THE central theme of When Money Dies, a book by Adam Fergusson published in 1975, is the ruinous impact that out-of-control public spending can have on an economy. Its case study is Germany’s hyper-inflation of the 1920s. Mugabe’s Zimbabwe or Maduro’s Venezuela would provide more recent examples.
Fergusson became an adviser to Margaret Thatcher’s Foreign Secretary Geoffrey Howe in the 1980s but his book gathered dust. In 2010 it was lifted out of obscurity when it was claimed that the American multi-billionaire investor Warren Buffett had recommended it. It was reported that Buffett thought European governments could learn from it the dangers of seeking to spend their way out of a slump.
The book became an instant best-seller although Buffett was later to claim that he had never heard of it. It was, though, overdue a wide readership. Given the 2008 slump, its time had come. The book’s underlying message concerns us all – successful economies can be built only on sound currencies.
The same is true of education. The sound currency on which schools and universities build their credibility is, fundamentally, examinations. When this credibility collapses so, too, does confidence in education.
A report from the Higher Education Statistics Agency (HESA) and Warwick University concludes that the earnings value (‘graduate premium’) of a degree has almost halved over the past twenty years. By the age of 26, graduates born in 1970 were earning 19 per cent more than their non-graduate peers. For graduates born in 1990, however, the earnings gap had fallen to 11 per cent.
As an educational currency, in some subject areas at least, degrees are utterly devalued. This, understandably, is being recognised by employers in what they are prepared to pay graduate recruits. The under-employment of many graduates makes for a sad story of disillusionment and even despair. Burdened by debt and disappointment, spare a thought for the school-leaver who was seduced by a money-grabbing university to sign up for a less than worthwhile degree course. How different and more fulfilling their lives might have been had they been encouraged along a more vocational pathway.
The educational inflation spiral is reflected across the entire system. The government’s examination regulator Ofqual has attempted, albeit unsuccessfully, to make GCSEs failure-proof by lowering the pass marks (grade 4 or grade C). It was just 14 per cent this year in mathematics. The current A-Level pass rate of 97.6 per cent is built on pass marks below 20 per cent. How extraordinary it is that candidates who get nearly half their answers wrong in A-Level maths still qualify for a grade A.
Employers are beginning to regard degrees as little more than the new A-Levels and GCSEs as equivalent to what should be a primary school test.
It is, after all, primary school level that GCSEs equate to in the top performing education systems around the world.
It is now masters’ degrees that equate to the once ‘gold standard’ BSc and BA of the 20th century, and soon only doctorates will mean much. More business, of course, for the money-making racket into which too many universities have now descended. Who cares about the value of the currency when there is loads of money to be made?
This, then, is what happens when education dies.