A letter to a Venezuelan academic

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Where are my rents?
Where are my rents?

Dear colleague,

This is an uncomfortable letter to write.

In the past few weeks we have come to the stark realization that our government is bankrupt. Not just morally bankrupt, we knew that, but pelando cable bankrupt – so bankrupt that the debate on economic policy right now is on whether the fiscal deficit is closer to 15 or to 20 % of GDP.

I don’t have to tell you that universities are feeling the pinch, and they are feeling it hard. Some reports I have read claim that universities only received a small fraction of what they asked for. Others say that they can’t even pay for wages. The situation is … dramatic. You are pissed, and rightly so, but we need to lay some hard truths on the table.

You are protesting for the wrong reasons.

Venezuela’s public university model is broken, and it has been broken for years. Back in the early 90s, my friend Francisco Monaldi wrote his undergraduate thesis on the notion that public education was unviable – cost overruns, a shrinking budget, and the pressing need to spend scarce education dollars where they are actually needed (i.e., helping a poor kid develop reading comprehension instead of paying for rich kids’ entire medical school) meant that reform was pressing, urgent, and inevitable. Or so we thought.

Twenty-odd years later, and we are still fighting for the same things. Public university professors now make peanuts, much less than any time in the past, and the situation is not bound to change. Do you think the government will give in to your protests for higher budgets?

Not a chance. The government hates you guys – after all, chavismo loses each and every university election it contests. And weren’t your students the kids blocking the streets a few months ago? Consider this payback. It hurts, I know.

However, we shouldn’t put all the blame on Maduro’s feet. He may well hate universities, but the collapse of the system was inevitable. Your measly wages are not entirely a chavista policy choice, but rather a symptom of a crumbling educational model. What you should be protesting for, instead, is a change in the system.

Unless Venezuela changes its ways and allows public universities to raise funds in other ways, i.e. by charging rich kids for tuition, nothing will change. We need to face the fact that subsidizing the supply of university education is simply not sustainable in a country with such pressing needs as Venezuela. We have crumbling infrastructure, crumbling public schools, crumbling hospitals, and yes, crumbling universities – but hey, they’re free!

Fighting for your piece of the petro-pie, a piece you will not get, makes you look petty, hopeless even. Insisting on this means the difference between you and the poor souls of Sidor asking for a lifeline for an unviable State-owned industry … is that you guys have fancier degrees. Ultimately, fighting for your budget is simply a defense of the status quo, the one that allows rich kids to go to Dental School without paying for tuition. At best, it’s politically naive. At worst, it’s immoral.

I began this letter by saying it made me uncomfortable to write it. I am an academic, and I do OK because I live in a country where the market system works (por ahora!), and where – unlike in Venezuela – my contributions are valued justly. So I don’t blame you if you deem it uncaring for me to pontificate about your situation from my lofty ivory tower. I get that.

However, know that I say all of this from a place of empathy. I really feel for Venezuela’s universities, as well as for your personal situations, but I think a healthy degree of honesty wouldn’t hurt us. The truth of the problem is that our model of university education, the one we all grew up in, is gone for good. We need to face that reality and press for change – not for an increase in the budget, but for real change, one that will make your institutions viable. In order to do that, you must put aside the hole you feel in your checking account and start pressing for a real solution to the problem.

I know this is easy for me to say, but we need to look at the problem in the abstract and recognize it for what it is: your lost budgets, sadly, are never coming back. It’s not too much to ask for a bit of serious thought about this.

After all, if anyone in Venezuela is still capable of abstract thinking about the issues, it should be you.

1 COMMENT

  1. I’m sorry, but it’s rather weak. The demonstrations for public universities to remain free is at least very uncomfortable to suppress. It’s not like saving a few bucks there will save Chavizmo from doing the Kursk.

  2. If you want to put all the burden of universities budgets on the shoulders of the rich kids we will end up having just a couple of small universities. Almost all of the universities in the developed world are heavily subsidized. The ones that are not,charge incredibly high tuitions. In Venezuela, even charging relatively high tuitions, you would not raise but a very small portion of the budget for universities,and certainly you would be blocking the access of the vast majority of the young people to them

    • Do you have a reference for this broad, sweeping assertion? Of course universities are subsidized – the point is that you subsidize demand, not supply. You give the money to the people who need them – the kids – not to nameless bureaucrats who then go and spend it on ten janitors for each student.

      • So you are basically proposing that instead of the government paying for everyone, everyone should pay for themselves unless they don’t have money and then the government pays for it? Isn’t this what happens in the US? Very good quality schools indeed but they have became more and more impossible to pay and then people are swimming in endless loans and so on? Who’s gonna decide who gets the money? More bureaucrats? So now public money diverted into bureaucrats?

        I don’t know Juan, here in the Nordics education is free but we know that the levels of tax revenues are insane compare to those in Venezuela. But the system works, they also get money for research from other sources, either government or charity or funds. Then again is not the students that are taking the burden of the costs of education.

        • The day we can afford a Nordic-style welfare system is the day I die a happy man. In the meantime, this is not about ideology anymore. It’s about math.

          • Prof. Rigobon at MIT used to say the same thing: stop subsidizing tertiary education in order to focus on primary education. It took me a long time to accept this!

          • I agree in almost all you have written in this blog. However, when people talk about math, people tend to focus in just some figures, ignoring other, and ignoring the relative amounts of expenditures (or investments) and its relation to the population estructure and its needs.

            I agree that with, or without, this government wrongdoings, Venezuelan universities must change profoundly. First because the word and its needs is constantly changing, and universities everywhere are doing so, but also because our universities are out of touch with the venezuelan population, its needs, and its economic possiblities.

            Those who have means to pay for education must pay, but they are not many, and their contribution is not going to solve the education budgetary scarcity.

            If we only educate those who can pay, we will end up creating a knowledge oligarchy among a sea of ignorance with all its economic and social consequences.

            If we do not have well funded schools, how do we expect to have good education and well prepared educators?

            How about expending less on war weapons, PDVSA planes, Nomenklatura perks and privileges (yesterday, today and tomorow), and more on better educational infraestruture, up to date educational equipment (hardware and software), and well prepared and motivated educators?

        • “So you are basically proposing that instead of the government paying for everyone, everyone should pay for themselves unless they don’t have money and then the government pays for it? Isn’t this what happens in the US?”

          Ummmm, nope, not what happens in the US!

          In the US, unless you receive a scholarship which can range from full ride to just about cover your books only, you are on the hook yourself. Most of these scholarships come from private sources although some may come from government grants. But overwhelmingly, the source is private and not public.

          You can take out a student loan that has such leonine terms that many who take them out take years to pay them off and have almost none of the rights that any other loan would have in case you fall behind.

          Student loan providers are worse than “buy here, pay here” used car operations!

        • The situation in the United States is more complicated. In fact from a student’s point of view (not that of his/her family) “the poorer the better”: colleges pay everything for the poorest students. And, increasingly, they are not, in general, “very good schools”, but mediocrities becoming more and more expensive. Pity the families in the middle of society.

      • In Venezuela’s UCV students would have to pay more than Bs. 10.000 monthly, that is two minimum wages (divide the budget between the students) . A large portion of the venezuelan students that can afford that sum, I believe, are already enrolled either in private institutions or in foreign universities. I can tell you that in the ULA most of the students are not rich, maybe they are what we can call middle or lower middle class, and certainly most of them would not be able to afford such spending in their education. I agree with you that the system needs revisions and that a partial transfer of the subsidies to the side of demand can have many advantages. But not a total transfer. “In 2011–12 universities’ income from full-time UK and EU student fees varied from 0% of total income to 37% of total income”(http://www.universitiesuk.ac.uk/highereducation/Documents/2013/WhereStudentFeesGo.pdf), that is in a country with a relatively high “affordability” (i.e. expensive universities)(http://www.businessinsider.com/tuition-costs-by-country-college-higher-education-2012-6?op=1). On the other other hand, in countries like France or Germany that proportion tends to zero (http://www.zmescience.com/other/germany-education-fees-01102014/). In Spain tuition only covers 20% of the costs and high proportion of students receive scolarships from the government. In Argentina, a student costs UBA (four Nobel Prizes) around 11,000$ (http://www.infobae.com/2007/10/26/345422-cuanto-cuesta-cada-alumno-la-universidad-publica) yet there are no fees or tuition.

  3. You should have written this a few years ago, when Poland’s Solidarity Union was striking to preserve the economically-doomed shipyards. They should have looked at things more abstractly.

      • But the topic is actually “political strategy in Communist countries”, not just Venezuela. Localism just means the lessons from othercountries are rejected without any basis.

  4. Juan,.

    You are totally correct, but as you can see above, most Venezuelans are not ready to hear it… yet. They are still harboring dreams of returning to the old status quo… even though that door is shut. It seems to me that Venezuela is going to have to suffer much more before people are capable of accepting economic reality. In the end, anything “free” becomes worth what you paid for it.

  5. “……. allows public universities to raise funds in other ways, i.e. by charging rich kids for tuition …” Just out of curiosity, what would be the definition of rich kids? Some people consider my household rich, but we can’t and don’t go out to dinner anymore, or travel overseas, etc. Don’t go out to bars or clubs. The glass of wine I used to have every night …. gone. Pretty boring life nowadays I must say.

  6. “I live in a country where the market system works (por ahora!)”

    Por ahora!!!

    To live in South America nowadays is like living in Europe in the interwar period. Things are fine “por ahora”, but we must have our luggage ready near the door “just in case”, because we never know if the locals of the country we live in will elect a fascist populist dictator that will destroy the country by ruining the economy and the democracy. I seriously hope the future generations of this forsaken continent will have more peaceful lives than what we have had. May they learn with our mistakes.

    —-

    Juan’s letter is perfect, enough of paying for rich kids’ education. The public Universities here in Brazil tend to have big parking lots because all these rich students go with their own cars. It’s clear that we end up helping people that are already doing fine in life. The government had tried to increase admission of poor people by implementing some quotas for racial and social class, but guess what, those people admitted can’t complete the graduation because they didn’t receive a proper elementary school education. So, most of them are forced to abandon the course at some point. If all this University funding started being diverted to primary education funding in the past, we would have drastically different countries today.

    And I don’t think that my privileged friends who went to public Universities really deserved (or needed!) all that money coming from poor people’s taxes to pay for their 4-5 years at University . Besides being morally wrong and economically unsound/unsustainable, it’s fundamentally unnecessary!!!

    Ps: No, Camila Vallejo, we don’t want to pay for your fancy degree! Ask daddy for that money.

  7. I’m an university student, not rich, not even close. I don’t entirely disagree with you but it is so sad to find so much chavista prejudices on your letter, Mr. Nagel. You make a terrible generalization when you talk about “Rich Kids”.

    Public education is NOT unviable. If that was the case, anything “public” would be unviable too. Public infraestructure, the military, government, public health, and all other public spending. Don’t blame the education system for Chavez’s plan of destroying everything on its way to establish “Bolivarian Socialism”.

    No, the collapse of the system was not inevitable. That’s like saying that the government shouldn’t pave roads because only rich people have cars, so that’s a crumbling model that needs to be changed.

    During half a century (or more) Venezuela has been producing highly rated professionals, a huge percentage of them coming from lower and middle classes. With their effort, most of them have improved their quality of life and that of their families. The fact that those professionals lately have more and more incentives to leave the country is another matter.

    If public universities, as you propose, charge rich kids for tuition, it would make so little difference. Not that I would be against that. But I think immoral would be to change the system and make superior education harder to get for thousands, just because rich kids shouldn’t have it “free”.

    I understand what you say about “give the money to people who need them”, how exactly would that work? Like the misiones? Like the consejos comunales? I think we both know the lesser of the evils.

    (Sorry for grammar and redaction mistakes).

    • Thanks for the comment, Harold. I’m not in the business of deciding the threshhold above which people should pay. But, in principle, anyone who paid for their primary and secondary education should be paying at least as much for their university education. Does that include you?

      • I was lucky that my parents could pay for a good primary education for me. My secondary education was in a public institution, not very good I must say. So I don’t know if that would include me. But if I had to pay for university, I just couldn’t afford it, and I know that most of my peers couldn’t either. Thank you for your reply, appreciate it.

        • Harold has a good point. Juan, your generalization about “rich kids” disappointed me very much. Most of the “rich kids” go to private universities anyway (UCAB, metropolitana) . The vast majority of students in ULA, UCV, LUZ, UDO, etc come from the middle class (whatever that means) and lower class.

          I went to a private high school. My father is an ULA professor with 25+ years of service. I can assure you, we’re not rich at all.

          I somewhat agree with you that subsidizing everything is unsustainable (i.e. meals en el comedor for free), but if something worth subsidizing is education. Think of the need for social mobility. How are things in Chile regarding inequality and how does that relate to education affordability?

          • I went to USB. My family was by no mean rich. More like middle class, They would not be able to pay for my career at, say, US prices.

            Still, we could have paid more than we did. And looking at my cohort, we were more or less all in the same boat, because well, you did not get to get good scores in the admission exam unless you went to a private school, in average.

            So, maybe there is room to explore between nobody pays and only rich people can get a title?

          • Totally agree with you. But I’m sure my parents wouldn’t have been able to pay even at UCAB prices. And for both me and my sister, well…

            I also felt that we could’ve paid much more, since it was practically free but I knew lots of people from Barinas, Apure and towns of other states who not only would not be able to pay tuition but also relied on beca trabajo and fundayacucho to support themselves on a monthly basis.

            So, not to be mean about Juan’s opinion but it seems he doesn’t grasp what public autonomous universities in Venezuela means for our society in general. Gas subsidy is a crazy thing, but this one is a little more complex

          • Oh, that was for context, but yep, we couldn’t have done UCAB levels either 😛 Still, there has to be a way to match things so the subsidies go where they are most needed instead of just “barra libre” for everybody, I think. You can pay 20% of the fees? 50%? 100%? 0%?

            Perfect world would be to not have to worry about it but if you have to choose because you dont have the money, you have to see how to employ the public money where it is needed the most.

  8. There is another vicious way the current system of blanket subsidies twist things, and have been twisting it for decades.

    Yes, your public university is almost free of cost for anybody, rich or poor. But of course, to actually GET into university you need to have a good education on the lower levels… which means that if you come from public schools you are likely not going to meet the requirements.

    Killing public universities would be suicide. Keep them running in such a warped manner is a slower suicide (but one with decades running so…). Improving public education from the base and then ensuring lower income people can go to university while everybody else pays what they can would be the logical solution.

  9. Juan,

    With free-gasoline subsidy money + ISRL (revenues tax) marginal rate up to 45% + tax loophole suppression, is easy to finance:

    1- Very good basic and secondary public education
    2- Good public universities
    3- Basic living allocation for poor students

    Relatively poor countries like France or Italie in 50s did that successfully. Include wealth tax (à la Piketty) in your fiscal reform and redistribution concerns can be dismissed : you give money to rich kids, you take much more money from their parents pockets.

    Nevertheless, I agree with you about the fact that Venezuela’s public university model is broken: populist internal democracy (autonomía) inducing very low standards, huge proportion of retirees in personnel due to insane retirement policy, etc.

  10. Obviously, the system is untenable, but nothing will improve or be addressed in anything close to a rational manner with these thugs in power. The government claims to provide free education, claims to have money, etc, so as long as they make that claim loudly then continue to protest. Let them either repress (which they will, selectively at first) or explain that they don’t have any money and don’t have any plan. Keep the pressure up.

    Hopefully this will create more student leaders to replace those political prisoners currently sitting in jail.

  11. Wow! What I got from Nagel’s blog was that Universities should stop complaining to deaf ears and begin taking charge of their future destiny. Nobody can argue with that.

    Then, Nagel suggests charging tuition to students that can afford to pay. This seems to have agitated the beehive, and each of the arguments have merit, but the issues are complex and do not lead anywhere.

    Until a few months ago, I had been serving on a science advisory board of a major university facing these very same issues, and we have been searching for “academic enterprises” that professors can start-up with the help of private capital. These start-ups provide economic incentives to the professors, the university, and provide students with jobs. However, there are also some very interesting programs in Germany where partnership are being formed. In those partnerships, the public education system provides specialized training and education programs that are funded private companies who need a specialized labor force.

    As I understand it, the most confounding obstacle for getting things done in Venezuela is the the lack of a useful labor force. I have read that Chinese companies, who are performing projects in Venezuela, have to bring in their own labor force. An Chevron engineer who is negotiating with the current regime said that the prohibitive cost of increasing petroleum production in Venezuela is not the below ground costs or the technology costs, but the lack of a trained labor force to get things done above ground in construction, services, and management. This is a specific case where Chevron could be willing to fund a training program that would suit their needs. Likewise, domestic manufacturing cannot be restored without a trained work force, and a trained work force will not stay in Venezuela unless there are jobs that pay competitively.

    The regime is failing. The universities would be wasting valuable time to be hoping for a solution to come from this failing regime, but there are things that can still be done.

  12. It seems to me, as pretty much the last bulwark of democracy in Venezuelan institutional life, and the promotion of democratic values, public universities are in fact an example of success, maybe the last example of success. I also think it would be impossible to means test for rich kids in Venezuela. None of the wealth is on the books, particularly these days, and even if it was, there are not that many rich kids.

    • Good point, however it would be possible to means test using proxy measures like physical address, where was secondary education completed, or things like that. However, I do believe there are other more urgent problems that should be addressed first like macroeconomic and political stability. Talking about education reform now is like pondering the color of the curtains while the house is on fire!

    • I might point out also, that whatever liquid wealth I have in Venezuela has shrunk to a small percentage of what it was. Am I the only one?

  13. In an ideal world wouldn’t a “postgraduate” tax on each of the professionals formed in every public university be enoughto cover the cost? Let’s say 1% of the income for the next X years? Could it work?
    It won’t make the nasty differentiation between “poor or rich kids”.

  14. Not only the system is paying for rich kids, its also paying for tons and tons of kids that doesn’t even really want to be there, but go to a university because what the hell, it’s free, so they don’t have to give it much thought.

  15. not to be too negative, but fundamentally, can universities really survive in an economy/society where there is no point in studying the majority of fields out there? Law students in a lawless country, engineering students with no construction or manufacturing, doctors without medicine, journalists without paper and access to information, etc..

  16. Oh also, the university professors don’t have the power to change the system. They’re not going to gain any sympathies by suggesting charging students but can make the argument that they are not being paid enough. They have to make practical, realistic and individual decisions because they’re also workers and need to put food on the table every day.

  17. I have my CS degree from Universidad Simón Bolívar (USB) because that university was public & free. As me, there are hundreds of students that achieved their degree in the USB because of the same reason. Countrywide, there are tens or hundreds of thousands that had the same benefit.

    The public university model seeks a only one objective: equity. As a result of equity, a phenomenous occurs: social (social class & rent) movility. The means that a poor high school scholar can enter the university and, after graduated, earn enough to live well and also (as an externality) grab his family from the poverty, after a few, or long, years.

    However, the neoliberal point of view recommends, ever, the privatization of all the public university. As opposite, in the keynesian point of view, funding the public universities can be though as social spend.

    Maybe the articles published in this well-reading blog should not justify an ideology from the facts or the suspected facts. Ideology management, you know, was a product of the nazi regime in Germany during the WWII (Goebels) and, later, of the communism regime.

    • We were 4 siblings and we all got college degrees from USA and UCV. We went to public high school (maybe in our days public basic schools were better). And even though we didn’t have to pay tuition, it was difficult because books were rather expensive for us, plus all the other stuff you need in college plus transportation, etc. I don’t know where we’d be now if it hadn’t been for public university.

      • Yea, see, thats the kind of nuance we lose when we deal only in extremes. The public universities do a lot of good to “lift” people, work that is absolutely necessary for the development of the country. That has to be preserved and improved.

        But that doesnt mean that a look at how to ensure the help goes where it is needed the most is not a good idea.

        Also, I dont know when you got you degree, but I was from the 89 cohort in USB and the ratio of private vs public schools students was heavily on the private side.

    • I am USB 84 and I am greatly appreciative of my education and the people I was educated with. However, was it cost effective for the Venezuelan state to have educated me in Venezuela? Would it have been better to just pay for my education outside Venezuela with a scholarship?

      One thing I would have missed by doing my undergraduate outside of Venezuela is that I would never understood many subtleties in the culture. On my return, I would have become a ‘gringo que habla castellano’.

      Of course the compounding of Chavismo destruction has brought mass emigration anyway making my ‘gringo que habla castellano’ argument mute.

    • “However, the neoliberal point of view recommends, ever, the privatization of all the public university. As opposite, in the keynesian point of view, funding the public universities can be though as social spend.”

      The privatization of all public universities is not a neoliberal point of view. That’s simply not true. What country has privatized all public universities?

      And the Keynesian point of view is not always the opposite of the neoliberal point of view.

  18. Not sure the issue is posed right , first the state benefits when it promotes higher education because people with high education can become good creators of wealth and ultimately help society achieve its goals of universal welfare . the thing is that not all high studies deserve govt subsidy , some are more potentially profitable than others , equally not all students have the same potential to make good use of their studies , so the thing is that to the extent some careers and some students are better capable of making long term good use of their studies for the countries ultimate benefit then they should be subsidised otherwise either they pay for their studies or recieve only a small subsidy or they are allowed access to less ambitious ( and less costly) but well designed studies to make optimal use of their more limited capacities.

    In Venezuela higher education needs an upgrade to make it more cost efficient and well run . But talking in the here and now , what would be best would be for the govt to shut down all those fake universitities which dole out farsical degrees to people who dont meet the qualifications for a real university education and use the freed money to fund the real universities. !!

    • ” first the state benefits when it promotes higher education because people with high education can become good creators of wealth and ultimately help society achieve its goals of universal welfare”

      It’s seems to not be working very greatly, right? I mean, how is the poor benefitting from that? How is the economy doing? How is the slums’ population being reduced with this policy? How is the ‘welfare’ going? Because after all these decades of public funded tertiary education, Venezuela (and all the other South American countries that do the same) should have become an example to the rest of the world, yet it isn’t. It’s just not working. Why? Because what can really help undeveloped countries to erradicate the horrendous pockets of misery they have is a good primary education. Tertiary education comes later. There is no developed country in the world without a good public primary education, it was the game changer for South Korea, for example.

      And let’s fool no one, at this point Venezuela is basically graduating people that will create wealth and “ultimately help society achieve its goals of universal welfare” in the US, Canada, France, Germany, the UK, Italy, Spain, Switzerland, Norway etc etc. Every Venezuelan with a degree has already left or making plans to leave the country. So what we have now is a third world country educating the workforce of the first world. Kind of bizarre if you ask me.

      Focus on the poor and educate them if you want to really change things; the upper and middle-class can take care of themselves. Trust me, they won’t be starving nor going to live in the slums if they don’t receive their government funded University diplomas.

      • Evidently improving the cost effectiveness of higher education by itself is not going to achieve anything if ( as is the case in Venezuela ) the whole social economic structure is collapsing , It has to be part of a wider set of measures that taken together puts things in the right direction .

        The thing is that higher education can be better organized and be more selective in the kind of studies it promotes phocusing on those that can contribute most to the creation of wealth for the country . Universities should be smaller , better run and provide for different levels of subsidies depending on the studies concerned and the capability of the students that enter it including the possibility of charging students who are not among the most competent and who want to study things that are not high priority for the countrys development needs.

        This is not to say that people in whatever social class who are not high education material dont get an education only not a higher education but rather one which prepares them for a productive professional or ocupational life .and doesnt close the door on their ascending to a higher education if they later show that they are upt to it.

        Indiscriminately showering the gift of higher education on almost every body because they are poor whatever their other credentials is irrational because it means spending limited resources on gratifuing the delusional and sweet cloying dreams of universal social advancement through education .

        Long time ago Ortega wrote an Essay on Higher education where he proposed creating a two tier system, one for talented students and lecturers who are really interested in learning and a more populous tier for those who simply want to a good job.

        It is always wise to concentrate your resources on what bring a bigger bang for the buck , high education for those best prepared to meet its challenges and make good use of it and , and technical an vocational training for those that dont meet the high education mark.

      • The “brain drain” is a problem, but one that has little to do with public education.

        I mean, the only solution to that is to stop the country economy from being a farce, and thats kinda out of the hands of the university authorities or students.

        • Yep. How dare the students and proffesors to know that their skills are better valued elsewere and to not want to deal with the rampant crime and the scarcity and the gang of criminals that rule this country?

          That’s a highly ironic comment on a blog with a lot of expats.

        • “I mean, the only solution to that is to stop the country economy from being a farce, and thats kinda out of the hands of the university authorities or students.”

          That’s the point!

          What you have is an undeveloped country investing incredible amounts of money on people that can’t/won’t impact very much the economic, cultural and political life of the country (“it’s out of our hands”, as you said very precisely), and who will ultimately go live elsewhere. So, what is the point? Why do we need them? It’s just a no-win situation for the Venezuelan taxpayer. It’s like burning money. Clearly a negative return on investment for the Venezuelan people.

          And since the middle-class is rich and artful enough to find 1001 ways to go live/work in other countries, of course it can find a way to pay for their study too.

          • You are mixing things up. You will need them – they are necessary to have a well run country, both in institutions and private enterprises.

            But if your policies end up with run away inflation, rampant crime and violence, and a dying economy where companies are closing, then the problem is not that you are wasting a few millions in educating people that you cant use because you are actually a Third World hellhole, and the solution is not in saving that money. Thats the symptom, not the disease.

          • I’m not saying that people with degrees are not necessary. Please…
            Just that as Nagel said: you just don’t have to pay for their education.

            Third world countries should have other priorities like elementary/high school, basic sanitation, electricity/water supply and things alike. Taking part in the space race, funding a F1 team, building stadiums and giving degrees to middle class/upper class students that will go work in multinationals and live/ski in Switzerland comes later.

            To have a small academic elite in a sea of povery doesn’t help very much in the grand scheme of things. Their impact is limited, it’s really “out of your hands” – to use your words again. Here in Rio we have like 6 or 7 colossal public universities where the middle class and upper class send their children to study for free, all that with zero impact on the sea of slums surrounding them. At worst, the poor people will work there as janitors; at best, as cooks. That’s the positive externality on the poor these universities bring. If I could, I would privatize all of these universities and divert all the money spared to heavily fund primary education in the poorest areas of the country: to teach the poor’s children how to read, write, talk, maths, computer lessons, hygiene habits, ethical principles and even how to cross a street. Ten years after that the slums would start to vanish.

          • You have to pay for their education. If they happen to be poor. The opposite is stating that some jobs are only for some people from a better off social class, and the rest just have to deal with it. It is also screwing yourself out of valuable, intelligent people that can become good professionals while your universities are full of those that can pay, not necessarily those that have the interest, passion and capabilites to study.

            Funding primary education IS very important, but without a path to higher education, what you are basically telling people is that their lot in life is pre-determined by their birth. And that on countries where you have a mass of poor people and too few in middle-class and better is a recipe for stunted development.

  19. Free question:

    All the vaunted PDVSA labor force that Chávez fired (and that is not coming back, BTW), all the social mobility that the 4th made possible…where did it come from?

    Answer: In a lot of the cases, from public universities. The fight is not to make the talent go back (too late for that), the fight is to give the talent that still comes from the public and private univiersities reasons to stay. And the rich people go mostly to the UCAB (private) anyways.

    And I cannot support the student debt racket, that has this tendence to raise the costs because “hey, you aren’t paying it now”, specially since you can’t declare bankrupcy from it on the US. Is indentured serfdom.

    Disclaimer: I already got a title from the public universities and now getting another one next year.

    • Selection Process in the old Pdvsa heavily favoured graduates from USB first and then UCV and UCAB later with all other trailing behind , with a premium for those professionals who had gone on to study abroad in recognized US , Canadian British universities . The companies at one time ran first class technical vocational schools to meet its own trained manpower needs , the best of their graduates where routinely given scholarships to study at top class universitites in Venezuela and abroad . They turned out to be some of the best managers , in many cases world class ( later hired to run international operations outside Venezuela ) . But the main education was not received in universities but through on the job training experiences which accounted perhaps for more than 70% of the expertise they eventualy came to command. Much of the training was in house or contracted with specialist firms to supplement a persons already work acquired expertise . The training process lasted the whole career of an employee .

      Petrobras and the Chinese Civil Service has the same philosophy that training never stops and that University level education has to be made available for the best of the crop on a continuous basis. People where hired strictly in the basis of personal talent and personality taking no account of their social origins although children of former employees were sometimes favoured simply because there was the notion that ‘like father like son’ and if the father was a good employee chances were that their children would also turn out to become good employees. .

  20. Tarsicio Castañeda wrote an interesting book in the early ’90s which touches upon the topic of financing for universities- and many other topics. I read it in its original Spanish version: Para combatir la pobreza : política social y descentralización en Chile durante los ’80s. Courtesy of the US Government, you can download it in the English translation Combating Poverty: Innovative Social Reforms in Chile During the 1980s. I wonder if Juan Nagel has heard of the book.

    One point that Castañeda makes about Pinochet’s social policy compared to previous years is that the proportion of the education budget that went to the poor increased during Pinochet, a fact which does not fit the traditional narrative on Pinochet.

    During the Pinochet regime, subsidies for free university education- subsidies which benefited mostly the better-off -were reduced, and more funds were devoted to secondary education.

    As more than 20 years have passed since I read the book, I am not going to go into details which I have forgotten. The material this book covers could be of interest. And it is free for the downloading. Por ahora. 🙂

  21. Here are my two cents. It is a difficult subject because people feel entitled to an college education.

    My experience relates only to USB. USB is basically free. You access the school by passing an exam. Many people in my school were well off. Many, myself included had cars. Many, myself included could afford to pay. Many didn’t and that’s fine. Here is were I think the system is broken:

    1.- If you can afford to pay, then do. Make that the default. If you can’t, well don’t. Some revenue is better than no revenue. Keep subsidizing as much as you need but no more.

    2.- No meandering. If you aren’t pay then study. And study hard. The mother of three in a barrio is paying an opportunity cost for you to be there. Value that. Respect her. Kids that are under a subsidy should excel. Fail and you are out. Or perhaps, fail and you loose your benefits.

    Things don’t have to be black and white (fully free or fully paid). Subsidies can meet people half way. What I thought to be appalling is the little kids valued their free tuition. They would meander. They would fail or drop courses over and over. Some kids hated the subjects. They wanted to be an engineer because there is the idea that it is necessary. Very few of my former classmates are actually engineers today. Many work on sales, marketing, or some business type thing. I find this somewhat unfair. The mother of three in the barrio invested a shit ton of money for these kids to become engineers. They, in return, studied something they weren’t interested in, to something afterwards that didn’t required to study that (or anything for that matter) or worse, they left the country.

    I remember that in Mexico City when you go buy the subway tickets there was a poster saying that that ticket was subsidized at the expense of other things. I believe kids need that reminder.

    • Rodrigo,

      (Repeating myself).

      Does an institution as our beloved USB belong in Venezuela? Would it not be more cost effective to ‘outsource’ the education of our brainier compatriots to elite schools elsewhere? How do you protect such an institution from the whims of the government? As much as academic independence is espoused he who holds the strings to the purse has the power.

  22. What fraction of the budget of tuition-charging research-intensive universities in the developed world is actually financed from student contributions? I don’t even have a ballpark figure for that, but if were pressed for an answer, I would go for “not that much”.

    I fundamentally agree with Rodrigo’s assessment above: the default should be that those who can afford to pay, should. But then, the question also becomes: should we expect universities to fund themselves by charging tuition, only? How can universities fund their education and research activities without depending on government handouts?

    Yes, the student tuition problem is part of a very dysfunctional system. But I’m not really sure that it is the most important one.

  23. Basic education ( primary and secondary) by itself is just a necessary first step in preparing people to become productive , by itself it accomplishes little unless followed by one of two kinds of education , good ocuppational mid level technical education or higher education .

    Basic education must be free for all , no question about fathers paying for it (unless they choose to) , I would say the same thing applies to occupational education . Here we are talking about an universal right .

    Higher education is different , here there is room to consider that the duty of the state to provide higher education is less peremptory, not every one can be expected to go to higher education , it demands more from the student and not every one can meet those demands. Government funding of higher education is more like a subsidy and there are studies on how subsidies should be structured.

    Blanket subsidies dont work as well as targeted subsidies , subsidies which are justified because of the returns they produce in terms of the benefit to the country . if resources are limited you concentrate their use on those things which carry the bigger bang for the buck. Some studies are more useful for the country than others , you probably want more physicians and engineers thatn anthropologists and lawyers , so you punt more money in those fields of study which you think are needed most and least on those which are least needed.

    If you have someone who is a good student and makes better use of the opportunity to study then they deserve a greater subsidy than people who are mediochre in their studies , you reward the best without punishing the fair who can still study but perhaps with a less generous subsidy or by having to pay for part or all of their studies,

    If you are poor and deserving of help because you are a good student and are studying something which is useful then you can get a bigger subsidy than someone who is also poor but a mediochre student and enrolled in some fancy but basically superflous line of study .

    All of the above is plain common sense. Also common sense is to organize the studies to make them more cost effective , you pay good teachers better than not so good teachers , you reward goo results rather than poor results , you dont pay for an army of administrative employees who dont work even if they have strong unions supporting them .

    The poor dont have to think that the only way out of their poverty is by becoming professionals , but by educating themselves to work at a well paid mid techical or occupational job .

    Last but not least the best education is imparted by work organizations that have as a philosophy to continously teach their employees how to improve their expertise and performance , companies very often have more to teach than universities and they do so happily because the better trained their employees the more productive they can become .!!

    .

  24. These are my thoughts on this topic:
    1. It is clear without a doubt that the terciary school system needs changing, the quality of education in Venezuela is decreasing thanks to lack of funds, poorly paid professor, less motivated students that know that to have a degree wont necesarilly get you a job in your field or anywhere.
    2. Juan talked about “rich kids” and i wonder: what rich kids? In current Venezuela “rich kids” ( Lorenzo Mendoza rich) are leaving the country and are choosing to be educated abroad. The ones that stay go to private schools and pay for their education. The rest is “middle class” families. Some will probably be able to pay tuition, some wont. And that could mean that those kids from families that cannot afford college will be left out. I think that the only family in Venezuela that could easily pay tuition for 1 or more is the cabello family, the rest would have to make efforts to afford it.
    3. But, like Rodrigo said not everything is black and white. Subsidies can meet students halfway. I also think that public school need stricter control on students. Students have to earn that spot in the classroom, by monitoring better the student grades for example. And by this i mean a minimum gpa in order to stay in school. I also thought about making those students with lower gpa pay for their tuition but in venezuela that would turn into a mess, with professor being force to fail students to get more money etc..

  25. Well, in a way public universities are already funded by the “rich” (in this context) as most taxes come from them. At least in most countries, of course Venezuela is a different case where most government money actually comes from a super state company called PDVSA,

    One last important thing. The main reason the middle class in Latin American study in public universities is because they’re free. Sure, they’re good, but a large part of the reason of why they’re good is because they’re able to attract the best students in the country. Sure, the teachers are good, but part of the reason good teachers want to work in public of universities is because they know they’ll deal with the best students, not so much because the salary, which can be better in private universities.

    I’m afraid if public universities stop beeing free, they’ll stop beeing attractive to the middle class, who will migrate to private ones. Then, the quality of public universities will go down. Is that in the interest of poor students? See the case of Chile, maybe the only country in Latin America where the best university is a private one. Incidentally, also the one in which the public university charge fees.

  26. Mmm… yes and no.

    Where I kind of agree with you

    There’s a lot of fat than can be cut from public universities today. Long story short I advocate universities stop providing a bunch of free services, and instead fund the demand in a way that kids who are better off self-exclude themselves (because it would be a waste of time to procure a subsidy they don’t need), and not using it should mean money is saved.

    Let’s name a few targets:

    – Transport: A wholly owned fleet of buses, that are always late, in dismal condition; and have their corresponding full-time employed drivers who spend most of the day joking and bitching about their pay, as opposed to driving. It should be cheaper to replace this with a “student pass” redeemable in the regular public transportation system, exactly like the ones used by kids in elementary/middle/high school in Venezuela today; as you can cap the expenditure by just issuing a sensible number of tickets per student (inner city kids get two tickets per school day, kids in the suburbs or from out of town get 4-6-8 tickets per school day). The saving is that the university no longer has to deal with driver strikes, driver pensions, spare parts, bureaucrats who write up projects to get funding for buses from the Higher Education Ministry, etc, plus kids with their own cars are unlikely to claim their “student passes” and even if they do get them, they wouldn’t redeem them at any bus, train or subway, and so the money would not leave the from the fund.

    – Food: My personal experience at USB was moderate queues to get very cheap (not free) food at above average quality. However, everyone I know from UCV, UC, LUZ, UDO and other public universities have told me of their experience with huge lines at the cafeteria, and free yet inadequate meals (sometimes borderline disgusting). If however, this system is replaced with a “food bonus” or “food stamps” redeemable in every in-campus cafeteria, competition should improve the quality of meals, and queues would dissolve as there would be lots of places where to get the food. Again, kids whose mom cook their lunch, or who get a nice allowance are unlikely to claim their “food stamps”, if these expire and the funds are kept until claimed, this represents savings, once the university rids itself from the fixed cost of having a cafeteria staff.

    – “Professional students”: These are students who spend 15, 20 or more years in college, enrolled in a program that is meant to be completed in about 5 years. Permanence rules need to be stiffened. For instance, if you fail a subject two times, from the third time on you have to pay for those credits, and if you fail a fifth time, you’re out of school. This saves money and frees up resources for kids who actually want to study, not just become “encapuchados” (masked thugs often involved in riots, crime and college corruption).

    Where I don’t agree with you

    First things first. There aren’t a whole lot of actually “rich” kids being getting subsidized education. People like Capriles or MCM went to UCAB, a private university. People like Lorenzo Mendoza got their bachelor degree in the US. A big exception is Medicine, since no private university has been allowed to teach it . So basically the people you’re railing against are kids from the middle class, not “rich” kids.

    Now let’s say, as you have advocated before, that UNIMET tuition becomes the standard. We’re looking at VEF 70.000 a year, which represents 14 minimum wages. Using the the INE assumption of a household average income of two minimum wages, you would have an average Venezuelan family spending 50% of their income to put a one kid in college -with Christmas bonus included- (the second kid would be SOL, because clearly 100% of the family income in college education is unsustainable). This would be a clear obstacle for social mobility via education.

    On a side note: In a country that uses public money import gas at market rates and then subsidize it for those better off, subsidize oil consumption to people in foreign countries, pay the airline tickets for baseball teams, sponsor a failed F-1 driver, prevent Polar from sponsoring the national football team, pay the salaries of a bunch of idle workers in public companies, pay obscene overprice on power plants, etc; it strikes me as odd to prioritize budget cuts in public universities.

    Alternatives

    To get funding, I like policies like a “college degree tax”. If you pay for college with public money (scholarship or public university), after you graduate, you get an additional tax when declaring your income tax. This tax can be time-limited (5 years, 10 years, proportional to the time spent in college, etc). It s my understanding this was proposed (and rejected) in Venezuela as “pago diferido de matricula” around 1992. It was revived around 2012 by some college authorities.

    To a lesser degree, I could agree to public schools charging a not so symbolic tuition, that is waived for kids who come from public education or who qualify for scholarships. By not so symbolic, I mean something that can be paid working part time or with the help of families, it would be about 20%-30% of a minimum wage or something of the sort.

  27. I agree in almost all you have written in this blog. However, when people talk about math, people tend to focus in just some figures, ignoring other, and ignoring the relative amounts of expenditures (or investments) and its relation to the population estructure and its needs.

    I agree that with, or without, this government wrongdoings, Venezuelan universities must change profoundly. First because the word and its needs is constantly changing, and universities everywhere are doing so, but also because our universities are out of touch with the venezuelan population, its needs, and its economic possiblities.

    Those who have means to pay for education must pay, but they are not many, and their contribution is not going to solve the education budgetary scarcity.

    If we only educate those who can pay, we will end up creating a knowledge oligarchy among a sea of ignorance with all its economic and social consequences.

    If we do not have well funded schools, how do we expect to have good education and well prepared educators?

    How about expending less on war weapons, PDVSA planes, Nomenklatura perks and privileges (yesterday, today and tomorow), and more on better educational infraestruture, up to date educational equipment (hardware and software), and well prepared and motivated educators?

  28. This is an important and sensitive topic. I agree that it is necessary to change the Venezuelan system of higher education. But I would not put the emphasis on who pays what. This is part of the issue but not the entire issue. There are other dimensions that need to be taken into consideration, like the relationship of the university with the private sector and with the public sector, the topic of general education and vocational education, the old topic of the relative weight of research and teaching in characterizing the institutions, the role of the communities in defining policies, the dilemma or false dilemma of national education versus global education, and of course the central aspect of financing higher education, among others dimensions. On the other hand, I give much importance to the situation of universities under de prevailing political regime. The objectives of the current regime regarding higher education are very different from those of a democracy as many Venezuelans understand that. Whatever you do will face the fact that the regime is determined to do away with the universities with a level of autonomy and democracy in their institutional constitution.

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