Notes on the University and the association of capitals

ONE. Elsewhere on this blog I recently wrote about the domination of merchants in higher education:

The links between commercial educational providers and universities, educators and students as producers and consumers of educational services, data and products, demonstrate power and dependency. This complex interdependency is not reducible to fetishized ideas of money via cost-savings or emancipation based on learning for a life of capitalist work. It links to ideas of the reproduction of capital within limits or barriers, and the current condition inside-and-against education demonstrates how crises re-establish the limits and conditions existing in the system as a totality and in the circuits of productive, money and commodity capital. Moreover, we are witnessing the attempt by finance and commercial capital to synchronise production with their own circuits. This is an uncomfortable symbiosis, as those of us engaged in a higher education that is being restructured by the dictates of finance capital and a new market can attest.

What is becoming more clear is the formation of associated capitals, in the form of public/private education providers, finance capital, brokers of educational services, technology firms, venture capitalists and so on, engaging in a public policy space designed to leverage accumulation and growth. These associated capitals might form transnational activist networks; they might be working in competition. The key is opening-up new markets.

TWO. The Leadership Foundation for Higher Education is hosting a conference Moocs: What we have learned, emerging themes and what next? The conference states that it “will take a critical look at how online and open access learning has evolved during the last year, with a particular consideration of the development of Moocs in both the US, India and Europe.” The speakers at the event are from MOOC providers or are champions of MOOCs as mechanisms for creating a market for educational services and commodities from the global North, for driving down academic labour costs, and for identifying and extracting surplus intellectual capital both inside and beyond the University. The conference is about problem-solving, rather than developing a critique of the idea of “open” or “open learning” or the MOOC phenomenon in light of critical pedagogic practice. Its aims and the biographies of those who are speaking reinforce both hegemonic educational power and the idea that “open” must be used to colonise and monetise higher education. Its aims are to:

  • Evaluate critically case studies in the rapidly unfolding landscape of Moocs and open access learning;
  • Participate in discussions with practitioners of Moocs and new models of open access learning;
  • Consider how these transformations are already affecting higher education provision in the US, UK, India and elsewhere, and to examine institutional and student;
  • Further evaluate the potential for integrating Moocs into university degrees;
  • Consider existing and new revenue models for Moocs.

Recent analyses of the impact of venture capital, higher education bubbles and return on investment, related to Coursera and Udacity do little to assuage the overarching momentum to use “open” or MOOC or whatever as a lever in the struggle between social forces. In any case, the role of new markets like the Chinese in those spaces is still unclear. Any educational technology failures are less to do with pedagogic failings and more closely tied to the political economic realities of a restructuring of higher education for the market. Organisational change and technology are key levers in this process, and their transformational appeal was highlighted by Gartner’s statement that Worldwide IT spending is projected to total $3.7 trillion in 2013. One might also reflect on Gartner’s note that we are witnessing increasing “innovation in personal and competitive business ecosystems” that impact “the labor content of services and products.”

Ecosystems; associated capital; entrepreneurialism; competition; growth; new markets; labour arbitrage; higher education.

THREE. Andrew McGettigan has recently argued that we are witnessing market creation out of control in UK higher education. He notes

The government exploited the existing ‘designation’ process to allow students at over one hundred private higher education providers to access student support on terms equivalent to those enjoyed by students at established universities, with the exception that since 2012/13 those students have been only able to borrow up to £6,000 per year towards tuition fees (up from £3,375 in 2011/12).

The cost to the Government “has been £80m over budget. With 30 000 students registered that year for the HNC and HND qualifications offered by Pearson-Edexcel through private colleges (the equivalent of one or two years of undergraduate study), that represents an 150 per cent increase in such students on the previous year.”

McGettigan asks “why does this matter” and argues:

Private providers can currently recruit how they like and, once designated, their Home and EU students have the right to access the publicly backed student loans (EU students can apply for tuition fee loans only).

The loan scheme is subsidised – only 65p in the pound is expected back. Public money is therefore involved.

Many private HE providers are commercial, for-profit operations – some like, Greenwich School of Management or University of Law are owned by private equity – so public money subsidises private fees and potentially profits.

As we saw in the USA, the private sector expands rapidly when backed by public money. Where will this money end up?

Further, we have no understanding of the performance of graduates from private institutions – they may end up paying back much less and so be subsidised to a greater degree

It also transpires that in order to introduce some control to the budget, the public teaching budget will have to be reduced by £20m – this is likely to come out of the budgets of widening participation initiatives. And £25m goes from the Access to Learning hardship fund. That is, students at established universities will suffer as a result.

In education, the public and the private dance out of time. The private is used to speed-up change, and acts as a disciplinary lever on public goods and issues of equality. In this, the State demonstrates its commitment to profit through competition above all else.

THREE. A recent Ernst & Young Global Limited report on China’s productivity imperative noted that there is increasing doubt that China will provide the sanctuary for long-term growth in higher education from the global North. It reports as follows.

A gloomy global macroeconomic outlook, particularly for Europe and the United States. That has already had considerable impact on the Chinese economy as export growth to key markets in Asia, Europe, and North America has slowed significantly since 2010. The worst is Europe, where exports have recently started falling, causing revenues flowing to China’s industrial sector to slow. China’s productivity growth has also fallen. Growth in total factor productivity has dropped from an annual average of 4.7 percent in 2001-07 to 2.8 percent in 2008-10. Earlier rounds of market liberalization and privatization have largely run their course, and the mass reallocation of labor from low productivity agriculture to higher productivity manufacturing is coming to an end.

The report notes that “Raising productivity is critical for China’s economic future as the experience of other East Asian economies shows that capital-driven growth is not sustainable.” Thus, it argues that:

By harnessing the following sources of productivity, we believe that companies can maximize efficiency and drive a new round of profitable growth across the economy:

Take advantage of structural changes such as reforms to lower market barriers and the opening up of new industries to investment.

Maximize the benefits of information technology by making better use of data, improving communication, and enhancing speed and flexibility.

Exploit technological catch-up by combining different existing technologies and adapting them for China’s needs.

Increase the pace of talent development, deploy talent to the highest-value opportunities, and improve the way workers engage with each other.

Meanwhile, Phoenix Capital Research recently focused on The China Crisis You Haven’t Heard About, and stated

In the near-term, China will engage in capital investment (the substitution of capital, technology and information for labor) to drive economic growth. This means the Chinese Government throwing money at the manufacturing, information technology and healthcare sectors in its economy.

The global North’s increasing obsession with on-line learning as a lever for growth has to be seen in light of the use of organisational development and technology to drive labour efficiencies and to lower market barriers. Capital investment, the creation of a reserve army of labour with interchangeable and low-waged commodity and leverage skills, the extraction of rents, and the creation of an entrepreneurial class form a conjuncture with this need to create a global market for higher education goods and services.

FOUR. In Volume 2 (Chapter 16) of Capital, Marx discusses the turnover of variable capital including the impact of working class consumption on that process. He argues that capital advanced as wages ceases to be capital and instead forms the means of subsistence or social reproduction. The mass of commodities that is “annihilated” is consumed unproductively – it maintains labour power but does not produce surplus value. However, Marx argues that speculation both in the creation of a skilled labour force that is able to be thrown into the production process, and in the accumulation and valorisation of capital, tends to push consumption and wages up, and this in-turn tends to be followed by a crash. This restructuring of the flows of capital then reveal a deeper and more permanent problem or contradiction, namely how can capitalists sell their products when the mass of the population is impoverished?

In terms of higher education, we witness the mechanisms through which policy and practice becomes entangled with relationships to distant/new markets through on-line education, and to the idea of the student as an entrepreneur. Marx argues that credit markets, witnessed in the form of indebted study are critical in enabling the expansion of markets into social or public goods like education, and across new geographical terrains. In Chapter 16 of Volume 2 he points up the:

Contradiction in the capitalist mode of production. The workers are important for the market as buyers of commodities. But as sellers of their commodity – labour-power – capitalist society has the tendency to restrict them to their minimum price.

Further contradiction: the periods in which capitalist production exerts all its forces regularly show themselves to be periods of over-production; because the limit to the application of the productive powers is not simply the production of value, but also its realisation.

However, the sale of commodities, the realisation of commodity capital, and thus of surplus-value as well, is restricted not by the consumer needs of society in general, but by the consumer needs of a society in which the great majority are always poor and must always remain poor.

At issue is the relationship between credit markets and individuated debt, the student’s needs to prove she has the entrepreneurial skills to survive and reproduce herself in a global and stratified labour market, the collapse in real wages and graduate earnings, and the idea of the University as a competitive space scored through with a need to extract surplus value and generate profits. How is the indebted individual defined and conditioned socially through a marketised education? What might be our collective response?

In addressing this issue, just as Capital develops its productive power through association, co-operative forms mights also point towards labour’s self-actualisation. William Thompson’s, Inquiry into the Principles of the Distribution of Wealth, (p. 453) argued that socially significant wealth is not that which is accumulated either as real assets or appropriated as claims on future labour, in the form of legal titles, interest rates. Thompson (p. 443) argued that:

In almost all other systems, the productive forces have been considered with reference and in subordination to accumulation and to the perpetuation of existing mode of distribution. Compared with the conservation of this existing mode of distribution, the ever recurring suffering or welfare of the entire human race is not considered worthy of a glance. To perpetuate the results of force, of fraud, and of accident, this has been called security, and for conservation of this lying security, all the forces of production of the human race have been mercilessly sacrificed.

He stated that it was “the forces of production and their free development in the future” that offered hope for co-operative forms of distribution and for co-operative labour. Thus, the recent piece by the Social Science Centre in Lincoln offers a different perspective on what is co-operatively possible at a different, local scale.

FIVE. Technological and organisation changes focus upon reducing the amount of capital needed to produce surplus value. Thus, capitalists adopt techniques that keep labour and capital fully employed, and as a result we witness a history of innovations related to reducing production time or working time. However, in Volume 2 of Capital, Marx also looks at the ways in which capitalists attempt to use innovations in spatial organisation, transport and communications, to reduce circulation time and to increase the geography of capital accumulation.

In the Communist Manifesto, Marx and Engels argue that the need to create and enable capital flows, accumulation and spaces for further valorisation, results in “The need of a constantly expanding market for its products [which in turn] chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere.” One result is that bourgeois, transnational and cosmopolitan consumption triumphs over local, national cultures, and industries that are defined by productivity and intensity dislodge indigenous cultures.

One example of this process is the subsumption and enclosure of intellectual property produced commonly and embedded in technologies and processes as what Marx called “mass intellect”. Thus, Wikileaks recently leaked a secret draft of the Trans-Pacific Partnership, a free trade agreement between twelve markets representing 40 per cent of the global economy. The leaked chapter on intellectual property rules demonstrates that the United States is pushing to make its Intellectual Property regime the standard for these markets. This focuses upon the adoption of existing US laws, to protect commodities like patents for pharmaceuticals or digital artefacts like movies or educational content. The Electronic Frontier Foundation fears that the IP section will limit on-line freedom.

In the Communist Manifesto it is argued that the Bourgeoisie, though its new powers of production and its commodities and its restructuring of laws, inscribes new, global markets into the circuits of production, and creates a world in its own image. This echoes Marx’s argument in the Grundrisse that the hegemony of the bourgeois mode of production rests on the expansion of a global system of valorisation, which in turn demands that commodities are not simply used but exchanged. This process of exchange demands the spatial transformation of productive forces, including transport and modes of communication. Thus, Capital drives beyond its spatial barriers and we see the “annihilation of space by time”, as circulation time and labour time are revolutionised to give quicker access to new markets.

In this process, the deployment of open, on-line tools are critical and pedagogical. They enable capital to reduce the friction of distance and speed that exists across educational and social spaces They also reduce the costs of educational service and commodity production by collapsing the relative locations of places and infrastructures. For instance, MOOCs enable concentrations of both cognitive labour and associated capital that then lead to efficiencies. Thus, universities working with private educational providers and technology companies form an example of agglomeration economies that enable the relocation of higher education in the global North to new markets. Public policy, in creating a local and global higher education market, draws in further educational functions. Moreover, flattened costs and precarious employment underwrite a more competitive landscape for all higher education providers, reinforced by the agencies like the World Bank and World Trade Organisation.

SIX. Thus, we might analyse the idea of the University, inside-and-against the organisational and technological innovations that drive the speed-up or acceleration of turnover time of educational services and commodities in a global market. These innovations include the subsumption of the University inside associations of public/private capitals, in order to secure their competitive place. These innovations also tend to reduce the friction caused by distance and localised working practices. We might then ask what is the popular response to this process? Does the Social Science Centre offer one such popular response? It states that:

while there are fewer existing networks of solidarity than might exist in larger cities, there is also an intimacy and a proximity that provide possibilities for associational networks that might be diffused in larger cities. Most of us work full-time and cannot give the time to the SSC that we would like to. Without the material basis on which to work and study full-time at the SSC, we have to think creatively about the form and nature of education practised within the SSC.

As a response, educators might question how we work through association or co-operation with the geographical and spatial-temporal implications of a critique of higher education policy and practice. We might highlight the dynamics of accumulation and the need to expand markets in established economies and to create new markets as a new form of imperialism (with privileged rights to sell goods via intellectual property laws). We might ask, how does higher education policy and practice demonstrate the flows of capital between the global North and “emerging markets”, in an attempt to allow production in the former to grow, whilst supporting the creation of competitor-economies? We might ask, where is it possible to find the courage to push-back?