Student fees, the petite bourgeoisie and the Treasury

During the announcement by Minister of Higher Education and Training, Blade Nzimande, about the government’s response to the student fees standoff, 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 (US$43,300) 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 press conference, a well turned out and coiffured black student said with a straight face 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.

Student beneficiaries of the National Student Financial Aid Scheme, or NSFAS, have not complained about being classified as poor and receiving financial support. What seems to be at play is 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 television station, 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 Karl Marx described as forever vacillating between the proletariat and the bourgeoisie.

For Marx the petite bourgeoisie was a class of shopkeepers and merchants. In South Africa it is more the bureaucratic petty bourgeoisie that wants to use the state to extract more gains for their class/race – a combination of class consolidation and rent-seeking.

Marx was quite derisive of what he called ‘petite bourgeois self-delusion’, because its members believe that they somehow represent the solution to the class struggle.

Half a century later, in the Mass Psychology of Fascism, Wilhelm Reich described the petite bourgeoisie in Germany as a hotbed for political reaction, which had become the mainstay of fascism through a “terroristic response to the loss (or lack) of economic, social and political power”.

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 of capitalism, Western culture, religion, foreign influences and, of course, universities in the name of peasant Communism.

While academics were either executed (along with two million others) or sent to farms, the children of the elite went to universities in China and France. Today, Cambodia has about 20 public and 50 private universities for 16 million people, but the highest Shanghai-ranked university – Royal University of Phnom Penh – 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, or Fees Commission, is to enquire into, and make findings and recommendations about, the feasibility of making higher education and training fee-free.

The problem is that the Fees Commission is investigating the wrong question.

Firstly, there is no such thing as ‘free higher education’. Universities are very expensive. Rather, as Barakat (2011) points out, the issue is who pays what and when?

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” (Garritzmann 2016).

In OECD countries, public universities often argue that low or no tuition fees provide greater equality of educational opportunity. But the overwhelming subsidy in public universities accrues to students from middle- and high-income families (Barr 2004).

One of South Africa’s most prominent education economists, Servaas van der Berg (2016), states that such 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”. Similarly, Johan Fourie from Stellenbosch University wrote last October that “blanket university fee reduction benefits the wealthy – and slows change”.

Briefly, it works like this. Free higher education results in low participation rates because, without fees, there is less money. The exception is highly developed and equal countries like Norway and Denmark.

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 in University World News, Patricio Langa et al wrote 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.

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 free public universities, Africa – like most of Latin America and particularly Brazil – 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% (Van der Berg 2016).

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 – 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 the best government and private schools who will succeed in school and gain access to tertiary education.

South Africa has limited growth and one of the most unequal and inefficient school systems on the African 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?

Power play of the petite bourgeoisie

In his announcement, the minister went beyond applying a Band-Aid by confirming the principle of fees and by introducing a clear, differentiated approach to fee payment within three bands: the poor below R120,000, a very wide middle-class between R120,000 and R600,000, and the affluent middle class and 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, Nzimande exposed the lack of policy coordination in a government at war with itself.

In many countries, the minister’s announcement would be regarded as a dramatic policy change and a victory for students in the under-R600,000 income bracket.

Importantly, the minister also handed the right to determine fees back to universities, after the ‘illegal’ announcement in 2015 by the president that there would be a 0% fee increase.

The minister’s policy change ‘clarified’ the double-talk of 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 22 September, there had been protests at about half of the country’s 26 public universities. At the most active (or media-visible) campuses – such as the universities of the Witwatersrand, Cape Town and KwaZulu-Natal – the protesting groups were no larger than about 1,000 students; that is, less than 5% of student enrolments.

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’ (mixed race) 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 interests, often with deleterious consequences. But 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 (among others, too small a vocational and 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 universities, as the only ladder into the affluent middle class (Cloete 2016).

With the World Bank reporting that South Africa has the highest private return to tertiary education (Montenegro and Patrinos 2014), and Van der Berg’s (2016) finding that graduates are three to five times more likely than a school-leaver to find a job, the perception is correct. But in this perception, higher education is not regarded as a contributor to economic growth, but as a mobility mechanism, as Van der Berg argued.

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.

It is not only President Jacob Zuma’s entourage, but also rolling bailouts for the state-owned enterprises and now for free higher education (which is already into the second bailout, with some of the money coming from the school system).

The student discourse for free higher education has not been about contributing 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 that of one million students who enter school annually, about 110,000 will enter university and 55,000 will graduate after five years (Cloete 2016). Being poor, black and special (one in 10) is the argument.

There is no mention by this new aspirant petite bourgeoisie – approximately one million in the university sector – about the three million 18- to 24-year-olds who are not in education, employment or training, or NEETS, 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 petite bourgeoisie is making what they now call a ‘national strategy’ to consolidate their class position and gain access to the Treasury in competition with other groups?

Be wary of false prophets

As was the case in fascist Germany and populist Cambodia, the petty bourgeoisie was encouraged and misinformed by certain intellectuals.

During the development of this South African conflict, 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 Vally at the University of Johannesburg and Rasigan Maharajh at Tshwane University of Technology, who have supported the call of free higher education for all.

From their publications, the argument contains three pillars: the freedom charter and the Constitution; increasing the proportion of gross domestic product 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 tertiary education it says that “the state, through reasonable measures, must make it progressively available and accessible”, which is exactly what Nzimande is doing.

The 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%, China almost 3% and Cuba – Nzimande’s favourite state – spends 4.5% from a very small and stagnant economy (Cloete ibid).

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 high tax the rich, for such obvious reasons as that government is often in cahoots with and-or dependent on the super-rich.

Nowhere in the world do the super-rich pay for free higher education.

In 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 return on higher education is four times lower than in South Africa – unemployment being less than 5% and the tax rate being a flat 50% for everybody.

So free higher education is paid for by virtue of the fact that everybody is working, everybody earns a good salary, everybody pays tax at around 50%, and the treasury is not raided by special interest groups. Taking the money from South Africa’s super-rich would only sponsor the NSFAS for a few years.

The aspirant petite bourgeoisie must be very careful of Pol Pot-type advisors who do not 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 (Barakat 2011).

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 graduation rates, high graduate employment, good tax collection and taxes must not be stolen. South Africa satisfies the condition of high graduate employment – it has highest private returns in the world – and a good tax collection system. The biggest drawbacks are that barely 50% of 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 NEETs, put in place a modern progressive graduate tax (instead of an outdated loan scheme) and stop raiding the treasury.

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. He is a guest professor at the University of Oslo, Norway, and an extraordinary professor for both the Institute for Post-School Studies at the University of the Western Cape and the DST-NRF Centre of Excellence in Scientometrics and Science, Technology and Innovation Policy at Stellenbosch University, South Africa.

REFERENCES

• • Barakat B (2011) Time is Money: Could deferred graduate retirement finance higher education? Vienna: Vienna Institute of Demography.
  
• • Barr N (2004) Higher education funding. Oxford Review of Economic Policy, 20(2): 264-283.
  
• • Cloete N (2016) University Fees: A story from evidence. http://www.chet.org.za/news/chet-prov...d-evidence
  
• • Garritzmann J (2016) The Political Economy of Higher Education Finance. Palgrave Macmillan.
  
• • Montenegro CE and Patrinos HA (2014) Human Development Reports. Comparable Estimates of Returns to Schooling around the World. Washington DC: The World Bank.
  
• • Van der Berg S (2016) Funding university studies: Who benefits? Kagisano, 10 (Student Funding): 173-186.