Karl Marx on University Tuition Fees

Karl Marx argued that making university free at the point of use tends to benefit higher income groups; analysis by the IFS supports Marx’s intuition

David Willetts, the architect of the Coalition Government’s decision to raise university tuition fees to £9,000 per year in England, recently gave a talk at my college. The topic was his new book about HE funding, A University Education. During the talk, he mentioned a quote by Karl Marx criticising free tuition, which I found rather amusing. However I forgot the quote afterward, and was unable to find it online. But happily, I just tracked it down in a Spectator article from last year.

The full quote, which comes from ‘Critique of the Gotha Programme’ (a letter written in 1875 to the Social Democratic Workers’ Party of Germany), is as follows:

“Universal compulsory school attendance. Free instruction.” The former exists even in Germany, the second in Switzerland and in the United States in the case of elementary schools. If in some states of the latter country higher education institutions are also “free”, that only means in fact defraying the cost of education of the upper classes from the general tax receipts [emphasis added]

Marx is saying that making university free at the point of use tends to benefit higher income groups, due to the fact that university students are disproportionately selected from those groups (even when university is free). In the absence of tuition fees (or something similar), university tuition has to be funded out of general tax revenues, which means there will be less money left over to spend on things like secondary education, infrastructure investment, and social welfare––thing that benefit all income groups, including the poor.

Moreover, even students from lower income groups who do make it to university will end up being richer than average (so long as they study something useful). In May of last year, the IFS analysed the effects of Labour’s manifesto pledge to scrap university tuition fees. Their conclusions were as follows:

Clearly, average student repayments would decline as a result. However, because student loans are repaid as a proportion of income, this average figure has very different impacts across the earnings distribution… As high-earning graduates repay the largest share of their student loans, they benefit the most from the removal of tuition fees. The repayments from the highest-earning graduates… would fall by 67% from £93,000 to £30,000, while the lowest-earning would benefit very little [emphasis added]

Of course, the fact that low-earning graduates do not have to pay back their student loans makes the effect of scrapping university fees particularly regressive in England’s current system of HE funding. But Marx’s point would still be correct in the absence of this rule, for two reasons. First, university students are disproportionately selected from higher income groups. And second, university graduates will end up being richer than average, regardless of their social background.

Note that I’m not arguing in support of England’s current system of HE funding, only that scrapping tuition fees would have a regressive effect.