notes on money and the democratic deficit and higher education

ONE. Unless academics rouse themselves

Andrew McGettigan writes of the incorporation of the university inside the deliberate re-organisation of our lives as financialised. So that our educational existence acts as a motor of/for other’s financialised power-over us. The financialised power-over our lives by hedge funds, private equity, technology firms, operating and accumulating on a global terrain.

“As universities mirror the increasingly unequal nature of English society, what they offer is a positional rather than a market good: their role in advancing social equality, or minimising embedded disadvantage, will be traduced in a meritocratic game of spotting ‘talent’ and ensuring that it is slotted into the appropriate tier. But the possibility of ditching even such minimal commitments to fair access hits a tipping point if the conversion from charity to for-profit is facilitated by government. This is so novel that we do not even have a term for such a process (‘privatisation’ does not cut it, since the charity is already private). We do though have a precedent. In 2012, College of Law was sold to Montagu Private Equity for £200 million. The export strategy document encourages universities to consider this option if they wish to exploit the new opportunities opened by the digital revolution that fixes education as a tradeable service.

“It goes without saying that this process and that of the financialisation associated with a generalised loan scheme will feed off each other. Although the policy terrain is settled temporarily, the ball is very much in the court of individual institutions: there are few safeguards against the ambition of overweening vice-chancellors fuelled by new financial options.

“I am frequently asked, ‘what then should be done?’ My answer is that unless academics rouse themselves and contest the general democratic deficit from within their own institutions and unless we have more journalists taking up these themes locally and nationally, then very little can be done. We are on the cusp of something more profound than is indicated by debates around the headline fee level; institutions and sector could make moves that will be difficult, if not impossible, to undo, whether it is negotiated independence for the elite or shedding charitable status the better to access private finance.”

TWO. Uncertainty and volatility as the new normal

Uncertainty and volatility, underscored by and underscoring the disciplining of increasingly precarious academic and student labour, are the new normal. The Institute for Fiscal Studies writes that Estimating the public cost of student loans under the UK Coalition Governments reforms is an increasingly uncertain business.

“Estimating this long-run public cost of student loans is inherently difficult. It depends on the repayments that will be made by graduates for decades to come – which can only be estimated by making a large number of assumptions about the future. However, an appreciation of the cost of providing student loans, and the uncertainty around that, is essential for policymakers. The government needs unbiased estimates of these if it is to properly understand the public finance implications of the current HE funding system, its likely financial sustainability, and how the burden of HE funding is shared between the taxpayer and graduates.

“Were the long-run cost of issuing student loans today to be underestimated, then a future government would have to accept higher-than-expected levels of public sector debt (as loan repayments would not reduce debt as much as expected) or offset this by increasing taxes or cutting spending (which would reduce borrowing and therefore the addition to debt).

“However, it should be emphasised that these baseline estimates are highly uncertain. They are based on a large number of assumptions, changing any of which would alter the estimated cost, sometimes significantly… This uncertainty makes it even more important that the potential cost of student loans is estimated in as transparent a way as possible. The 2012 reforms have increased the uncertainty over the long-run public cost of higher education by replacing the certain costs of teaching grants with the uncertain costs associated with student loans.”

All of which reminds me that Cormac McCarthy wrote, in Cities of the Plain:

“‘It is an uncertain business,’ the old man said, ‘you must persevere. To persevere is everything.’”

THREE. You can scream and you can shout but it’s too late now

The space-time of higher education is being claimed and restructured globally for the market, as universities are being claimed and restructured as competing capitals. This mirrors the globalising effects of the Sky TV deal on English football in the 1990s. As McGettigan notes elsewhere:

“Twenty years ago, the way money moved around English football changed beyond recognition with the advent of the Premier League and Sky TV. Regarding the ensuing stratification and divisions in the professional game, the Manchester Capitalism blog observed a withering of the club as a social institution’ and a fragility attributable to ‘the growing influence of elite networks around the game.’

“Vice-chancellors appear to have less oversight than many football club chairmen. And many of them now talk publicly as if they were appealing to fans desperate for silverware. Consider the recent comments of the Sussex registrar: ‘Universities face a choice: to compete on the global stage or to settle for second-rate status. Our staff and students expect us to aim high, and we do. But this is going to become increasingly difficult. … we cannot afford to be in a position in which any part of our offer to staff and students does not match the best in class.’

Global competition of universities as business underpins Ryan Shorthouse’s argument for universities to be subsumed under the rule of money and the logic of competition, and to articulate their governance and organisation around a risk-based, financial contract with their students. This is not public governance, regulation and funding. This is the transnational rule of money and the devil take the hindmost.

“So a different route to a financially sustainable system needs to be found. One idea is for universities to contribute to the loans subsidy themselves. This could be done collectively, with all institutions contributing a small proportion of their fee income to a pot of money the government can then use to cover written-off loans.

“Or, perhaps more fairly, the cost of written-off loans could be covered by individual universities. If a university charges high fees but few of its graduates pay off their loans, the government should find a way of getting that institution to cough up. It could, for example, reduce the amount the university receives in teaching grant in future years. If the amount deducted were sufficient, this could deter universities from overcharging in the first place.

“An alternative, more radical, solution would be for universities – rather than students – to take out loans from the Treasury to finance undergraduate tuition. These loans would be repaid through the earnings of a university’s graduates, who – in an “equity contract” with their university – would pay their loan back to their alma mater through the PAYE system under the same parameters as now.

“Under this system, universities could charge their graduates what they wanted. But they would be wise to lend only what they would expect to receive back from each cohort of graduates. This would result in the state paying considerably less, while low-earning graduates would pay the same (nothing until they were earning more than £21,000 a year). Universities would be exposed to greater risk, but they could potentially derive much greater rewards, too.”

Risk and money and impact, driven by commodification and competition, and resulting in the subsumption of the humane values that drive a critical education under the demands of the market. And so we witness George Osborne framing a consultation on how to spend £7 billion in capital funding for science for the next Parliament through the “greatest opportunity for commercial application.” I wrote elsewherethat this is the General Intellect of society co-opted inside financialised higher education, so that the University comes to be governed and organised around money and impact:

“Through innovation and competition, the technical and skilled work of the socialised worker, operating in factories or corporations or schools, is subsumed inside machinery. Therefore, the ‘general intellect’ of society is absorbed into capitalised technologies and techniques, in order to reduce labour costs and increase productivity. As a result, ‘the human being comes to relate more as a watchman and regulator to the production process itself’ (Marx, Grundrisse, p. 705).

“Inside the University, how do we come to understand the mechanisms through which the general intellect is co-opted into technical and scientific processes that enable capitalist work and value production? Is it possible, inside the University, to reclaim them?”

FOUR. The international market will save us

Like those English football clubs that strive for Champions’ League places, in order to compete for financial rewards on a European scale, we witness higher education being recalibrated around international competition. So we read that Grant Thornton’s report on Irish higher education connects internationalisation, institutional association or collaboration, and labour arbitrage:

“Change is needed in relation to Ireland’s third level institutions if they are to survive their increasingly strained funding circumstances… Revenue options highlighted, many of which institutes are already taking or are actively considering, include increasing international student income, higher alumni contributions and winning a bigger share of the international research funding pie. On the cost side, options being considered include consolidation, regional clusters, the use better procurement processes and outsourcing to drive down operating costs.”

And Moody’s has reiterated the impact that a globalised higher education terrain and domestic deregulation will have on individual institutions:

“increased competition is likely to lead to growing credit variation between individual institutions. Overall, the ultimate credit impact of the reform on particular universities will depend on their current market positions and the strategies adopted in response to the reform.

“As part of the ongoing reform in the English higher education sector, the UK government (Aa1 stable) recently indicated that it will completely remove existing caps on domestic undergraduate students by 2015/16. This is credit positive for the sector, as it will allow universities to grow enrolment and revenues. However, it also creates an increasingly competitive domestic market, which Moody’s expects will lead to universities implementing capex-driven strategies in order to defend their current market positions and in some cases expand their student enrolment numbers.

“Moody’s notes that the risks and opportunities universities face as a result of the reform vary according to their current market position, exposure to domestic undergraduate market and available financial resources. As a result, Moody’s groups universities into three broad categories to assess the opportunities, expected responses and credit impact of the reform.”

This view is then further reinforced through the normalisation of a discourse of marketization and the rule of money in every facet of higher education, including teaching and learning. Thus, Paul Ramsden writes for the Leadership Foundation for Higher Education that:

“The close association between the student experience and teaching and assessment, as well as broader aspects of university life, is now generally accepted and understood. It forms part of national discourse and international league tables. It is integral to institutional success in competitive systems of higher education.”

<deep breath. For. Fucks. Sake.>   This is the paucity of our higher education discourse. The rule of money peddled as pedagogic practice. As I argued elsewhere on the creation of a higher education market:

“They want to use information and data to quantify academic labour, and to drive funding, and to enclose and commodify pedagogy, and to extract value. A real cultural change. The new normal.”

FIVE:  a new higher education market of commodity producers and consumers (a reprise)

In Volume 2 of Capital, Marx demonstrated that Capital is the unity of three circuits: it is formed of moments of the circulation of money, of production, and of commodities. Money and commodities are mobile, and intellectual or cognitive services or commodities are especially so, and are productive of value. Production, situated in reality, is less mobile, and needs to be corralled or kettled or coerced. Hence the drive for internationalisation or the MOOC, or their need to find spaces from where value can be extracted or invested. And they are no longer just Vice-Chancellors. They are private equity and hedge funds and private providers and policy-makers and transnational activist networks. But mostly they are money.

As David Harvey shows, the money form is more visible and is prioritised because it is how surplus value is realised. Accumulated money and the power that accompanies it means that other forms of human or humane value in the production of commodities are marginalised. Money is hegemonic. The creation of money recalibrates the world.

One form of recalibration is taking place inside higher education, where the discourse of mission-group leaders, Vice-Chancellors and Ministers of State, is around finance, the consumption of education, and business needs. In order to restructure higher education for the market, universities need to be formally subsumed in their current (public/private) forms within capitalist production and circulation, and then restructured inside the circuits of productive and commodity Capital. So we see the transformation of educational services into products, and the use of data, and technological and organisational change to drive further the processes of consumerisation and commodification of academic labour. And this includes the curriculum.

Critically, the subsumption of universities inside the mechanics of capitalist reproduction demands a market. This applies to Vice-Chancellors acting as CEOs or nascent business leaders, and to private providers of educational services, both of whom need specific use-values (course content, data, knowledge exchange partnerships, research outcomes as products, technical infrastructure and so on) in specific amounts that can be purchased and put to work. Crucially, this work has to be productive of surplus value, and profit. Hence it needs a market, and if one doesn’t already exist it must be created. This need for a market is also extended to potential students who carry debt, and who are encouraged to purchase commodities or services-as-commodities, as positional goods. Thus, the material circumstances of the production, purchase and circulation of educational commodities are critical, and they catalyse policy as a means of restructuring. Because policy and secondary legislation (there has been not HE Bill under the UK Coalition Government) are being used to create a market.

However, one of the central issues for academics is that as they labour under commodity capitalists, they have to vie for a place on market, and this makes them vulnerable to crises related to futures-trading, or access to means of production, or to overproduction, or to market-saturation, or to an inability to access credit markets, or to more general, societal access to debt. Hence the very real impact of finance capital in creating a higher education market based on catalysing new systems of production or organisational development or technological innovation leaves universities at risk. It leaves academics at risk. The University’s much-vaunted institutional autonomy abstracts it from a notion of public good and distances it from any socialised purpose or meaning. Autonomy prefigures marketisation and competitive restructuring. It is thus impossible to separate out Governmental policy based on funding, or Governmental support for MOOCs, or venture capital investment in educational technology start-ups or MOOCs, or University restructuring and reorganisation, from this need to create a market. One outcome is the need to commodify and marketise y/our pedagogy, and to commodify and marketise y/our relationships.

And pace Marx in Volume 2 of Capital, education as a commodity is critical to this because the commodity is the social form against which every educational capital can be considered. The circuit of educational commodities is the form of motion common to all educational capitals. It is social only in that it forms the total social capital of the capitalist class, as it is restructuring education. Moreover, the movement of individual educational capitals is conditioned by its relationship to other educational capitals, or universities. This is a material relation underscored by competition, surplus value, risk, hedges, and the rate of profit.

SIX. The realities of a world rate of profit

In Volume 3 of Capital Marx argued that:

The progressive tendency of the general rate of profit to fall is, therefore, just an expression peculiar to the capitalist mode of production of the progressive development of the social productivity of labour. This does not mean to say that the rate of profit may not fall temporarily for other reasons. But proceeding from the nature of the capitalist mode of production, it is thereby proved a logical necessity that in its development the general average rate of surplus-value must express itself in a falling general rate of profit. Since the mass of the employed living labour is continually on the decline as compared to the mass of materialised labour set in motion by it, i.e., to the productively consumed means of production, it follows that the portion of living labour, unpaid and congealed in surplus-value, must also be continually on the decrease compared to the amount of value represented by the invested total capital. Since the ratio of the mass of surplus-value to the value of the invested total capital forms the rate of profit, this rate must constantly fall.

Simon Clarke argued for the interconnections between the rate of profit and the exploitation of labour, inside a competitive global market, and the need for progressive responses:

“The historical tendency of capitalist production is to the progressive increase in the productivity of labour, so that each worker mobilises a growing mass of raw materials, and a progressive displacement of direct labour by machinery, so that each worker uses more fixed capital. In physical terms this means that there is clearly a tendency for the composition of capital to rise. The value expression of this composition may not rise so rapidly, because the machinery and the raw materials may become progressively cheaper compared to the cost of labour power, but it is not unreasonable to assume, as did Marx, that there is a constant tendency for the composition of capital to rise in value terms. With a given rate of exploitation, this would imply a constant tendency for the rate of profit to fall.

“The tendency for the rate of profit to fall will be modified by factors which moderate the rise in the composition of capital. However, it will also be counteracted by the tendency for the rate of exploitation to rise which is inextricable linked to the tendency for the organic composition of capital to rise. The rising organic composition of capital and the rising rate of exploitation are complementary expressions of the increasing productivity of labour: with a given real wage increasing productivity immediately implies an increasing rate of exploitation. Whether the rate of profit falls, remains the same, or even rises, therefore depends on the relationship between the rate of increase in the composition of capital and the rate of increase in the rate of exploitation.”

One issue in addressing such exploitation has been class collaboration between labour and capitalist in meeting the challenge of competition from other, especially foreign, capitalists and their workers. This is perceived salvation in continual exploitation. In creating a higher education market we witness reactionary responses based on a retreat to the system of exploitation itself or in finessing the market, rather than in a radical overhaul of the governance, funding and regulation of higher education for a different, social purpose.

Michael Roberts argues that this matters because we are witnessing the creation of a global market and a global rate of profit that represents a different view of the response of national and international bodies to this secular crisis of capitalism. In spite of the organisational and technological innovations designed to extract more value from labour, the tendency of the rate of profit to fall cannot be overcome and this then defines responses to the crisis, including those of universities as competing capitals and UK higher education as a competitive sector. Roberts notes that:

“further destruction of capital values will be necessary through another significant slump in global capitalism to raise profitability. Only then could the remaining potential value from the world supply of labour be utilised to restore the health of world capitalism.”

SEVEN. Unless academics rouse themselves

In a recent video report on the March 22 protests in Spain one activist argued:

“We see the repercussions in daily life but those in power obviously do not feel the affects of the crisis.”

A second added:

“So what they are doing is to cut back on the rights of the pubic instead of defending those social rights. As a result of which people nowadays are unemployed, have no income, and are witnessing the deterioration of public services… the dismantling and the crisis in which the country’s system of production finds itself… [one of] exclusion and social disintegration… and in the next generation we will pay for it”

These activists and the demonstrations that emerged as oppositional space-times inside-and-against austerity focused upon the organisation of everyday life, including healthcare, housing, food and education, through local democratic assemblies that were networked on a national scale around set piece events like M22, and which injected a sense of “dynamism”. This dynamism then invigorated the work of the multitude of invisible, mutual, self-managed initiatives, like the occupations of vacant homes, the development of pantries or food banks, the creation of social centres, the provision of local healthcare.

Thus, this “movement based on assemblies” becomes a critical space-time of alternatives that begin to organise and govern and point beyond the market as the sole organising principle.

“In Madrid, since the famous 15M, or the movement of the occupation of the plazas as I prefer to call it, the social fabric of the neighbourhoods multiplied exponentially… the situation demands more mutual aid, more help in general, in the neighbourhoods, between neighbours, because every day people have less and less, every day the cuts in services are more difficult, every day the police repression is worse, and there needs to be a new form of organisation.”

We might then ask how is our educational life to be organised at once both locally and globally, and how does this organisation connect to the production, distribution and consumption of our everyday necessities? Where we witness economic shock therapy and the rule of money defining and being defined by an oligarchic and polyarchic politics, through which our everyday lives are disciplined, what is to be done? Which brings us back to Andrew McGettigan:

“I am frequently asked, ‘what then should be done?’ My answer is that unless academics rouse themselves and contest the general democratic deficit from within their own institutions and unless we have more journalists taking up these themes locally and nationally, then very little can be done. We are on the cusp of something more profound than is indicated by debates around the headline fee level; institutions and sector could make moves that will be difficult, if not impossible, to undo, whether it is negotiated independence for the elite or shedding charitable status the better to access private finance.”


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