I'm trying to get my head around the historical processes whereby we (the UK) got into this mess over higher education. Not the minutiae (who's going to pay for university education) but the why of it ...
Here's my working hypothesis:
* Pre-industrial revolution (< C18): universities were diploma mills for vicars. Apprenticeship system and relic of mediaeval guild system provides training for members of the professions. Some professions — law, medicine — begin moving towards academic training.
* Industrial revolution (c18-19): physical sciences and arts are taught at new metropolitan red-brick universities. Professional training is institutionalized, although lengthy apprenticeships continue. In factories, work forces are trained on an ad-hoc basis according to the employers' needs. Oxbridge begin to take in a higher proportion of non-clergy and teach other subjects, but university education remains an upper class/high-end professional domain. Universal primary education for basic literacy and numeracy are introduced at this time to ensure the mass work force meet basic requirements.
* Industrial revolution (c19-c20, pre 1979): universal education to age 12, then 14, then 16 is introduced as the requirements of skilled labour in an industrial economy become more complex. Multi-year apprenticeships are extensively used to train skilled workers. Stable employment and "job for life" are assumed. From 1950 onwards, professionalization of teaching drives a requirement for school teachers to be graduates. Increase in demand for university graduates (for teaching and mid-range professions that formerly worked on apprenticeship). Period characterized by high employment, strong trade unions, long employment tenure.
* Thatcher revolution (1979-90): the "job for life" goes out of the window, unions take a hammering, high structural unemployment sets in for a generation with the forced shutdown of many old smokestack industries, and there's a top-down political drive for higher mobility (which doesn't work, in the short term).
Consequences of Thatcher revolution include: emphasis on credentialism — if you don't have a job for life, you need proof (on paper) of skills that were formerly acquired in the workplace — combined with deprecation of apprenticeship system (where's the incentive to provide a 5 year apprenticeship for a trainee if they then turn round and go find a job elsewhere?). Demand for pieces of paper as proof of fitness for employment goes through the roof.
* Post-Thatcherite adjustment, phase 1 (1991-97): demand for HE puts unprecedented strain on funding. First, student grants are phased out and replaced with loans. Next, Polytechnics and Colleges are redesignated as Universities and their paper output standardized as "university degrees" (see credentialism above). (Some of the new Universities genuinely rise to the challenge and become centres of excellence; others ... don't.) The school diploma system based on 'O' levels (later GCSEs) and 'A' levels is systematically adjusted via creeping grade inflation to allow double the previous number of school leavers to achieve paper qualifications acceptable for entry to lower end commercial training establishments.
* Post-Thatcherite adjustment, phase 2 (1998-2008): Many jobs previously occupied by apprenticeship graduates or people with part-time diplomas are now graduate entry — e.g. nursing, banking, non-chartered engineering. The few non-graduate entry trades are artificially inflated in value due to the rarity of 4-5 year apprenticeship posts (by 2000, a plumber in Edinburgh could earn more than a Java developer). Stated public policy is to market the UK overseas as a highly-educated highly-flexible workforce; the drive for near-universal higher education is thus part of a bid for positioning in global markets. Unfortunately, India and China have universities too ...
* The present crisis (2008-2010): "knowledge work" is in a deflationary spiral due to offshoring and competition from overseas. Just about everyone has a sheepskin — credentialism has run its course as increasing constraints on employer's ability to provide references mean that the only indicators of a prospective employee's suitability are third-party training transcripts. The work force is largely atomized and demoralized. Students graduating in 2008 come with a £30,000 debt to service — comparable to the mortgage on a 1988 graduate's first home. The tertiary education sector is competing in a global marketplace with institutions that are part of the American higher education bubble (with 700% fee increases over two decades).
Meanwhile, individual workers may find that their increased earnings from acquiring the employment credentials leave them behind their peers who skipped out on higher education and went straight into a trade.
Then a government emerges that wants to make huge cuts to public spending, and the education sector is a tempting target. If people need paper credentials in order to work, why not pile all the costs of the education sector on them? Hence the message of the Browne review.
Prognosis: bleak. What's actually happening here is a credentials bubble bursting. The industrial policies of Margaret Thatcher forced people into a paper chase, and the need to compete with global markets accelerated it — but inflation in the cost of education reduced its earning power, and we're now seeing a decade-overdue adjustment.
(But what about research? What about academia? Well, they were minority pursuits all along, compared to the higher education production line that is the focus of the former polytechnic system: just look for degrees in "Computer Science and Business Studies" and ask what they exist for. (Here's a hint: it's not an MBA, and there's not much real computer science in it either.) And as for actual research in science and the arts ... did you really expect anything good to come of a bunch of Tories? Hey, at least they ring-fenced the Olympic budget! So we know the anti-terrorism police in London will have a budget in 2012, even if the libraries have no books.)
Someone please tell me I'm misreading the situation and being overly pessimistic ...?