Thursday, 29 July 2010

Tuesday, 20 July 2010

Vince Cable's Graduate Tax

The latest news about university funding is Business Secretary Vince Cable's proposed Graduate Tax, where graduates pay a tax dependent on income after graduation and the money is channelled directly to universities.

Left Foot Forward covers the story here, however the focus is on Cable himself and on whether or not he will keep his campaign promise of scrapping tuition fees, rather than a discussion of whether this proposal is the best way to fund higher education or of the wider implications of the policy.

LFFs analysis is based on the assumption that:
The fair solution is to abolish tuition fees and ensure that graduate contributions are based on actual earnings in the real world, rather than sticker prices in prospectuses, which are based on guesswork.

However, little to no thought appears to have been given to whether or not this is the best way to fund higher education and what impact this will have on decisions made by students and graduates alike.

I think this is the appropriate time for a full disclaimer:
I am a university graduate; I have an engineering degree and a pretty good job; I had the privilege of attending university without the need to pay any tuition fees whatsoever (I do have a substantial loan to pay back, but that was only to cover living expenses).

In principle I have nothing against the idea of getting the people who have benefited most from a service to pay the most for it.  My concern is not simply out of self-interest of not wanting to pay any more tax.  My concern is in how the tax will affect people's behaviour.

For example how many potential students of engineering/medicine/law/etc. will choose to study history or teaching instead, figuring that they're likely to earn less in those professions therefore avoid the graduate tax?  How many potential students will decide not to go to university at all?  (This may or may not be a legitimate concern, considering that UK universities are already grossly over-applied for).  What will be the impact of these decisions on the wider economy in the long term?

Maybe the numbers are small and these concerns of little consequence.  What troubles me is that I haven't seen any analysis of the proposals that even considers these questions.

Wednesday, 14 July 2010

Public Transport in Cuba

I recently had the opportunity to visit the fascinating country of Cuba.  Whilst there I was informed by a tour guide of the solution the Cuban government have come up with to tackle the problem of providing public transport.

As you may already be aware Cuba is a socialist country, in fact judging from my own experiences it is by far the most socialist country I have ever visited (including China and Vietnam).  The government owns just about everything: it's part or whole-owner in all the hotels, about half of the cars we saw driving around were government owned (you can tell from the colour of the license plate), 85% of the farmland, all of the shops and most residential property lies in the government's hands.

As a foreigner you're not allowed to buy property in the country, you can only lease it from the government.  Prices in shops are set by the government so are the same everywhere (our rep pointed out that even though there is a 'duty free' shop at the airport this is essentially a joke as the prices are no different to anywhere else) - the only exception to this are flea markets.  Locals are only allowed to buy a private car from government-run car dealerships; the type of car they are permitted to buy is dictated by how much they have paid to the government in taxes.

Many locals therefore, drive government-owned cars and/or rely on public transport.  The solution the government have come up with to provide it's citizens with public transport is to introduce a simple law which is essentially this:

If you are driving a government vehicle (i.e. one with blue license plates) and you have space for additional passengers you must stop to pick up hitch-hikers.

They enforce this by having government officials man hitch-hiking posts (which operate like bus stops) and flagging down vehicles with blue license plates to check if they can accommodate the hitch-hikers.

I wouldn't dream of hitch-hiking or picking up a hitch-hiker in this country, but I've been assured that it's an incredibly common and safe practice in Cuba.

Thursday, 1 July 2010

Around the Internet: June 2010 Edition

I've not had a lot of time to put together an 'Around the Internet' for this month, as you may have noticed I've not blogged for several weeks now.  The following two stories entertained me though:

"A German student created a major traffic jam in Bavaria after making a rude gesture at a group of Hell's Angels motorcycle gang members, hurling a puppy at them and then escaping on a stolen bulldozer."  Story here via Reuters.
(hat-tip to Tyler Cowen for both stories).