The Corporatization of Higher Education

Educational Policies Committee 2004-05
Chair, Technology Committee 2004-05
Area C Representative

Recent concerns over corporatization of education led to resolutions adopted by the Academic Senate for California Community Colleges. Those resolutions called for more, in-depth information about this issue. The process of developing a position paper started with researching available literature in the field. In doing so, it became apparent that much valuable work has already been done in that area, particularly the recent publication Academic Values, Market Values: The Shifting Balance (American Federation of Teachers [AFT], 2004). Rather than reproducing the work already done, this article is intended to provide an overview and point you in the direction of the substantial information available.

Over the past few years, there has been pressure to adopt corporate management structures due to the drop in public support for institutions of higher education -note the drop in per fte funding over the last several years when measured in real dollars.

Even if we put aside the need for securing funding, what other motivations may there be for this trend to corporatization? One of these is the idea, strongly disputed by many including us, that the marketplace is more efficient. Governor Schwarzenegger's call for merit pay is a recent example. Our salary structures are often attacked as being unfair in that compensation is based only on seniority. The assumption seems to be that there are clear quantitative measures that can be used to provide compensation models. In the early 80s, during an oil boom, one of the authors of this article was employed in oil and gas exploration and was rewarded with company cars, minimally monitored expense accounts and bonuses. Corporations had to decide how much individual professional employees should receive as a bonus. The "bean-counters" who ran things felt that an objective measure, such as how many barrels of oil reserves one had discovered, would provide a useful measure. The exploration managers were able to point out that no one individual could be given credit for major discoveries. In addition, the most skilled exploration professionals would often be assigned to previously unexplored frontier areas where there was the least likelihood of a discovery. So the decision was made to determine the bonus amounts entirely on the basis of total years of exploration experience-i.e., a seniority formula. Just as where you explore for oil is as much a factor as one's skill as an explorer, so it is in teaching: the backgrounds, motivations, and time on task of one's students are as much factors in the successes of our students as are the skills of the professoriate. Basing pay on seniority, provided that instructors are regularly and meaningfully evaluated by their peers, is the fairest method of compensation.

Legitimate community needs for job training must also be taken into account. However, how do we deal with the student, now being viewed as a customer, who comes to us for a specific product -e.g., learning how to be a nurse, welder, auto technician or preparing for transfer. How do you tell your customer that he/she does not merit the desired "product"-the Degree, Diploma or Certificate. This is clearly a major concern for us as the maintenance of academic rigor motivates us all.

In October 1997, Digital Diploma Mills, Part I, The Automation of Higher Education by David F. Noble, was widely disseminated over the internet and brought new attention to trends that were brewing among academics and those connected with academia and politics. Examples given illustrate partnerships between top university administrations and private corporations resulting in requirements that faculty use technology in one way or another. To quote noble, "universities are not simply undergoing a technological transformation. Beneath that change, and camouflaged by it, lies another: the commercialization of higher education. For here as elsewhere technology is but a vehicle and a disarming disguise."

One trend was corporate and political leaders recognizing the value of knowledge and "knowledgebased" industries (space, electronics, computers, materials, telecommunications, and bioengineering) with a focus upon "intellectual capital."

As patent holders, universities assume the characteristics of companies, and as such set about at once to codify their intellectual property policies, develop the infrastructure necessary to conduct commercially-viable research, cultivate their corporate ties, and create the mechanisms for marketing their new commodities, including exclusive licenses to their patents.

The result of this first phase of university commoditization was a reallocation of university resources toward research desired by the university administration's corporate partners. Universities are educational institutions with two primary functions: research and student instruction. Decisions about how an institution's budget is allocated to these functions, and decisions about what is researched and what is taught, should be made in an atmosphere of academic freedom, and not dictated by outside entities, especially if they stand ultimately to gain from whatever is decided.

The second trend toward the commercialization of academia was the commoditization of instruction.

The initial champions of computer-based instruction focused their attention on increasing the efficiencies of already overextended teachers. Rather than focusing attention on the content of our courses, these "champions" wanted to find ways of disseminating the information more "efficiently," i.e. getting instructors, without increased compensation, to service more and more students, the presumed beneficiaries of "improved" education. These champions are not really motivated to improve education at all. That's just the name of this particular market.

Olivier Frayss, a professor of american studies at the sorbonne in Paris, France, presented an address to the California Federation of Teachers Convention March 10, 2001 in which he presented five characteristics common among international assaults on higher education:

1. Education is considered as a market rather than a public duty, knowledge as a commodity rather than a means to become more human, students as consumers rather than citizens or future citizens.

2. Institutions try to appropriate the intellectual property rights of faculty and plan to sell their courses to other institutions, firms, and the public at large.

3. Huge investments of public money are made to fund efforts to develop on-line education.

4. The promise of high-tech education is used as an excuse to reject claims for the building of needed schools and colleges and the hiring of new teachers and classified workers.

5. As in other "service industries," technology is used by management to cut labor costs, deskill a majority of workers, improve productivity and monitor compliance with employer-made rules. The implication is that the "information age" is different from the "industrial age" mainly in that industrial methods are applied to the so-called "knowledge workers," which means us.

Yet, even today, major corporations all over the world are planning to invest huge sums of money to corner what they call the education market, and governments give them encouragement in many ways that include inducing universities to behave like corporations, which then enables government to cut public funding for higher education as the institutions of higher learning are turned into profit centers.

This is becoming increasingly true of community colleges as well. In California, Governor Schwarzenegger refuses to raise taxes on wealthy individuals and corporations while at the same time robbing K-12 and community college education of $2-3 billion "guaranteed" by Proposition 98, a proposition that was overwhelmingly approved by the "people" that he is so fond of threatening to take his policies to!

As public funding for community colleges dries up, the colleges in turn must beat the bushes for alternative funding. These alternative funds very rarely, if ever, come without strings.

The history of health-care in this country in the last ten years shows that such "knowledge workers" including doctors and nurses are now experiencing vastly modified working conditions as a result of the commoditization of medicine: the high-tech, hyperwired, network-modeled way to cut expenditures on people's healthcare and to increase corporate profits. If you do not believe that commoditization can happen to us, ask your doctor if he diagnosed the development of HMO's ten years ago.

Any discussion of corporatization can quickly degenerate into a collection of dilbert like anecdotes. While these visual aids may be useful for setting a mood, a more substantive way of defining the discussion is needed. To that end the introduction to the above noted AFT journal (Scheuerman and Kriger, 2004) offer us two useful definitions in the introduction to the AFT Journal:

Exchange value

Companies produce goods and services only as a means to an end. The purpose is to exchange them for money, to make a profit-the only reason for a business to exist. Quality attracts customers. In the marketplace circumstances may force a company to reduce costs to a point where quality suffers. "When this occurs, as it frequently does, the tension between the primary drive for profit and the secondary need for quality is exposed as a contradiction inherent in the production of exchange values." (p. 12),br> Use value

Idealized, the purpose of higher education is to teach the values associated with the pursuit of knowledge or the pursuit of truth.

This pursuit is intended to encourage dissent and tolerance for other opinions. While this process frequently results in objectively useful results it is the not the primary goal of the institution. "Nevertheless, the fact remains-the goal of higher education institutions is education. Or to say it another way, educational institutions produce use values, intangible and abstract goods that are ends in themselves." (p. 12)

This attitude is most obvious in considering the substantial pressure to provide a larger proportion of a college's offerings through distance education. If we evaluate distance education in terms of its exchange or use values, we have a tool that separates the appropriate use of an innovative delivery method, under the design and control of the faculty, from the corporate model that treats the student as a consumer, renames deans as vice presidents and presidents as CEO's and is pushed as a productivity tool. When the faculty loses control, the result can be educational Taylorism1-i.e., treating teaching the same way products are manufactured on an assembly line-breaking down the process to a series of lower skilled tasks and adding strict management control. The result may well be: online institutions with no counseling, a small group of developers who create a course and instructors hired to send out pre-packaged email and grade submissions with no customization of content allowed!

Exchange value has its place in a capital driven model.

Our problem is that teaching is not about delivering a product. Education is not a commodity.

"Academic Institutions exist for the transmission of knowledge, the pursuit of truth, the development of students, and the general well-being of society," (American Association of University Professors, 1992) not for profit.

These trends toward exchange value were also seen in a report delivered several years ago at the annual meeting of the California Conference of the american association of university professors:

We now have CEOs and CFOs drawn increasingly from management backgrounds of one sort or another, instead of presidents or provosts promoted up from the faculty. As a corollary to this, the pay of senior administrators has become almost entirely disentangled from the pay of faculty and the cult of the Ceo has taken hold at many not-for-profit institutions. We see institutions devoting inordinate staff fte to public relations, fund raising, and patent management while professing to have insufficient resources to fill desperately needed tenure lines.

The speaker went on to note that studies conducted by a statewide bargaining unit showed that student enrollment, full-time faculty hiring, and administrative costs are out of sync, with administrative hiring and salaries far outpacing those of faculty. The presentation also noted that work now done by highly paid administrators is work that faculty could-and once did-produce under the auspices of participatory governance.

While many of us have no problem with the ideas inherent in the use of alternative means of delivery, our "managers" are more focused on a product that can be sold. Increasingly the managers of our institutions are concerned with securing the copyrights to our work. This is one of the reasons our unions have become so heavily involved in this discussion. Without contract language to address intellectual property rights the "work for hire" doctrine inherent in the Copyright Act of 1976 can be applied to anything we produce. Potentially this doctrine can be extended to those items which have always been considered yours-e.g., notes, exams etc.

It would be simple to condemn the proponents of corporatization as lacking any understanding of what we do in producing goods with "use value."

However, just as the motivation for distance education includes faculty who are eager to teach courses online, we must acknowledge that there are managers who view what they are doing as being for the benefit of the institution. As examples consider how college bookstores or cafeterias operate. Are they profit centers for our colleges?

Technology can be a great aid in the teaching/learning process, but it can never substitute entirely for teachers and students coming together.

However, it is a fact that 80-90% of a community college's budget goes for the salary and benefits of its faculty. That shouldn't be surprising, since it is in the classroom that the central raison d'etre for the colleges resides. Since the passage of AB 1725 and the strengthening of the role of academic senates, curriculum decisions are firmly in the hands of community college faculty. We must be careful that we are not seduced by that which has seduced some higher education administrators, and use our control and influence to ensure that academia remains a path to humanization, not corporatization.


American Association of University Professors (1992). Joint Statement on Rights and Freedoms of Students. Author: Washington, D.C.

Fraysee, O. (2001, March 10). Address to California Teachers' Association Convention, Santa Monica, CA. Retrieved February 21, 2005, from

Noble, D. (1997 October). Part I: The Automation of Higher Education. Retrieved August 30, 2005, from See also at that site by the same author:

Part II: The Coming Battle Over Online Instruction, March, 1998

Part III: The Bloom Is Off The Rose, November, 1998

Part IV: Rehearsal For The Revolution, November, 1999.

Part V: Fool's Gold, March, 2001

Steck, H. (2003 January). Corporatization of the University: Seeking Conceptual Clarity.

Annuals of the American Academy of Political and Social Sciences, 585, 66-83.

Vogel, M. (Ed.). (2004, June), American Values, Market Values: The Shifting Balance, (1) 1. washington, DC: American Federation of Teachers. Retrieved August 30, 2005, from…

Recent Additional Resources:

Bowen, R. (2005 May-June). Book reviews

Academe, Washington, DC: American University of University Professors

Rhoades, G. (2005 May-June). Capitalism, Academic Style and Shared Governance.

1. Frederick Taylor wrote the principles of scientific management in 1911. Some of the principles of taylorism include: develop a "science" for every job, including rules motion, standardized work implements, and proper working conditions. Carefully select workers with the right abilities for the job. Carefully train these workers to do the job, and give them proper incentives to cooperate with the job science. Support these workers by planning their work and by smoothing the way as they go about their jobs.