Joseph Stiglitz.
Joseph Stiglitz. Photo: Andrew Taylor







The government's plan to deregulate universities is ''a
crime'' and its plan to require co-payments for medical services is
''absurd'' in the view of visiting Nobel prize winner Joseph Stiglitz.



Asked by Fairfax Media to nominate the two biggest mistakes
the Australian government could make that would take it down the
American path of widening inequality and economic stagnation Professor
Stiglitz nominated the budget changes to university fees and Medicare.



Each would make Australia more like the US.



''Countries that imitate the American model are kidding
themselves'', he said. ''It seems that some people here would like to
emulate the American model. I don't fully understand the logic.''




In the lead-up to the May budget Education Minister
Christopher Pyne said Australia had much to learn about universities
from overseas, adding: ''Not least, we have much to learn about this
from our friends in the United States.''



Asked what Australia had done right that the US had not, Stiglitz replied: ''Unions.''



''You have been able to maintain stronger trade unions than
the US. The absence of any protection for workers, any bargaining power,
has had adverse effects in the US. You have a minimum wage of around
$15 an hour. We have a minimum wage of $8 an hour. That pulls down our
entire wage structure.''



Professor Stiglitz said Australia had an education ''system that is really a model for the rest of the world''.



In Canberra as a guest of the Australian National University,
he said deregulating fees would move the entire system in the wrong
direction. ''Trying to pretend that universities are like private
markets is absurd,'' he said.



''The worst-functioning part of the United States educational
market at the tertiary level is the private for-profit education
system. It is a disaster. It excels in one area, exploiting poor
children.



''If you're rich your parents can pay the fees, but if you
are poor you are going to worry about how much debt you're undertaking.



''It is a way of closing off opportunity and that's why the United States doesn't have educational opportunity.



''While we in the US are trying to re-regulate universities you are talking about deregulating them. It really is a crime.''



On healthcare Professor Stiglitz said Australia also had one of the best systems in the world.



''Why would anybody make reforms to try to make your system
like the American system?'' he said. ''People don't make a decisions
about medical tests and procedures based on price. Maybe for cosmetic
surgery they do, but for poor people, price signals price them out.''



The typical inflation-adjusted income of a US household is
lower than it was 25 years ago. The typical inflation-adjusted income of
a male full-time worker was its lowest in 40 years.



''You have to say that the American market model has failed.
It's a very strong statement for someone who believes in a market
economy.''