Marxist Theories of Crisis and the Current Economic - Case Study Example

? Tuition Fees: An Analysis From Three Unique Perspectives Tuition Fees: An Analysis From Three Unique Perspectives Whenone considers many of the complex issues that face our current global system, one of the reasons for the contention that invariably evolves between the different groups of shareholders ultimately centers around the means of interpretation and the different paradigms with which these shareholders approach given points of view. As a means of understanding this unique paradigm within which such diversity of understanding exists, this brief paper will examine the case of university tuition fees in Ontario Canada as a case in point. As a function of this level of analysis, the matter of tuition fee increases will be discussed and analyzed from a neoclassical/conservative vantage point, a mixed/liberal vantage point, and a radical vantage point. As a means of understanding the question from these three distinctly different points of view, the author hopes to provide a level of insight into some of the motivating factors surrounding the seemingly endless public and governmental debates concerning tuition fee hikes and the effects that these necessitate on the government, private citizen, university employee, and student. Moreover, by analyzing such determinants, it is the hope of this author that the strengths and inherent weaknesses and flaws of each of these vantage points will be adequately represented to the reader. With respect to the first vantage point, that of the neoclassical conservative one, this is an economic point of view that is almost solely concerned with the maximization of utility. In other words, the equilibrium of supply and demand economics is one in which the utility of the shareholder is most appropriately met where the supply and demand curves intersect. E. Roy Weintraub, a prominent economist, noted that the three main determinates of the neoclassical economic understanding were as follows: the understanding and belief that people have rational preferences among outcomes that can be identified and associated with a value, the belief that individuals maximize utility and firms maximize profits, and the belief that people act independently on the basis of full and relevant information (Weintraub, 2011). With each of these determinants, it is readily noted that the main underlying purpose is concentric around the elements of supply and demand fulfilling their purpose of finding the integration point at which the desire of suppliers to provide themselves with the maximal profit and the desire of the consumer to pay the least amount possible is met at the equilibrium point. This neoclassical and/or conservative approach is one which has defined the free market for the better part of 100 years; and indeed the very same approach that the current Keynesian system currently operates within. However, such an approach is found wanting with respect to the degree that it factors in the need to educate the populace or other social goods. The fact of the matter is that although supply and demand/neoclassical understandings of economics help to appreciate the nuances of many other markets, the market for education is something unique due to the residual and societal good that it generates as a function of its impartation. For this fact, the proceeding views with regards to the way that the market for education should be provided to the end consumer have sought to deviate from the traditional or neoclassical approach that has hitherto been detailed. Moreover, such an approach necessarily relies on the laissez faire concept of economics whereby a tuition increase would merely be seen as something that the market would have to accommodate without enlisting any government or tertiary influence into the matter. This understanding of the marketplace as something that requires little to any interference is a hallmark of the neoclassical system. A fundamental difference that develops within the mixed/liberal approach as compared to the neoclassical approach that has thus far been detailed is the fact that the liberal/mixed approach believes that the residual benefits that tuition increases will have with regards to the system as a whole and the educational attainment level of the population is something that cannot and should not be underestimated. For purposes of the mixed or liberal approach, the reader can understand that this approach is one that seeks to balance the market driven forces detailed above in the neoclassical approach with the more socially conscious role that such a determinant factor such as education will affect on the system as a whole. In the liberal or mixed point of view, the societal good of education becomes something that is necessarily important not only to the individual suppliers and consumers of the end service/product but something that is also tangentially beneficial to the system as a whole; to such a degree that it is necessary to provide a level of regulation and/or state or federal funds towards ameliorating the effects that an increase in tuition fees would have on the consumers as well as those who would benefit in an ancillary manner to the availability and distribution of such educational attainment. In this way, the mixed or liberal approach deviates significantly from the more supply and demand centric neoclassical approach. In effect, one can correctly assume that such a vantage point would require a more heavy degree of socialism as a means of seeking to enact a level of overarching fairness and equity to the system. There is no single way in which this can be accomplished; however, for purposes of clarity and of definition, this analysis will put forward two distinct ways in which a given system would attempt to defray the costs of possible increasing tuition fees. The first would be to enact a level of government restrictions which would hold tuition hikes to a minimum or require that any and all increases in tuition be approved at a state or federal level prior to being enacted. Such an approach would necessarily have a deadweight economic loss due to the fact that a level of bureaucracy would now be in charge of administering the efficacy of educational profit margins (Toy, 2012). Likewise, a secondary approach would be for the state to sponsor a greater degree of subsidies to the students as a means of making up for the unique margins that exist between the newly increased tuition levels and the ability of the individual student to afford this. Such an approach is useful from the standpoint that the cost overruns are not ultimately passed along to the most vulnerable individual within the economic the particular market; the student. Naturally, this subsidization itself presents a unique layer of deadweight loss due to the fact that in order to sponsor such a plan, the government will need to enact a new tax or develop a new source of revenue as a means offsetting the deficits that such subsidization would necessarily incur. In this way, a further layer of taxation and subsidization, though for a good cause, will mean that the efficiency of the economy will be reduced. Finally, the radical vantage point with regards to the situation which has been described of course deviates from both the neoclassical and mixed and/or liberal approaches which have thus far been detailed. As a function of the radical approach, a unique level of systemic understanding exists whereby the determinants of economics which have helped to define the other two approaches which have been listed do not necessarily apply. Oftentimes, this particular approach utilizes distinctly anarchical or Marxist ideology which does not espouse the same economic standpoints which have hitherto been utilized. Due to this paradigm shift, one must appreciate the particular standpoint of understanding that individuals who espouse this view approach the topic from. As has been noted within last year’s student demonstrations throughout Canada, to include Ontario, the level to which the student demonstrations espoused the first two views which have herein been discussed were ultimately limited (Maniatis, 2012). As is the case with most malcontents turned demonstrators, those individuals who actually took to the streets and bullhorns to protest the tuition increases were the most strident and vocal of the students affected by such an action. As such, the views that these most radical shareholders expressed mostly hinged upon an ideology that held that education as well as many other “goods” should necessarily be free of charge. Although in an ideal world education should be free, the fact of the matter with regards to the economic realities that define the ways in which the current economic system operates dictates that such a costly endeavor such as higher education cannot necessarily be free of charge. Such an approach necessarily ignores the equilibrium point of supply and demand economics as something that is overly capitalistic and focused on the end profit margin. In such a way, typically Marxist interpretations of economics and the means by which public goods should be provided to the society are emplaced above the Keynesian concepts that have previously been identified and expounded upon. Naturally, as such an approach represents the polar opposite of the neoclassical vantage point which has previously been defined; both of these outliers represent the very extreme polar ends of both liberal and conservative viewpoints on how tuition hikes should be viewed within the system. As this essay has noted, the fact of the matter is that each of these vantage points helps to acquaint the reader with a level of analysis and paradigm consideration that sheds a unique light onto the situation of tuition fees and how the government, university, students, and societal shareholders should integrate with each. As a function of the differing beliefs of the means by which government is ultimately responsible for the education and development of the individual as well as the economic development of the society itself, three drastically contrasting views have herein been presented which help the reader to understand the key levels of divergence that exist within each. Although the level to which agreement between each of these groups that have been listed will be not likely be great, the fact of the matter is that by understanding the guiding dynamics which help to differentiate one from another, the reader as well as the policy makers which ultimately represent the individual shareholders and greater society will be able to formulate effective responses which can seek to at least nominally address the concerns of each group. Although it is highly unlikely that such a policy mechanism would likely deviate from the fundamental concept of modern economics to the extent that the radical elements of the debate may demand, the fact remains that by being aware of these demands and seeking to draft a middle path within which to include these participants, such a policy would have a much higher likelihood of success. References Maniatis, T. (2012). Marxist theories of crisis and the current economic crisis. Forum For Social Economics, 41(1), 6-29. Toy, G. (2012). A DEFENCE OF ECONOMIC MODELS. Policy, 28(3), 43-49. Weintraub, E. R. (2011, January 15). Neoclassical Economics, by E. Roy Weintraub: The Concise Encyclopedia of Economics | Library of Economics and Liberty. Library of Economics and Liberty. Retrieved February 1, 2013, from http://www.econlib.org/library/Enc1/NeoclassicalEconomics.html Read More