The profit motive is threatening higher education

An architecture is opening up that threatens the public funding, regulation and governance of higher education.

The profitability of higher education partnerships for companies like Pearson Education highlights how educational technology is developed as a way in, both to the extraction of value from universities, and to the recalibration of the purpose of universities to catalyse such extraction further.

Partnerships and leverage are enforced, in part, because academic labour is shackled inside the demands of performance revealed in research evaluations or student satisfaction scores. Engaging with external partners like Pearson for service-driven efficiencies makes sense for universities that are being recalibrated as businesses.

In June 2012 David Willetts, the UK universities and science minister, was reported to have made an appeal to private investors to support overseas expansion of UK universities and to have said that Goldman Sachs was “keen to investigate this possibility”.

For Willetts the key was the extraction of value from external markets, with technology as a central plank in opening up the sector for “a wider range of providers with a particular focus on teaching, or concentrating on the efficient delivery of licences to practice, or focusing on distance learning”.

This is underpinned by the recalibration of universities for economic growth as their primary goal-aim-purpose, alongside the real subsumption of the idea of the university as a public good inside the logic of the market.

One outcome of this subsumption is the disciplining of academic labour in the name of valorisation and profit. A knock-on is that the relationship between academics and students is disciplined by money. It is unsurprising therefore that Willetts is co-sponsoring a higher education and technology symposium hosted by Goldman Sachs, with the theme of “Innovation in Higher Education: Technology, online learning and the future of higher education”.

The symposium “will focus on the evolving role of technology, the growth in online education and the emergence of a group of venture-funded companies bringing innovative business models to the market”.

Dangers of the rush to privatisation

Such collaborations show the risks I wrote about previously in response to Pearson College, where I argued that privatisation “signals the possibility that a surfeit of new, for-profit providers will cheapen the costs of academic labour that does not develop proprietary knowledge or skills.

“This risks driving down labour costs and increasing precarious academic work based on postgraduate rather than tenured staff. Flexibility, redundancy, productivity, privatisation, restructuring, value-for-money – all underpinned by technology – risk becoming the new normal for academics involved in teaching and research.”

The discipline of the market is entering higher education in the guise of for-profit, technologically rich operations like Pearson College – an establishment that enables the education corporation Pearson Education Inc to leverage its learning management system and online content produced by academic labour, the partnerships that it has with established academic institutions in the UK, and its connected educational think-tank – in order to gain fees-rents-profits from an emergent higher education market.

The result of this encroachment of the private on the public sector is the reduction of spaces that are available to develop critiques of the recalibration of the university. There is no alternative.

The point, then, is whether academics can develop new forms of labour in new, collectivised spaces, in order that the complexity of their labour as a process inside higher education might be unravelled and re-stitched against technologically enabled, new public management.

Criticism of Goldman Sachs

There has been substantial criticism of Goldman Sachs: for example, in its client relationships based on claims of profiteering, via claims based on settlements related to collateralised debt obligations, subprime mortgages, the Goldman Sachs Commodity Index that was implicated by some in the 2007-08 world food price crisis and commodity trading (detailed here), and the corporation’s alleged role in masking the debts of the Greek economy.

Critical here are connections between the contested histories of Goldman Sachs’ global performance, the treadmill dynamics of a corporation based around the rate of profit and financialisation, and the logics of debt-based restructuring of higher education, in-part using technology as a lever.

Witness the Goldman Sachs investment banking arm’s development of higher education and non-profit institutions that will work with public and private universities and non-profit issuers nationwide to structure and execute tailored debt capital markets financings. According to its website:

“The firm has a dedicated group of credit specialists whose primary responsibility is to assist the investment banking team and issuers or clients in evaluating and achieving their rating potential. They take an active role in the credit analysis, rating strategy and investor sales process.

“In addition, with specialty expertise in areas such as athletics risk management, royalty magnetisation, public-private partnerships and online learning technology implementation, our experts can provide advice and financing solutions tailored to the needs of our issuers or clients.”

This is of interest because the higher education sector has seen a crack opened for bond issues, which has been analysed by Andrew McGettigan, and has been realised at De Montfort University and Cambridge, and which has been mooted at University College London. The latter has been criticised because it is linked to the gentrification of local housing.

Alongside recent criticism of higher education’s leadership by the Council for the Defence of British Universities, the engagement of higher education leaders with private finance and corporate power, and the co-option of higher education for profit, raise serious questions for staff and students about the idea of the university and the ways in which their practices inside it are co-opted for profit.

As Chris Kirkham notes in his article, “With Goldman’s Foray into Higher Education, A Predatory Pursuit of Students and Revenues”:

“…a recent complaint from the US Justice Department detailed a business bent on recruiting students at all costs, a description supported by the accounts of the employees interviewed by the Huffington Post.

“Hidden behind the upbeat earnings calls and bullish quarterly reports was a cut-throat sales culture that rewarded employees who regularly bent the truth and took advantage of underprivileged and unsuspecting consumers, employees said.

”Goldman Sachs and Providence Equity Partners, the other major private equity player in the deal, declined to comment for this article.

”But employees recounted a distinct culture shift once the company went private under Goldman Sachs and the other private equity investors, as day-to-day operations warped from a commitment to students and their success into an environment laser-focused on hitting mandated enrolment targets.

New recruits were viewed simply as a conduit for federal student assistance dollars, the employees said, and pressure mounted from management to enrol anyone at any cost.”

It should also be noted that Providence Equity Partners now owns Blackboard Inc, and was advised by Goldman Sachs on that deal.

This should matter to academics precisely because everyday scholarly activities are becoming increasingly folded into the logic of capital through, for instance, indentured study and debt restructuring of the practices and means of producing learning, internationalisation, privatisation and outsourcing.

As a result, the internal logic of the university is increasingly prescribed by the rule of money, which forecloses on the possibility of creating transformatory social relationships as against fetishised products and processes of valorisation. We might ask, then: what is to be done?

* Richard Hall is head of Enhancing Learning through Technology, based in the directorate of library and learning services at De Montfort University in the UK. This is an edited version of his blog.