Privatising universities places individual corporate interest above society’s needs

Contributed by Joe Montero

Ross Gitten’s article (The Pen 19 September 2017) about the backdoor privatisation of Australian universities has prompted the following comments. To begin with, he is right to suggest that government defunding is causing university administrations to turn towards establishing special relationships with corporations and that this is compromising them as institutions of higher learning.

One can take issue with his favourable comments on the Higher Education Contribution Scheme (which puts students into long-term debt) and the growing shift towards recruiting overseas students. But they are secondary issues to the central one of defunding and turning universities over to corporations.

University education is often thought of as a means, to expand knowledge. After all, individuals attend to gain expertise and those who progress to academia, are supposed to contribute to the expansion of collective knowledge in their chosen field.

A more basic reason for universities to exist, is to train the next generation as the providers of specific forms of labour required by the economy. Australia’s economy is capitalist and this means, for the most part,  meeting the requirements of privately owned enterprises. From this direction, the push is for a quite narrow set of skills and applied knowledge that is specific to the demand of the corporate world.

To expand knowledge, universities must break new ground and stretch the field of theory, as well as pass knowledge to the new generation. They must go beyond immediate economic application and embrace a whole of society approach. Doing these things does not mesh well with the demands of the current market.

In theory and policy,  neoliberalism is driving the present changes. This comes from the corporate world and filters through government, seeing that whatever doesn’t serve the bottom line of the corporate world is a waste of resources that must be eliminated as much as possible. This outlook is closely tied to the mantra of small government, which has become a cover to divert funds to raise corporate subsidies and other related expenses. Removing funds from universities is part of the package.

Neoliberalism is not a new idea. It is applied orthodox economics in times of relative economic downturn. At these times, the rate of return in investment is in decline, even if the absolute return isn’t. It provides incentive for the corporations to socialise costs as much as possible. In every-day language this means to transfer costs to the rest of society.

The means to do this is to raid the public purse. Spending on government services goes down, alongside company tax and personal tax on the wealthiest. At the same time as corporate welfare in the forms of grants, contracts and privatisations and other means rise.

It does not work, even on the terms laid out by supporters of neoliberalism. The main reason is that it sticks to the false concept that what is good for individual enterprise is good for society. A fire might be good for the seller of fire extinguishers. But it is not so good furniture maker whose business was in the building that caught fire. When a group of corporations prosper at the expense of diverting resources from somewhere else, the net effect can easily be negative, damaging the economy at large.

This is the main reason why the application of neoliberalism has not fixed economic problems but made them worse.

This can be seen in what is being done to universities. The harder and the longer they are squeezed, the more they take on the character of failing institutions, Work in these institutions is being increasingly casualised and poorly rewarded, the best talent is loaned to the corporations and research narrows down to applied projects that bring in the big money. The incentive to raise money at all costs, pressures a downgrading of standards, as students take shape as commodities to be milked.

On top of this, a portion of government funds are diverted to private training companies, in a way that creates an environment, favouring those that can provide for the least costs, rather than provide the best quality.

Universities should contribute towards building a better society in all respects. They are further away from this that they have been for a very long time and this needs to change.




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