At the heart of all the main issues in education at the moment is economics. In fact economics in education has become of increasing importance and is a growing field in itself. Analysis of data to evaluate education policy has been valuable in understanding how schools perform and the achievement and a progress of different types of students, for example.
This approach is in the tradition of classical economics. Underpinning classical economics is the idea that people make rational decisions within markets. This leads to econometric models that can be used to predict the behaviour of markets and the behaviour of the economy as a whole. In education, for example, it leads to predictions about earnings following participation in school-based programmes or interventions, the study of various subjects or attendance at Higher Education.
Classical economics sets its boundaries at the edges of the economic system. It does not concern itself with the political dimensions of economics, apart from say, informing policy makers on resource allocation. This rests on its fundamental principle of rational behaviour.
If we step outside classical economics, we can still see the distributions of wealth and power that classical economists observe, but we can also begin to see the forces that create these systems. It is not simply rationality with, as Adam Smith observed, an invisible hand ensuring that all would be fair in a freemarket society. Karl Marx’s critical analysis of capitalism in the three volumes of Das Kapital showed that the freemarket does not lead to a fair or equipatable distribution of wealth. It necessarily leads to the accumulation of capital. As a consequence there is an exploited working class. And hence economy is necessarily political.
One can be forgiven for thinking that in state education political economy can be ignored. The reason we think like that is that since the end of the Second World War and until recently, we have had no reason to think differently. But now we must. I shall explain by dividing the period between 1945 and the present into three economic phases.
The first phase is from 1945 until 1970. The post-war period saw considerable government spending on health and education and sat alongside a freemarket economy. Education was grant-funded through local authorities. This investment was seen as a benefit to society as a whole. However, from the late sixties until the 1970s, things changed. The economic context changed and public education economics had to change in response. This leads to our second economic period between 1970 and 2008.
In the 1970s, there was a change from a mixed economy with public sector spending alongside a freemarket economy to neoliberalism, where there was much greater emphasis on the freemarket. During the early seventies there was a crisis in capitalism, in the UK this was characterised by inflation, decreasing company profits and increasing wage demands by the work force. In the end the unions lost, their pay was controlled and businesses were able to maintain their profits to some degree. The worst outcome was that the economic crisis was erroneously blamed on the unions, inefficient nationalised companies and a supposedly bloated public sector. When Margaret Thatcher was elected in 1979, she famously took on the unions, began privatising nationalised companies and reducing the size of the public sector. Underpinning this was the belief privatisation and marketisation was the best way to run our public services. The invisible hand would do its job. Neoliberalism was the political economy that continued until 2008. It was adopted by New Labour in 1997 and was supplemented by an increase in public spending. Although much capital spending in schools was from private capital. For large businesses, neoliberalism created opportunities to profit from public-sector services and subsidised by the state.
The preoccupation through this period of neoliberalism has been on the deficit in public sector finances. That is the difference between tax revenues and government spending. The preoccupation with eliminating deficit spending and an attempt to return a surplus in public finances has the effect of reducing private sector surpluses (I explain this in more depth here). In other words private sector borrowing has to increase, households become more indebted, house prices inflate. This creates demand in the economy (consumers are debt spending) and the banks profit. In 2008 this whole sorry pile of private debt was found to be overvalued and the big banks had to be bailed out by the state. Once again capitalism is in crisis. But the financial crisis of 2008 was a symptom of underlying problems brought about by neoliberalism itself.
The neoliberal period of unregulated freemarket capitalism has resulted in increased wealth inequality, while the richest 10 per cent or so, have got richer the rest have got poorer or are carrying considerable debt. Inequality in society is indicative of a divided and unhealthy society. Wealth and income inequality leads to democratic inequality, where the wealthy are in a position to influence government much more than the less well off. It also leads to health and education inequalities. Furthermore, it leads to a less productive society since there is less investment in workers and their development.
We find ourselves in period of post-capitalism or post-neoliberalism, the collapse of centrist politics is indicative of this also. No longer is the status quo working for a large proportion of society, this is evident in the election of an unequivocally anti-austerity leader of the opposition, and more dramatically the referendum result that will ultimately lead us out of the EU. This was the precipitation of an anti-establishment and anti-status quo vote.
In terms of the character of education, the three economic periods (public sector, neoliberalism and post-capitalism) have shaped schools and pedagogy in particular ways. During the public-sector period (1945 – 1970) practices and organisations were emergent, but drew heavily on the approaches used in traditional establishments, like for example, the grammar school. In an attempt to address diverse social needs and with new ideas developing in the fledgling field of education research, there were attempts to address individual needs using student-centred practices. However, the mainstay of educational practice drew on traditional teacher-centred practices, because it is much easier to prepare for and to manage classrooms.
The neoliberal period (1970 – 2008) can be characterised by increasing accountability, increasing managerialism and perfomativity. The emphasis on accountability means that teachers are expected to ensure students achieve targets and expectations in terms of progress and examination results. There is increased surveillance and attempts to identify effective practice in terms of progress and attainment. In the 2000s this extended to a prescription of classroom practice and pedagogy. While practice remains largely traditional, there are elements of progressive student-centred teaching, but on the whole the latter, apart from among enthusiasts, was superficial. The importance of the social aspects of learning, such as discussion and dialogue, the importance of affect and motivation and the recognition of constructivist learning were recognised and mandated in official views of pedagogy. However, given the demands placed on teachers and the intensity, as a result of being held increasingly accountable for students’ results, these elements were only really implemented in a performative way, to please observers and inspectors rather than placing them at the heart of education.
The post-capitalism period (2008 – present) continues a neoliberal theme, but it does not hide the crisis beneath. Since 2010 the Coalition government and the Conservative government from 2015, have extended the privatision projects brought in by previous governments. Academies are effectively outsourced education service providers to the state. There is increased emphasis on quantifiable outcomes to monitor the quality of the service provided by schools. In an attempt to make the educational commodity more clearly defined the student-centred aspects of pedagogy have been abandoned and even vilified. The emphasis has been increasingly on narrowly defined definitions of knowledge and the reduction of learning to a process of memorisation of increasingly complex facts. The crisis beneath this, within the post-capitalist school, is the overall reduction in teachers’ pay and conditions, longer working hours, excessive workloads and deprofessionalisation. The recruitment and retention of teachers is increasingly challenging. There are also deep concerns about the impact of intense school experiences on children’s mental health and wellbeing.
Economically, we move into a post-capitalist post-neoliberal world in which economic, technological, social and political forces are undermining existing approaches. Yet the government continues to press ahead with a privatised and marketised approach to education. What we need to do is develop schools and educational practices to respond to community needs in a more holistic way and to draw on contemporary understanding of learning in terms of culture, socialisation and cognitive development. We cannot return to public sector nationalisation of state education, but we must reduce the managerialism and hierarchical structures of schools and academy chains and improve the working conditions and professionalism of teachers. They can be mutualised as community co-operatives, to devolve decision making and to collaborate with communities. This is an antidote to the corporate managerialism of the neoliberal period. While schools cannot mitigate for wealth inequality, they can connect with local communities and help develop confidence and build social and cultural capital. Austerity (deficit reduction) is a political choice and not consistent with the post-capitalist period we find ourselves in (I elaborate on this in a previous post here).
The driving force in state education is political economy and by considering economic and political forces, not only can we better understand policy, practice and pedagogy, we can better design schools and learning to respond to the political economy in which we live.