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Universities as Commercial Enterprise, an Ongoing Case Study

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This essay on the current experience at the University of Michigan published on Inside Higher Ed, made the rounds last week. Titled “Corporate Values”, it includes several quotes that speak directly to my ten year experience at my current institution. To wit:

America’s public research universities face a challenging economic environment characterized by rising operating costs and dwindling state resources. In response, institutions across the country have looked toward the corporate sector for cost-cutting models. The hope is that implementing these “real-world” strategies will centralize redundant tasks (allowing some to be eliminated), stimulate greater efficiency, and ensure long-term fiscal solvency.

As I’ve argued in the past, the experience in Britain serves as both a model and a warning to my colleagues in the United States. Decisions are taken purely on a revenue-stream criterion. If eliminating one undergraduate program will allow resources to be shifted to another, thus resulting in a marginally enhanced revenue stream on a per-student basis, then such a move has appeal. Those of us providing the “content” are treated as interchangeable parts, have superficial input in decision making (which is typically window dressing as one of many “stakeholders” in the institution, designed to assuage concerns of consultation). Management decisions are conducted with no transparency, and handed down as edicts. There’s no entertainment of feedback, let alone constructive criticism.  Again this resonates:

They frame departments as “customers” of centralized services, perpetuating the illusion that the university can and should function like a market. This premise devalues the local knowledge and organic interactions that make our units thrive. Indeed, it dismisses any attribute that cannot be quantitatively measured or “benchmarked.” Faculty members who reject these models quickly become characterized as “change resisters”: backward, tradition-bound, and incapable of comprehending budgetary complexities.

Adopting the corporate model is analogous to Margaret Thatcher’s “There Is No Alternative” policy prescription of neo-liberal economics in response to “globalization”, however one defines the concept.

Of course, if there’s a need for “retrenchment”, “streamlining”, “doing more with less”, or whatever cliche du jour masks the reality of “layoffs”, it’s never the fault or responsibility of senior management. Rather, we need to continually reposition the institution in the face of a dynamic “sector” in order to retain our position as a world leading university. More recently, the fault is placed solely at the feet of the government, and the policy to eliminate central government funding for higher education at once, and allow for the trebling of tuition fees. The degree to which tuition was increased was left up to each institution. Of course, all but a handful increased tuition from around £3000 per year to the maximum of £9000, mine included. I’m not arguing that the universities are to blame for government policy, which simply did in one day what has been a gradual erosion of state support in the US for the past decade or two. However, I think that there might have been an opportunity to price ourselves marginally lower than the overwhelming majority of our “competition”, thus limiting the need for the ongoing layoffs which have characterized my institution since 2008. A google search of my institution and redundancies finds stories every year between 2008 and 2012, including two on our own web page celebrating the lack of resorting to compulsory redundancies in 2009. The VC is quoted: “I consider that the University is now much better placed to achieve its strategic objectives and vision to become a first-choice first-class university serving the city and region and I am confident that we can now look towards a bright and sustainable future.”

That was 2009.  After I wrote most of this post yesterday morning, an email was sent to staff at noon outlining the need to “reshape our academic offer” which will “drive our investment strategy with investment in some areas, and divestment in others, which we think may include some redundancies”. Said email was also couched in the usual fuzzy business speak about sustainability, strategy, and the need to be “fleet of foot”.  Revealing here is, to my knowledge, that this is the first time one of these memos from senior management explicitly admitted that there might be layoffs. It’s already hit the local media here, and here. So, in addition to 2008 through 2012, we can now include 2013 on the Google count of media stories about redundancies at my institution. I think we did not have any compulsory redundancies in 2009, but we did have over 200 voluntary redundancies during the “strategic review” from 2008-09.

Let’s look at that 2009 statement again:

“I consider that the University is now much better placed to achieve its strategic objectives and vision to become a first-choice first-class university serving the city and region and I am confident that we can now look towards a bright and sustainable future.”

Now let’s compare it with that released yesterday:

“From January 2014, we will be commencing the combined Academic and Research Review with the objective of shaping a new and sustainable academic business model.”

Bluntly, a university run along its interpretation of a commercial model will feature employment insecurity as a daily reality. Again, every year since 2008, employees at my institution, be they academic, professional services, or support staff, have faced the prospect of getting sacked.  Maybe this is understandable if it only has to happen once. However, either the original plan failed — and we have to call this a failure as that bright and sustainable future didn’t last very long at all: during 2011/12 a large number of professional services staff were made redundant, and now we have the prospect of sweeping redundancies among academic staff (in addition to what my colleagues in sociology are experiencing right now). If the original plan did not fail, then this is the new normal. And again, it’s not only my institution. A google search reveals a dozen or so institutions in England that are experiencing similar chaotic insecurity in search of the elusive business model that is both sustainable and bright.

Yet, a university is not a business. We do not have shareholders, nor do we sell a product. Universities are a public good, which add value to individuals and society writ large. Assuming that this is the new reality, why in hell would one want to pay the opportunity costs involved in earning a Ph.D. in order to work in an industry where your job security isn’t that far removed from Dominos Pizza, and where your pay is significantly lower than a similar position in the private sector?  Why go into this “sector” when the fickle year-to-year interests of students, or the shifting business models of senior management, can render your contribution redundant?

The flyer attached to this post was sent out by the local branch of our union last week, and those potential redundancies in question are in Sociology (not to be confused with the prospect of additional redundancies released yesterday). The union of course over-states the case; what I’ve heard indicates total redundancies expected by the university can be counted on two hands[*]; regardless, we’re dealing with academic positions held by human beings, and it’s not their fault that the university in general and their subject in particular is in this situation at this point in time. The School of Government is barely four months old, and our Director was hired from abroad and promised a two year grace period to ensure an operative business model. However, after he accepted the position, Sociology were lifted from a different faculty entirely and added to the new school. Sociology used to be in the same school as my department, then in 2009 the social sciences were disaggregated and sent off to three different faculties. And now at least sociology is back with us, for the time being at least. This is a problem created by the complete lack of institutional stability, or as we joke, a Mao-esque permanent revolution. I’m in my 11th year at my institution. Since I was hired, my department has been part of two faculties, was an independent department before those unites were amalgamated into “schools”, of which we’ve now been in four, have had five Heads of School, and our fifth department chair in that period has just retired. Between the seemingly permanent threat of redundancies and the reality of annual institutional reshuffles, it’s amazing that we’re able to get any work done with even a modicum of positive morale, which is especially critical when an important aspect of one’s job is facing students nearly every day during term.

Again, as I’ve written in the past, I don’t believe the entire manner in which my institution responds is down to poor or uncaring management specific to my institution. A part of it is the corporate world view adopted by those running this institution specifically, and most others across the UK. The institution does not exist as a public good, for the creation or dissemination of knowledge, but rather as a business, where success is measured in profit (or loss) and revenue streams. Indeed, it’s going to get worse before it gets better; I learned yesterday that from 2015 there will no longer be a cap on enrollment at any university. What this means for us is our neighbors up the road on the A-38, with a Russel Group reputation and an international ranking significantly higher (at 148) than our 300th, will be able to recruit the level of student that is our bread and butter, for the same tuition fee. As there’s too much pride at stake for senior management to lower our tuition fee, the email sent out yesterday has a compelling logic as a result of the latest restructuring: wholesale scrapping (divestment) of departments, and concentrating on the few subjects where we are competitive with Russell Group institutions. Universities, aside from the handful at the very top of the reputation tables, will specialize in a mere handful of subjects. If this comes to pass, they really won’t be universities any longer, at least not in the classic sense the way the concept is understood.

Three further paragraphs from Michigan essay deserve quotation:

The absence of consultation with regard to the plan is particularly galling given that academic departments previously have worked well with the administration to keep the university in the black. Faculty members are keenly aware of our institution’s fiscal challenges and accordingly have put in place cost-cutting and consolidating measures at the micro level for the greater good.

Whether or not the collective protest initiated by a critical mass of faculty will result in change or reversal remains to be seen. Nevertheless, the past few weeks have been a wake-up call. Faculty must educate themselves about the basic fiscal operations of the institution in these changing times and reassert their leadership. Gardens, after all, require frequent tending.

Otherwise, we remain vulnerable to opportunistic management consultants seeking to use fiscal crisis as a source of profit. Public institutions that remain under the spell of misleading corporate promises will ultimately save little and lose a great deal.

It’s not too late for my American colleagues to ward off some of the excesses of commercialization that are negatively impacting the British system. For starters, the system of governance is still significantly different. American professors have considerably more autonomy, there remains shreds of the model of shared governance, and tenure. Over here, we do not have those advantages. We are fully corporate, and indeed, the onus for recruitment (of students) is largely up to individual programs. (Over one hour of our two hour school faculty meeting yesterday afternoon was spent on ideas surrounding how to enhance recruitment). Yes, there are faculty and even university level initiatives, and “open days” are organized along those lines, but if there is a decline in recruitment for any given program, senior management places the blame on the academics in that program. If we were an automobile company, each of us would be expected to contribute to the literature on advancing fuel cell and hybrid technology, yet also design, build, and sell the car. Yet, to strain the analogy, if gas prices suddenly double, those of us responsible for SUVs all get the sack.

At least we were given a shred of feel good phraseology: “We’re a successful University which has dealt with the volatility of the higher education sector with confidence in who we are and what we do.” However, I find it astonishing that we can continue on “with confidence” when our reality has been the threat of being made redundant for five years running.

I should add that like my colleagues, I take pride in my job, my department, and my university, but it would be nice if the “sector” returned that favor.

[*] As I now occupy precisely zero administrative positions, following nine straight academic years of holding at least one, and for several years two, I’m out of the loop, hence the reliability of that comment should be treated as not 100%.

[**] An unintended consequence of the relatively new “branding” of my institution, conducted several years ago and requiring the help of two private consultancies, is the scope of creativity allowed to precede the “With Our University” to fit different contexts. Let hilarity reign.

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  • Snarki, child of Loki

    Shorter “vision statement”:

    The beatings will continue until morale improves

  • Waspuppet

    However, I think that there might have been an opportunity to price ourselves marginally lower than the overwhelming majority of our “competition”, thus limiting the need for the ongoing layoffs which have characterized my institution since 2008.

    That would require your institution to ACTUALLY “think like a business,” and not just say whatever comes to the top of their heads second to “we want your money.”

    • DrS, 42 year old 40 year feminist

      That would require your institution to ACTUALLY “think like a business,” and not just say whatever comes to the top of their heads second to “we want your money.”

      That *IS* thinking like a business.

      • ericblair

        If you look at the whole approach here, we already have a business model like that: it’s called “diploma mill.” The purpose of the university is primarily the rent-seeking issue of whatever degree the customer wishes, with some eye to keeping him/her entertained for a specific amount of time, and paying for the upkeep of a suitably impressive pile of granite and marble to provide social credibility.

    • GoDeep

      I don’t know enuf abt the British system to comment intelligently, but based on Dave’s description they are running universities over there like we run modern day consultancies, where each management discipline is responsible for its revenue stream; for extending the intellectual boundaries of the practice; and for selling & marketing itself.

      I’m comfortable w/ that as far as consultancies go. But like Dave says, its hard to wrap my head around the idea of a university as a business & not a public good. There are many worthy areas of intellectual/artistic endeavor that will never make a market.

      • Davis X. Machina

        There are many worthy areas of intellectual/artistic endeavor that will never make a market.

        If they’ll never make a market, how can they be worthy?

        All that is, can be bought and sold.
        All that cannot be bought and sold, is not.
        All that can be bought and sold, must be bought and sold, for the highest price.
        This is the whole of the Law and the Prophets. The rest is commentary.

        Baruch atah ha Shuk, dayan ha emet.

        • GoDeep

          I know you’re being sarcastic, but this isn’t even challenged by our so-called business elites. Very few business elites majored in business. A significant percentage majored in engineering, but many more majored in poli sci, econ, or even history. I don’t know any (non-engineering) executives who don’t value a liberal arts education (and precious few engineers who object).

          Hence I find this antagonism to a liberal education passing strange.

          • Davis X. Machina

            It’s not considered unsuitable at the highest, booted-and-spurred-and-ready-to-ride levels.

            It’s considered unsuitable for the saddled and ready to be ridden.

            • Linnaeus

              This.

              • GoDeep

                I guess…I’m from the saddled & ready to be ridden class as are my closest friends, but none of us thought it wise to major in business, even if we ultimately wanted business careers… I may be a victim of my experience. The only ppl who complained abt my economics major were ppl who were decidedly not of the business elite class (like my mother & HS counselor), lol.

                • Linnaeus

                  I don’t think Davis X. Machina is saying that the ready-to-be-ridden class is, on the whole, making its own determination that liberal arts are not for it. Rather, that’s the message coming from societal elites.

          • NewishLawyer

            Me too. I try to point out that a lot of business elites or even successful professionals have liberal arts backgrounds but to no avail.

  • Waspuppet

    At least we were given a shred of feel good phraseology: “We’re a successful University which has dealt with the volatility of the higher education sector with confidence in who we are and what we do.” However, I find it astonishing that we can continue on “with confidence” when our reality has been the threat of being made redundant for five years running.

    Your mistake there is in thinking that when they say “We” they include you.

    (Sorry for the double comment; I hit the wrong thingy.)

  • Scott P.

    I am at an American institution that is currently suffering enrollment declines, that are affecting our college and department particularly heavily. Everybody is in crisis mode, with the unwritten message being that programs will soon be on the chopping block if they aren’t bringing in enough students. We’ve already had classes suddenly cut for insufficient enrollment, and each of the last three semesters I’ve been thrust into a class I hadn’t planned on teaching due to cancellations

    It is, of course, impossible to operate in a coherent fashion when there is no predictability regarding who will teach what, when.

    • MAJeff

      We’re dealing with similar issues in PA. Out here in the SW part of the state, we’re dealing with enrollment declines, along with stagnant/declining state funding, and some of the state universities are starting to cut programs. Our college ended up cutting about 11% of course sections last fall, and preemptively cut 5% for the spring semester. It’s brutal.

  • NewishLawyer

    I agree with your observations and conclusions that universities are a public good even private ones like my alma mater.*

    However, we might be very quaint and old-fashioned in our belief here and I wonder how many students are on the side of the admin with this because of rising tuition and loan anxiety.

    I am a firm believer in the idea of a mass educated class and am also a firm believer in a strong arts and humanities education. This belief has gotten me labeled as being something close to an artistocrat because students can’t think about majoring in the arts and humanities unless they are loaded.

    While this is not exactly true, it does seem to be a common mentality. I went to a small liberal arts college (something that seems very American these days) and there were plenty of people from modest to less economic circumstances who majored in arts and humanities subjects. This was from 1998-2002.

    Now the perception with loans is that those subjects are luxuries for the rich. You need to major in something practical and job oriented like Forensics, Business fields, Pre-Med, Engineering, etc. A friend who is going to college much later was originally going to major in English/Writing but switched to Forensics because she felt it had more clear job application options.

    I don’t know how much this new thought pattern is organic or comes from the press of business and revenue minded admins.

    There is a long and unsolved debate about what the purpose of a university education is and plenty of people seem to think that it is to provide entry to the middle class or above and this is somehow incompatible with being an English or Renaissance Studies major.

    • Steve LaBonne

      If you’re a student who’s going to be incurring massive debt and will need a healthy income to have any hope of repaying it, thinking that way is inevitable, indeed not to do so is foolish. (And yes, things have gotten quite a bit worse even since you were in school- tuition is significantly higher and the job market is much worse- so your personal experience is largely outdated.)

      Heavy subsidies are a prerequisite for mass liberal education; non-wealthy students can’t and won’t (and shouldn’t) bear the direct and opportunity costs themselves. But our society has (unwisely) decided not to provide the subsidies any more.

      • NewishLawyer

        Considering I graduated law school in 2011, I know all about the employment crisis.

        Actually things were not that good in 2002. 9/11 happened, the first Tech bubble went bust. IIRC about half of the graduating class did not have anything lined up. Maybe more. I was one of the lucky ones because I was interested in teaching English in Japan for a year. This was pre-housing boom.

        Point taken on tuition though.

        • Steve LaBonne

          All I’m saying is, the students are the last ones who should be blamed for thinking like this. (I don’t think you were really doing that but it could be read that way.) It’s not just a perception that you can’t afford to major in English if you have a lot of loans; I’ve seen too many people in their 20s and 30s (sometimes all too close to home- one my wife’s sons) who are (barely) living with the consequences. Frankly I’m delighted that my daughter is going to be an engineer (and her boyfriend already is one.

          • GoDeep

            One of my friends from college was an English major and, following in the footsteps of his beloved father, got a Ph.D in English with the intent of being an English professor. His brother, too, got a PhD in Anthro. Neither has been able to find full time, tenure-track positions in academia. One works as a adjunct clinging to the hope all these years later that he will land a tenure track position. His brother just said screw it & went into the software industry.

      • postmodulator

        I think our benevolent masters think that the “subsidy” is that we don’t have to borrow the money to finance our education at the market interest rate.

        Of course, given the unique nondischargeable nature of student loans, this idea, too, is a lie.

      • tt

        The massive gap between in-state and out-of-state tuition at many state schools suggests to me that many students are still being subsidized.

  • NewishLawyer

    You might be too late:

    http://www.slate.com/articles/life/education/2013/11/minnesota_state_moorhead_could_cut_18_academic_programs_why_do_colleges.html

    I’m honestly surprised at some of the departments on the chopping block. Physics? Economics?

    • Davis X. Machina

      If you want to study impractical, theoretical stuff like physics or economcs, that, you go to the UMN flagship campus in the Twin Cities.

      Up here the University of Southern Maine (Portland) is also getting ready to ditch its physics major.

      The rationale is that physics is too hard, it doesn’t attract enough majors, and all you really need is enough physics profs to teach the required courses for the popular majors.

      In twenty years you won’t be able to take a BA degree at a public college in the US, except for a few showy exceptions, like, maybe, UT Austin or Michigan. In thirty, you’ll be able to add the BS.

  • LeeEsq

    The reason why mass higher education wasn’t seen as a commercial enterprise during the immediate post-WWII years was that society as a whole saw it as a good thing and was willing to pay the taxes to support it. We have large parts of society that doesn’t want to pay its taxes any more, the results be damned. If universities need to turn into commercial enterprises in order to survive than so be it.

    • GoDeep

      The Space Race & the GI Bill.

      • postmodulator

        Garry Wills, in Nixon Agonistes — and I’ve seen the insight elsewhere — pointed out how the Greatest Generation was, first, lifted into better circumstances by liberal programs, and then became more conservative as a strategy to preserve those circumstances.

        This is constantly being repeated in micro and macro. I spent all of 1999 hoarsely arguing with dot-com employees that they had too benefited from government spending and that their tax bill was therefore just. Mostly they never saw it.

        • LeeEsq

          There is a third school of though that the broad prosperity enjoyed after WWII wasn’t a result of liberal programs or free market capitalism but hard to replicate historical conditions.

          The theory goes something like this. Western European countries, Japan, South Korea, and Taiwan were so devastated by WWII or the Korean War that the only way their economy could go was up. Meanwhile the United States, Canada, Australia, New Zealand, South Africa, and Israel benefited by surviving WWII with their infrastructure intact and posed to take advantage of the dissaray elsewhere.

          All of the above countries benefited by large swathes of the world cutting themselves off from global markets by growing communist or otherwise non-participation and a desire for autotarcky. This benefited the workers in the the above countries because it made the price of labor high by limiting its supply. As globalization and the fall of communism made more labor available to business than living standards in the countries mentioned in the first paragraph were bound to decrease.

          • GoDeep

            I think its both factors, Lee, no? The absence of serious competition following WW2 absolutely had a ginormous effect on US industry, and the fact that the middle class had broad access to education & homes for the 1st time in American life certainly ensured that millions of people capitalized on the opportunity presented.

            • LeeEsq

              Its a bit of both but I’m wondering if the broad prosperity that was enjoyed in what we would call first world countries had more to do with difficult to recreate factors than anything else. All the Communist countries basically wrote themselves out of competition with the first world. So did many non-aligned countries through a decision to go for less market friendly economic policies.

              The labor sources available to industry were limited. Moving a factory to China was not possible because China was shut off. The consumers available for various products was also limited. We know that businesses would take advantage of cheap labor when it was available. Factories moved to the non-unionized South before they moved outside the United States.

          • postmodulator

            And there’s something to that theory too; it certainly fits the data. But as far as someone benefiting from a program that they want to turn around and cancel for anyone unfortunate enough to be younger than them, I have a lot of sympathy for the explanatory power of that, because I’ve seen so much anecdata.

            Hell, the GI Bill, for instance, still exists, but in three generations it went from paying a full ride at any school you could think of, with some cash left over, to sort-of making a dent in the cost of a state university. (That’s without looking up what the numbers currently are, but I think that’s about accurate.)

  • LeeEsq

    I do not support this but am merely pointing out the persepctive of the anti-tax crowed.

  • tt

    All your examples are negative. Are there positive models? There are lots of public universities in the US/UK. Are any responding correctly to cuts in government funding?

    • NewishLawyer

      They are but not necessarily in great ways. They seem to be trying to become quasi-private universities:

      http://www.psmag.com/education/breaking-away-several-top-public-universities-going-private-68007/

      They seem to be giving states a deal where they accept less government money but in exchange get more freedom to accept international or at least out state students and be able to raise tuition more.

      I’m not sure this is what we want.

      • postmodulator

        That’s surprising, the idea of freedom to accept international or out of state students. At my state institution I’m not noticing any constraints on that; we have an outreach office in Beijing. (I miss typing “Peiping.” What a cool word.)

        We do have a cap on tuition hikes, but at least once in recent memory, our president asked for a temporary lift on the cap…

        Actually, that was a funny debacle. In broad strokes: the president, having been in that office a year or two, constructed a plan where he would raise tuition substantially every year, for four years; the state would contribute about an equivalent amount of public funds; and the combined new revenue would enable the university to blossom. (I have no idea what “blossom” was supposed to mean in this context. I was already working here then and the idea of, for instance, my receiving a raise was at no point mooted.)

        So he goes to the state and says “Lift that cap for four years and I’ll raise tuition et cetera.” And the state legislature says “Fuck, if you’re willing to charge the students that, we can cut the shit out of our contribution to you.”

        And so they did.

        And the president lived happily ever after, by the expedient of getting a better job about six months later. And student tuition went on a rocket to Russia but academic budgets stayed virtually frozen.

        • NewishLawyer

          I wonder if the Presidents are just thinking “if our budgets are going to be slashed, we might as well get something out of it.”

          • postmodulator

            I can’t tell what the presidents are thinking. From a distance, what it looks like to me is that they’re so focussed on placating an enormous number of different constituencies with conflicting and usually unreasonable demands that they’ve forgotten that universities are actually here to do something. But I’ve never worked closely with one.

            • Hogan

              Grand Bargain syndrome strikes again.

        • GoDeep

          Is that what’s been going on? I’ve been trying to get a read on what’s driving the insane inflation in university tuition but have yet to find any good quantitative based articles. I hear everything from the Baumol Effect to Over Priced Presidents to Slashes in State Funding to Too Much Sports Spending, but nothing that really tracks dollars & cents well.

          • Joe Bob

            I don’t have anything quantitative to offer but my first hand experience is that the single largest factor is declining state support.

            I went to a Midwestern land grant university for graduate school. From when the school was founded in the 1860s until about 2000 a majority of the school’s funding came from taxpayers. After 2000, the largest sources of funding are tuition and fees.

          • Snarki, child of Loki

            Go over to the Washington Monthly College Guide blog.

            Public colleges traditionally were very “lean”, with one of their major goals being to provide affordable education to in-state students; so tuition was set on the basis of cost minus state subsidy, with state gov’t having strong representation on the bodies that controlled the finances to enforce the deal.

            In the language of health-care reform, this is the “public option” that kept tuitions down by competition with the private colleges; and public colleges still get the vast majority of the students.

            But the slashed state support drove up tuition, and also broke the mandate to set tuition based simply on cost. (Perhaps that’s the MBA mindset having its effect).

            What we’re seeing now is an price that is simply based on supply (limited) and demand (large), because a college degree is still considered an absolute necessity for a reasonably comfortable lifestyle. Loans have helped make this possible, in the same way that mortgages make homebuying possible: you finance an expense that gives a long-term benefit, which is not to say that students don’t get screwed on the loan terms.

            The underlying education costs haven’t actually changed that much (just ask faculty how much they pay has gone up over the past couple of decades). But since colleges (public and private) are 99+% non-profit, they have to spend those tuition dollars somehow, and the RESULT has been fancy dorms, bloated administrative empires, etc.

    • guthrie

      No, there are likely no positive models here in the UK because the game is rigged to exclude them. That is, for our definition of positive that is, not the managerial class’s definition of positive.
      Let me repeat that – it is rigged for commercialisation in the UK. No other option is being offered or allowed. Organised labour is too disorganised to take up the challenge.

      The government was in fact warned that the fees thing they set up was a mess and would lead to everyone trebling their fees because of the uncertainty involved in the changes in funding, but they didn’t listen or didn’t care.

      • tt

        So you’re saying that Dave is wrong to blame the universities? The actions they are taking are the only ones available?

        • guthrie

          That’s true, I’ve kind of overstated myself. But It is rather odd to suggest that an oil tanker turn itself into a cruise liner. There are probably alternatives, but there’s no source of drive to change and the economic cards are held by the ideologically driven government. So given all this, they are pretty much doing what they can do, albeit with extra helpings of suck because the first part of destroying university access was getting the universities taken over by managers whose job it is to manage, rather than improve research and teaching.

          • Dave Brockington

            At my institution, the explicit, naked commercialisation model was implemented by our current VC, who took the post in late 2007. This was years before the central government withdrew state funding and implemented the trebling of tuition fees, and over two years before the election of the current coalition government. Senior management will blame the government (without saying as much, rather refer to the dynamic challenges faced by the sector), but that wouldn’t be accurate. This has been senior management’s agenda since taking office.

  • BoredJD

    I’m speaking out of more familiarity with the American system, but I’m still left with a lot of unanswered questions, the most obvious being: what the hell happened? Why has tuition been rising? Obviously loss of state subsidies is one thing, but that can’t account for the entirety of the rising costs. Does administrative bloat have something to do with it? If that’s the case, then at what point did that happen? The idea of paying a dean a seven-figure salary still seems insane, but it happened, seemingly overnight.

    Students hear a lot of griping about cuts to education, but not a lot of solutions about who can or should pay, or whether the things proposing to be cut are necessary and why. And on the faculty side, there seems to be an assumption that it is good for the costs to be borne, and it’s preferable that the State bear them, but if not the students will do in a pinch. Without mutual understanding, it would seem difficult to build a working alliance between students and faculty that might blunt the power of central admins.

    • postmodulator

      it would seem difficult to build a working alliance between students and faculty that might blunt the power of central admins.

      Yeah, “difficult.” We’re in an era when the arrogance of tenured professors is proverbial, the entitlement of college students is equally proverbial, and the only other stakeholders — the adjunct faculty and GTAs actually doing all the work — are as weak as kittens. So, yeah, a working alliance might be “difficult,” in the sense that it is “difficult” to fly to the moon by flapping one’s arms.

    • NewishLawyer

      I think that globalization has destroyed the idea of a regional college or university.

      My law school is connected to a Jesuit university. The university has been around since the 1850s, the law school since 1913. As far as I can tell, they were content with educating locals for most of their career. The student body was largely from the area and possibly of working class to moderate socio-economic backgrounds. The children of cops and firefighters, Dockworkers, etc. If you meet alumni from the 1960s or before they tend to fit this mold.

      Now the undergrad institution has more of a reputation for catering to International students and the not-as-bright children of the American rich. There are still some local students but they are dwindling in number.

      Everyone wants to get students who can pay top dollar and seem posed to donate in the future. They use expensive dorms and other amenities to cater to this crowd.

      I went to college from 1998-2002 and my dorm was rather spartan. We had two dining halls on campus. The gym was new and nice but there was no climbing wall and stuff like that. We were also a small school and prestigious enough that accommodations could be spartan.

      Now everything seems super fancy and elaborate.

      There was an article in the Atlantic by the President of GW who claimed that this arms race is only going to continue.

      • GoDeep

        Here’s a piece that suggests the same thing: http://www.nytimes.com/2012/03/11/business/college-costs-are-rising-amid-a-prestige-chase.html?_r=0

        This is suggestive but I’d still like to see a more dollars & cents accounting. State funding declined by X%, Administrator salaries went up by Y%, Labor costs went up Z%, and Tuition went up 3,000%.

        • LeeEsq

          I think Harvard’s current President once remarked that they get enough applications to fill seven or eight Harvards every year. The problem is that the number of elite students has gone up but the number of elite schools has more or less remained constant in the United States and across the world.

          One way to solve this problem is that elite universities could expand or create branches in order to accomodate more students. This isn’t going to happen because it will dilute their brand name. As a result, you have elite students, in terms of grades and socio-economic status, applying to schools they previously wouldn’t and forcing the price up. This brings formerly non or less elite schools into the elite status. This creates even more problems.

          • postmodulator

            Twenty years ago, I knew precisely one student who applied to an Ivy, and she was waitlisted. (I’m of humble origins — my parents cautioned me that hoping for a good state school might be aiming a little high.) She had gotten a B once in high school, but that was the only stain on her academic record, and she had the extracurriculars, the volunteer bullshit, you name it.

            If they’re more selective than that now, I’m terrified to think who they’re admitting. (Besides the hordes of dumbass legacies.)

            • LeeEsq

              The problem is that there more students like her now or better and not just from the United States. Twenty years ago is 1993 and globalization was more or less just beggining. India was poor. China was still a poor place with few rich people able to send their kids to prestigious Western universities. Most Communist countries were only a few of years out of Communism. South Africa was still formally under Apartheid even though it was going to end soon.

              Twenty years ago, the number of kids from outside the United States trying to get into elite or non-elite American universities was much less. The number of foreign students who did not need scholarships was even smaller. The number has increased exponentially since then and many more can pay full tuition without scholarship.

            • Davis X. Machina

              It’s a $75 lottery ticket.

              • LeeEsq

                Pretty much.

      • BoredJD

        Given what I remember about a lot of private schools around where I grew up versus the more blue-collar versions of them that exist in my parents’ memories, this is spot on.

        NYU seems to be the most prominent example, going from a cheap, quasi-public school for working-class (mostly Jewish) kids, to a Manhattan playground for the progeny of the upper-middle-class from around the country and the super-rich from across the globe. (Of course, if that was actually the case NYU would not have become synonymous with “massive student loans” among my generation).

        But that raises a broader question: why did the alumni who benefited from a low-cost, accessible education not pressure their institutions to maintain those same values? I met a prominent lawyer and NYU Law alum who bemoaned the high cost of the school, but still talked about his involvement with the program.

        Somewhere, somebody got into their heads that education needed to be affordable, not cheap. Those are very different things.

        • postmodulator

          why did the alumni who benefited from a low-cost, accessible education not pressure their institutions to maintain those same values?

          My instinct is to say “because people are awful.” But some people think I’m too cynical.

          • BoredJD

            In more words: powerful, successful alumni use donations to build shrines to themselves, and a shrine that nobody wants to make a pilgrimage to is no shrine at all.

        • GoDeep

          B/cs ppl compartmentalize, and they still have loyalty to their schools. They have a whole host of fond memories associated with their school & they want to return the favor.

          I, along with all my classmates, strenuously object to both my college’s & my b-school’s rampant tuition increases, but we’re not going to stop working with the school. Hell, by contributing time & $$$ we hope to either slow the tuition increases or at least help in someway the students there.

        • NewishLawyer

          NYU was always a weird example. Same with BU and GWU. Large private universities in cities with more prestigious institutions. NYU always probably felt like a kid brother to Columbia, BU to Harvard and MIT, and George Washington to Georgetown.

          I was thinking more about Brooklyn College and the rest of the CUNY System but maybe NYU also spent time educating local working-class youths and is now how you describe it.

          But NYU always had some prestigious programs like Tisch, Stern, and their Law and Medical Schools. NYU was one of the first film schools with a national reputation like UCLA.

          • BoredJD

            IIRC, NYU was considered the place for smart, working-class Jewish kids who were kept out of Ivies, and then, driven by the GI bill, moved essentially to open enrollment after WWII.

            In Boston, I am thinking specifically of Suffolk and Northeastern.

            • NewishLawyer

              Based on some googling you might be correct.

              Suffolk and Northeastern are great examples of former working-class universities.

            • CL Minou

              When I was there for grad school, I told people NYU was a Greek word meaning “couldn’t get into Columbia.”

              • NewishLawyer

                That is the reputation I knew NYU of having. When I was applying to school, they were seen as the place for students in the B to B plus range.

    • stepped pyramids

      Extremely simplified explanation: quasi-privatized institutions encourage rampant rent-seeking and are much less efficient than either fully private or fully public systems. The current educational funding system allows losses to be socialized and profits to be privatized at both ends: banks get to issue large quantities of relatively high-return and subsidized debt, university administrators and their contractors get to put those dollars in their pockets, and students get to be on the hook forever.

      Privatizing education (eliminating subsidized loans and state funding of schools) could potentially eliminate a lot of the bloat, in exchange for radically reducing access and introducing further inequality.

      A more public system would also be more efficient and equal, although it’d cost more on the books. It’d be cheaper in terms of total social cost, though, like single payer health care.

      The ACA reconciliation actually included a fairly decent step in this direction by removing banks from parts of the federally-subsidized loan system. This was a case where the US Government was paying banks to lend out the US Government’s money — pure rent seeking. Eliminating it saved money. Of course, the wingnuts referred to it as “socializing education” or “socializing student loans”.

      • Steve LaBonne

        This is pretty much what characterizes all our major problems: rent-seeking has become by far the dominant sector of the economy, dwarfing anything describable as productive activity.

        • postmodulator

          Yeah, “rent-seeking” is going on America’s gravestone. Like the Romans and lead plumbing.

      • Linnaeus

        I’m not an economist, so I may be off-base here, but it’s my understanding that the nature of university education as a positional good exacerbates this problem. You’ll pay more (and go into debt to do so) for higher ed more than you would when purchasing other goods and services because of the benefit of your having a degree from a particular university, and conversely, others not having it.

        • BoredJD

          As pointed out by Dean Tractenberg at GW, though, there’s a bit of a chicken and egg problem. You pay more for a GW degree because it’s worth more because it costs more. In his own words:

          “The way Trachtenberg saw it, selling George Washington over the other schools was like selling one brand of vodka over another. Vodka, he points out, is a colorless, odorless liquid that varies little by maker. He realized the same was true among national private universities: It was as simple as raising the price and upgrading the packaging to create the illusion of quality. Trachtenberg gambled that prospective students would see costly tuition as a sign of quality, and he was right. “People equate price with the value of their education,” he says.”

          http://www.theatlantic.com/business/archive/2012/09/meet-the-high-priest-of-runaway-college-inflation-he-regrets-nothing/263032/

        • College is sold as both a social necessity and an investment in the future, the former of which is somewhat true and the latter of which should be true. In exchange for such an irreplaceable prize, the student loan system tells teenagers that they can pay for it sometime later.

          For a lot of them, this is their first experience with debt and money management. Beyond that, I can say from observed experience that financial counseling in state universities frequently just amounts to finding a way to scrape up more money for sixth-year students to finally finish their degrees.

          And then there’s the sunk costs issue: you’ve gone into debt for three-fourths of a degree. You’re not doing that well, but what you know is that if you leave school now you’ll start being on the hook for your debt without even a degree to show for it. So yeah, you take those private loans and finish your degree.

          I’d like to throw the whole system out, but in the absence of that I would suggest a second- or third-year bailout program to allow people who aren’t going to be able to finish a program effectively to have their loans forgiven, and a tighter rein on financing for academic underperformers after that period. Sometimes it is a valid option to choose to drop out.

          • BoredJD

            “I’d like to throw the whole system out, but in the absence of that I would suggest a second- or third-year bailout program to allow people who aren’t going to be able to finish a program effectively to have their loans forgiven, and a tighter rein on financing for academic underperformers after that period. Sometimes it is a valid option to choose to drop out.”

            Interesting proposal. The more philosophical reaction to exempting student loans from bankruptcy protections is that a graduate discharges the debt but retains the signaling of the degree. That wouldn’t be present if we allowed students to cut their losses before they got the degree, similar to what happens when a university closes.

            Retention of the knowledge/education itself does not seem to be a problem, since one could take out $25,000 to buy out the contents of a Barnes and Noble, read the books and discharge the debt.

            • I’m willing to accept the risk that some people might become educated without paying money for it (perish the thought!). I suspect it’s not going to be the case for a lot of people, though. If you’re getting something out of the educational experience, you’re probably going to be able to finish the degree.

              The people that don’t get much help from this proposal are the people who complete a degree in four years without any significant academic slip-ups. Those people have their own set of problems which I think are mostly distinct from the educational finance system.

              That’s probably a fatal flaw with my proposal in political terms — it’s a hard sell if it isn’t designed to punish the unvirtuous.

              • GoDeep

                Its an intriguing proposal & maybe the most sensible. But incomes for ppl w/ only a partial degree are falling while they’re rising for ppl w/ that degree. The credentialing matters a lot. 75% of a degree is worth no more than 10% of a degree.

              • BoredJD

                One could say that about all consumer bankruptcy protections. But what I think drove the exemption for student loans in the public eye was (1) before relatively recently, student loan debt was a province of the very poor, (2) the idea (fueled by apocryphal stories) that the system would be gamed by future investment bankers or corporate lawyers who’d get the degree, file bankruptcy in a week, and then take that job at Goldman or Skadden. This is not how bankruptcy works, but people don’t understand most safety net programs that they don’t deal with on a regular basis. Moreover, it’s just not realistic- not all college or law degrees are created equal.

              • NewishLawyer

                What sort of problems do you think people have if they can do a 4 year degree in 4 years without academic slip-ups?

                • postmodulator

                  The worst job market in eight decades, same as if they got it in five or six years?

                • BoredJD

                  “What sort of problems do you think people have if they can do a 3 year JD in 3 years without academic slip-ups?”

                • There’s a bootstrapping issue in the current economy with turning a 4-year degree into an entry-level job in the relevant field. Law is an obvious example, but it’s an issue in most fields right now. Even STEM fields.

                  I don’t think that’s an issue with education finance, exactly, but the need to repay loans tends to direct 4-year degree holders into higher-paying work outside their fields rather than the cheap or free employment and/or secondary training they might require for an entry-level job.

                  And the longer you spend outside your preferred field, the less useful your formal credentials get.

          • NewishLawyer

            I would say college has become a damned if you don’t, maybe damned if you do.

            We know that people without college degrees are likely to suffer low wages, higher unemployment, and less chances of advancement.

            Now we have also reached the stage where it appears that getting a college degree is necessary for a middle class or above life but not a guarantee.

      • GoDeep

        Are there any #s to quantify this rent seeking in the university sector? For instance I have friends who complain that several administrators at UT’s Law School make $200K+ a year, but of course in the private sector they’d make even more. At that point my friends say, ‘Well public servants should be paid less.’

        And, obviously, it would take many, many scores of administrators making $250K+ per year to match up to the 15% annual inflation #s we’ve been seeing in university tuition for the last 10yrs.

        • postmodulator

          I am not willing to stipulate that administrators at the level you’re talking about could make more in the private sector. We’ve had a lot of administrators come to us from the private sector, many moving several states away, and I don’t believe that they were all actively seeking pay cuts.

          There are large classes of university employees who mostly could be making more in the private sector; we’ve got one specific IT area that gets people scooped out of it about every three months.

          • GoDeep

            The ppl my friends were citing were senior level administrators. They would have been Sr Vice Presidents & Sr Partners in the private sector, in all likelihood making more in total compensation (income + bonus + equity) http://www.statesman.com/news/local/pay-soaring-for-some-ut-system-executives-records-2461329.html

            • GoDeep

              Do you think academia generally pays better, or worse, than the private sector? My friends in academia make considerably less than in the private sector, even at the ‘middle management’ rank & certainly at the professor & adjunct rank.

            • GoDeep

              Do you think academia generally pays better, or worse, than the private sector? My friends in academia make considerably less than in the private sector, even at the ‘middle management’ rank & certainly at the professor & adjunct rank.

              • postmodulator

                Well, generally worse, but mobility between the two sectors is not always easy and so apples-to-apples comparisons are not simple. What it seems like to me is that if someone has nebulously defined “management skills,” they end up making a pretty competitive wage. But there are innumerable skillsets that universities will pay for that no one else in the entire world will. (Fencing coach. FERPA compliance officer. “Knows a lot about Henry James.”)

                Maybe UT Austin’s law school differs a lot from my institution, but I’d be surprised.

                I think there’s some title inflation happening here too — “Directors” and “Vice Presidents” running an organization with like six people in it. (I know of a director with zero direct reports and a very nebulously defined portfolio.) So they’re not making what they could in the private sector, but they’re not really doing the work they’d be doing in the private sector.

                Obviously adjuncts are paid less than they would be in the private sector. If you define the hourly work that adjuncts do honestly, and then divide by their wage, you couldn’t legally pay someone that in the private sector. So yeah.

            • BarrY

              GoDeep, if they could make more elsewhere, then why were they in academia?

              • Anonymous

                Because they wanted to teach and conduct research. Also tenure was a powerful tool for keeping wages low. Now it is a powerful tool for exploiting junior faculty. (Since it is increasingly difficult to achieve.)

    • guthrie

      The specific trebling (talking UK here) occured because the market worshippers know no economics; their plan for the funding changeover created massive uncertainty, so the universities all had to charge the maximum possible to stand a chance of keeping level funding.
      The net result is that you can assume either that they are stupid, or that they are evil. Or that they are both.

    • Matt_L

      Stepped Pyramid’s explanation about rent seeking is important, but the whole problem cannot be just chalked up to administrative bloat.

      People like to cite the fact that 70% of our college’s expenses are “salary and benefits” and tend to assume that outrageous faculty salaries for tenured faculty driving up costs. But the percentage of full time tenured faculty has been declining steadily since the 1970s and they have been replaced by and large with part time non-tenured adjuncts and fixed term instructors. This has been an effective check on salary growth for tenured instructors. The one exception to this is the growing “fringe” expenses for things like health insurance. The money that might have gone to pay for faculty raises go to pay increased health insurance premiums instead. Like private companies, Universities have been shifting their faculty retirement benefits away from expensive defined benefit plans towards define contribution plans (401k). So salaries in academia aren’t necessarily the problem.

      As newish lawyer suggests, part of the change is a shift in who the universities are serving. Private institutions have been bumping up student amenities (climbing wall, Olympic sized pools, more dorm buildings with single rooms, etc) to attract customers who will pay the sticker price. Public colleges and universities have felt compelled to offer similar amenities to attract similar students. The result are increased student fees and charges that are added on after the tuition bill.

      Not all of these things are ‘frivolous luxuries’. The Universities now have to implement important social policies like Title IX and other anti-discrimination legislation. (Remember Title IX was not just about sports, in fact it is mainly about making sure that women have the same access to the academic side of the university. It has been spectacularly successful, since women now make up over half of American college students). Running a university now requires more administrators than it did twenty or thirty years ago. The new reporting requirements proposed by the Obama Administration is going to lead to an increase in the number of administrators because there needs to be more people to write reports.

      But finally, for American public universities, the decline in state funding does matter. Back in the 1990s the state subsidized 70% of the cost of a student’s education while the student and their family picked up the other 30%. Now, in the 2010s it is directly the opposite, the student pays a little over 70% and the state covers less than 30%. Don’t be fooled, your parents and grandparents paid a lot less to go to a state college because someone thought it was worthwhile to pay the taxes necessary to support the system. That is the bottom line.

      • I think you’re dead on. Administrative salaries are a symptom of the disease, not a cause.

        I’d consider the construction of new facilities and rising of health insurance costs to be examples of rent seeking, though. And all of these changes have been able to go under the radar without countervailing pressure because the costs have been taken off the public ledgers and moved to the the private debt rolls of students.

        The answer is public funding. Always has been. State budgets are a tough place to find that funding, though, since they fluctuate so much with the economy.

        • GoDeep

          I don’t see facility construction as rent-seeking, unless there’s some pay-to-play scheme behind it; this is even less true when it comes to health insurance–all kinds of businesses are crying uncle when it comes to this.

          I’m very interested in this “overhead” issue which Matt cites, since it tracks a thought I’ve had for years, but for which I’ve never seen any quantitative examples/reports. Has anyone seen any good #s that documents an increase in university overhead?

          • You don’t think that contractors see universities as an abundant font of cash?

            • GoDeep

              The contractor’s ‘revenue’ is the university president’s ‘expense’. For this to be classic rent-seeking the president would have to be ‘unfairly’ profiteering from this–getting a kickback for instance from the contractor.

              I think, more typically, uni presidents build new facilities b/cs they fuel uni prestige. And increased prestige fuels increased income for them. I miss the shrinking green space at my alma mater for instance but the campus is far more impressive than when I attended & enrollment is up like 50%.

              • postmodulator

                Well, administrators here past a certain level expect fairly luxurious surroundings. I’ve lost count of the unnecessary office-redecoratings. So that’s a “benefit” from employing the contractor, if you squint.

                I used to daydream about forcing these people, before they could begin their big redecoration project, to go out in front of our building and buttonhole a student — then tell the student, “You. I’ve decided that you will be paying for your student loans out of your Social Security check — because I don’t like the carpet in my office.” Rub their noses in it, I guess.

                • GoDeep

                  OH, I see what you’re saying, sorry. Gold plated toilets, marble walls, and granite desks. I can see that as a form of rent seeking.

                • Snarki, child of Loki

                  Since colleges are generally non-profit, they can’t just declare a dividend with all that excess tuition cash, so they have to soak it up somehow.

                  Administrative empire building and salary-padding, gold plated toilets, climbing walls, all that stuff.

                  But I think that’s all and EFFECT. The CAUSE is the death of the “public option”: state subsidized colleges that compete on price, with the near-unlimited demand for higher ed.

            • postmodulator

              That’s a hard question. This is an area where I have first-hand experience, people selling the university something. There are some businesses that we expect to sell to us at a loss, in exchange for the prestige of having sold to us. There are other businesses from whom we expect deep discounts on various bases.

              At least one business recently started to aggressively trying to make a profit from its relationship with us, and we’re responding by wiggling out of that relationship.

              I think that for us public institutions, our one saving grace is that we’re relatively recession-proof as a source of, say, building cash. So during the housing bust, for instance, we were still putting up new buildings and renovating old ones. I don’t think that we were paying at a rate that guaranteed exorbitant profits, but we were buying and no one else was.

      • BoredJD

        “But finally, for American public universities, the decline in state funding does matter. Back in the 1990s the state subsidized 70% of the cost of a student’s education while the student and their family picked up the other 30%. Now, in the 2010s it is directly the opposite, the student pays a little over 70% and the state covers less than 30%. Don’t be fooled, your parents and grandparents paid a lot less to go to a state college because someone thought it was worthwhile to pay the taxes necessary to support the system. That is the bottom line.”

        That unwillingness may not necessarily be unjustified. If I pay 30% of my kid’s meatball sub at lunch, and the school subsidizes the other 70%, then it’s not strange to wonder why the state would not want to maintain the same proportion of subsidy if he switches to prime NY Strip. Especially if people made do with meatball sub for a long time.

        Now if that NY Strip was mandated by federal law, or was richer in vital nutrients than the meatball sub, it might be reasonable for the state to consider picking up the 70%. But I haven’t seen any numbers on the breakdown of necessary administrators to implement Title IX versus more career services officers to tell students about jobs that aren’t there, or scholarship programs for minority students versus sending recruiters across the country to drum up students at private schools.

        I am most familiar with the law school system, where the endemic rise in faculty salaries, lowering of teaching loads, unnecessary admin bloat, and the proliferation of amenities is pretty well documented by Prof. Campos and others. The UG system is much different, though.

        • GoDeep

          Can you describe the admin bloat? Or point me toward resources that do?

          • BoredJD

            I can describe it, but you don’t want to read that opus. An example I like to use is Career Services offices, which are almost universally seen as ineffectual by students, but have grown out of control as the schools desperately try to look like they are doing something about the jobs crisis. But OCS cannot create jobs, nor can it really have an effect on the competitiveness of the students beyond marginal assistance, like editing resumes and scheduling practice interviews. The OCS at my law school was something like 12 people with two assistant deans and a full dean.

            Brian Tamanaha’s Failing Law Schools is a good place to start if you want numbers.

            • postmodulator

              Some admin bloat is idiotic, the same kind of admin bloat you see in the private sector. Idiot president decides that he needs to have a “Director of Green,” a whole area that does “Systems Architecture,” a world-class museum. But moron CEOs of Fortune 500 companies make those same calls all the time.

              Some admin bloat is the university doing something it do fifty years ago. That further breaks down into “stuff the university started doing that is a good idea” and “stuff the university started doing that is not a good idea.” And then you get into judgement calls:

              Universities do Title IX stuff now. That’s probably a good idea since it’s mandatory.

              Universities do way more diversity stuff now. Much of that is a good idea, if expanding access to higher education is viewed as a public good. (But you can pick up a lot of bloat in the implementation — think here of the committee that spends six months deciding to change the name of the department to whatever the current accepted phraseology is.

              Universities do a ton more IT stuff than they did back when IT didn’t exist. This is full of judgement calls. Students can email profs now. That’s good. Profs can email collaborators outside the university now. Universities can get grades to students quicker now. That’s good…right? Maybe not a necessity? Universities can host MOOCs now. That’s…not bad? Not all bad? Universities have WiFi networks now. That would feel like a luxury to me, except that my institution dragged its feet on rolling out WiFi right up to the point where it became clear that applicants were choosing to attend other universities that actually had it.

              Universities provide luxuries for students that were unthinkable twenty years ago. World-class gyms (there’s a reason everyone makes jokes about climbing walls). Cable TV in the dorms. Better dining options. (Dorm food used to be famously disgusting, consonant with what prisoners get.)

              This goes on and on. Some bloat is pure waste, some is partially productive, some you could never part with, and the dividing line is not ever exactly clear.

              I haven’t done an extensive study on this stuff. All I have is twelve years’ experience in the employ of a public institution and a fairly jaundiced view of human nature. So take that for what it’s worth.

    • LeeEsq

      Besides what everybody else said, business people have realzied that universities are prone to the same corporate raider activity that other institutions and businesses were in the 1980s.

  • wjts

    The hope is that implementing these “real-world” strategies will centralize redundant tasks (allowing some to be eliminated), stimulate greater efficiency, and ensure long-term fiscal solvency.

    I have long been curious as to how colleges and universities became excluded from the “real world”.

    • By becoming the monasteries of the 20th century without of course the vows of celibacy.

      • J. Otto Pohl

        I wish I’d taken a vow of silence.

        • wjts

          I do, too. Otto will occasionally make an interesting point. Nym-jackers never do.

      • wjts

        Speak for yourself.

        • postmodulator

          Yeah, there are a lot of academics for whom a vow of celibacy would be pretty redundant. Computer science grad students come leaping to mind unbidden.

          • TribalistMeathead

            The CS majors I knew had sex frequently, but almost exclusively with other CS majors.

          • That’s not my observation. The CS postgrads I’ve known have all been pretty normal with normal relationships.

      • guthrie

        Well certainly here in the UK the contribution of the universities to the advance of science and the economy over the last century cannot be overstated, therefore to suggest they were not part of the real world is simply a lie.
        The source is usually some private company manager complaining that universities didn’t train their graduates in precisely the skill set he needs right now, and who usually has no idea where the inventions which power their business and keep them alive actually came from.

    • J. Otto Pohl

      Because Stalinism.

      • Lee Rudolph

        Aesthetic or non-aesthetic?

  • Ed K

    This. Every damn bit of it.

    • Ed K

      Well, except for the part at the end about how American universities haven’t gone fully down this road, and still have a shred of shared governance, etc. Sorry, but I think those ships have sailed quite some time ago, even if the dead husks might still be visible from some angles.

      • postmodulator

        Shared governance isn’t always an unalloyed good. Wasn’t there an article a few months ago about how it’s largely killed the University of California’s community college system, because the shared governance model ended up including way too many veto points?

        • It is also an argument and system frequently used to undermine faculty unionization. If there is shared governance than faculty are “management” rather than workers according to this argument.

          • postmodulator

            I…did Otto just make a good point?

            • LeeEsq

              Yes.

          • Linnaeus

            Hell, my institution invoked shared governance as an argument against RA/TA unionization.

          • Ed K

            I’d be willing to consider the idea that real SG (or as I say Fac Gov) might be preferable to unionization. It’d have to be real FG though, and include pretty much everyone, and allow for unions of those who weren’t included. This would, obviously, require a lot more in the way of a robust tenure system and a lot less in the way of precarious labor than we see now, but I’ve had folks argue fairly interesting cases to me that if we want control over working conditions that would allow us to really fight things like precaritization, it’s faculty governance that’s going to get it for us, not unions.

            Since I know some of those folks read this blog, they might be interested in chiming in under their own names.

        • Ed K

          Well, the ideal would really be faculty governance… but the reality is that it’s a modesty veil at most places now (SLACs probably being the major exception), and possibly one that admins retain in place precisely for the block on unionization, etc.

  • Hogan

    However, either the original plan failed

    Run like a business indeed.

    • wjts

      I’m so old that I remember when “I don’t think it’s quite fair to condemn a whole program because of a single slip-up” was biting satire rather than actual policy.

  • Lee Rudolph

    In the one (and only) case of a “university as a commercial enterprise” with which I am intimately familiar, what I mostly saw going on was cargo-cult management. Real businesses (presumably) measure stuff to determine how their plans are succeeding, therefore we shall “measure” stuff (no matter that the measurement tools were and remain uncalibrated, etc., etc.) to provide quantitative cover for our predecided actions; real businesses make 5-year plans (or is that real soviets? never mind), therefore in every one of the six years that I was a department chair, I (like each of my fellow chairs) had to prepare a 5-year plan (which was ignored for one year before being discarded and replaced); real businesses have vice presidents, therefore we shall have (more and more and more vice presidents); and so on and so forth.

    • postmodulator

      “Cargo-cult” management sums it up nicely, actually. I think you could discard the thirty-odd comments I’ve splattered about on this thread and replace them with that one line.

      • But, in real cargo cults the participants are waiting for a return of a plane with actual real goods based on the fact that previously planes delivered real goods. In the case above there does not appear to be any precedent of delivery that would inspire belief in future delivery.

        • Lee Rudolph

          Very true. I plead precedent: my use of the phrase (and concomitant mangling of the metaphor) is derived from Feynman’s “cargo cult science”, not from the original cargo cults.

        • postmodulator

          Otto, that’s two trenchant insights in one thread, and neither one contained the word “Ghana.” Are we going to find the real Otto’s body in a Dumpster?

          • Hogan

            He can do that when he wants to.

    • Ed K

      Yep. Especially the stuff about pseudo-measures, etc. Dead on there.

  • Tracy Lightcap

    A few thoughts:

    1. This entire trend is actually quite dangerous. Modern societies – not just their economies – depend on the professional credentialing system at the center of collegiate education. We need more skilled people, not less, and trying to submit the skill set required to a “market process” that, of course, isn’t even close to one, will make it considerably more difficult to generate them. The load of information costs this would impose is unfathomable. And, of course, there’s the problem that having people in responsible positions that don’t have the skills needed will greatly increase production costs as well. Oh, and btw, computers won’t help much here; remember, the world is going post-industrial everywhere with service industry – the one area where reducing production costs is most intractable – at its base. Indifferently credentialed workers = grotesquely inefficient economies.

    2. There is a ray of hope here. I remember reading an article a few years ago – and now I’ll have to find the damn thing – about whether the shift in prison “management” from rehabilitative to warehousing models had actually changed how prisons work. The researchers found that it had had some marginal effects, but that what happened in general was that prison administrations re-named and re-“branded” what they were already doing to insure that there was a lot less change going on then their rhetoric indicated. Some colleges and universities are changing a great deal (like Dave’s); others, I would guess, not so much. Instead, they’ve changed how they talk about what they are doing.

    3. The underlying assumption of this entrepreneurial model of academic governance is that there is a unity of interests among all stakeholders; i.e. that everyone involved with a college or university has an interest in lowering costs and achieving good interim employment results. This is akin to thinking that the way to defeat a guerrilla war is to increase the costs to the rebels of fighting it. In general, the administrators behind these ideas never think very deeply about how people, especially graduates, actually feel about their institutions. When UVA fired Helen Sullivan, the graduates, faculty, students, and donors all went through the roof. They saw that the value of their degrees (grads), research (faculty), education (students), and educational commitments (donors) were being threatened and reacted accordingly. It was the Board and the state’s officials who suddenly found themselves on the wrong side of the barricades. The MIchigan episode is similar. The captives of a discourse seldom see what it actually portends for those they think they are serving.

  • DAS

    How does the drive to cut costs at colleges and universities jibe with the drive to increase STEM education. Except for the “M” (mathematicians need pencils and paper and maybe computers depending on what kind of math they are doing) part, STEM is quite expensive. Lab chemicals are not cheap. Lab equipment can be very expensive and expensive to maintain. I know a lot of it can be covered by grants faculty earn from outside agencies that can be used to purchase dual use (both for faculty research and also for training students) equipment and even supplies, but a lot of equipment costs and a huge amount of supplies costs, while offset by special lab fees, end up getting paid for by the university.

    And upper-level STEM courses are hard (again, excepting math — I found upper division math to be relatively easy … easier than lower division math, at least) and managing lab courses is very labor intensive. So upper-level STEM courses (at least lab sections) require low student/faculty ratios, which means you either have an army of adjuncts, you have a big grad program (which means lots of Ph.D.s coming out searching for jobs) or you end up hiring a lot of faculty, who cost money.

    So what happens when the push for cost cutting discovers how expensive it is to educate, for example, a chemistry major?

    • LeeEsq

      None at all as far as I can tell. College costs seemed to have start exploding sometime in the early 2000s and continued since. The emphasis on STEM happened latter. The reasons why are complex but a lot of it amounts to a few factors. The first one is that states have cut funding for state schools. This means that state schools had to cut more funding from fees and tuition, requiring them to raise fees and tuition.

      Another problem, as I mentioned above, is that globally the number of students who qualify for an elite schools are on the rise while the number of elite schools has not risen. In the United States, the current elite schools are more or less the same they were after post-WWII. Its probably the same in other countries. Since the elite schools do not want to expand capacity in order to meet demand; many respected but non-elite private universities and schools are attempting to become elite. The fact that a degree a Western university has a certain cachet among the global elite is making it worse.

  • DAS

    A few comments:

    the experience in Britain serves as both a model and a warning to my colleagues in the United States.

    If Britain is our model, from what I hear from colleagues teaching at British institutions, we’re screwed. Britain has, from what they say, destroyed their storied universities.

    why in hell would one want to pay the opportunity costs involved in earning a Ph.D. in order to work in an industry where your job security isn’t that far removed from Dominos Pizza, and where your pay is significantly lower than a similar position in the private sector?

    So long as there were private sector jobs, we could make this point. Now that there are so few private sector jobs, there is no pressure for universities to treat their faculty well lest we just pick up and leave and go into private industry where we might get paid better.

    *

    One point that gets lost, IMHO, in drives to make universities (and for that matter public authorities) more cost effective “like private enterprise” is that the cost metrics are different for a university than for a stock-holder or private equity owned enterprise.

    When a private enterprise needs to make a major expansion, they can sell stock to raise capital. Then, the private enterprise sells their goods or services for a cost just above the marginal cost of providing said service/good: all the private enterprise needs to do is to make a little bit more than the marginal cost to stay afloat and give return to their investors (from the profit). OTOH, universities and public authorities are expected to balance their budgets: i.e. they need to charge their “customers” the average cost of the service they provide potentially offsetting that cost with state subsidies, which are always controversial and unstable. If they really want to run universities (or public transport authorities or what have you) like private enterprises (not that we should run universities this way), then government should play the role of an investor and pay money into the system for major capital expansions, allowing universities to charge students (and public transport systems to charge riders and …) the marginal cost of their services rather than the average cost.

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  • Dave

    Working at a UK university where I see staff in areas like research-support striving every day to help ‘pure’ academics progress in the face of those academics’ resistance to opportunity; where many of those ‘pure’ academics, even in a middle-ranking, historically teaching-oriented uni, behave as if doing anything except personal research is a favour; where even in areas that have been supported through the recruitment of substantial new cohorts of research-active staff, the most vocal claims are still of exploitation; where facts of government policy are treated as if the consequence of personal malice on the part of senior colleagues… I am unsurprised that ‘management’ has an increasing tendency to treat academic staff as clueless gobshites. It doesn’t make it right, but by God they don’t help themselves.

    This is especially the case in the more ’eminent’ unis, where ‘management’ have historically BEEN ‘academics’ all the way to the top, and where staff with an alternative vision for ‘the university’ had every opportunity over the past 30 years to have a coherent strategy of organisational takeover, but instead focused on either whingeing or divisive money-grubbing, leaving those institutions in the hands of people who probably think academics are idiots, because that’s how they act.

    And I won’t get on to the question of naming names amongst people who have actually committed themselves in print to the ‘ideal university’, sometimes AT THE SAME TIME as accepting management roles in which they cut, exclude and divide with the highest of hands. But if you ever wanted to start searching between the publications and the actions of some senior people in humanities at the U of Kingston, for example [NOT my own employer, but that of several put-upon friends] you could…

  • Thad

    “Universities, aside from the handful at the very top of the reputation tables, will specialize in a mere handful of subjects. If this comes to pass, they really won’t be universities any longer…”

    Welcome to Ontario ,Canada
    October 15, 2013
    “Niche markets? Context on “differentiation” in Ontario”
    http://www.universityaffairs.ca/speculative-diction/niche-markets-context-on-differentiation-in-ontario/

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