My trade union, UCU, is campaigning against the establishment of “private” universities in the UK. They have a point about the way in which this is being done, which is in my view with reckless disregard for quality and probity issues which could damage the whole UK higher education sector.

HE is a vital part of the economy, and the Coalition government’s massive experiment with privatising student funding, introducing price competition and licensing private suppliers is at best “a brave decision, Minister” as Sir Humphrey would say.

But are “private” universities in principle a bad idea? I am not so sure my union is right to say they are. In my view it depends on the configuration of the HE system, not the existence of private interest HE organisations by themselves.

American public administration scholar Barry Bozeman famously claimed that “all organisations are public” and in one sense he’s right. In modern societies, all organisations exist within a set of rules established by the public realm.

The most successful capitalist organisations – joint stock limited liability companies – were denounced by The Economist magazine as “socialistic” when they were first legislated into existence by the British government in the 1850s. Without state sanction for contracts and property rights, such companies simply couldn’t exist. So to that extent Bozeman is right – all organisations are “public”, or at least have some features of “publicness”.

The converse is also of course true – all organisations are to some degree “private”. Even the most public of public organisations buy things from the private sector. Their employees have private interests and can choose to work for them or not (except for conscripts of course).

So there is always some “grey” in statements about “public” and “private” organisations. Indeed some organisations live in a kind of twilight zone between the two – UK Universities for example. The Office for National Statistics places universities in the private sector for employment and financial counting purposes. But most people think of most of our universities as “public” institutions.

There is however a vast, yawning chasm between what we generally think of as “public” and “private” organisations – what I would call the “logic of public interest” versus the “logic of private gain”. Most employing organisations are dominated by one or the other logic. The values, aims, processes and purposes of organisations – almost everything about them – are shaped by either the logic of public interest or private gain. There may be many superficial similarities, but as one wit famously put it “public and private organisations are fundamentally alike, in all unimportant respects.”

Universities can fit almost anywhere along the public private continuum. In much of Europe they are public, so public that when my friend Christopher Pollitt, then at Erasmus University, wanted to change how students presented their final dissertation on a Masters programme he was running he found it needed a change to Dutch higher education law!

In the UK, most universities inhabit the grey area between public and private, whilst the system as whole is being rapidly driven towards the “logic of private gain”. In America the universities are more diverse, with a mix of public, private and in-between. The nearest parallel I can think of is broadcast system in the UK – where we have “mixed economy” of strong public provision – the BBC and to some extent Channel 4 – dominated by public interest and a strong private interest sector.

So my question is this: given that the university sector serves both the public interest (society as a whole needs it) and the private (a minority of individuals benefit from it) should it also be a “mixed economy” like broadcast media or the US system?

There is an important point to note here. A mixed economy “like broadcast media or US universities” implies a split between fully public and fully private providers and their funding. “State” universities in the US are essentially like ours, regarded as public whereas mist if the “Ivy League” universities are dominated by the logic of private gain, even if they also make some social provisions in the form of scholarships.

At the moment our universities are undifferentiated. They all (now) have more or less the same status. Interestingly, prior to the early 90s they didn’t – the old Poly’s were much more “public” (and counted in public sector economic and employment numbers).

Are we going to see a further shift – this time with some universities moving more into the fully “private” mode? Probably. Does it matter? Yes, but only if at the same time we don’t shift the others back into more of a public interest role – the equivalent of the BBC.

This doesn’t have to be a second rate role – no-one thinks the Beeb is. But if the genuine public interest in preserving and enhancing universities – for public interest research and to provide more equal opportunities, we need public universities to balance the private ones that are probably coming.

None of this should be taken to imply that such a mixed economy is right for, say, primary and secondary education. The state, rightly, mandates children of these ages to be educated. In my view the scope for a mixed economy, especially of private interest based education, should be much less because of this which makes mandatory education for all very much within the “logic of public interest”. But for non-mandatory, only partly state-funded, HE a proper mixed economy could well be a valid and sensible solution.