DANIEL HOJMAN, ASSOCIATE PROFESSOR OF THE FACULTY OF ECONOMICS AND BUSINESS (FEN): «THE ESSENCE OF THE NEOLIBERAL MOMENT IS THE IDEA OF A MINIMAL STATE»

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Doctor in Economics at Harvard University and associate professor at the Faculty of Economics and Business (FEN) of the University of Chile, Daniel Hojman, commented on Brian Pusser’s address, thus paving the way for an engaging discussion about Chilean higher education. The text below reproduces part of his presentation. 



Translated by Patricio Novoa, Department of Linguistics of the Universidad de Chile /Photo by Alejandra Fuenzalida

Professor Pusser contributes two central ideas that can be of great use in this discussion. In the first place, higher education is part of a more general political discussion that, as a rule, has not been satisfactorily explained. And, secondly, there is still a question concerning the specificity of the state owned higher education system’s role.






Given this framework, I propose three ideas. First, a central part of
the political dispute in Chile regarding higher education focuses on the definition of the public role of higher education. Although this may seem abstract, it is in the background of legislative discussion of the reform. The second point has to do with the definition of priorities and the kind of effects that higher education should have in terms of the discussion of the type of development we should pursue. Therefore, the definition of the system of higher education must consider a view of the model or the type of development that we want for the country. My third point, in line with the previous one, is related to the role of the state in this development model. Specifically, state higher education must go hand in hand with the state project.

Higher Education in the Political Arena

I shall begin by focusing on the idea that the higher education system is an arena that is politically built, andwhere the state plays a central role—asit finances, certifies, regulates, and determines which combination of institutions or organizations will provide higher education. In principle, what is central is that different types of organizations—private and public; private for profitand private non-profit; confessional and non-confessional—willoffer different priorities with respect to education. That is why, inevitably, this is a discussion dominated by interests and ideologies.


I value the effort to place the debate over Chilean higher education in a comparative historical context, but it is indispensable to understand what the political determinants are that situate us in the present moment.







The Chilean case has a dramatic quality, because one associates a good part of what the present system is to the radical reforms that took place during the dictatorship. This fissurewent hand in hand with an ideologicalshift taking place globally, which some have called‘the neoliberal hegemony’ or ‘the neoliberal moment’. After the coup d’état of 1973 there was a complete restructuring of higher education; theBalkanization of the University of Chile and of other state universities soon followed, along with the direct intervention of universities, and an important exodus of academics and students. This intervention was certainly not motivated by the development of higher education communities and theirgoal of serving national development.


Sincethe 1980’s, the surge of dozens of private universities and the withdrawal of the state have been associated with an orientation towards the market and minimal regulations, where incentives are placed on the increase of enrollment. This contributes, among other things,to aformidable heterogeneity with respect to the types of institutions, the qualities they offer, the degree of complexity, their missions, etc. The pertinence of an important number of deregulated university programs has been widely questioned. 





At the same time and for different reasons, especially starting with the democratic transition and, even moreintensely, in the 2000’s, there has been an enormous expansion of student enrollment and, alongside it, of private financing for education, aimed particularly at households—withthe resulting high levels of debt for students and their families. The expansion of enrollment was mainly absorbed by private universities, a process that involved, implicitly or explicitly, a political decision.


It is important, then, to consider this political dimension; today, theredefinition or restructuring of the Chilean higher education system also forms part of a broader political debate. There is an international context where, for different reasons, the neoliberal paradigm is just beginning to be questioned and, therefore, it is necessary to understand that context. And I want to finish this part, which has addressed the importance of considering higher education as part of a politically constructed arena, by mentioning two key risks.

The first risk could be referred to as “the nostalgicimpulse.” For example, the University of Chile is a state university thatis closely related to the construction of the national state; the same could be said of other state universities. This was interrupted at a certain moment and, as an alternative, one could put forward the idea of going back to how it was before. You have to be very careful at this point and ask yourself the right question. That is to say, it is clear that the state has to play a major role in the higher education system, but the relevant question here is:what is the higher education system we want twenty yearsfrom now?

There is a second risk thatmoves in the opposite direction. The higher education system has been functioning as a market for such a long time, and so there is a risk, both for users of the system and for political elites themselves, that the systemwill become naturalized as a market. This is an obstacle to thinking about how it is we are goingto get out of the status quo andtransition towards a significantly differentsystem.

Higher Education and Its Public Role

The second point has to do with the definition of what the function of public education is. We have spoken about and will continue to discuss enrollment gratuity. And financing is a topic that has triggered many headlines; but clearly, it cannot be disassociated from the discussion about regulation and about the function of state education. In other words, what justifies the fact that the state finances certain educational institutions and not others? Is it justifiable that it should selectively finance institutions that are different, and not simplyfinance universally?What would be the criteria that would justify a system of differentiated financing? So, as professor Pusser notes, the central idea here is that different institutions can put an emphasis on different priorities within education and that there are institutions that can provide more or provide less public goods; from the state’s point of view,that wouldbe the justification for financing them.  In other words, if there isheterogeneity in the university system, thenwhy not finance universitiesheterogeneously.

This, of course, is an important issue for state universities, because, if there is anything that makes state universities unique, it has to do with their capacity to guarantee the provision of essential public rights and public resources that perhaps other universities—which can also provide public services—don’t provide in the same way.

Sadly this debateregarding the public function of universities or higher education in general has been dominated by slogans, and it is hard to delve deeperinto the subject. This, in part, is what the congress will have to discuss.  They will ask, “Is it possible to define a ‘public domain’ that will help us to justify the financing of both state and private universities?”

The concept of the common good, or common interest is a strongly debated concept, it is highly political, changing in time, and there is no great clarity with respect to what it means.

In economics, which is a discipline that tends to pauperize reality, the definition of public good—accordingto Paul Samuelson, Nobel Prize in Economics—isthat it satisfies two properties. First, that it should be inclusive. That is to say, that people cannot be excluded from its use. The second property is the absence of rivalry in its use; basically, if someone uses the good in question, that mere fact shouldn’t reduce its availability to others. A little more flexible definition is that it is constituted by a good that produces strong positive externalities for a large group of people, direct effects that are not fully captured by prices or monetary retributions.

I make this conceptual digression because I find it necessary to invite people to think about what the positive externalities are, the dimensions of the public good, which higher education provides. We will not necessarily reach full agreement on this, but the public function of higher education institutions requires democratic validation.

There are public functions that are not economic, but which havedeephistoricalroots that are linked to the functioning of democracy. They have to do with citizenship, with participation, and that which 
in the Greek tradition, and up until some time ago,were considered by many as constituting the principle role of public education: civility, civic commitment, democratic dialogue, and social capital.

There is also a productive component associated with higher education that evidently generates private returns:  I educate myself and there is a reward for that education, which is represented by a salary. This private return is what tends to emphasize a more mercantile vision of education. Understandably, there are also productive externalities: that others should be educated makes me more productive; the new knowledge that is produced is universally available knowledge, which, potentially, generates a large number of positive externalities in many areas of the economy, especially in the contemporary world.

A third context is the value dimension, which, from an economic perspective, can be interpreted as corresponding to externalities. For example, higher education and, in particular, the state network, has to play a role in the promotion of values such as non-discrimination, equality of access to opportunities, social mobility, plurality, public trustin the relevanceof what is offered or inthe proper use of public resources, effective transparency, etc.

We can see, then, that there is a series of dimensions that define or have defined the public function of the university.

Now, just what are the institutional elements that ensure the production of these public functions? What organizational characteristics and indicators make possible the distinction between institutions that promote more of the public good or those that promote less of it? What is the role of standards, of autonomy, of corporate government, in relation to the public functionsof a higher education institution? Could it be justifiable that certain institutions receive financing, while others receive less financing, while still others receive no financing at all? Suitable legislation should give an answer to these questions.

Higher Education and Human Development

The questions about the future of higher education and about the future of Chilean development are related.

The critique of the neoliberal model of public education is based on the idea that universities are too biased to what is external, and external means market. I do not know if this critique is fair, but I do believe that we are taking for granted the notion of development from the neoliberal perspective, and that the system of higher education has to move on towards a much more complex notion of development: Integral human development, not economic only, but one that contains a social, political component, related to notions of multidimensional welfare, which involve from material welfare to citizen participation, going through environmental sustainability.

If we believe that the system of higher education must be oriented to this integral development, then, naturally, we are summoned to think of a different university, a university that is not only responsive to market needs, or to productive ones, or to competition with other universities, but one thatis oriented towards a national project, and is capable of collaborating with other universities to find solutions to these problems.

State Universities and the Construction of the State

A central dimension of development has to do with the role of the state
and, in the specific context of higher education, with the role of state institutions.

There are different views here, but if there is anything that characterizes the essence of the neoliberal moment, it is the ideal of a minimal state, which in my opinion reaches the point of negligence. This is clearly reflected in the Chilean State’s disregard of public education. But in the world we face, after decades of neoliberal hegemony and the absence of regulation—andwhere there will be different assessments of the progress accomplished—thequestion arises as to whether it makes sense to promote a different paradigm in order to meet the great challenges of society.

We know that the market will not solve the main problems of mankind; it will not solve global warming, or achieveworld peace, or stability, or democracy; it will not solve the problem of inequality, or find the cure for cancer, or figure out the problem of innovation, or the diversification of production. So the state has to play a different role, not necessarily a role that stifles the private sector, but a distinct, more dynamic role. This is what Mariana Mazzucato calls the ‘entrepreneurial state’, which can plan strategically, articulate, coordinate, cooperate with civil society and with the private sector, and strengthen democracy.

The question, then, is what role do public universities play in generating or sparking that change in the state’s role? When thinking about the restructuring of higher education and, in particular, the state institutions of higher education, it makes sense that the state system beoriented towards the needs and towards the development of the country, and to theconstruction of a state conducive to the kind of development Chile needs.

The restructuring of the state university system has to contribute to the strengthening and modernizing of the state. The public system is expected to play a leading role in bolstering the capacities and human resources across the territory—a crucial aspect for the
improvement of the essential goods and services the state provides (public health, for example)—processing the new demands associated with educational reforms, facilitating a positive relationship with the private sector, and maximizing civic and productive communities.

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