University Rent-Seeking: This Time It's Personal

As a university professor who is also the mother of an 18-year-old daughter, I am experiencing the anxiety of the university admissions season more than most this year. My daughter has her place, and yet I feel uneasy rather than jubilant. My visit to the institution of her choice convinced me that it is one of those rapacious London-based universities that profits from the rent paid by its own students while competing to out-rank Harvard in a meaningless international comparison. I try to explain the meaning to her life of a debt that may well reach £100,000 over her lifetime.

With my political hat on I have written a report for Green House thinktank that argues strongly for free third-level education for those young people who would benefit from it. My research into this issue blew away many of the myths that were propagated during the debate about raising students fees in the UK. I discovered that the UK’s spending on higher education in 2008 put it in 26^th position out of the 33 members of the OECD. The figure illustrates these comparisons and offers some interesting evidence. Perhaps most striking is the high proportion of GDP that the US and Canada spend on tertiary education. While we are following the US models in terms of fee rates, we are not following their level of investment in education, which is around 2.5 times as much. It is important to stress that these data relate to a period before the 40% spending cuts introduced in 2011/12.

Now a paper published in the autumn edition of the Journal of Co-operative Studies explains where all our public money is going, and why we cannot afford to fund our young people through education. It exposes a process of self-endowment by senior academics, who have used the cover of the shift from collegiality to managerialism to massively increase their salaries. The absence of checks on managerial autonomy has enabled the moral hazard of self-serving rent-seeking:

'The levels of vice chancellors’ pay provide material evidence of this hazard. In 1994-5 the
median VC pay was £92,000 and in 2009-10 their average pay was £254,000. Over the same period, the top of the senior lecturers’ pay scale rose from £33,000 to £55,500. In 1994-5 VCs earned 2.8 times the pay of a senior lecturer at the top of the scale, whilst in 2009-10 the comparable multiple was 4.6. In 1995 the Prime Minister’s salary was £82,000 and 29 out of 103 vice chancellors earned more than £100,000. In 2010 the Prime 20 Minister’s salary was £142,000, but every single VC was paid more than him, as were a further 800 other university employees.'

The authors find deep-seated problems with the governance of universities that they argue can only be addressed by a change in the ownership structure: the John Lewis University. The assets of every university should be placed in a nonrevocable trust that would hold the formal legal title to the organisation’s assets. The university's academics and students would become the Trust's beneficiaries. The trust deed would 'affirm the university’s status as a community social asset and an element of the knowledge commons'.

The authors conclude that 'Current turbulence in higher education organisations in the UL opens up potential spaces in which such alternatives might flourish. What is needed is
imagination and the determination to make change happen.'

As ever, if you would like to read the paper but cannot get beyond the corporate firewall that encloses academic knowledge, please contact me.

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Economics in University: Teaching or Propaganda?

In spite of the utter failure of academic and professional economists to predict, explain or find solutions to the financial and economic crises sweeping the globalised, marketised world they have created, there is still little challenge to the narrow and one-sided way that economics is taught in our universities. In spite of the fact that economics is about complex human relationships, and is therefore bound to be the subject of debate and disagreement, there is no problem with university courses that only teach the neoclassical pro-market approach.

A list of universities that offer 'pluralist' components in their courses, that is to say that they include approaches other than the neoclassical orthodoxy, does exist, but it is short. The Association of Heterodox Economics is doing great work here, but it is unfunded and run by people who know that their commitment to dissent and debate will limit the success of their careers, their opportunities for promotion and publication, and their chances of finding research funding.

In the US, the website Remapping Debate is running a series of articles on the limitations and political bias of economics education in universities. In the latest Martha Starr, professor of economics at American University, makes the obvious point that it is not helpful to teach students about economics as though all the problems have been solved. Not only does this make it less likely that they will come up with new solutions, but given the mayhem they see all around them it is likely to be unconvincing. In any other subject this proposal of dividing up the curriculum between different schools of thought; only in economics could this seem dangerously radical.

This is not an internally focused debate revolving around a bunch of disgruntled academics. Politicians and policy-makers have generally studied one year of economics, which means that they have learned the biased system of thought and the mantras they repeat throughout their lives, limiting options and closing down debate. Teaching orthodoxy rather than reality is dangerous and is against the academic freedom which our universities should set as their highest standard.
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University Futures

The hiatus in posts was caused by a brief trip to Cambridge to see my son graduate. The ceremony was typically bizarre in a way only Oxbridge can manage. The graduands were gowned and robed, but had little sense of what they were undergoing, since the ceremony took place in Latin. Much of this seemed entirely appropriate to a ceremony which is one of the few rites of passage that remains in our civic life and would have provided excellent subject material for an anthropological study.

More fun might be had designing the robes for the co-operative university, which has been under discussion here and elsewhere. The UK Society for Co-operative Studies held a session at Co-operative Congress last week as part of an ongoing debate about the need to establish a co-operative business school for the UK. The document produced there for discussion, and the report Co-operation in the Age of Google to which it in part responds, can be found on the Social Exchange Repository.

One aim of the Society is to take forward the debate about the structure of education: 'An educational programme, therefore, is not simply an opportunity to accredit what is already taking place. It is a mechanism by which those who have spent years on co-operative development activities can contribute their knowledge in a way that informs the development of higher education.'

In this regard there are interesting developments already underway in Lincoln's Social Science Centre, which is 'run as a ‘not-for-profit’ co-operative and managed on democratic, non-hierarchical principles with all students and staff having an equal involvement in how the Centre operates'. Staff donate their time for free, but such models could be developed as alternatives to the elite private universities that the government is encouraging.

Perhaps more important, though, is to build up our research knowledge about alternative economic models. So much of the existing neoclassical framework, from economies of scale to the concept of profit itself, have no meaning in the context of co-operative businesses. Until we can create our own concepts and coherent intellectual framework we are not equipped to replace the destructive and defunct capitalist paradigm with a new business model that we can teach with confidence in our universities.
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My University Has Turned into a Bank

Previous posts about the government's determination to infect our higher education sector with the market ideology and its focus on finance rather than education in planning its policy for universities indicate a clear direction of travel: across the Atlantic.

If you want to know what they will find there, and what the shape of our universities is therefore likely to be in the next few years, you should read the article 'How universities became hedge funds' by Bob Samuels. Bob, the President of the lecturer's union AFT branch at the University of California, tells a disturbing tale of the financialisation of US universities.

The process he describes of the movement from educational institution to finance house follows five steps:

'To understand how both public and private research universities have gotten themselves into this mess, one needs to understand five inter-related factors: the state de-funding of public education; the emphasis on research over instruction; the move to high-risk investments; the development of a free market academic labour system; and the marketing of college admissions. These different forces have combined to turn American universities into corporations centred on pleasing bond raters in order to get lower interest rates so that they can borrow more money to fund their unending expansion and escalating expenses.'

We already have at least three of these features either in place or in development in the UK higher education system.

As I pointed out in an earlier post about the creation of social enterprise bonds, the marketisation of public services is not about increasing choice and putting the person who pays in control. It is about finding new ways to use debts, in this case the debts created through student loans, to create income streams that can be securitised and profited from. The filth of finance is being forced into our schools, universities and hospitals.

*The nasty pigurines are a poorly chosen selection of gifts to young savers created by Nat West in the 1980s - capitalist pigs all.
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The Future of Universities: A Rhetorical Question?

The higher education sector is giving clear evidence that the Tories are responding to their own rhetoric rather than the reality of the way a modern economy is organised. Cuts to university funding have been savage and sudden: 6% to the teaching grant and 54% to the capital grant for 2011/12. Universities are supposed to make up the shortfall through increasing fees, but these increases cannot be imposed until 2012/13, leaving a year with a massive spending gap.

These cuts are aimed particularly at teaching, penalising those universities which continue to focus on teaching rather than research and contribute to social mobility by accepting students from less wealthy backgrounds. As Sally Hunt, UCU General Secretary, put it:

'Exceptional universities that concentrate on teaching and widening participation have been told today that they are being left to scrap it out in an untried market place. In addition, institutions that focus on arts and humanities will be forced to charge higher fees to make up the shortfall when they are given the option to triple the current maximum fee to £9,000 in 2012.'

In the market for education of the government's imagining, a lower-quality university will compete on price, offering cheaper degrees to those with less money, first-generation hopefuls perhaps, rather than public-school leavers. If we were talking about shoes or beefburgers this rationale might work, but no university wants to think that its degrees or its students are second-rate. A full 57 of the 80 English universities that have so far revealed their fee structure have tripled their fees to the maximum £9000, with many more within a thousand or so of that maximum.

Universities, long the object of managerialisation, are now being treated as though they were private-sector businesses, but they are not and never can be: they face different rules and constraints. In the private sector, if you see your market share contracting you cut costs and change the quality of your product or cut output. Since standards of education are controlled by the QAA and numbers of students are fixed by government dictat, neither of these options is possible for university managers.

What we are facing in the UK's once proud university sector is a bloodbath as managers struggle to be impressively ruthless by engaging in a process of random downsizing without any sense of strategic direction. In spite of the continuing public support for higher education, courses of practical value to the country will be cut if they are not the ones favoured by students. Staff who have failed to make themselves fit for the purposes of corporate managers will be lost.

The threat posed a generation of politicians who cut their teeth under Thatcher, and imbibed market rhetoric with their mother's milk, is only now becoming clear. Their failure to understand that the public sector cannot behave like the private sector is a danger to us all.
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Ideas Merchant Facing Institutional Challenge

This has been a week of mysterious coincidences. On Wednesday I made a presentation about co-operatives to a delegation from the Technical University of Chongqing who were visiting my own institution. This troubled me on many levels. It indicated the limitation of the globalised approach to HE: I simply could not identify a ground on which to make my approach to these people. I had utterly insufficient knowledge of their cultural and social understandings.

I was not a party to the reason for their visit and so was left to assume that we were hoping they would send us thousands of students and help keep us solvent in the competitive-global-knowledge-economy. Aside from my concern about the carbon impact of this strategy, I did not become an academic in order to train Chinese businessmen to be more effective capitalist managers. I sold them the idea of co-operatives as a means of negotiating over the value of labour production. I believe that they left unconvinced, and I cannot be sure whether I made them more or less likely to make a formal link with our university.

Given this experience at the sharp-end of the academic barrow, the violent debates over the shifting of the costs of higher education away from the public purse and onto individual students were gratifying. The general conclusion appears to be that this level of our national education has moved fully into the market. This will, according to David Willetts, improve the quality of teaching. Education is a product like a potato or a sports car. If others offer better or cheaper education (potatoes/cars) I will be forced to become a better teacher.

Although Willetts is fondly known as 'two brains' he appears to have practical experience of only one side of the teaching relationship. I think this shows in his approach to policy. My experience tells me that the awareness that your time is being bought by your students undermines the trust and respect that a teaching relationship requires. Far from seeking out more time with their professors, my experience suggests that students believe they have bought the degree when they arrive; turning up and being troubled with new ideas or, worse still, expected to actively engage with theoretical concepts is an affront to their consumer rights.

Much as Darian Leader so cogently argues for psychotherapy, education cannot be turned into a product. An education that is bought and sold will always be a poor education. Watching your students check their mobiles during a lecture, and wondering whether they are calculating if you have earned the £26.49 they paid for you since you entered the room, is a dispiriting experience that saps the confidence and encourages the sort of teaching that appears to be offering value for money: voluminous handouts and regurgitated facts.

Perhaps most important of all, real education is not always an enjoyable experience. Genuine education is emancipatory and revolutionary, which may be a reason why Conservatives distrust it. The good educator challenges the student's world-view and this cannot always be a comfortable experience. You know you are teaching successfully when you see a furrow begin to appear on the youthful skin of your students' foreheads. This connotes the performance of 'thinking', an activity that has been increasingly rare in universities since the advent of the market.
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The Happiness Crusade

The demonstration I was on yesterday in Cardiff was so much fun it went on all night. If you are a tweeter you can support the protest by sending a message of support. The demonstration was lively, noisy and made up of a mixed bag of students and schoolkids, leavened with a mix of Marxists, socialist workers and Greens. We were already well into chanting when the younger students arrived in their own march to great cheers - what somebody on the Twitter feed has called 'the children's crusade'.



Protesting is turning out to be so much fun that it makes me wonder whether this is part of Cameron's reason for beginning to measure happiness since, as the graphic shows, close social connections make people happier than money, once their basic needs are met (thanks to nef for the graphic, and their leading research in this area). Labour's creation of the disturbingly oxymoronic position of Happiness Tsar has been taken up by the Condems who have instructed their national statistician to begin a programme of scientific measurement of how jolly we all are.

Unlike in Bhutan, however, happiness is not to become the focus of policy-making, merely an adjunct to the measure of economic growth which is, as the PM will tell us later today, the real source of all our aspirations. If Richard Douthwaite was right in his seminal book The Growth Illusion in establishing that, beyond a certain point, growth actually detracts from our happiness, then this is a circle that simply cannot be squared. Instead we need to be developing policies for the post-growth world, as in the recent example of participatory policy development at the Leeds Steady State Economy conference, whose report was recently published.
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Limiting Educational Aspiration

The blizzard of policy announcements since May has been quite bewildering. Journalists and academics are reeling at the pace of change, and much of what is being proposed seems both illogical and inconsistent. In my own area, that of higher education, the aim of the policy seems fairly clearly: to reduce the number of young people going to university. Raising fees from £3,000 to £7,000 or more is not a funding measure but a rationing measure.

The Telegraph headline may read 'too many middle-class students at university' but is not very informative until we have a clear idea of what 'middle class' means. As the cuts proceed it appears to be the very concept of 'middle class' that is being squeezed. Perhaps we could have a more informed debate if the sociologists who used to explain to use what class meant had not all been removed from their posts during the 1980s Thatcherite purges.

Clegg argues that tuition fees led to an unfair system of admissions; the Lib Dems graduate tax would ensure social mobility. The actual policy has focused on cutting costs, so the 'too many students' part stuck but the graduate tax was lost. Two posts in a row citing Clegg unfavourably might be considered unfair, but he has foolishly allowed himself to be the fall-guy for the coalition's policies. It's a small step from 'too many middle class students' to 'too many students', and naive Nick has done the Tories dirty work for them.

For those who missed the announcement because they were looking down a Chilean mine, and to those whose minds cannot accept it and are still asking 'eight-teen per cent?', let me repeat here that the policy proposed by the erudite Lord Browne is that the teaching grant should be cut by 80%. In future the government will only subsidise medicine, science, engineering and modern languages degrees. The sorts of courses we need our thrusting businesspeople to be equipped with, which is unsurprising given that Browne and Cable (who will implement this policy on behalf of the coalition) are both veterans of the corporate oil industry.

The savings that will result from this reduction in funding a civilised society is £3.5bn. In comparison with the size of the bailout this seems like a drop in the ocean. Corporate pressure has already diminished the standards of education in our universities; this will convert them into external training departments for the globalised business elite. As well-qualified young people who choose to enter employment rather than university displace their less well-qualified contemporaries unemployment rates are sure to rise, bolstered by the cohorts of university teachers whose skills will no longer be required. The savings will be cancelled out but this does not mean the policy is misguided, since its aim was always political rather than economic.

The Browne Review promised to ask searching questions about what our universities are for, but none of the most important questions were considered. How might our cleverest citizens prepare society for the transition to a low-carbon economy? How do we balance the interests of business and citizens in determining curricula? How might universities be models of transition institutions, rather than following an export-led growth model of education?

These questions were not asked because Lord Browne already knew the answer to his own question. Our professors are required to work in the service of business and to prepare a new generation of serfs to do likewise. Critical thinking is off the menu: the new paradigm will be developed elsewhere. Tweet

Curiosity Killed the Trac

I am working hard not to go down the route of allowing my personal economic situation - as a university academic - to influence either my views or the content of this blog, but the system for tracking the value of the psychic and intellectual labour of the staff of the UK's universities can be used as an object lesson in the futility of accounting for work.

In the case of our universities, the strategy appears to be to turn creative intellectuals into contracted brains in the industrial vats. The level of animosity has reached such a pitch in the wake of Mandelson's Higher Ambitions report that a couple of weeks ago the country's professoriat - hardly the most radical sector of society - marched on Westminster en masse. Their march was to show opposition to the government objective of turning universities into training institutes for corporations.

According to the latest in a round of futile measurement exercises the Research Excellence Framework, the value of universities is to be measured partly in terms of their 'impact'. I am listing the list of impact measures in full at the end of this post since it gives a clear idea of how universities are being manipulated. I particularly enjoy the way that quality-of-life indicators are included as an afterthought - and we are expected to suggest ways to measure these for ourselves. The drafters of these proposals clearly lost confidence in their ability to translate quality into quantity when it came to life itself.

The order of priorities for universities is also made clear by these proposals. First comes subsidising corporate training budgets, then providing free inventions for industry, then helping out the public sector (activities which are defined in a pure managerialist way), then advancing sustainable development, increasing cultural richment, and finally helping society's losers and improving quality of life. This list encapsulates what is wrong with our whole social and political system, for which our universities are now intended to be an uncritical support system.

Part of the fun or working in a university is that you are permitted to spend some of your time devising typologies and taxonomies (I promise that other more useful things are done with the share of your taxes spent on HE as well). One such is the diagram illustrated below of Pasteur's Quadrant. It is intended to distinguish between the different sorts of research that 'scientists' carry out.

Obviously the two-by-two is a gross simplification and the graphic would work better if you thought of the two axes as continua, but there is probably some validity in considering how immediately useful in a practical sense research is intended to be, and to what extent the researcher was concerned to seek fundamental understanding as opposed to a more superficial explanation (or typology?).

The complaint of the Professors and other notables such as Sir Alec Jeffries, so-called inventor of DNA profiling is that it is impossible to know when research in the top left square, the blue-skies square, might generate practical outcomes. Jeffries claims that his own work was based on pure curiosity about the genetic make-up of seals. It was only as a by-product that his research team found that their insights could be used to map DNA found at crime scenes.

The purpose of the REF and other such impact-based measurement exercises is to force academics into the bottom right square. It seems to me that what they are actually doing is forcing academics to focus so hard on proving usefulness and avoiding deeper explanations that more and more are being forced into the bottom left square. This is the square of doom for any intellectual - the place where your work is not only shallow but useless as well. The sort of work that wins the annual Ignobel Prizes.

And in the latest assault on academic freedom researchers are to be 'tracked' according to a new process devised by accountants to require us to justify every minute of our time. In what Professor of Critical Accounting Rebecca Boden has called 'a deeply flawed and inoperable system', we are to keep note of how we spend the hours of our days, as though thinking could be subjected to a time-and-motion study. This will not only kill research driven by curiosity, as Jeffries feared, it will also undermine the place of thinking as a part of academic life.


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Public Service

My musings on the value of public goods were enhanced by a recent trip to Scotland. It is a noticeably more public-spirited country than England, whether you measure this in terms of public space, public transport or even public toilets. Ok, I was in Edinburgh, Scotland's wealthiest city, and it was beautiful weather, but the state of care for buildings and parks really struck home - not to mention the fact that everything was free.

I was in Edinburgh to see my son graduate, a delightful event which involved him being tapped over the head with a hat made from a pair of John Knox's trousers - as legend has it - and which took place in the McEwan Hall. I was planning to write a blog contrasting the continued commitment to erudition of Scotland's universities with the money-grubbing that has sadly tarnished by own Alma Mater where, if I were to study today, I would find myself in the Said Business School.

But of course the Mr. McEwan who funded the hall is the same man who is responsible for generations of drunken Glaswegians, just as Bristol University was funded by the Wills family who destroyed the lungs of several generations of working people. But am I too deluded to think that their attitude towards the university would have been one of deferential respect? And that this would be in stark contrast to Mr. Said, who probably condescended to donate his millions merely to buy some PR?

Since HE became swallowed up into the business brief (when we moved in the Department for Innovation, Universities and Skills which was later merged into the Department for Business, Innovation and Skills, making clear our key role as provider of creative thinkers for business), it has been clear that the government's view of universities is simply a training institution for corporations. Our role now is to teach 'academic skills for business' and the closer we are to an out-sourced training institution the happier are our paymasters. This is a disaster for our academic freedom, but also for the country. Since our research is now held within the straitjacket of business thinking, we cannot solve the problems of the world if those solutions might (and let's face it they usually do) result from the activities of said businesses. Tweet

Take me to a Free University

I was talking to a colleague recently about my disappointments at work and the struggle for academic freedom. She responded with a joke. A hijacker rushes to the cockpit of the plane he is on, points a gun at the head of the pilot and demands 'Take me to a free country'. The pilot responds 'Sorry, mate, this is an aeroplane not a spaceship'.

Years ago I made a plan - budget and all - to set up a Free University in Aberystwyth. We even had a building organised. It would have worked, creating half a dozen part-time jobs on reasonable salaries, charging the kids £3,000 a year. It makes you wonder what happens to the money in the universities we have. Of course if you work in those universities you know - most of it is wasted on prestige projects and administration.

A colleague recently made me think by telling me I wasn't a real academic because I write in an accessible way. I have, in the past, tried the obfuscatory prose that is the entry card to the best journals. I have to admit I can't do it very well but mainly something in me just won't do it. Why use five-syllable words and complex concepts when the ideas can be expressed in everyday language and thoughts? To justify those big, fat salaries presumably.

So, in my bioregional utopia, what would the higher education sector look like? I'm fairly sure universities would be organised as co-operatives. Since the exchange is between learned and learners the infrastructure need be fairly minimal - making it possible to have a much more fulfilling educational experience at a much lower cost. No value extracted for administration, management or buildings maintenance.

The institutions of learning would respond to their local environment and the leading industries where they are based - much as Glamorgan University was once the School of Mines. The homogenising of HE has followed the homogenising of the globalisation process so what is taught in management schools in Beijing is much the same was what in taught in management schools in Belfast.

In Stroud we specialise in sustainability so our Communiversity will showcase our achievements in this area, backed up by the necessary theory. An alternative is the proposal to create a Sustainability University of the Valleys. This proposal grows out of the permaculture principle of using the waste of one system to create the fertiliser for the new system. In this case the University will train the unemployed, working-class men of the Valleys communities to build a sustainable utopia. High hopes worthy of what calls itself higher education. Tweet

Sharing the knowledge

Now that universities have become corporations and higher education is just another sector of our globally competitive economy, why should we co-operate with each other and share our knowledge. Shouldn't we rather be hoarding it and selling it for the highest price?

This is a particularly disastrous strategy for knowledge management at a time of crisis when knowledge about how to manage our affairs sustainably needs to be spread as rapidly as possible. A recent conference of researchers exploring the Transition Towns in the UK came up with an answer to this problem: the knowledge co-operative.

Many well-motivated researchers laugh in the face of intellectual property law and proudly proclaim their willingness to give away their knowledge. This is missing the point in two ways. First, if you have signed a standard university contract your knowledge doesn't belong to you anyway. Even though all our best ideas arise in the bath or on the bus everything you have ever thought belongs to your employer.

More seriously, if we don't try to maintain control over this knowledge, then others probably will. Just like the neem tree, vital insights into how sustainable communities actually work could be controlled by corporations and sold back to us - just as our research papers are. Nothing could be more iniquitous than the fact that we review each other's work for free, edit our own work, format and typeset it - but then cannot gain access to each other's work without subscribing to journals whose profits go to publishing corporations.

The sustainability knowledge co-operative will be a membership organisation which academics and research centres can join. They will undertake to share knowledge freely with others in the co-operative who will not make a profit from it. Their own contributions can be protected by creative commons licences so that if somebody is likely to make a profit from their ingenuity then they can negotiate a share. Some knowledge will be so important that - like Volvo's three-point seatbelt or pencillin - it will be given to the world for free, but it will not be available for others to copyright.

Knowledge is a common resource, and knowledge created by publicly funded universities should belong to the public. However, in a free market, we cannot leave this knowledge floating freely. We need to constrain it legally in a way that facilitates its sharing and empowers those who create it rather than the corporate knowledge factories which employ them. Tweet