UCU Teach Out I

Universities, Inc.

  • This report is a part of the following series: UCU Teach Out.
  • This piece was written over a year ago. It may no longer accurately reflect my views now, or may be factually outdated.

Every morning I wake up on the wrong side of academic capitalism.

Prof. Bob Jessop

As part of the ongoing UCU-organised academic strikes currently going on up and down the country, the Lancaster UCU branch has been putting on a series of Teach Out events. One of these was a talk by Prof. Bob Jessop, Distinguished Professor of Sociology at the University of Lancaster, on the historic developments in university culture that have led to this current dispute.

Prof. Jessop opened the talk with the above quote, before lamenting how far we’ve come from the original ideas of the university. If one looks at the mission statement of a university 50 years ago, and the mission statement now, he claimed, about the only similarity is the word university. Universities were now a prime example of nominalisation—resembling what had historically been given the same label in name alone.

Prof. Jessop claimed that the original definition of a university was that of a self-regulating community of students and scholars, sanctioned by civil law, with all its echoes of Plato’s Academy. He presented as an example of this original approach the constitution of his own Sociology Department, when he joined it back in the 90s—students were constitutionally mandated to be members of the departmental organisational structures, with the side-effect that they were institutionalised to be able to outvote the academics. Nowadays, the closest approximation of this is our Students’ Union’s Academic Rep Scheme, which places a handful of students in representative positions, their ability to affect change very much at the mercy of the department. From my own experience as the 2nd Year Computer Science Rep, the power they wield is advisory at best.

The university definition has changed in recent decades. The most accepted now is that of a high-level educational institution in which students study for degrees and academic research is done. This raises two concerns for the market powers that be. In the degree-awarding element, curricula must be standardised so that an employer can know what they are getting when they hire a graduate. In the research element, the question becomes how to quantify the value of a piece of research, in order to justify its costs.

These needs became priorities during the surge of neoliberalism amongst the worlds’ governments over the last half-century. Prof. Jessop identified this as having begun during the 1950s, and the growth of what he termed Fordism—the pursuit for growth and efficiency above all else, and the conveyor-belt mentality that is the logical end-point of this pursuit. During this time, the idea of the university shifted from that of an élite institution to that of a producer of mass higher education. During the 1960s—the attitude of which Prof. Jessop summated via Harold Wilson’s white heat speech—this led to closer ties between universities and the state (as well as business). He finished this section with a mention of the 1970 Warwick University registry house occupation, as covered in Warwick University Ltd., that discovered documents detailing close ties between the university, local business and the government including, but not limited to, influence over appointments and surveillance of students.

Prof. Jessop then went on to describe Daniel Bell’s vision of the shape that post-industrial society would take, as expounded upon in The Coming of Post-Industrial Society. Bell expected society to transition from a capital and mechanical base to a knowledge-based and intellectual one. Prof. Jessop pointed out that whilst, when originally discussed in the 70s and 80s, the term of art used was knowledge-based society, contemporary discussions now talk exclusively of the knowledge-based economy. In Bell’s view, university would replace industrial enterprise as the main organisation within the post-industrial society. Instead, Prof. Jessop argued, what had actually happened was that university had become an industrial enterprise.

Despite Prof. Jessop’s view, quoting a colleague of his, that neoliberalism fails continuously, but it fails forward, the marketisation of knowledge continued apace in the 70s and 80s, particularly in the USA. During the neoliberal crises of these decades, the world saw the emergence of the neoliberal university, built along the corporate model, and aiming to compete with one another. Despite having happened in 2014, Prof. Jessop cited the University of Lancaster’s rebranding as indicative of this approach. Where the original logo was unique, distinctive and—featuring as it did the inter-faith Chaplaincy Center—representative of the old ecumenical sense of togetherness that the university used to stand for, the new logo comes from one thought: Why don’t Southern public schoolboys come to Lancaster? Because they only go to unis with shields. The continuing crises of the 80s and 90s led to increased concern on how to restructure and reorient higher education institutions to support the expected move to the knowledge-based economy.

The global financial crisis of 2008—or, as Prof. Jessop called it, the North Atlantic financial crisis—and the Eurozone crisis served primarily to reinforce the trend, politically, towards austerity politics. Prof. Jessop referred to this phenomenon as an enduring trend, using enduring in the same sense as the US military, whose overseas military bases are never permanent, only enduring, implying that they may one day go away.

Prof. Jessop defined the knowledge-based economy as the self-reflexive use of knowledge to produce knowledge. For this economy to function, there must be a shift in focus from the intellectual commons to intellectual property. As Prof. Jessop summed up the shift in academic philosophy, you can’t just go around producing knowledge that might benefit other people! Crucially, universities also had to diversify if they were to survive—they needed revenue streams independent of their ever-fluctuating student numbers. For example, he related noting that the management of the University of Wisconsin seemed very upbeat when he had worked there, despite low student numbers. The reason became clear when he asked a colleague why: the University of Wisconsin held the patent on Warfarin.

Those universities who could achieve this financial stability found that they were better able to borrow on the credit market. This led to a refocusing within university building plans away from buildings and facilities of academic benefit, and towards buildings that are easier to flog if the university goes bankrupt. Cases in point: the University of Lancaster’s £20m, 2011-built Sports Center; the on-campus Lancaster House Hotel; more and more student accomodation being put up for out-of-term holiday letting; the in-development Health Innovation Campus, which will apparently offer cosmetic surgery procedures alongside its medical training; and, most ludicrously, the golf course the university bought last summer. The university has become an asset, its worth determined by its value upon bankruptcy. Prof. Jessop finished this section my remarking that the Americans couldn’t survive without importing so many Chinese, Indians, etc., because they have so destroyed their domestic education system. Concerningly, he added, many within Britain are pointing to the US model as an exemplar—witness the push to increase the number of bodies with degree-awarding powers.

Continuing to paint his bleak picture, Prof. Jessop revealed how SLABS—student-based asset-backed securities—are now the second-most-invested-in security by US hedge funds, after mortgages. Where universities started off competing with each other within the higher education sector, the higher education sector now finds itself competing against other sectors and trying to match their rates of return. As an example of how financialised the higher education sector had become, Prof. Jessop noted that Moody’s quietly downgraded the credit rating of all UK universities following the Brexit referendum—all, that is, except for the University of Cambridge. He quoted the Moody’s report that stated it was because of a stable output reflecting superior financial resistance. He also noted the report’s observation that Cambridge doesn’t intend to increase student numbers.

The desire, in other universities, for ever-increasing student numbers, exposes them to risk. A select few universities, such as Cambridge, can ignore this. Not only can they guarantee complete utilisation of the available places, but they embody the logic of the star celebrity—they earn more for being the best in their field. Cambridge, Prof. Jessop claimed to have had confessed to him by staff, doesn’t even know what to do with all its endowments. Thus, Cambridge is less indebted than its peers and, Moody’s state, can raise funds easier due to its reputation, its connections with government and its alumni. In other words, thanks to the Southern public schoolboys that Lancaster attempted to sway with it’s meaningless crest. Prof. Jessop even related the bizarre story of having had had a former Lancaster Vice-Chancellor boast to him about being a seven-crane VC, referring to the number of cranes currently developing marketable real estate upon his campus.

Prof. Jessop then turned his eye to the students loan debacle. Claiming that the government wants student loans off the books, in particular the public sector borrowing requirement books, they frame the cost of university as a loan. That some 75% of these high-interest loans are ultimately written off, and that it would thus make far more sense to issue lower-interest loans on the public sector borrowing requirement, is of no consequence to the government. The status quo fits within the politics of austerity, so it continues. There are even, Prof. Jessop noted incredulously, now suggestions of a system of angel bonds, in which financiers can invest in a students’ future earnings, in the expectation that the hopefully-successful graduate will repay them from those same earnings. This, in turn, has led to securitised angel bonds in which the university guarantees a particular vintage—say, my own 2017 Computer Science cohort—to a maximum of either £6,000, £9,000 or £12,000, depending on how confident they are in the future earning of their students. This, in turn, will no doubt lead to more selective admissions processes. Will any university be interested in widening participation when they can instead accept those students whose family and school connections guarantee them to be high earners later on?

Prof. Jessop summarised all of his previous points thusly: the rescaling and recomposition of the university system for the knowledge-based economy leads to […] the growing trend of the integration of education and research into a competitive financialised economy and, via securitisation, into a hyperfinancialised neolibeal economic order. A bleak message, perhaps, but there was a glimmer of hope. There is, however, a strong residual sense, Prof. Jessop concluded, that universities should not only exist to serve markets. This was evidenced, he believed, by the recent scandal over gratuitous VC pay. I am not sure I’m convinced, however. I think the time for the universities may have passed, and that a new system will emerge to carry the torch of Plato’s Academy. Just what that system is, however, I’m less sure on.

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