Linda, I've seen some examples of both the students and tutors at the Newcastle degree course going out there with notebook and pen (well, more likely a minidisc recorder, but you get the drift) to interview and record the performances of traditional musicians. I don't know if all those on the course study context and community as thoroughly, but certainly those that I've met indicate that it's far more than a "technique factory". Hope this is reassuring. Incidentally, I'm not on the folk degree course, nor at Newcastle Uni, so have no axe to grind.
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