ACADEMIC CAPITALISM & THE NEW ECONOMYSheila Slaughter&Gary RhoadesJohns Hopkins University PressSeptember 2004

• The new economy is a knowledge or information economy

• Electronic

• Computers

• Hardware

• Software

• Medical substances and devices

• Biotechnology

• Producer services

• Financial instruments

• Product design

• Entrepreneurial research

• Education

NEW OR KNOWLEDGE ECONOMOMY IS NEOLIBERAL

• Individual• Private sector/market• Marketization of state & nonprofits• Competition• Productivity based on technology• Monetization & commodification of ideas & services

GLOBAL ORGANIZATION

• Neo liberal policies promote• Global agreements (GATT, GATTS)

• Global trade adjudication offices (WTO)

• Strengthened protection for intellectual property

• Easy movement of highly educated workers

• Off-shore production

PUBLIC GOOD KNOWLEDGE REGIME Low tuition, mass access Basic research, few ties to corporations State funding with block grants, non-federalized, non-

marketized Teaching as important as research Public service and outreach critical component Boundaries between state and private sector fairly firm

NEO-LIBERAL POLITICAL COALITIONS• Bi partisan Congressional coalition

• More $ to production functions of the state

• Less $ to welfare functions

• Redefinition of state• Privatization

• Commercialization

• Deregulation

• Reregulation

ACADEMIC CAPITALISM

Generating external revenues, cutting costs, & raising rankings are key to colleges & universities

Knowledge is commodity privately held & traded in global markets

Universities & faculty derive income from knowledge, ranging from IP to university brands

Universities & faculty compete for resources to fund knowledge production

The boundaries between public and private blurStudents are consumers

CIRCUITS OF KNOWLEDGE

• Knowledge no longer moves primarily within scientific/professional/scholarly networks

• Entreprenurial knowledge, application

• Knowledge is rarely disinterested• Clincial trials, patents & licensing, branding

• Focused funding flows that privilege STEM fields

• Mission agencies

• Popular majors: professional, esp. business

• Preferential option for the market

INTERSTITIAL ORGANIZATIONAL EMERGENCE

• new organizations emerge to manage new activities related to generation of external revenue

• Technology licensing offices

• Economic development offices

• Trademark licensing offices

• Copyright licensing, sales & marketing

• Distance education

• Special services for students with disabilities

INTERMEDIATING NETWORKS

• intermediate between public, non-profit and private sectors

• Business Higher Education Forum

• University-Industry-Government Research Roundtable

• Internet2,

• Educause

• League for Innovation

EXTENDED MANAGERIAL CAPACITY TO ENGAGE MARKETS

Executive compensation increases dramatically relative to faculty and non-professional workers

54 percent of all professionals are non-academic professionals

Faculty are 47 percent of professionals

Increasing numbers of non-professional jobs are outsourced or automated

EXPANDED MANAGERIAL CAPACITY

• Interstitial organizations become institutionalized• Technology transfer

• Economic development

• IT

• Student services

• Foundations & fundraising

• Auxiliary enterprises

• Marketing

• Enrollment management

• Research support services

EXECUTIVE COMPENSATION REPORT: MA

The average disclosed pay for each employee amounted to more than $464,000.

The highest reported pay package for each school ranged from $345,000 (Clark University) to $6.4 million (Harvard)

The median inequality ratio between highest and lowest-paid employees across the schools analyzed was 22.2

At the Top

Head Football Coach $366,636

Head Basketball Coach $302,451

Athletic Director $265,146

Chief Research Officer, Med School $214,237

Chief Financial Officer, Med School

$198,105

Vice Provost $189,280

At the Bottom

Academic Evaluator $35,534

Lab Technician II $34,201

Residence Hall Manager $33,768

Child Care Center Teacher $32,421

Computer Operator, Entry $32,091

Security Guard $27,978 Salaries are unweighted and reflect actual 2009 dollars

Source: CUPA-HR 2009-10 Mid-Level Administrative and Professional Salary Survey, Research Institutions (Very High and High Research)

CONSEQUENCES OF EXPANDED ADMINISTRATIVE CAPACITY

When so many resources are concentrated on administration the following occurs

Some faculty are paid a great deal, most are paid less There are increasing numbers of lecturers and part timers The gap between non-professionals and all other workers increases More work is outsourced or automated

Source: NEA Higher Education Research Center, Update, Vol. 11, No. 3, September 2007.

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1988, 1993, 1999, and 2004 National Study of Postsecondary Faculty (NSOPF:88;93;99;04). (This table was prepared August 2007.)

SOURCE: U.S. Department of Education, National Center for Education Statistics, 1988, 1993, 1999, and 2004 National Study of Postsecondary Faculty (NSOPF:88;93;99;04). (This table was prepared August 2007.)

Does the All-administrative university realize “Market” Gains ?

The promise of marketizing universities is that competition of various sorts:

For students For grants For donors Fpr intellectual property

Will create a more efficient , effective and less costly university.

I argue that most $ are public, in other words, that the citizenry pays even as tuition rises

TECHNOLOGY TRANSFER

• Most patent income accrues to relatively few universities and patents

• Many universities spend more on technology transfer than they bring in

• Federal research funds support university intellectual property, yet “march in” rights on corporate licenses are never exercised

• Citizens pay for federally funded research, pay for state colleges & universities, pay for products of federally funded research, & pay increasing amounts for tuition

NEW CIRCUITS OF KNOWLEDGE:ON-LINE & DISTANCE EDUCATION• Columbia University's Fathom

• a packaging and distribution system for member institutions to distribute/sell web-based courses and seminars

• University of Chicago, the University of Michigan system, the London School of Economics and Political Science, Cambridge University Press, the American Film Institute, RAND, the New York Public Library, and the Woods Hole Oceanographic Institution

DISTANCE EDUCATION

• University of Maryland's University College

• UMUC was created with private-sector investment, although in recent years it has received tens of millions of dollars in state appropriations--about $10 million per year in 1999 and 2000, $15 million in 2001, and $20 million in 2002

UMUC

• It’s greatest success has been in securing military funding to provide education to service men and women around the globe. Most recently, UMUC was awarded a Tri-Services Education contract from the U.S. Army, at a value of $350 million over ten years. By its own accounts, members of the military accounted for 47,000 enrollments in 2002, of a total of 87,000.

STUDENTS ARE CONSUMERS

• Marketing• Enrollment management

• Early admissions• Snap apps

• Students as captive markets & profit centers

• High status niche marketsFood courtsRecreation CentersLuxury dorms“Wired” dormsSelling student mailing lists to lending institutions

DEBT

2008, 67% of graduating students had debt Average = $23,000 (increase of 24% from 2000)

Many more are in $40K + category

Pell grant recipients, whose families usually make under $50K, are more likely to graduate with high debt

African American’s are most likely to graduate with high debt

Four out of five borrowers with high debt have private (non federal) student loans

SOME DEPARTMENTS CREATE NEW ECONOMY MAJORS & PROFIT CENTERS• Distance education MBAs for high prices

• Stanford $80K• Science MS with no thesis• Profit centers created by academic

professionals• SALT• Community College industry training

• Business school student consulting programs• High priced short courses and summer courses

SOME PROBLEMS & POSSIBILITIES FOR ORGANIZING Stratification/faculty

Problem: those that benefit from academic capitalism have no reason to organize

Possibility: organize the have nots at the level of colleges

Non-academic professionals Problem: they are the majority & a number are aligned with

administration Possibility: organize categories whose jobs are threatened or neglected

Student services, academic advisement, human resources

Part-timers/lecturers Problem: two tier work force that is likely to create tension over timw Possibility: provide benefits, including pensions

Problems & Possibilities (con’t)

Classfied staff: Problems: many universities are anti-union & and it manifests most clearly

at this level Possibilities: support from other organizing groups on campus

Although this has historically not been the case

Possibilities: tie organization and increased pay and benefits to the following campaigns:

Off-shoring

If manufacturing jobs are going overseas, need to build job base in US

Jobs, jobs, jobs

Executive compensation/non-profit status

If higher education is non-profit, and has elements of public good left, then excessive pay is unseemly, and the gap between executive pay and worker pay reduced