BY SIMON MARGINSON THE AUSTRALIAN OCTOBER 19, 2012 12:00AM

I THANK Andrew Norton and Geoff Sharrock (10 October) for their spirited and lengthy responses to my short critique of Graduate Winners (3 October).

It is hard to achieve a robust intellectual debate about policy free of name calling, though we need this badly. I did not state that the OECD’s Education at a Glance is an argument for more public funding. The OECD is neutral, as I said in my critique. Perhaps that is its virtue. At bottom public versus private is a philosophical question not reducible to evidence. It is assumption driven and precisely because of its intellectually open approach to evidence, OECD materials can support either side of this debate. Norton acknowledges the neutrality of OECD statistics but finds them “not the most appropriate”. He prefers Australian data that fit his argument better.

To repeat the main point I made, the problem with Graduate Winners is its method. It uses closed assumptions about the virtues of markets and builds arguments and evidence to prop up those assumptions. This is what I mean by dogmatic. If you are not a true believer in Milton Friedman, who first outlined the standard neo-liberal argument for market reform in 1955, you disagree. I do not think higher education anywhere works according to a textbook market logic (international comparisons make that clear), and trying to force the sector to fit that template, as in the UK at present, leads to policies that are both ineffective and highly destructive.

My criticism is not that it lacks rigour or evidence. It is admirably rigorous-within its chosen assumptions. It tests the evidence, but within the standard neo-liberal framework, in which competitive markets are both standard of measure and the normative goal to be achieved.

The assumptions of Graduate Winners are unsuitable as a recipe for policy. For example the assumption that all benefits of higher education are reducible to individual benefits, such as rates of return to graduates. This is an extreme position with little support outside Australia. How would the Grattan model such collective benefits as a sustainable environment, which is advanced by certain educational programs? This has nothing to do with individualised earnings or other personal benefits. It cannot show fully in research on the effects of higher education on separated individuals, like the HILDA and ABS data that Norton cites. How would Grattan model national defence, or the benefits of a common scientific literacy? These collective goods do not fit the paradigm. They are ignored.

Then there is the claim that the public benefits (which it sees as a kind of individual benefit) will flow regardless of whether funding is public or private. Sharrock finds this argument robust. But it is a leap of faith! It cannot be proven. There is no system anywhere where all funding is market-based or all private. Even the US Ivy League use philanthropy and tuition subsidies extensively.

Essentially this simply restates the invisible hand dogma in certain readings of Adam Smith-the idea the common prosperity and welfare are maximised when unregulated self-interest lets rip.

But Adam Smith explicitly stated that this was not true of education, where there is a strong case for public intervention.

Simon Marginson is with the Centre for the Study of Higher Education, University of Melbourne.