Marx was clear that given the nature of capitalist social relations, there can be no balanced growth or equilibrium reached inside production for the market. The history of crises, and of both State and transnational responses to those crises, crystallises that reality further. Unfortunately for those living and working inside higher education this is being realised as the University moves from its formal subsumption under capitalist social relations to its real subsumption. This process involves the restructuring of higher education as a terrain for exchange value, rather than simply for the production of use values, and as a site for the expanded reproduction of capital.
This restructuring is painful bordering on the excruciating for many, and it is imposed in-part through measures like: the announcement in the Autumn Statement of 30,000 extra university places next year and the abolition of all number controls in 2015-16; the calls for the removal of the cap on fees; increased privatisation and outsourcing; encouraging alternative providers; the sale of the student loan book; the use of REF/impact measures for academic labour, and so on. Each of these tactical arrangements furthers the deterritorialisation of the idea that the public/social might underpin the organising principles for higher education. As a result we are left in asymmetrical opposition the State’s use of force to impose marketization. Market forces, indeed.
On the sale of the loan book, Andrew McGettigan has questioned:
why would you sell this asset class at the bottom of the market? that is, when the economy is only just beginning to recover from recession. If you believe in ‘the growth to come’, wouldn’t you be better holding on to an income steam [sic.] tied to graduate earnings?
So one is left to question whether this tactic is simply a deeply political move that is designed for the purpose of fundamentally restructuring the future direction and organising principles of higher education? One result is that it becomes impossible to go back. Moreover, each provider becomes a competing capital in a system of expanded reproduction, and is forced to become part of an association of capitals rather than simply a provider of education.
The potential for higher education to be folded inside a broader system of expanded reproduction is important for reinvestment or reallocation purposes across a global economy. However, this potentiality is disciplined by credit and debt and that bears its own risks. As the mainstream economist Jeremy Sachs recently argued, “The U.S. economy, and the world economy, cannot recover sustainably by propping up consumers for yet another binge.” Yet Phoenix Capital continue to argue that debt-related binges are exactly what is fuelling any semblance of growth:
So, we have investor sentiment showing record bullishness, investors are piling into stocks at a pace not seen since 1999-2000: at the height of the Tech Bubble, earnings are generally falling, the global economy is contracting, and the Fed is already buying $85 billion worth of assets per month.
We all know how this bubble will burst: badly. It’s just a question of when. The smart money is either selling into this rally (Fortress and Apollo Group) or sitting on cash (Buffett). They know what’s coming and are waiting.
In this view, Governments need to generate reinvestment and productive capacity, in order to reinstate meaningful growth that is not simply based on consumption and mortgage-debt. However, as Michael Roberts notes, corporations are increasingly unwilling to make productive investments, preferring to hold financial assets like bonds, stocks and cash. This would indicate that the returns on productive investment are too low relative to the risk of making a loss. Thus, investment in new technology or research and development, which requires considerable upfront funding for no certainty of eventual success, is stalling. In spite of limited venture capital involvement in MOOCs and the engagement of some universities in bond markets, as Audrey Watters queries, at issue are both the business model for higher learning and how its providers will make money in the medium-term.
Roberts amplifies the importance of understanding this problem for higher education, because “In order to compete, companies increasingly must invest in new and untried technology rather than just increase investment in existing equipment.” This is riskier because R&D is costlier to finance and requires firms to hold a greater cash buffer against future shocks. Thus, says Roberts, “companies have to build up cash reserves as sinking fund to cover likely losses on research and development.” As universities are restructured as competing capitals or businesses, the relationships between investment, capital intensity, labour productivity and profitability or the ability at least to service debts through surpluses, become critical.
A central issue in judgements that will need to be made about these interrelationships and especially investment opportunities will be appetite for risk. In a speech on profitability and investment in the UK private sector, Ben Broadbent from the Bank of England noted:
Even if the crisis originated in the banking system there is now a higher hurdle for risky investment – a rise in the perceived probability of an extremely bad economic outcome… In reality, many investments involve sunk costs. Big FDI (foreign direct investment) projects, in-firm training, R&D, the adoption of new technologies, even simple managerial reorganisations – these are all things that can improve productivity but have risky returns and cannot be easily reversed after the event.
This matters for academics and students in an increasingly opened-up UK higher education market, not just because the Government is cracking the public sector for the extraction for value and profit, and as a space inside which excess surplus value can be invested, but also because secondary legislation and customary practices are becoming mechanisms for the creative destruction of capital. As Michael Roberts notes in a separate blog-post, levels of corporate debt and poor rates of return on investment mean that:
According to research by the ‘free market’ Adam Smith Institute, 108,000 so-called zombie businesses in the UK are only able to service the interest on their debt, preventing them from restructuring. In a way, this is holding back a recovery in overall profitability and new investment because “Zombie firms stop workers and money being redeployed to more productive uses, they prevent new, better firms entering the market, they undermine competitiveness, reduce productivity and slow the growth of the whole economy.” In other words, they slow ‘creative destruction’ of capital by the liquidation of the weak for the strong.
It is too easy to see how the creative destruction of certain institutions and the reappropriation of their capital assets will flow from marketization.
We might therefore usefully question how Government higher education reforms are situated against a critical political economy of the restructuring of the idea of higher education. Whilst we may argue that there is an ideological hatred of the public or the poor or the disadvantaged by those in-power that is visceral and neoliberal, we also need to recognise, as Roberts does, that reforms are driven by the “dominance of the capitalist sector” and in particular by finance capital. The sale of the loan book, outsourcing, MOOCs, precarious academic labour, are all refracted through this reality. To call for public re-investment for higher education, as Roberts again highlights, “does not ensure a rise in profitability for the capitalist sector as a whole… [and] As long as the capitalist sector is dominant in the major economies, that is what matters.”
Thus, for universities, the opening-up of the sector to the coercive laws of competition is likely to mean more outsourcing and association with the private providers of services and commodities, more engagement in finance (bond) markets, limited use of venture capital for technological innovation, and a faster pace of organisational development and restructuring, each focused on capital or labour intensity, and the production of surplus value. However, this will simply expand the contradictions inherent to capital into the sector, rather than enabling those contradictions to be overcome.
One result is likely to be the removal of the fee cap for indentured study, in order to raise effective demand. For the Russell Group this will provide an opportunity to service the global, bourgeois consumption of “high-class”, expensive educational products. For the rest there will be a fight for low-cost consumers or for a foreign trade in international students/labour that is a form of arbitrage. One of the problems in all this is that market-forces tend to be anarchic (witness Phoenix Capital’s statement noted above about the looming bear market) and incoherent, and a poor guide to managing production and abundance/scarcity of resources. This is as true of academic labour as of any other form as it is subsumed under the dictates of competition and the production/accumulation of surplus value.
One of the critical questions in this restructuring relates to the response of academics and students inside the system. In a reflection on the Autumn Statement, Andrew Westwood argued:
After all of the arguments about both the affordability and the desirability of a mass higher education system, George Osborne has come down firmly and decisively in favour of both. I thought we had lost that debate – that faith in mass human capital and the knowledge economy had been irreparably damaged. I was wrong and I’m pleased about that.
That should be something to celebrate.
This statement is distasteful because it reduces humanity to “mass human capital”. As I note elsewhere, it is actually a “flagrantly despicable term to reduce people to”. However, economically it is also deeply flawed. The argument is that the worker’s labour power is her capital in the commodity form, and that education will help her to build that capital and deliver a return. As David Harvey notes, this might work in artisan/craft societies, but in the transition from craft to capitalist work this level of autonomy is restricted to capital alone as the automatic subject. The craftsman or artisan can only survive as she is able to sell her labour power in the market for a price, and to purchase her own means of reproducing that labour power. Her labour power is only capital in the hands of the capitalist. The worker is not able to make use of her skills, but sees these subsumed under the means of production of the capitalist class. She is therefore alienated from both her own labour power, which is used by the capitalist to extract surplus value, and from herself. The academic’s/student’s/worker’s skills are never their own autonomous capital. If they were human capital then they would be capable of returning interest. However, the academic/student/worker has to labour; she cannot live off the revenue that accrues from her alleged human capital.
There is no choice for the academic/student/worker but to labour as a form of coercion, and to upskill as an entrepreneur as a form of coercive practice. It is in-part as a negation of this coercion that we witness new “site[s] of occupations, strikes, road blocks and picket lines as students and workers rally against privatization.” Whilst these are related to specific issues to do with 3cosas, outsourcing, the privatisation and enclosure of university space, or cops off campus, as NovaraMedia note this is a specific reaction to the political management of austerity that is aimed as the dispossession of public, free space and time. It is designed to mobilise lives around the search for money. As Joseph Kay notes, this has ramifications for the idea of the University:
the choice to be inside the university is disappearing. Whether by escalating indebtedness, involuntary outsourcing, or indeed, summary suspension for political activity, exclusion from the university is making a comeback. At the same time, whether to be against the university is also becoming less of a choice, since the university, at least in its present form, is increasingly against us.
We confront the university less and less as a place of an idealised ‘Education’, and more and more as an exploitative boss, a spendthrift landlord, a creditor, and an instigator of violent repression. The blood on the pavement at UCL symbolises this shift.
Blood on the pavements of our universities is a marker that the State and its institutions will impose acceptance of indenture and a shift in incomes from the poor to the rich, and from the UK to London, and an attrition on real wages, and precarious employment, and ballooning unemployment, and the overcoming of stagnation through financial asset booms, credit-fuelled property ownership and exorbitant bourgeois consumption.
This reminds me that I wrote two years ago, pace John Holloway, about exodus either by Capital from any University that was in opposition to the dictates of the market, or by academics from the University as it was reinscribed for value:
The argument against this is that the constitutional view isolates the [University] from its social environment: it attributes to the [University] an autonomy of action that it just does not have. In reality, what the [University] does is limited and shaped by the fact that it exists as just one node in a web of social relations. Crucially, this web of social relations centres on the way in which work is organised. The fact that work is organised on a capitalist basis means that what the [University] does and can do is limited and shaped by the need to maintain the system of capitalist organisation of which it is a part. Concretely, this means that any [University] that takes significant action directed against the interests of capital will find that an economic crisis will result and that capital will flee from the [University] territory.
In the face of this reality, and that of cops on campus, I went on to state that:
Yet the University remains a symbol of places where mass intellectuality, or knowledge as our main socially-productive force, can be consumed/produced and contributed to by all. The University remains a symbol of the possibility that we can create sites of opposition and ontological critique, or where we can renew histories of denial and revolt, and where new stories can be told, against states of exception that enclose how and where and why we assemble, associate and organise.
Increasingly I doubt that this is the case. Increasingly I believe that the game is up, and that the crucial actions now is liberating participatory knowledge, practice, skills and organising principles, and forming co-operative associations that can begin to describe alternative forms of value beyond the market. As I wrote at the time of the last set of occupations:
academics need to consider their participatory traditions and positions, and how they actively contribute to the dissolution of their expertise as a commodity, in order to support other socially-constructed forms of production. How do students and teachers contribute to a re-formation of their webs of social interaction? How do students and teachers contribute to workerist and public dissent against domination and foreclosure?
As Kay notes: “we need to take the rage, and direct it into agitating and organising in our everyday lives.”
In this, Michael Roberts argues that we need to discuss value and organisation:
we must replace a system of production for profit and a society based on greed and self-interest with one that is commonly owned and planned for the needs of all and based on cooperation and support.
Academics need to consider how they contribute to a discussion about social reproduction that is post-capitalist co-ordination. That enables a “postcapitalist imagination”. The social is clearly possible, and we have countless examples of dissent and alternatives to neoliberalism, like: that currently being worked through in Ecuador; or in the ALBA grouping of nations; or in the Mondragon Co-operative; or in the Paris Commune; or in solidarity economies; or in the Social Science Centre; where the social relations of production might be refocused around associated workers rather than associated capitals. These examples, and those of students in occupation, offer hope that new social mechanisms or organising principles, which in turn enable solidarity networks to manage direct decision-making, might enable a transition to a different institutional structure as part of a transition to a complex, post-capitalist society.
In managing co-ordination, we might look at co-opting the principles of the very organisations in which we work, namely universities as pivots for associations of capitals. These associations not only produce means of production but also organise other means of production as inputs in a larger, networked production process. How might those principles, and in fact those means of production be co-opted and traded for use rather than exchange? The capitalist organisation of the University as an association of capitals addresses co-operation in terms of command and control. How might we co-opt this for co-operative ends and to create solidarity networks that might help us to manage issues of energy availability, climate change, poverty and so on, and more broadly the transition to a post-capitalist world? Where and how might academics and students recover their labour as a “postcapitalist imagination”?