How the corporation captured the academy

November 25, 2015
Ben Manski

Note: This article was originally published in the Liberty Tree Journal in 2007

The rapid increases in college tuition costs and a corresponding increase in student borrowing have created an $85 billion per year student loan industry that has transformed many college financial aid offices into businesslike operations designed to maximize a university’s net revenue.
~ The Financial Aid Fiasco,
U.S. News & World Report, April 15, 2007
What a difference a generation makes. Sometimes for the worse.  In the case of higher education, if little else, the late 1970s were a golden era to be remembered  a time in which access to education, racial integration, and the long-term positive socioeconomic effects of public education spending were at an all-time-high. Numbers tell much of the story of what has happened since: Federal and state government spending on higher education has more than halved as a proportion of overall spending on public higher education.  Tuition has more than tripled at public universities and colleges in the United States.  
For the poorest Americans, the tuition hikes mean that they must pay twice the proportion of their family income for an undergraduate degree (1/4 of their income today versus 1/8 in the 1970s).  The ratio in federal financial aid between grants and loans has switched such that where in the 1970s, the government provided two dollars in grants for every one dollar in loans, today the reverse is true. As higher education has become less affordable, graduation rates also declined. As loans replaced grants, student debt nearly tripled; the post-70s generation is the most indebted generation in American history.
How did this happen?  How did the United States go from 1979, a year that proved to be the high-water mark for access to higher education, to the student loan scandals of 2007?
The Corporatization of Higher Education
The colossal shift in higher education financing post-1979 happened not because of an invisible hand, but by design.  It was a matter of policy.  Understanding that shift begins by recognizing what actually occurred, but also requires taking note of how it happened, who made it happen, and why.
The causality of what transpired is clear enough.  Federal and state taxes on corporations and the wealthy collapsed at the same time that the operating costs for higher education continued to increase.  State and federal financing of public higher education plummeted, student tuition hikes filled most of the financing gap, and student debt followed.  Graduation rates fell most steeply among low income youth and youth of color.  In particular, cost became the most cited reason for non-graduation among African American students (far ahead of other concerns commonly acknowledged by administrators, such as campus climate).  
The remainder of the higher education financing gap was filled by other sources, including individual donors, and increasingly, private corporations.  Whereas individual donors were usually satisfied with having a classroom or building named after them, the corporate funders demanded  and got  more.  Corporations exerted ever greater influence on university research, curriculum, and procurement priorities, and increasingly, the governance of higher education itself.  In short, what happened was the corporatization of higher education.  
Generally, corporatization can be defined as the transformation of property, institutions, purpose, or powers from that which is public or private into that which is corporate (which is to say, exercising state power through a hierarchical, privately controlled corporate entity).  Corporatization is distinct from privatization in that the latter term usually implies some empowerment of the private individual.  Furthermore, corporatization is not limited to “free market” economies, but has also occurred in command-and-control economic systems such as the former Soviet Union.  In the case of education, corporatization refers to the transformation of schools, colleges, and universities into more corporate institutions.
To understand how this happened and why, it is useful to briefly step back and recognize that higher education is not the only U.S. sector that has been made subject to corporatization over the past generation.  It is nearly impossible to think of an aspect of American life free from this phenomenon. 
Today, we speak of the corporatization of the military in the form of the increasing role of the so-called “Private Military Companies,” or PMCs,  in the occupation of Iraq; current estimates of PMC personnel stationed in Iraq near 50,000.  We witness the corporatization of elections as corporations take over key functions like the maintenance of voter registration lists, organization of debates, financing of the establishment political parties, and significantly, vote tabulation.  Other examples of corporatization abound, and the list runs as far as the mind is willing to venture: 
  • in welfare, corporatization has taken the form of “Welfare Service Providers;”
  • in corrections, we’ve seen the growth of prison corporations like Wackenhutt and the Corrections Corporation of America;
  • in disaster management there are the Halliburtons; in the administration of police powers, the expansion of the powers of “Private Security Companies;”
  • in national intelligence, a proliferation of extralegal and often illegal corporate contractors;
  • in law, the spread of involuntary extrajudicial binding-arbitration agreements;
  • in public services, corporations taking over bus systems, water treatment, parking enforcement, you name it;
  • in nature, the recognition of corporate property rights to the genetic code itself.
These newly corporatized sectors are multi-billion dollar operations, and they are increasingly governing every aspect of American life.   The sector, estimated by corporate think-tanks to have a potential market value approaching the double digits — double trillion digits — was hardly going to be immune to the general application of invasive corporatization to our country.
Naming names: Corporate agents in higher education
The current generation is not the first to face the possibility of corporate capture of the academy.  Corporate influence on higher education was a major concern of progressives of the 1920s and 30s.  And the antiwar movement of the 1960s produced a number of “university watch” reports on corporate infiltration of the university, in which the campus military contracts that produced the Dow Riots at Wisconsin and elsewhere were identified as merely the “military tip of the military-industrial iceberg” floating below the surface.  Yet ours is the first generation to face corporatization as a pending reality. We are facing that reality for a a number of reasons. Here is a short summary of what (and who) they are:
A. The Money Power.  In 1980, Congress passed, and President Jimmy Carter signed into law the bipartisan Bayh-Dole Act, named for Senator Evan Bayh (D) and Robert Dole (R).  Bayh-Dole was the brainchild of the Business-Higher Education Forum, a think-tank backed by just about every major U.S. CEO.  The Bayh-Dole act poured fertilizer on the emerging higher education research industrial complex by flipping a switch:  For the first time, universities receiving federal funding — meaning virtually all universities — were permitted to engage in exclusive research contracts with private corporations in which the contracting corporation became the sole owner of the intellectual property produced.  
What Bayh-Dole meant in practice was that the Monsanto corporation could now provide funding to an ag school research program in exchange for the exclusive rights to the technology produced by that program.  Monsanto representatives kicked in a fifth of the actual research costs and walked out with with the exclusive rights to the biotechnology behind Roundup Ready soybeans.  Quite a profit for Monsanto on its limited investment; quite a loss for the rest of us.
The Roundup Ready story happened all over the country, and it’s happening more and more with every year.  One education industry study has found that the so-called technology transfer made possible by Bayh-Dole increased at an exponential rate after the early 1980s, doubling every five years.
Bayh-Dole’s effects have not been limited to the theft of public wealth represented by technology transfer, however.  At the same time that major corporations were lobbying for passage of Bayh-Dole, they were also demanding the imposition of fiscal austerity measures  on public highereducation.  Despite steady public opinion support for education tax spending, the National Association of Manufacturers, U.S. Chamber of Commerce, and other big business lobbyists were successful in their efforts to slash federal and state funding for higher education.  These cuts have resulted in massive tuition hikes, student indebtedness, lower graduation rates, the resegregation of higher education, larger class sizes, and lower wages for college employees.  The cuts have also fed into an internal marketization of the university. 
The introduction of corporate cash into money-starved institutions has created an artificial internal market in which fields favored by major corporations — genetics, engineering, pharmaceuticals, business, etc. — enjoy a competitive advantage over other, less potentially lucrative fields — such as education, social work, languages, sociology, ethnic and gender studies, and history.  That these corporate research contracts provide only a small portion of the overall research costs matters little, for that outside investment of 15, 20, or 30% is enough to leverage the entire project.  In today’s research university, they who pay, play.  Those who can’t pay can go elsewhere.  And those colleges and universities that can’t bring in the research dough have a choice: Either shift priorities and try to run with the big dogs, or fade away.  Educating tomorrow’s public servants gets lost somewhere along the way.
B. The Idealogues.  Another, more diverse set of actors are the corporate idealogues: The neoracists, neoliberals, and neoconservatives.  Each for their own distinct reasons, and in their own sometimes contradictory ways, have sought to remake higher education on a corporate model. The neoracists are led by the Bradley Foundation, that three quarter billion dollar operation that funded publication of Charles Murray’s infamous screed, The Bell Curve.  The Bradley Foundation has been busy in recent decades pushing a particularly racist strain of corporatism.  They made the initial investments in the (usually shoddy) research that was used to legitimize the spread of corporate prisons, prison labor, welfare corporatization, and school vouchers.  In higher education, Bradley’s most notable efforts have come in the form of the attack on affirmative action and multiculturaleducation.
The neoliberals of the Clinton ilk are a different breed, and while they have been known to embrace neoracist agendas (“the end of welfare as we know it,” eliminating affirmative action, the death penalty), their primary focus has been building on the success stories of neoliberal capitalism Indonesia, Argentina, Venezuela, Brazil  by expanding the regulatory powers of the World Trade Organization to include services such as water, health, and education.  Largely because the neoliberal “success” stories turned out to be disasters, the impact of neoliberalism within the United States has been somewhat moderated.  Nonetheless, many of the failed models implemented abroad are being replicated here in the form ofeducation funding cuts, “tuition flexibility,” and the like. 
The neocon agenda compliments the other two nicely: It is focused on destroying the capacity of students, faculty, staff, and the public to resist corporatization.  The neocons brought the art of union-busting to a new level with their so far succesful attack on the right of graduate employees at private institutions to engage in collective bargaining.  Neocon outfits like the Alliance Defense Fund took a page from the labor union-busting playbook to launch a 10-year assault on the rights of students to collect and distribute student fees.  And both students and faculty have found themselves in the crosshairs of David Horowitz’ Orwellian state-by-state campaign for an “Academic Bill of Rights;” essentially a bill of particulars for penalizing the expression of views that make the priviliged and powerful uncomfortable.
C. The Enablers.  Our last cast of characters in the corporatization of higher education are college and university administrators.  Regardless of differences among them, all administrators share the common characteristic of being in charge.  They are Lords of the Manor, kings and queens of their realms, and their primary instinct, in all but a few cases, is to ensure that their institution survives and prospers.  To torture the metaphor further, in a choice between feeding the serfs and adding a new wing to the castle, they will choose the castle.
In the context of corporatization, administrators are rarely protagonists.  Instead, we find them in a similar position to students and faculty: They must decide how to respond to the financial regime being imposed on them.  Do they choose to play the corporate game and enable corporatization to move ahead, or do they seek to change the rules of that game by allying with students, faculty, staff, and the public?  In almost all known instances, administrators have chosen the former path.
In practice, enabling corporatization has taken multiple forms, all designed to free administrators to raise tuition and sign more corporate contracts:
  • Charter departments — generally in the more lucratic fields of business, law, medicine, and engineering — have been established under the guise of “letting them pay for themselves.”  Here, the department or school in question is exempted from campus or systemwide tuition, research, or curriculum policies.  In practice, the effect has been to further internal marketization, undermining other fields claiming fewer resources, and raising tuition in the impacted disciplines to such a point that students cannot financially afford to go into public service (i.e. - teaching, poverty law, community medical clinics) upon graduation.
  • Charter universities are becoming more common in state public university systems.  This model cracks the sixties era egalitarian promise of qualityeducation for all by segregating the “crown” campus — the Ann Arbors, the Madisons, the Amhersts — from the rest of the system, and permitting campus-based exemptions, again, from systemwide tuition, governance, research, and other key policies.
  • Outright corporate privatization has been tried in only a few instances, Maine most notable among them, and involves turning a public college or university into a private corporation by ending public ownership and legislative oversight. Voucher systems are being implemented in various states on a similar model to primary and secondary education voucher systems.  
In 1968, the rector of Mexico City’s Autonomous National University of Mexico (UNAM) famously led a march by 100,000 on the national government to protest the invasion of the university by riot police.  Today, in the United States, administrators have repeatedly chosen to call in the riot police to attack students protesting corporatization.  For the most part administrators have chosen to play the role of enablers, not resisters, of corporatization. 
From resistance to democratization
A onetime Wisconsinite famously said, “the best defense is a good offense.”  Vince Lombardi’s strategic advice is as good for the field of education as it is on the football field.  The best thing about the work of the new Democratizing Education Network (DEN) is not that it unites students, faculty, staff, youth, and concerned citizens in resistance to the corporatization of higher education.  It is that the DEN has an aggressive agenda for democratizing our universities, colleges, and schools.  As codified in the Democratizing Higher Education Charter, the DEN unites these distinct constituencies in working for so-called “non-reformist reforms” in higher education, which is to say, reforms that don’t merely change the distribution of resources, but which, in addition strengthen democratic power.  
Abolishing tuition would have an immediate democratic effect in bringing tens of millions of poor and working class young people into our universities.  Winning legal recognition of the right of students and all campus workers to organize unions and engage in collective bargaining would greatly strengthen the capacity of students and workers to win other reforms.  Restructuring campus governance so that appointed regents, trustees, presidents, and chancellors are replaced by elected bodies would again, strengthen the capacity to win new progressive reforms.
For an entire generation, corporations have set the American higher education agenda.  The rest of us have paid the price.  Student unions, higher education unions, and an aggressive democracy movement offer the opportunity to not only reverse the damage done, but to transform the academy into a pillar of democracy.  Let’s see what kind of positive difference a generation can make.


Adopted at the 2005 Democratizing Education Convention in Madison, Wisconsin:

  1. Full Public Funding for Public Higher Education

  2. Free Access to Higher Education and Abolition of Tuition

  3. Affirmative Action to End Institutionalized Racism and Sexism

  4. Full Recognition of the Right of Students and Workers to Organize

  5. Democratic Self-Government of Higher Education

  6. Service to the Public Welfare, Not Corporate Profits

  7. Free Speech and Academic Freedom

  8. Debt Forgiveness of Student Loans

  9. Civic Education for a Democratic Society

  10. Education, not war. Schools, Not Jails