Students at Cambridge are privileged, but not as privileged as they ought to be. They are privileged because, not only are they attending one of the world’s great research universities, they are also attending one of the world’s great teaching universities. Cambridge seeks to combine the virtues of both Harvard and Amherst.

Teaching at Cambridge is underpinned by the supervision system, whereby undergraduates are taught in small groups, sometimes singly, and often by world authorities in their subjects. Anyone confronting a Cambridge student knows what great advantages this system gives to its students whose written and verbal fluency puts the products of most other universities to shame. After President Eisenhower first met his successor, John Kennedy, he commented that you can tell a Harvard man, but you can’t tell him much. The same is true of a Cambridge man – and of course woman.

Why, then, are Cambridge students not as privileged as they ought to be? Anecdotal evidence suggests that the realities of the supervision system are sometimes far from the ideal. Students complain that world-famous figures are too busy with their research, or just not interested in teaching, which is seen as a tiresome interruption. All too often, students are fobbed off with overworked junior lecturers or graduate students. Sometimes the world-famous figures are ill-equipped to convey their knowledge to the young.

Cambridge suffers, as other universities do, from a system of government funding which devalues teaching. Each university receives from the Higher Education Funding Council a teaching grant which is the same for Cambridge as it is for less prestigious universities. For example, the grant for classics at Cambridge is the same as the grant for media studies at Poppleton.

The Higher Education Funding Council tells Cambridge how many students it can take. If the university takes more, it is fined for each extra student that it takes. The Council also tells Cambridge how much it must charge each student. The level of the fee means that Cambridge makes a loss on each student that it takes. So, although Cambridge is not a nationalised industry, the government tells it how many students it can take, and what it must charge them. It is now coming to tell them how students should be selected. This is a system which central planners in the Soviet Union would have envied.

One does not need a degree in economics to appreciate that central planning of universities makes little sense, and, in particular, that it provides little incentive for good teaching. A university with good teachers cannot raise its fees, while a university with bad teachers is protected from competition.

By contrast, the state provides incentives for research, since universities are evaluated, supposedly by the quality of their research, but in practice, one suspects, by its quantity. This has made the lives of young academics, required to publish prematurely in learned journals, a misery, and it has led to far too many publications of questionable worth, which most dons have little time to read. Most of them perhaps are not worth reading. One of my colleagues at Oxford used to argue wryly that his colleagues ought to be most grateful to him for the large quantity of his unpublished papers!

The Browne Report on higher education funding and student finance, recently published, offers a cure for all this. Instead of the current system of state planning of higher education, it proposes a market, a regulated market admittedly, but a market, with consumer power being put into the hands of students.

In future, if Browne has his way, universities will be able to charge whatever fees they like. Some universities, like Cambridge, will of course remain prestigious research universities, and will also seek to remain top-class teaching institutions. Others may become liberal arts colleges on the American model, concentrating on teaching, but not research. Some universities may privatise themselves – indeed Cambridge may well be one of them. Some universities may seek to cut costs by providing intensive two-year courses, rather than the Cambridge model of three-year courses, stemming perhaps from days of old, when the long vacations were put aside for gentlemen to pursue their reading.

What is certain, if the Browne proposals go through, is that there will be a greater diversity of higher education institutions. That can only benefit students.

Of course, students do not want to pay for university courses, nor to be saddled by debt. Under the Browne proposals, as today, no student pays anything upfront. The contribution remains deferred and income-contingent. Indeed, no student pays anything until she is earning at least £21,000 per annum.

The Browne Report, then, proposes to make Cambridge students even more privileged than they are today. Yet most Cambridge students probably oppose it. Why?

Students have a strong social conscience. They believe that higher graduate contributions will deter candidates from poorer families from coming to Cambridge. Yet the old system, the system of central planning, manifestly failed to encourage access. The percentage of Cambridge students from poorer families was not much higher before fees were first introduced in 1998 than it had been thirty years earlier. American experience shows that a high student funding contribution need not damage access. Indeed, the percentage of students from poor families attending universities is higher in America – and in Australia, which also requires large student contributions – than it is in Britain.

In fact, the system of state control of the universities subsidises the middle classes, not the poor. The competition for places at Cambridge between those from independent schools and those from the maintained sector is largely one between different segments of the middle class. In this sense also, Cambridge students are privileged but it is a privilege difficult to defend. It is hard to argue that taxpayers, most of whom have not attended Cambridge, should subsidise those lucky enough to win places there.

Much will be expected of future generations of students. But much also will be offered to them – in particular, the chance to choose a university on the basis of its teaching excellence, and to ensure that the quality of teaching promised in the university prospectus is actually delivered. Cambridge of course has nothing to fear from a competitive market. Indeed, the Browne reforms will probably make Cambridge students even more privileged than they are today, and deservedly so.

Students are trained to be self-critical. Yet their reaction to Browne has been a knee-jerk one. They ought to think again.