The Abbott government’s proposals for reform of the higher education sector have not found much favour with students, academics or the general public. They have, however, had a good deal of support from vice-chancellors who claim, through organisations like Universities Australia, to speak for the sector as a whole.

The strongest support has come from the vice-chancellors and presidents of the long-established “sandstone” universities, represented by the “Group of Eight”. Far from accepting fee deregulation as an unpalatable but necessary response to cuts in funding, the Go8 has positively welcomed the idea. The position of the Go8 comes from three misguided beliefs.

1) Microeconomic reform is a good thing

Support for microeconomic reform remains strong in elite circles long after the general public has soured on the idea. The most notable example is the persistent belief, going back to the 1990s, that for-profit institutions like the University of Phoenix, particularly in their online form, are the way of the future. The exposure of this group as scams based on extracting US government grants for students who will never graduate has been met with the response that “learning from failure is a step to success”.

On this basis, it is unsurprising that the Victorian approach to privatised vocational education is being extended to higher education in general, with Go8 support. A failure so catastrophic must surely be an omen of future success?

2) Competition will enhance diversity

A closely associated claim is that competition will enhance diversity and choice, both in prices and in the education offered to students. This is nonsense, as has been shown by previous limited experiments with deregulation, where universities have been allowed to choose their fees, subject to a maximum. In most cases fees have been raised to the maximum level allowed in a very short time.

It is also evident that most universities see higher fees as permitting them to raise entry standards and reduce student intakes. So, students will see uniformly higher fees and less choice of institutions.

With regard to diversity, the striking feature of competition in higher education is that, while it amplifies inequality in resourcing, it produces ever greater homogeneity in approaches to teaching and research. In the pre-competition era, the 1970-vintage universities embodied a range of innovative approaches to teaching and research compared to the traditionalism of the sandstones. Universities of technology and former colleges of advanced education had a distinctive ethos reflecting their diverse origins.

Now these differences have disappeared. Since the incentives are the same everywhere, universities have made the same structural reforms (replacing discipline-based departments with numbers-driven “schools”) and the same choices in specialisation (killing classics, philosophy and so on while expanding business and particularly MBA programs).

3) Australia needs its own Harvard

The other central element of the Go8 support for reform is the belief that Australia needs a more stratified system along the lines of the US. One element of this is the complaint that Australia lacks top-flight universities comparable with US institutions like Harvard, Princeton and MIT.

The first observation to make in response to this is that these educate around 1% of the US population, with total undergraduate enrolments of 100,000. Adjusting for the fact that the US population is around 15 times as large as ours, an “Australian Harvard” would enrol around 7000 students.

The second observation is that we once had such an institution. The Australian National University was created as a research-only national flagship modelled on the Institute of Advanced Studies at Princeton. The case for focusing national support on a single institution was strong in the 1950s and 1960s, when the state universities (today’s Go8) were provincial offshoots of Oxbridge, largely lacking in a research culture. It became much weaker with the massive expansion of the university system under Menzies and Whitlam, and the subsequent lifting of aspiration.

The decision to abandon the national flagship model and treat ANU much like other universities had the enthusiastic support of seven members of the Go8, who did not find this particular form of stratification appealing. We could reverse this process if we chose, by reinstating ANU as a national flagship, or picking another member of the Go8, or starting again from scratch. What we cannot do, given our size and resources, is create eight Harvards, collectively enrolling many more students than the entire US Ivy League.

Far more important than this is the fact that, as virtually all observers now agree, the US system of undergraduate education is failing badly. Many other countries (including Australia) have overtaken the US in terms of the proportion of young people who complete a university education.

Moreover the stratified system in the US reproduces and amplifies an increasingly stagnant social structure. Inherited wealth is the key to success. Not only the Ivy League but the “flagship” state universities (which have followed the path of quasi-privatisation being advocated in Australia) are largely confined to the children of households in the top 20% of income distribution. The resulting loss of social mobility has provoked a crisis in a country that has always seen itself as a “land of opportunity”.

Yet this is the model our university leaders say we should follow. Both Education Minister Christopher Pyne and the representatives of university management have presented this as the last opportunity for a deregulated, enterprise-driven university system.

It seems likely that the Senate will reject the government’s “reform” measures. Once it fails, our leaders should abandon this model and consider how to build a post-school system based on assumptions of affordable and universal access to diverse and high-quality education.