How Universities Are Increasingly Choosing Capitalism Over Education

Yves here. Some further observations. First, the author neglects to mention the role of MBAs in the reorientation of higher education institutions. When I went to school, the administrative layer of universities was lean and not all that well paid. Those roles were typically inhabited by alumni who enjoyed the prestige and being able to hang around the campus. But the growth of MBAs has meant they’ve all had to find jobs, and colonizing not-for-profits like universities has helped keep them off the street.

Second, this post focuses on non-elite universities, but the same general pattern is in play, although the specific outcomes are different. Universities with large endowments are increasingly hedge funds with an educational unit attached.

By Henry Heller, a professor of history at the University of Manitoba, Canada and the author of The Capitalist University. Cross posted from Alternet

The following is an excerpt from the new book The Capitalist University: The Transformations of Higher Education in the United States since 1945 by Henry Heller (Pluto Press, December 2016):

The fact that today there are over 4,000 colleges and universities in the United States represents an unparalleled educational, scientific, and cultural endowment. These institutions occupy a central place in American economic and cultural life. Certification from one of them is critical to the career hopes of most young people in the United States. The research produced in these establishments is likewise crucial to the economic and political future of the American state. Institutions of higher learning are of course of varying quality, with only 600 offering master’s degrees and only 260 classified as research institutions. Of these only 87 account for the majority of the 56,000 doctoral degrees granted annually. Moreover, the number of really top-notch institutions based on the quality of their faculty and the size of their endowments is no more than 20 or 30. But still, the existence of thousands of universities and colleges offering humanistic, scientific, and vocational education, to say nothing of religious training, represents a considerable achievement. Moreover, the breakthroughs in research that have taken place during the last two generations in the humanities and social sciences, not to speak of the natural sciences, have been spectacular.

But the future of these institutions is today imperiled. Except for a relatively few well-endowed universities, most are in serious financial difficulty. A notable reason for this has been the decline in public financial support for higher education since the 1980s, a decline due to a crisis in federal and state finances but also to the triumph of right-wing politics based on continuing austerity toward public institutions. The response of most colleges and universities has been to dramatically increase tuition fees, forcing students to take on heavy debt and putting into question access to higher education for young people from low- and middle-income families. This situation casts a shadow on the implicit post-war contract between families and the state which promised upward mobility for their children based on higher education. This impasse is but part of the general predicament of the majority of the American population, which has seen its income fall and its employment opportunities shrink since the Reagan era. These problems have intensified since the financial collapse of 2008 and the onset of depression or the start of a generalized capitalist crisis.

Mounting student debt and fading job prospects are reflected in stagnating enrollments in higher education, intensifying the financial difficulties of universities and indeed exacerbating the overall economic malaise.[1] The growing cost of universities has led recently to the emergence of Massive Online Open Courses whose upfront costs to students are nil, which further puts into doubt the future of traditional colleges and universities. These so-called MOOCs, delivered via the internet, hold out the possibility, or embody the threat, of doing away with much of the expensive labor and fixed capital costs embodied in existing university campuses. Clearly the future of higher education hangs in the balance with important implications for both American politics and economic life.

The deteriorating situation of the universities has its own internal logic as well. In response to the decline in funding, but also to the prevalence of neoliberal ideology, universities—or rather the presidents, administrators, and boards of trustees who control them—are increasingly moving away from their ostensible mission of serving the public good to that of becoming as far as possible like private enterprises. In doing so, most of the teachers in these universities are being reduced to the status of wage labor, and indeed precarious wage labor. The wages of the non-tenured faculty who now constitute the majority of teachers in higher education are low, they have no job security and receive few benefits. Although salaried and historically enjoying a certain autonomy, tenured faculty are losing the vestiges of their independence as well. Similarly, the influence of students in university affairs—a result of concessions made by administrators during the upheavals of the 1960s and 1970s—has effectively been neutered. These changes reflect a decisive shift of power toward university managers whose numbers and remuneration have expanded prodigiously. The objective of these bureaucrats is to transform universities as much as possible to approximate private and profit-making corporations, regarded as models of efficient organization based on the discipline of the market. Indeed, scores of universities, Phoenix University for example, have been created explicitly as for-profit businesses and currently enroll millions of students.

Modern universities have always had a close relationship with private business, but whereas in the past faculty labor served capital by producing educated managers, highly skilled workers, and new knowledge as a largely free good, strenuous efforts are now underway to transform academic employment into directly productive, i.e., profitable, labor. The knowledge engendered by academic work is accordingly being privatized as a commodity through patenting, licensing, and copyrighting to the immediate benefit of universities and the private businesses to which universities are increasingly linked. Meanwhile, through the imposition of administrative standards laid down in accord with neoliberal principles, faculty are being subjected to unprecedented scrutiny through continuous quantified evaluation of teaching and research in which the ability to generate outside funding has become the ultimate measure of scholarly worth. At the same time, universities have become part of global ranking systems like the Shanghai Index or the Times Higher Education World University Rankings in which their standing in the hierarchy has become all important to their prestige and funding.

Several intertwined questions emerge from this state of affairs. In the first place, given the rising expense and debt that attendance at university imposes and declining employment prospects especially for young people, will there continue to be a mass market for higher education? Is the model of the university or college traditionally centered on the humanities and the sciences with a commitment to the pursuit of truth compatible with the movement toward converting the universities into quasi- or fully private business corporations? Finally, what are the implications of changes in the neoliberal direction for the future production of objective knowledge, not to speak of critical understanding?

Universities during the Cold War produced an impressive amount of new positive knowledge, not only in the sciences, engineering, and agriculture but also in the social sciences and humanities. In the case of the humanities and social sciences such knowledge, however real, was largely instrumental or tainted by ideological rationalizations. It was not sufficiently critical in the sense of getting to the root of the matter, especially on questions of social class or on the motives of American foreign policy. Too much of it was used to control and manipulate ordinary people within and without the United States in behalf of the American state and the maintenance of the capitalist order. There were scholars who continued to search for critical understanding even at the height of the Cold War, but they largely labored in obscurity. This state of affairs was disrupted in the 1960s with the sudden burgeoning of Marxist scholarship made possible by the upsurge of campus radicalism attendant on the anti-war, civil rights, and black liberation struggles. But the decline of radicalism in the 1970s saw the onset of postmodernism, neoliberalism, and the cultural turn. Postmodernism represented an unwarranted and untenable skepticism, while neoliberal economics was a crude and overstated scientism. The cultural turn deserves more respect, but whatever intellectual interest there may be in it there is little doubt that the net effect of all three was to delink the humanities and social sciences from the revolutionary politics that marked the 1960s. The ongoing presence in many universities of radicals who took refuge in academe under Nixon and Reagan ensured the survival of Marxist ideas if only in an academic guise. Be that as it may, the crisis in American society and the concomitant crisis of the universities has become extremely grave over the last decade. It is a central contention of this work that, as a result of the crisis, universities will likely prove to be a key location for ideological and class struggle, signaled already by the growing interest in unionization of faculty both tenured and non-tenured, the revival of Marxist scholarship, the Occupy Movement, the growing importance of the Boycott, Divestment, and Sanctions movement, and heightening conflicts over academic freedom and the corporatization of university governance.

The approach of this work is to examine the recent history of American universities from the perspective of Marxism, a method which can be used to study these institutions critically as part of the capitalist economic and political system. Despite ongoing apologetics that view universities as sites for the pursuit of disinterested truth, we contend that a critical perspective involving an understanding of universities as institutions based on the contradictions of class inequality, the ultimate unity of the disciplines rooted in the master narrative of historical materialism, and a consciousness of history makes more sense as a method of analysis. All the more so, this mode of investigation is justified by the increasing and explicit promotion of academic capitalism by university managers trying to turn universities into for-profit corporations. In response to these policies scholars have in fact begun to move toward the reintegration of political economy with the study of higher education. This represents a turn away from the previous dominance in this field of postmodernism and cultural studies and, indeed, represents a break from the hegemonic outlook of neoliberalism.[2] On the other hand, most of this new scholarship is orientated toward studying the effects of neoliberalism on the contemporary university, whereas the present work takes a longer view. Marxist political economy demands a historical perspective in which the present condition of universities emerged from the crystallization of certain previous trends. It therefore looks at the evolution of the university from the beginning of the twentieth century, sketching its evolution from a preserve of the upper-middle class in which research played almost no role into a site of mass education and burgeoning research, and, by the 1960s, a vital element in the political economy of the United States.

In contrast to their original commitment to independence with respect to the state up to World War II, most if by no means all universities and colleges defined their post-war goals in terms of the pursuit of the public good and were partially absorbed into the state apparatus by becoming financially dependent on government. But from start to finish twentieth-century higher education also had an intimate and ongoing relationship with private business. In the neoliberal period universities are taking this a step further, aspiring to turn themselves into quasi- or actual business corporations. But this represents the conclusion of a long-evolving process. The encroachment of private business into the university is in fact but part of the penetration of the state by private enterprise and the partial privatization of the state. On the surface this invasion of the public sphere by the market may appear beneficial to private business. We regard it, on the contrary, as a symptom of economic weakness and a weakening of civil society.

The American system of higher education, with its prestigious private institutions, great public universities, private colleges and junior colleges, was a major achievement of a triumphant American republic. It provided the U.S. state with the intellectual, scientific, and technical means to strengthen significantly its post-1945 power. The current neoliberal phase reflects an America struggling economically and politically to adapt to the growing challenges to its global dominance and to the crisis of capitalism itself. The shift of universities toward the private corporate model is part of this struggle. Capitalism in its strongest periods not only separated the state from the private sector, it kept the private sector at arm’s length from the state. The role of the state in ensuring a level playing field and providing support for the market was clearly understood. The current attempt by universities to mimic the private sector is a form of economic and ideological desperation on the part of short-sighted and opportunistic university administrators as well as politicians and businessmen. In our view, this aping of the private sector is misguided, full of contradictions, and ultimately vain if not disastrous. Indeed, it is a symptom of crisis and decline.

The current overwhelming influence of private business on universities grew out of pre-existing tendencies. There is already an existing corporate nature of university governance both private and public, as well as an influence of business on universities in the first part of the twentieth century. In reaction there developed the concept of academic freedom as well as the establishment of the system of tenure and the development of a rather timid faculty trade unionism. This underscores the importance of private foundations in controlling the development of the curriculum and research in both the sciences and humanities. In their teaching, universities were mainly purveyors of the dominant capitalist ideology. Humanities and social science professors imparted mainly liberal ideology and taught laissez-faire economics which justified the political and economic status quo. The development of specialized departments reinforced the fragmentation of knowledge and discouraged the emergence of a systemic overview and critique of American culture and society. There were, as noted earlier, a few Marxist scholars, some of considerable distinction, who became prominent particularly in the wake of the Depression, the development of the influence of the Communist Party, and the brief period of Soviet-American cooperation during World War II. But the teaching of Marxism was frowned upon and attacked even prior to the Cold War.

The post-1945 university was a creation of the Cold War. Its expansion, which sprang directly out of war, was based on the idea of education as a vehicle of social mobility, which was seen as an alternative to the equality and democracy promoted by the populism of the New Deal. Its elitist and technocratic style of governance was patterned after that of the large private corporation and the American federal state during the 1950s. Its enormously successful research programs were mainly underwritten by appropriations from the military and the CIA. The CIA itself was largely created by recruiting patriotic faculty from the universities. Much of the research in the social sciences was directed at fighting Soviet and revolutionary influence and advancing American imperialism abroad. Marxist professors and teaching programs were purged from the campuses.

Dating from medieval times, the curriculum of the universities was based on a common set of subjects including language, philosophy, and natural science premised on the idea of a unitary truth. Although the subject matter changed over the centuries higher education continued to impart the hegemonic ideology of the times. Of course the notion of unitary truth was fraying at the seams by the beginning of the twentieth century with the development of departmental specialization and the increasingly contested nature of truth, especially in the social sciences in the face of growing class struggle in America. However, the notion of the idea of the unity of knowledge as purveyed by the university was still ideologically important as a rationale for the existence of universities. Moreover, as we shall demonstrate, it was remarkable how similarly, despite differences in subject matter and method, the main disciplines in the humanities and social sciences responded to the challenge of Marxism during the Cold War. They all developed paradigms which opposed or offered alternatives to Marxism while rationalizing continued loyalty to liberalism and capitalism. As if on cue, sociology, psychology, literature, political science, and anthropology all took sides by explicitly rejecting Marxism and putting forward viewpoints opposed to it. History itself stressed American exceptionalism, justified U.S. expansionism, minimized class conflict, and warned against revolution. Indeed, this work will focus on these disciplines because they defended the capitalist status quo at a deeper cultural and intellectual level than the ubiquitous mass media. As Louis Althusser pointed out, the teaching received by students from professors at universities was the strategic focal point for the ideological defense of the dominant class system. That was as true of the United States as it was of France, where institutions of higher learning trained those who would later train or manage labor. Criticizing the recent history of these disciplines is thus an indispensable step to developing an alternative knowledge and indeed culture that will help to undermine liberal capitalist hegemony.[3]

The approach of this work is to critically analyze these core academic subjects from a perspective informed by Pierre Bourdieu and Karl Marx. Bourdieu points out that the deep involvement of the social sciences (and the humanities) with powerful social interests makes it difficult to free their study from ideological presuppositions and thereby achieve a truly socially and psychologically reflexive understanding.[4] But such reflexive knowledge was precisely what Marx had in mind more than a century earlier. Leaving a Germany still under the thrall of feudalism and absolutism for Paris in 1843, the young Marx wrote to his friend Arnold Ruge that

reason has always existed, but not always in a reasonable form … but, if constructing the future and settling everything for all times are not our affair, it is all the more clear what we have to accomplish at present: I am referring to ruthless criticism of all that exists, ruthless both in the sense of not being afraid of the results it arrives at and in the sense of being just as little afraid of conflict with the powers that be.[5]

His task as he saw it was to criticize the existing body of knowledge so as to make it as reasonable as possible, i.e., to undermine its illusory and ideological character and substitute knowledge which was both true and helped advance communism. Such a project entailed deconstructing the existing body of knowledge through rational criticism, exposing its ideological foundations and advancing an alternative based on a sense of contradiction, social totality, and a historical and materialist understanding. It is our ambition in surveying and studying the humanities and social sciences in the period after 1945 to pursue our investigation in the same spirit. Indeed, it is our view that a self-reflexive approach to contemporary knowledge, while woefully lacking, is an indispensable complement to the development of a serious ideological critique of the crisis-ridden capitalist society of today.

Marxism is still regarded with suspicion in the United States. As a matter of fact, anti-Marxism in American universities was not merely a defensive response to McCarthyism as some allege. Anti-communism was bred in the bone of many Americans and was one of the strongest forces that affected U.S. society in the twentieth century, including the faculty members of its universities. An idée fixe rather than an articulated ideology, it was compounded out of deeply embedded albeit parochial notions of Americanism, American exceptionalism and anti-radicalism.[6] The latter was rooted in the bitter resistance of the still large American middle or capitalist class to the industrial unrest which marked the late nineteenth and early twentieth centuries and which had a strong bed of support among the immigrant working class. Nativism then was an important tool in the hands of this class in fighting a militant if ethnically divided working class. Moreover, the anti-intellectual prejudices of American society in general and the provincialism of its universities were ideal terrain for fending off subversive ideas from abroad like Marxism. Later, this anti-communism and hostility to Marxism became the rationale for the extension of American imperialism overseas particularly after 1945. The social origins of the professoriate among the lower middle class, furthermore, and its role as indentured if indirect servants of capital, strengthened its position as inimical to Marxism. Just as careers could be lost for favoring Marxism, smart and adroit academics could make careers by advancing some new intellectual angle in the fight against Marxism. And this was not merely a passing feature of the height of the Cold War: from the 1980s onward, postmodernism, identity politics, and the cultural turn were invoked to disarm the revolutionary Marxist politics that had developed in the 1960s. Whatever possible role identity politics and culture might have in deepening an understanding of class their immediate effect was to undermine a sense of class and strengthen a sense of liberal social inclusiveness while stressing the cultural obstacles to the development of revolutionary class consciousness.

This overall picture of conformity and repression was, however, offset by the remarkable upsurge of student radicalism that marked the 1960s, challenging the intellectual and social orthodoxies of the Cold War. In reaction to racism and political and social repression at home and the Vietnam War abroad, students rebelled against the oppressive character of university governance and by extension the power structure of American society. Overwhelmingly the ideology through which this revolt was refracted was the foreign and until then largely un-American doctrine of Marxism. Imported into the universities largely by students, Marxism then inspired a new generation of radical and groundbreaking scholarship. Meanwhile it is important to note that the student revolt itself was largely initiated by the southern civil rights movement, an important bastion of which were the historically black colleges of the South. It was from the struggle of racially oppressed black students in the American South as well as the growing understanding of the anti-colonial revolutionaries of Vietnam that the protest movement in American colleges and universities was born. Equally important was the Free Speech Movement at Berkeley. Indeed, it is the contention of this work that the issues raised at Berkeley over democracy in the universities and the free expression of ideas not only shaped the student movement of that time but are still with us, and indeed are central to the future of universities and intellectual life today.

At the heart of the Berkeley protest lay a rejection of the idea of a university as a hierarchical corporation producing exchange values including the production of trained workers and ideas convertible into commodities. Instead the students asserted the vision of a democratic university which produced knowledge as a use value serving the common good. It is our view that this issue raised at Berkeley in the 1960s anticipated the class conflict that is increasingly coming to the fore over so-called knowledge capitalism. Both within the increasingly corporate neoliberal university and in business at large, the role of knowledge and knowledge workers is becoming a key point of class struggle. This is especially true on university campuses where the proletarianization of both teaching and research staff is in process and where the imposition of neoliberal work rules is increasingly experienced as tyrannical. The skilled work of these knowledge producers, the necessarily interconnected nature of their work, and the fundamentally contradictory notion of trying to privatize and commodify knowledge, have the potential to develop into a fundamental challenge to capitalism.


1. Paul Fain, “‘Nearing the Bottom’: Inside Higher Education,” Inside Higher Education, May 15, 2014.

2. Raymond A. Morrow, “Critical Theory and Higher Education: Political Economy and the Cul-de-Sac of the Postmodernist Turn,” in The University, State and Market: The Political Economy of Globalization in the Americas, ed. Robert A. Rhoads and Carlos Alberto Torres, Stanford: Stanford University Press, 2006, pp. xvii‒xxxiii.

3. Perry Anderson, “Components of the National Culture,” New Left Review, No. 50, July‒August, 1968, pp. 3–4.

4. Pierre Bourdieu, The Field of Cultural Production: Essays on Art and Literature, New York: Columbia University Press, 1993, pp. 86–7.

5. Karl Marx, Letter to Arnold Ruge, Kreuznach, September 1843, Letters from the Deutsch-Französische Jahrbücher, at

6. Larry Ceplair, Anti-Communism in Twentieth-Century America, Santa Barbara: Clio, 2011, pp. 1–2, 12.

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  1. Jim

    Capitalism requires that total strangers be on the hook for student loans? And if this is Capitalism then why didn’t this trend emerge 100+ years ago? Why now?

    1. Trout Creek

      It is a function of the adaption of NeoLiberalism as a governing principle which you can basically start around the time of Reagan.

    2. Steve Sewall

      Because a) the market for a college degree is vastly bigger today than it was 100+ years ago b) tuitions were affordable so there was no way for high-interest lenders (“total strangers”) to game the system as they do today.

      Plus I wonder if the legal system or tax code would have let them get away with anything like what they get away with today.

  2. schultzzz

    I agree with everything dude says, but the way he says it is so deathly dull and needlessly technical . . .

    it’s a shame that someone so openly critical of the university system and culture nonetheless unquestioningly obeys the tradition of: “serious writing has to turn off 99% of the people that might be otherwise interested in the subject.”

    1. John Wright

      Yes, his writing caused this reader to do a MEDGO (“my eyes doth gloss over”)

      It was technical in its assertions, but has few metrics to quantify the trends such as inflation adjusted administrative cost or inflation adjusted government college funding now vs then.

      There is a mention that the USA government has touted the “upward mobility” or excess value, AKA “consumer surplus”, of a college degree to students and their families for years.

      The US government further encouraged the student loan industry with guarantees and bankruptcy relief de-facto prohibited.

      The current system may illustrate that colleges raised their prices to capture more of this alleged consumer surplus, a surplus that may no longer be there..

      If one looks at the USA’s current political/economic/infrastructure condition, and asserts that the leaders and government officials of the USA were trained, overwhelmingly, over the last 40 years, in the USA’s system of higher education, perhaps this is an indication USA higher education has not served the general public well for a long time.

      The author mentions this important point “These so-called MOOCs, delivered via the internet, hold out the possibility, or embody the threat, of doing away with much of the expensive labor and fixed capital costs embodied in existing university campuses. Clearly the future of higher education hangs in the balance with important implications for both American politics and economic life.”

      Maybe the MOOCs are the low cost future as the 4 year degree loses economic value and the USA moves to a life-long continuous education model?

      1. Arizona Slim

        ISTR reading that the completion rate for MOOCs is pretty low. As in, 10% of the students who start the course end up finishing it.

          1. JustAnObserver

            Now sure about the `now’ bit. I maybe a bit cynical but I’ve always thought, even when I was at one, that colleges/universities major function was as a middle-class finishing school for those unable to afford the real deal in Switzerland.

          2. Bryan

            College is about maintaining the minimum requirements for upward mobility in the US. Not sure why it doesn’t get said more, but while we rightly deplore discrimination on the basis of race, gender and sexual orientation, we somehow find it perfectly acceptable so long as it is practiced on the basis of graduation from college. It’s a form of blackmail.

    2. julia

      I do not agree and it is deathly dull and needlessly technical. In fact it remains me off the marxistic education I enjoyed growing up in East Germany.
      Maybe it is time to rethink after school education. Physical Labor should loose its stain of being for loosers and stupid people. A whole lot of professions could be better taught through apprentiships and technical college mix.( many younge people would maybe enjoy being able to start qualified work after only 3 additional years of education).
      And do we really need 12 years of standard school education? There are so many kids that do not function well in school.
      Universities should be for the really eager and talented…who want to spend a big part of
      their youth learning.
      I guess we need a lot of new ideas to get away from the old paradigma ( anti- marxist or marxist)

      1. John Wright

        I took a couple of classes at the local junior college in automotive smog testing and machining.

        One of the instructors told me the JC administration viewed this Junior College as having two parts, College Prep + vocational education.

        He suggested the administration looked down on the vocational education portion, saying “But we get the jobs”.

    3. Steve

      I don’t know how you read other works from academics if you think that this was dull.

      Do you or anyone thinking this was “dull” have any examples of academic essays or books that contain useful knowledge but also consider them “shiny?”

      Personally, I thought this was a very good essay as it explains some things I’ve been thinking about American higher education and quite a few things about my personal university education at a tier-1 research school.

    4. Clearpoint

      Agree. I had to make myself read it. Finally got through it the day after I started, but had to remove all distractions to fight off the boredom of the pedantic writing. Glad that I did, as I find the author’s hypothesis — universities operating as profit making businesses instead of as publicly minded not-for-profit institutions — very thought provoking. It’s got to be a very small market indeed that will read the entire book.

  3. Altandmain

    Basically universities have become a cog in the machine of neoliberalism.

    Rather than anything resembling an institution for the public good, it has taken on the worst aspects of corporate America (and Canada). You can see this in the way they push now for endowment money, the highly paid senior management contrasted with poorly paid adjuncts, and how research is controlled these days. Blue skies research is cut, while most research is geared towards short-term corporate profit, from which they will no doubt milk society with.

    I tremble when I think about what all of this means:
    1. Students won’t be getting a good education when they are taught by adjuncts being paid poverty wages.
    2. Corporations will profit in the short run.
    3. The wealthy and corporations due to endowment money have a huge sway.
    4. Blue skies research will fall and over time, US leadership in hard sciences.
    5. The productivity of future workers will be suppressed and with it, their earning potential.
    6. Related to that, inequality will increase dramatically as universities worsen the situation.
    7. There will be many “left behind” students and graduates with high debt, along with bleak job prospects.
    8. State governments, starving for tax money will make further cuts, worsening these trends.
    9. Anything hostile to the corporate state (as the article notes) will be suppressed.
    10. With it, academic freedom and ultimately democracy will be much reduced.

    What it means is decline in US technological power, productivity gains, and with it, declining living standards.

    All of these trends already are happening. They will worsen.

    I’d agree that a more readable version of this should be made for the general public.

    1. James McFadden

      Well said.

      But your description suggests an inevitable bleak dystopic future – a self-fulfilling prophesy. The future is not written – we can help determine its course. It starts with grass roots movement building in your neighborhood and community. And I can’t think of a more rewarding task then creating a better future for our children.

      But perhaps my farmer’s work ethic, my inclination to side with the underdog and stand up to the bully capitalists, are notions that most Americans no longer possess. Perhaps Cornel West is correct when he states: “The oppressive effect of the prevailing market moralities leads to a form of sleepwalking from womb to tomb, with the majority of citizens content to focus on private careers and be distracted with stimulating amusements. They have given up any real hope of shaping the collective destiny of the nation. Sour cynicism, political apathy, and cultural escapism become the pervasive options.”

      However, it is my observation that Trump’s election has woken this sleepwalking giant, and that his bizarre behavior continues to energize people to resist. So why not rebel and help bring down the neoliberal fascists. Is there any cause more worthy? And for those who won’t try because they don’t think they can win, consider the words of Chris Hedges: “I do not fight fascists because I will win. I fight fascists because they are fascists.”

    2. Richard Burt

      Good prognosis. I think most of what you say has has already happened over the past twenty years,

  4. Jason

    I’m going to complain about your headline. A lot of stuff on this blog is obviously relevant only to the USA, and when it’s obvious it doesn’t need to be mentioned in the headline. But it’s not at all obvious that this topic is only about the USA (or North America, since the author is in Canada?), so maybe you could edit the headline to reflect that it is in fact only about the USA?

    My observation of Australian universities is that they have similar problems, although maybe to a lesser extent. But I doubt the same things happen in all countries. I’d be interested to know more about mainland European universities, and ex-Soviet-bloc universities, and Chinese universities, and Third World universities.

    As for “Universities with large endowments are increasingly hedge funds with an educational unit attached”, I think the rich universities in the UK (i.e. the richer residential Oxbridge colleges, if you count them as universities – Oxford and Cambridge Universities themselves are not particularly rich – plus maybe Imperial College?) have very little invested in hedge funds and a lot in property. Can anyone confirm or deny that?

    1. Colonel Smithers

      Thank you, Jason.

      In the past two decades, the UK’s top universities, often called the Russell Group after the Russell Hotel in Russell Square where they met to form a sort of lobby group, have made money and started hiring rock star academics. I don’t know how much these academics teach, but they often pontificate in the media.

      Big business, oligarchs and former alumni (often oligarchs) donate money, allowing them to build up their coffers. Imperial is developing an area of west London.

      Oxbridge colleges own a lot of property. Much of the land between Cambridge and London is owned by Cambridge colleges. This goes back to when they were religious institutions and despite Henry VIII’s dissolution of the monasteries.

      London Business School has expanded from its Regent’s Park base to Marylebone as the number of students, especially from Asia, grow. I have spoken to students from there and Oxford’s Said Business School and know people who have guest lectured there. They were not impressed. Plutonium Kun has written about that below.

      1. bmeisen

        Oxford and Cambridge are British state universities as I understand it. The Russell Group consists primarily of state institutions that have assumed / been given / been restored to an elite role in the British system of higher education, which is overwhelmingly public. Oxford and Cambridge are at the peak of a relatively flat hierarchy of elite public higher education. Higher ed’s role in the constitution of British elites is characterized by 3 features: association with an institutional reputation and thereby access to a network, a financial hurdle, and a meritocratic process of selection. Of these the financial hurdle is the least problematic – tuition is still peanuts compared to that at American elite institutions.

        Things have gotten better – you no longer have to be a male member of the church of England to get in – and the system is more democratic than the French system of elite public higher ed, i.e. the ruling elite in the UK can be penetrated by working people, e.g. Corbyn.

  5. Winston Smith

    My son is half Japanese and half American and holds a passport with both countries, he is still in elementary school, but my wife and I are encouraging him to go to school in Japan or to Germany (ancestral home) and seek his fortunes outside of the US as the crapification of the US roller coasters out of control.

    Japanese universities are still affordable compared to the US and it’s administrative layer, modestly paid, isn’t run by MBAs, corporate hacks and neoliberal apologists and others who would better serve the public by decorating a lamp post somewhere with piano wire tightly wrapped around their necks!

    My niece attended Kyoto University, one of the best schools in Japan and it cost her and her parents about 7500.00 a year. She commuted from Nara City and Finished her degree in just under three years and had a job waiting for her in the middle of her third year.

    Now, I agree that Japanese universities have their fare share of problems and insanity, but the thought of dealing with US universities nauseates my wife and me.

    The only school in the US that I would want my son to attend would be Caltech, if he could ever successfully get accepted. They still do great science there, much of it blue sky research. LIGO is still running!

    * disclaimer, I used to be a Caltech employee.

    1. Colonel Smithers

      An increasing number of British students are going to the Netherlands and, to a lesser extent, Germany for courses taught in English and for under EUR2000 per annum. Leiden and Maastricht are particularly favoured. Apparently, some Spanish universities are cottoning on to that market.

      Half a dozen years ago, a clown masquerading as a BBC breakfast news reporter went to have a look and condescend. Her concluding remark was, “The question is are continental universities as good as British ones.”

    2. Jake

      But but…Japan has sooooo much government debt and must cut cut cut unless it implodes!

      Out of curiosity, may I ask you to elaborate on what you mean when you say japanese universities have ‘their fare share of problems and insanity’?

      1. schultzzz

        re: japanese universities.

        The university system is not set up for education. it’s a reward to the conformists who studied 12 hours a day all through jr high/highschool to pass the university entrance exams (which notoriously don’t test for any useful knowledge). The idea being that if you waste your whole childhood studying for a phoney test, you won’t dare question the system once you’re in the workforce, as it would mean admitting your whole childhood was wasted!

        Since college is viewed as a reward, rather than a challenge, there’s very little learning going on. it’s about developing relationships (and drinking problems) with future members of this elite class.

        So most Japanese corporations wind up having to teach the grads everything on the job anyway.

        A Japanese degree doesn’t mean ‘i know things’ it means ‘i have already by age 20 sacrificed so much that i don’t dare ever rock the boat’, which is exactly how the corporations and govt bureaucracies want it.

        You might say “oh but science! Japanese are good at that!”

        But my wife, a nurse, says that it’s considered rude to flunk an incompetent student, providing she/he’s respectful of the professor. There are doctors who routinely botch surgeries, but firing them would be rude. These doctors would have flunked out of regular (i.e. non-Japanese) universities.

        End rant!

        1. Jake

          Hmm… your rant doesnt fit in with all the social indicators and progress that the Japanese have made since world war 2. How come their health system is ranked highly if doctors routinely botch surgeries?

  6. PlutoniumKun

    Having on more than one occasion suffered through management restructuring organised by MBA’s which did nothing other than reduce productivity in favour of meaningless metrics and increase the power of managers who had no idea how to actually do the job, I’m increasingly coming to the conclusion that the MBA was a clever invention by an anarchist determined to create a virus to undermine capitalism from within. At least, thats the only possible theory that makes sense to me.

    1. templar555510

      I agree . Putting it more bluntly the MBA is a clever con to get would-be students to sign up in the belief it’ll teach them something that can’t be taught – how to make money. I’ve said this on this blog before – the ability to make money is a knack ; it doesn’t matter what the field is it’s all akin to someone selling cheap goods on a market stall .

  7. Colonel Smithers

    Thank you, Yves, for posting.

    Some observations from the UK:

    Many UK universities are targeting foreign, especially Asian, students for the purpose of profit, not education. Some universities refer to students as clients.

    Some provincial universities are opening campuses in London as foreign students only want to study in London.

    There are many Chinese would be students in London this week. Some universities have open days at the moment. When the youngsters and their parents are not attending such days, they go shopping at Bicester Village, just north of Oxford. It’s odd to see commuters arriving from Buckinghamshire at Marylebone for work and Chinese and Arab tourists going shopping in the opposite direction, and the reverse in the evening.

    The targeting of rich Asian students, often not up to academic standard, has led to a secondary school in mid-Buckinghamshire, where selective education prevails at secondary / high school, to take Chinese students for the summer term and house them with well to do (only) local parents. The experiment went well for the “grammar” school, i.e. it made money. As for the families who housed the kids, not so much. There were complaints that the children could speak little or no English, which is not what they expected, so the host families could barely interact with the visitors. The school wants to repeat the programme and expand it to a full year. That is the thin end of a wedge as the school will scale back the numbers of local children admitted and probably expand the programme to the entire phase of secondary / high school. It’s like running a boarding school by stealth. The school is now an “academy”, so no longer under government control and similar to charter schools, and can do what it wants.

  8. David Barrera

    Yves Smith,
    I like your introduction to the article. “Universities with large endowments are increasingly hedge funds with an educational unit attached” A recent and very simple but eye opener interview on the subject-Richard Wolff-

    As Henry Heller mentions Bourdieu, I can not find among his bibliography much on the specific increasing dominance of the “free market” over learning institutions. The Field of Cultural Production focuses mainly on the opposition market/art,cultural field and the rules of art. Some of his other works elaborate very well on the transformed reproduction of social agents with different economic and cultural capital weights. His major works on higher learning are The State Nobility and Academic Discourse, which are about the homologies between the hierarchy of higher learning centers and the market position occupiers which the latter produce. All of it within the French context. The great late Bourdieu certainly denounced the increasing free market ideology presence and dominance on “everything human”(i.e Free Exchange, Against the Tyranny of the Market and elsewhere); yet not much in that regard-to my knowledge-on the centers with the granted power to issue higher learning degrees. I guess my point is that Heller’s reference to Bourdieu strikes me as a bit odd here.
    Nevertheless, I like Heller’s article. Just as incidental evidence: my town’s community college President is a CPA and MBA title holder, the Economics 101 class taught does not deviate the slightest from economic orthodoxy doctrine and I must add that, despite-or because of- a 75% tutoring fee increase in the last eight years, the center has consistently generated a surplus aided by the low wages from the vastly non-tenured teachers.

  9. Colonel Smithers

    The students from China, Singapore and the Middle East often live in the upscale areas of London, often at home rather than rent. Parents are often in tow. They also drive big and expensive cars.

    It’s amazing to see what is driven and by whom around University, Imperial and King’s colleges and the London School of Economics in central London. This was remarked upon by US readers a couple of years ago. Parking is not cheap, either.

    A friend and former colleague was planning to rent at Canary Wharf where he was a contractor. He put his name down and was getting ready to move in. The landlord got in touch to say sorry, a family from Singapore was coming and paying more. Apparently, Singaporeans reserve well in advance, even before the students know their exam results.

    A golf course was put up for sale near home. The local authority tipped off some upscale estate agents / realtors from London. A Chinese buyer has acquired the thirty odd acre property. Without planning (construction) permission, the property is worth £1.5m. With planning permission, it’s worth £1m per acre. A gated community / rural retreat for the Chinese student community is planned. Oxford, London, Shakespeare Country, Clooney Country and Heathrow are an hour or less away.

  10. Left in Wisconsin

    My favorite line:
    Marxism is still regarded with suspicion in the United States.

    I love a good Marxist and I know that a totalizing perspective such as Marxism requires a certain amount of generalization, but I found more to criticize in this post than to recommend it. Apparently entire disciplines have agency (As if on cue, sociology, psychology, literature, political science, and anthropology all took sides by explicitly rejecting Marxism and putting forward viewpoints opposed to it. History itself stressed American exceptionalism, justified U.S. expansionism, minimized class conflict, and warned against revolution.).

    It is clearly true that the modern university is overly focused on money-making – both the university enterprise itself and the selling of higher ed to students – but, from my long experience with one big Tier One and lesser knowledge of several others, it is wrong to say that the modern university looks to operate as a business. Indeed, the top heaviness of bureaucratic administration in the modern university is not very business-like.

    IMO what declining public funding has done is allow/force the modern university to aim it’s giant vacuum sucker in any and every direction. By the way, if Wisconsin is any example, there are enough Chinese students interested in American university degrees to keep it in business for quite a long time.

    But my biggest complaint is with the history. After first laying out an ideal (but not very) historical vision of the utopian university, in contrast with today’s money grubber, he later admits that the mid-century university was not all that open to leftism. Then the miracle of the 1960s, which seems to spring from social protest alone. The real story of the 1960s was the huge expansion of higher ed in the U.S., which led to considerable faculty hiring, which allowed a lot of leftists to get hired in the 1960s and early 1970s (often at second or third-tier schools) when they would not have in the 1950s. This was always going to be a one-time event.

    The author also seems to suggest that universities owe it to Marxists to hire them if their analysis is good. This is a weird argument for a Marxist to make, seemingly entirely oblivious to the overall political economy he otherwise emphasizes. It ends up sounding more than a bit self-serving. I’m not sure lecturing in History on the public dime is Marx’s idea of praxis.

  11. cojo

    The same can be said about administrative costs in medicine. Seems the parasitic infection is everywhere!

  12. bmeisen

    The notion of “corporate” needs some clarification. If it means “profit-making” then clearly some institutions like Phoenix U and Trump U are in it for profit. If the author suggests that higher ed in the US is moving towards this model then I think he’s wrong. The elite institutions do not, I believe, want the for-profit status, will in fact do everything possible to disown it. If it means organizing along profit center lines, and staying financially in the black while celebrating efficiency and excellence then yes, this sense of corporate has captured higher ed in America and it may not be such a bad thing given the tendency in large organizations to waste and decay.

    His use of “corporate” is I bet more about his marxist analysis than about the real corruption in higher ed today. The culture’s broad neo-liberal orientation – the American Way of Life that is exceptional and ignorant of alternatives – is the starting point. Higher ed is becoming within the neo-liberal cultural orientation “oligarchist” not corporate. Youth is still convinced that a college education is an investment in their future that pays handsome returns, even if you go 100k in debt to get it. The administrators are controlling the bells and whistles on the educational delusion machine – and enriching themselves behind the curtain. Those who benefit in this system – the administrators, the legacy families, and enough of those who get in on merits and come out with distinctly better prospects than their parents – know that the system can’t really adopt the corporate model. A veneer of public good is essential. But as long as few complain and beneficiaries enjoy rewards then we’re par for the course. As long as students and non-tenured teaching staff remain insufficiently organized there is little likelihood of change. The elite institutions will consolidate their power, defining costs and serving their oligarchic clientele.

    Even the notion of a college price tag is baseless: Harvard and the elites have price tags – they are published in US News and World Report. And every higher ed administrator must laugh when they see those numbers. Harvard could charge 10 times their stated tuition and fees and still fill its residence halls. So are they discounting? alternatively, Trump’s son-in-law begins studying at Harvard shortly after his father donates 2.5 million. Is the price tag 2.5 million? And what about the endowment? Why does anyone have to pay anything to go there?

  13. Michael Meo

    Look, I haven’t read all of this post yet, nor all of the comments; still, in the very first paragraph our author says, “The breakthroughs in research that have taken place in the last two generations in the humanities and social sciences. . . have been spectacular.”

    I study history. I have to read the most recent history books in order to contribute to my field, as would be the case in any other discipline. You could call history a humanity, if you like, or a social science; it doesn’t matter.

    There have not been any, not one, “spectacular. . . breakthroughs” in history in the last 40 years.

    Therefore, folks, at least some fraction of this fellow’s post is junk, or, to be polite, tripe.

    1. Wisdom Seeker

      Concur. He lost me a few sentences later, with this unsourced and undocumented opinion masquerading as fact:

      > But the future of these institutions is today imperiled. Except for a relatively few well-endowed universities, most are in serious financial difficulty. A notable reason for this has been the decline in public financial support for higher education since the 1980s, a decline due to a crisis in federal and state finances but also to the triumph of right-wing politics based on continuing austerity toward public institutions.

      Cost creep, price gouging and administrative bloat are fairly well documented at multiple institutions, including e.g. UC Berkeley and NYU. And the author fails to note the obvious link between subsidized loans (= increased “demand”) and higher tuition (= higher prices). The government’s enabling students to go into debt regardless of the value of the education funded by that debt, is a curse and not a blessing.

  14. Scott

    Every time the US Government guarantees a loan the bankers get giddy with a nearly sexual desire equal to the general popular love of Maryiln Monroe, or Elvis.
    Hence the huge debt created, amongst people made wage slaves with no hope of paying.
    The distortion of capitalism is in whatever the US government says if will pay or force individuals to pay regardless of the need to write it down.
    The experiment that was Communism had a major flaw. It paid power with access to everybody else’s work, or deeds.
    I overcome that flaw with maintenance of an contribution to private property. (Transcendia Insurodollar)
    While it was not fully played out, Communism failed and we know it failed. It failed because human nature is what it is. Greed is not good. Didn’t get regulated well in Communism and doesn’t get regulated as well as it did during the period of Glass Steagall.
    The thing I like about Marxist Theory is Industrial Service Banking.
    The thing I don’t like about Communism is a right to my private property.
    The responsibility of a great government is education, & defense.
    Fact is nobody can do it all for us.

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