Recessions are not all bad news for ÖйúAƬ, unlike for banks. If the City of London ceases to offer rocket scientists million-pound bonuses, they may stay in academic life. If the brightest students cannot command high starting salaries in big companies, they may turn to research. If jobs are scarce, teaching and nursing look more attractive and the knock-on effect runs right through post-compulsory education as people stay on to improve their credentials. Fear of unemployment is at least as good a driver of achievement in schools as government or parental exhortation.

If interest rates fall, that too will bestow benefits. Many ÖйúAƬ institutions borrowed when credit was cheaper and are now stretched to the limit. This is clearly illustrated by the ever-rising deficits evident in the annual funding-council figures. Cheaper borrowing will help balance the books, as (alas) will lower wage expectations. Property prices too may fall, allowing universities to improve their estates by borrowing and buying cheap.

Recessions are the times when the long-term nature of ÖйúAƬ enterprise pays off. Universities fortunate enough to retain the sort of people who recognise the possibilities - and the sort of councils that will give them scope - can achieve dramatic ends. The steady rise in prestige of Warwick University is a good example. The development of Greenwich (page 5) may be another.

In the United Kingdom (except for some Oxbridge colleges), and more so in continental Europe, few universities have substantial endowments. Stock market downturns do not, therefore, carry the same menace as they do for America's private universities with their billion-dollar endowment funds.

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These universities have been raking it in during the stock-market boom of recent years. They have been able to glitz up their campuses and lure academic stars with the kind of hefty incentives and cushioned working conditions that would make European eyes pop. Despite repeated warnings from Federal Reserve Board chairman Alan Greenspan, it seemed the old law of what goes up must come down had been indefinitely suspended. Now times are leaner.

Meanwhile, European universities that remain heavily dependent on public spending are paradoxically less vulnerable. While no one can predict to what extent European economies will be affected by the global gloom, European governments are more inclined to intervene to offset downturns with a bit of old-fashioned Keynesian spending. If the British government is to keep unemployment down it, like its Conservative predecessors, will need to expand further and ÖйúAƬ to take people off the streets. Now that the unit cost of each university place is being reduced through the introduction of fees and the removal of grants, investing in colleges and universities will seem relatively cost effective. It will simply require Chancellor Gordon Brown to be a little flexible with his Calvinist principles.

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Furthermore, hard times can breed a certain humility in governments. On pages 32-33, Ron Amann describes the reshaping of Economic and Social Research Council activities to provide more accessible information to underpin public policy. Reappraisal of policy-linked social sciences, first induced by Keith Joseph's unalloyed hostility in the 1980s, is now bearing fruit in a series of programmes that bridge disciplines in ways to gladden Aidan Foster Carter's heart (page 16).

Perhaps bright Brits will once again choose to do academic research in subjects such as economics. And perhaps, after the embarrassment of giving 1997's economics prize to the academic geniuses behind the hedge funds, the Nobel search committee may be ready to look harder at the merits of economists outside North America.