia, or most current students will have to drop their studies and seek work. An 80% cut is simply insane, unless..

Unless they are planning to simply withdraw government support as they roll in the new tuition fees arrangement. Quite who is going to explain to students that they will have double the debt for (at best) the same quality education, is not clear at the moment.

But back to macro. The Guardian education supplement is usually 10 pages longer: the total block on recruitment in British universities simply means that unemployment amongst aspiring academics will explode. Fewer students will gain the training needed to become productive workers. How exactly is that going to help the economy recover?

This is getting desperate. Either the government is playing mind-games with us (which is what I hope), or they're committing to a 'liquidationist' approach to the crisis. It didn't work so well last time it was tried.