Saturday, June 22, 2013

The Corporate Takeover Of Higher Education

This post is in response to an article published by Socialist Viewpoint (SV) entitled The Corporate Takeover Of Education, by Luma Nichol. SV reprints the article from the Freedom Socialist Party--the very name is an oxymoron, reflecting the general incoherence of the enterprise.

Still, the article resonates. The faculty union on my campus often rails against the "corporate takeover of higher education," and Nichol's article reflects that sentiment fairly well. Many of my colleagues will agree with most of what she says.

Nichol's first order of business is to discredit the motives of anybody who disagrees with her. She explicitly targets three foundations: the Gates Foundation, the Walton Foundation, and the Lumina Foundation. The Gates Foundation aspires "to ensure that all low-income young adults have affordable access to a quality postsecondary education that is tailored to their individual needs and educational goals and leads to timely completion of a degree or certificate with labor-market value." The Lumina Foundation has a goal "to increase the proportion of Americans with high-quality college degrees, certificates or other credentials to 60% by 2025." The Walton Foundation is not involved in higher education.

Now one can disagree with what these organizations do. Indeed, I take issue with Lumina's purpose--I think their emphasis on credentials is not helpful. Likewise, were I managing the Gates Foundation I'd probably allocate resources differently. But Nichol does more than disagree--she accuses them all of rank dishonesty and corruption. Indeed, she claims they're funded through the student loan program (Sallie Mae), creating an intrinsic conflict of interest. (This is news to me--I think it's very unlikely to be true.)

In Nichol's world, these organizations are just stalking horses for big business. The goal is to privatize education and reap huge profits as a result. Accordingly, students, faculty, unions, and communities are going to get screwed over. Corporations are intrinsically evil, and this is just another example of how.

But it doesn't add up.
Shrinking class offerings feed a rising industry of schools for profit, distance learning, and Mass Open Online Courses (MOOCS), which are free web courses financed by entrepreneurs who decide the curriculum.
So entrepreneurs are creating courses that are free to students. How will this result in huge profits? Indeed, the primary goal of entrepreneurs is to lower the cost of education. The Gates Foundation has aggressively championed free or cheap education, e.g., funding the Khan Academy, a non-profit organization offering free classes to anybody in the world.

Here's the truth. Since 1980, the cost of a college education has increased by four or five times the rate of inflation. Costs have gone up for both students and taxpayers. The problem facing higher ed right now is that it's just too darn expensive. English, history, and philosophy, for example, are very valuable disciplines, but when the cost to taxpayer and student for a BA sums to more than $70,000 (the bill at my relatively cheap state school), the value proposition is just not there. To cover that price you really have to major in either computer science or engineering.

So the key task confronting higher ed right now is to lower the cost. And that's precisely what these foundations and entrepreneurs are doing--free classes through MOOCs are a whole lot cheaper than classrooms, and in many cases they're also better.

So why has the cost risen so much? It's because colleges are joined in a cartel enforced through accreditation. Cartels charge monopoly rents, and the college cartel has done even better by conning the taxpayer into paying half of the bill. But prices simply cannot keep going up. Indeed, because governments are broke, household incomes are stagnating or declining, and especially because of increasingly effective competition from outside the cartel, prices are starting to go down.

I predict that college tuition prices will crash in the near future, perhaps even by 90%. This is excellent news for students--even for minority students. It's good news for almost everybody--except people who benefit from the cartel.

The people who put the cartel together in the first place were faculty, who have always seen themselves as a guild. More egregiously, the faculty have attracted a large cohort of hangers-on: administrators, directors, affirmative action officers, advisers, football coaches, deans, and other assorted parasites. The faculty, themselves ill-suited for the modern world, and the parasites together produce little of social value. The net result is this highly paid cloud of useless employees is about to implode. Most of them will be laid off. And good riddance, I say.

Obviously faculty unions oppose this turn of events, and are doing everything in their power to stop it. They won't succeed, and their efforts will probably result in a worse crash when it finally comes. But leave it to Ms. Nichol to rise to their defense.

  • She's a Luddite. She is against any technological change that might displace a faculty employee.
  • She equates faculty interests with student interests. Lower prices are bad for faculty, therefore she claims they must be bad for students. Of course this isn't true.
  • She plays the race card. She says that minorities will suffer more when tuition goes down. This defies logic.
  • She thinks only faculty believe in a quality education--that students, entrepreneurs, and the community, are too stupid to make any curricular decisions on their own outside of the cartel.
  • She maintains that faculty and faculty alone are pure of heart and acting in the best interests of "the people," while anybody else represents an evil, dishonest, and greedy special interest.
If this is the best argument that faculty unions can make, they're sunk.

Further Reading:


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