The Universities: Why free for all doesn't make sense

Nico Cloete says the 'leftist' rhetoric of FeesMustFall is disguising a petite bourgeoisie effort to raid the Treasury

University fees in South Africa: Is the petite bourgeoisie trying to raid the Treasury?

During the announcement by Minister Nzimande about the Government’s response[1] to the fees standoff [2] he frequently made reference to the ‘poor and the working class’ as one group, the ‘missing middle’ as another, and those who earn more than R600,000 annually as a third group – bringing class into the higher education debate. As a communist of a ‘special type’ the Minister was trying to avoid traditional class jargon, but then stumbled into the students’ Janus-faced discourses about ‘free higher education’.

This was demonstrated on national television immediately after the Minister’s announcement when, outside the room of the press conference, the eNCA interviewed a well turned out and coiffured black student who, with a straight face, said that the Minister was trying to divide the student movement by classifying them into different groups, and that it was very embarrassing to be classified as poor or rich. The NSFAS students have not complained about being classified as poor and receiving financial support. What seems to be at play here was the embarrassment of being rich (while posing as poor) and, even more problematic, the well-off getting a free education in the name of the poor.

The Minister’s reluctance to speak about class directly seems to have missed the students’ discourse of race: we are black and therefore poor. Perhaps it is not surprising that the following morning, on the same eNCA, the Minister declared that he was ‘baffled’ by the reaction of the students. What the Minister did not see coming was the petite bourgeoisie, who Marx described as forever vacillating between the proletariat and the bourgeoisie. [3]

Marx was quite derisive of what he called ‘petite-bourgeois self-delusion’ because they think that they somehow represent the solution to the class struggle. [4] Half a century later, in the Mass Psychology of Fascism, Wilhelm Reich described the petite bourgeoisie in Germany as a hotbed for political reaction, who had become the mainstay of fascism through a ‘terroristic response to the loss (or lack) of economic, social and political power.’ [5] 

A different, but no less dangerous middle-class political tactic has been to talk for the poor while advancing middle class interests. The Minister’s own middle class ‘ideological fathers’, Lenin and Stalin, sent millions to the prison camps on behalf of the poor. In Cambodia, Pol Pot (himself University of Paris-educated) with his Khmer Rouge movement tried to purify Cambodia from capitalism, Western culture, religion, foreign influences and, of course, the universities in the name of peasant Communism.

While academics were either executed (along with two million others) or sent to the farms, the children of the elite went to universities in China and France. Today, Cambodia has about 20 public and 50 private universities (16 million people), but the highest 'Shanghai-ranked' university (Royal University of Phnom Pehn) is not even in the top 3,000 in the world.

Asking the wrong question

The main brief of the Commission of Inquiry into Higher Education and Training (The Fees Commission) demands that it ‘enquire into, make findings, report on and make recommendations about the feasibility of making higher education and training (higher education) fee-free in South Africa. [6] 

The problem with the brief is that they are investigating the wrong question.  Firstly, there is no such thing as ‘free higher education’. Universities are very expensive. Rather, the issue is who pays what and when?[7] Secondly, international research shows that ‘there is broad agreement amongst economists of higher education funding that government subsidies are “regressive”, meaning subsidies favour the rich’.[8] According to Barr from the London School of Economics, in OECD countries public universities often argue that low or no tuition fees provide greater equality of educational opportunity, but that the overwhelming subsidy in public universities accrues to students from middle- and high-income families.[9]

One of South Africa’s most prominent education economists, Servaas van den Berg, states that their findings ‘for South Africa are not unique, since World Bank research shows that much of tertiary education spending in Armenia, Bolivia, and Brazil benefits higher income groups’.[10] Similarly, Fourie from the University of Stellenbosch’s Research on Socio-Economic Policy unit states bluntly that ‘blanket university fee reduction benefits the wealthy – and slows change.’[11]

Briefly, it works like this. Free higher education results in low participation rates because, without fees, there is less money and the participation rates[12] are low.[13] By contrast, in countries like South Korea with high government investment and fees, the tertiary education participation rate is over 80%. Africa (with participation rates below 10%) is an example of low government investment and free public higher education. In an article ‘The Illusion of Free Higher Education in South Africa’, Langa et al. write that as the quality of public education declined in Sub-Saharan Africa, the children of the elite left public schools for high-cost private schools, only to reappear in a public university – for free.[14]

As higher education systems in Africa expanded provision of free higher education became increasingly expensive and unaffordable, compounded by a sustained decline in economic growth. Since only a small elite (less than 10% of 18 to 24-year-olds) can be absorbed by the free public universities, Africa (like most of Latin America) developed a dual system of free public education for the elite, and low-quality private colleges (calling themselves universities) for the poor. The main problem for the poor in South Africa is not that they cannot afford higher education; rather the issue is that less than 5% of them qualify for entry into universities, while for the 5% whose parents earn over R600,000 the percentage who qualify to enter university is over 70%.[15]

To state the obvious, in South Africa – the country with the world’s highest inequality index (Gini-coefficient 0.68) and the highest private returns to tertiary education internationally [16] – free higher education will widen, not reduce, inequality. This is because the low participation rate (currently at 20%), combined with free tuition, would immediately restrict the expansion of places.

Furthermore, it will be the children of the new political and business elite who have the significant social, cultural and economic capital from Model-C and private schools who will succeed in school and gain access to tertiary education. Like the rest of Africa, South Africa has limited (zero) growth and one of the most unequal and inefficient school systems on the continent. Installing a free university system on top of that will only serve to solidify and expand inequality.

The issue is thus not feasibility, but whether South Africa wants to adopt another self-destructive policy that will widen inequality and privilege the de-racialising rich. As such, the question to be addressed by the Fees Commission should have been: What is required for a sustainable higher education system with affordability for those who qualify for access?

The power play of the petite bourgeoisie

In his announcement, the Minister actually went beyond applying a Band-Aid by confirming the principle of fees and by introducing a clear, differentiated approach to fee payment[17] within three bands: the poor below R120,000, a very wide middle class between R120,000 and R600,000, and then the affluent middle class/rich. The government is promising free higher education for the poor and to pay the proposed (around) 8% fee increase for those in the ‘not-so-missing middle’.

Only those from families with incomes above R600,000 will pay fees, which means that only about 30% of the undergraduate student population will pay for the increase. By saying that he does not know where the money will come from since he is not the Minister of Finance, Minister Nzimande exposed the lack of policy coordination in a government at war with itself. [18]

In many countries, the Minister’s announcement would be regarded as quite a dramatic policy change and a victory for the students in the under-R600,000 income bracket. Importantly, the Minister also handed the right to determine fees back to the universities, after the ‘illegal’ announcement in 2015 by the President that there would be a zero percent fee increase. [19]

The Minister’s policy change ‘clarified’ the double-talk of the students, who immediately began protesting with demands for free quality higher education for all – essentially a contradiction in terms outside of the Nordic countries. By Friday 22 September there had been protests at about half of the 23 universities. At the most active (or media-visible) campuses, such as Wits, UCT and KZN, the protesting groups were no larger than about 1,000 students; that is, slightly less than 5% of student enrolments at these institutions. This raises a question about the other 95%: Are they passively supporting the call or are they too disorganised to respond?

It would be really interesting and helpful if some of the sociologists who do not have students to teach during the protests would do some participatory action research and study the class composition of the protestors. Regarding race, based on television broadcasts the proportion of whites, Indians and Coloureds among the protesting students is well below 5%. Do they disagree with the protests or are they hoping they can be silent beneficiaries?

For the poor, this is an interesting dilemma: they have been promised free higher education already, but by supporting the petite bourgeoisie (and the bourgeoisie), they may jeopardise their gains. However, history is replete with examples of the poor and the working class acting against their own interests, and often with deleterious consequences. But, of course, with around 70% of the student population now black, the demand could be based on race: black is poor (or at least entitled).

In a recent submission to the Fees Commission, I argued that higher education has become part of the competition for resources (amongst others, too small a vocational technical post-school system, high youth unemployment, and few new government jobs), which results in both the poor and the middle class seeing higher education, and particularly the universities, as the only ladder into the affluent middle class.[20] With the World Bank reporting that South Africa has the highest private return to tertiary education,[21] and Van den Berg’s  finding that graduates are 3 to 5 times more likely than a school-leaver to find a job, their perception is correct. But in this perception, higher education is not regarded as a contributor to economic growth, but as a mobility mechanism.[22]

Another explanation, more in line with competition for resources, is that in a context of no growth and limited opportunities, a political tendency has emerged of certain groups raiding the Treasury (or at least trying to).[23] It is not only the Guptas or the President’s entourage, but also the rolling bailouts for state-owned enterprises and now for free higher education (higher education is now already into the second bailout, with some of the bailout money coming from the school system).

The student discourse for free higher education has not been that they contribute to economic growth (45% of all undergraduates, and 70% of the poor on student financial aid, never graduate), but that they are poor and ‘special’ – special in the sense that of the one million students who enter school, about 110,000 will enter university and 55,000 will graduate after five years.[24] Being poor, black and special (1 in 10) is the argument.

There is no mention by this new aspirant petite bourgeoisie (approximately one million in the university sector) about the 3 million 18 to 24-year-olds not in education, employment or training (NEETS),[25] for whom a more deserving case of being black and poor can be made. Is it too farfetched to speculate that at least the vocal, active component of the relatively small (in the South African bigger picture) petite bourgeoisie is making what they now call ‘a national strategy’[26] to consolidate their class position and gain access to the Treasury in competition with some other groups? In other words, is this a move by the clever ones, but without a clever (or substantiated) motivation?

Be wary of false prophets

As was the case in fascist Germany and in populist Cambodia, the petty bourgeoisie was encouraged, and ‘’misinformed’’ by certain academics/intellectuals. During the development of this conflict, the traditional academics have been almost completely silent, and passive, letting the university management (with their exorbitant remuneration packages) deal with the crisis. But there has been a small group of academics, with prominent members such as Professors Salim Valley (UJ) and Rasigan Maharajh (TUT) who have supported the call of free education for all.

From their different publications [27] the argument contains three pillars: the Freedom Charter and the constitution; increasing the proportion of GDP for higher education; and taxing the super-rich. The Freedom Charter was an expression of political aspiration, not a document to guide policy. But the Constitution is key to policy-making and on further (tertiary) education the Constitution states that ‘the state, through reasonable measures, must make it progressively available and accessible’, which is exactly what Minister Nzimande is doing.

Their second demand is for a greater proportion of the state budget to go to higher education, from 0.75% to 1%. This is far too conservative. Developmental states such as Malaysia spend 1.75% and China almost 3% (Cuba, the Minister’s favourite state, spends 4.5% from a very small and stagnant economy).[28]  Successful developmental states invest heavily in higher education and charge fees – with financial aid schemes for the poor.

The third, and a purportedly leftist demand, is that ‘the super-rich can pay’. In no unequal developing country has the government managed to tax the rich, for such obvious reasons such as that the government is often in cahoots and/or dependent on the super-rich. But nowhere in the world do the super-rich pay for free higher education; in the Nordic countries with quality free higher education the money comes from a combination of being some of the most equal societies in the world (in Norway the private returns to higher education are four times lower than in South Africa), unemployment being less than 5% and the tax rate a flat 50% for everybody.

So free higher education is paid for by virtue of the fact that everybody is working and everybody earns a good salary (domestic workers earn more than R2,000 a day in Norway); and everybody pays tax at around 50%, and the Treasury is not raided by special interest groups. Taking all the money from Motsepe, Oppenheimer, Rupert and the Guptas will only sponsor NSFAS for a few years.

The aspirant petite bourgeoisie must be very careful of Pol Pot type advisors who do not[29] refer to research evidence on different student funding systems, except to say that they are opposed to a graduate tax because it will be an ‘enormous burden’ for the new petite bourgeoisie.

As a matter of fact, internationally there is a move towards progressive graduate tax systems.[30] The advantage of these systems are: no or minimal fees; they disconnect students from family status – poor and rich are treated the same; differentiation comes after graduation; those who earn high salaries pay more and quicker; and those who earn lower salaries pay less and over a longer period.

The conditions for such systems are high completion (graduation) rates, high graduate employment, good tax collection, and taxes must not be stolen. South Africa satisfies the condition of high graduate employment (highest private returns in the world) and a good tax collection system. The biggest drawbacks are that barely 50% of the undergraduate students graduate and the raiding of the Treasury.  

So the issue is not whether there is enough money for free tertiary education, the issue is to fix the undergraduate university and the college systems, provide vastly expanded education and training opportunities for the NEETS, put in place a modern progressive graduate tax (instead of an outdated loan scheme) and stop raiding the Treasury. So while the fees commission, and the media are looking at money, the issue is political and systemic.  

Professor Nico Cloete is director of the Centre for Higher Education Trust, CHET, and coordinator of the Higher Education Research and Advocacy Network in Africa, HERANA.

A shortened version of this article first appeared on the University World News Website – see here.

Footnotes (not including direct external links)

[7] Bakarat B (2015) Time is Money: Could deferred graduate retirement finance higher education? Vienna: Vienna Institute of Demography

[8] Garritzmann J (2016) The Political Economy of Higher Education Finance. Palgrave Macmillan

[9] Barr N (2004) Higher education funding. Oxford Review of Economic Policy, 20(2): 264-283

[10] Van der Berg (2016) Funding university studies: Who benefits? Kagisano, 10 (Student Funding): 173-86

[11] Fourie J (2015) A blanket university fee reduction benefits the wealthy – and slows change.

[12] The participation rate is defined as the proportion of a 18 to 24-year-old cohort attending university.

[13] The exception is highly developed and equal countries like Norway and Denmark.

[14] Langa P, Wangenge-Ouma G, Jungblut J & Cloete N (2016). South Africa and the illusion of free higher education.

[15] Van Den Berg, ibid.

[20] Cloete N (2016) University Fees: A story from evidence

[21] The World Bank research classifies South Africa as high private returns to tertiary education without economic growth. Montenegro CE & Patrinos HA (2014) Human Development Reports Comparable Estimates of Returns to Schooling around the World. Washington DC: The World Bank.

[22] Van Den Berg, ibid.

[24] Cloete, ibid.   

[28] Cloete, ibid.

[29] Professors Habib and Bawa warn against a ‘’Pol Pot brigade’’ and appeal to ‘’thoughtful activism’’. See Sunday Times here.  

[30] Bakarat, ibid