Nov 05, 2010
The Harvard Business Review blog recently ran an interesting post directly applicable to this discussion. While Bruce Nussbaum runs through a number of reasons why people are losing faith in corporations in the United States, I think his list has a wider applicability to institutions in general, including not only corporations, but also governmental agencies, including schools and universities.
1. Outsourcing -- the column takes an American perspective, but the phenomenon is experienced globally. Nussbaum writes, "The truth is that most U.S. corporations chased cheap labor to boost their profits over this period... It was all about teenage girls and boys in China making things and 20-something Indians servicing something, all at low wages."
Around the world -- except in a few outliers like Finland and Singapore -- the education industry, like other industries, pays poor salaries, outsources where it can, and in general devalues the people who make it work.
While productivity is rising globally, the staff who produce this productivity are receiving less and less of the benefit. Indeed, with things as they are, it is as though institutions are telling employees that they should be happy to be getting any of it at all, and not complaining about their declining share.
We see this in the drive to hire less and less qualified people, at ever lower salaries, to become teachers. We see universities that hire low-paid graduate assistants (who will not be graduated unless they comply!), NGOs and government offices that depend on interns and low-paid assistants, hospitals and health services that contract out essential services to private companies employing low-paid non-union staff.
The trend is the same across the board. Institutions further their own ends at the expense of those who work for them. Wages and benefits, so important to the economic health of workers and society, are not seen as a net benefit by the institution, but as costs, to be minimized where possible.
2. Trust -- Nussbaum says, "America's business, legal, accounting, and financial elites bear little resemblance to responsible adults you can trust." The same proves to be true of elites worldwide, whether they are overtly corrupt or criminal, or whether they are doing it behind the protective veil of corporate secrets and Swiss bank accounts.
The fact is, business news today is a litany of fraud, theft, obstruction of justice, and even more serious cases. Countries that are supposed to be democracies kidnap dissidents and torture prisoners. Contracts are awarded based on bribery and influence peddling. Some states cannot keep their governors out of jail.
Nussbaum writes, "Where were the business voices condemning Wall Street for the excesses that brought on the Great Recession? Where were the voices of reason when Washington turned a budget surplus into a huge deficit by cutting taxes, launching two wars, and expanding Medicare without paying for any of those moves?" If there's one thing to count on, it seems that the leaders of our institutions will often serve their own interests, to the detriment of society as a whole.
The lack of trust extends to our educational leaders. We have begun to see an erosion of trust in our educational institutions, a distrust in those who manage them while serving their own political careers, a distrust in those who hold them accountable.
And if we cannot trust the stewards, we can trust the pundits even less. Gadflies complain about "achievement," ignoring a substantial difference in the drop-out rate. Others tell us teachers make the most important difference, and recommend that substandard teachers should be fired, all the while ignoring the most important predictor of educational outcome, the backgrounds and resources of the students' families.
We have reached the point where not only can we not trust the people who manage our educational institutions, we cannot even trust the implements put into place to monitor those managers.
3. Greed -- while today's elites enjoy unprecedented wealth, "the middle class has stagnated for two decades, while poverty, especially among children, has soared," writes Nussbaun. It is accepted as normal, structural, even justifiable, that large swaths of populations worldwide struggle without enough to eat, little education, and no health care to speak of while the people running our institutions continue to earn -- and waste -- unimaginable salaries.
Much of the economic turmoil of the last few years can be traced directly to the need of these presidents, CEOs and managers to earn substantial salaries while running the institutions with which they were entrusted into the ground. No source of wealth is immune from their attentions -- they are at once plundering pension funds, environmental resources, government revenues and taxation, and any other source of revenue they can find. Nothing must be left in the hands of the people! There is, it seems, no upper limit to the wealth they, or their companies, can amass.
There is no war on teachers, proclaims the Wall Street Journal. But teacher and public sector unions remain the largest and last non-corporatist voice in politics and society, and the union pension fund the largest and last pool of money not in corporate hands. Opponents may claim to be against the union only, not the teachers, but it is the teachers wealth and influence they will plunder. And I think that it is ironic that those complaining about the 'power' of the teachers' unions are themselves the most powerful people in society.
Meanwhile, the institutions themselves -- those that can -- continue to stockpile wealth. In a year where most people are lucky to keep their jobs, for example, Harvard's endowment fund earned a healthy 11 percent, rising to $27.6 billion. Yale struggles along at $16 billion (2009; 2010 figures are not posted yet). Stanford's endowment sits at about $12 billion.
Is there a good reason to sustain and support institutions that continue to amass their own wealth, which pay their administrators and presidents handsomely, and which do more to extend the gulf between rich and poor than to ameliorate it?
4. Corruption -- there is little distance to be found between the people occupying the boardrooms of governments, our top institutions, and corporations. This smallish club manages both public and private affairs to the same conclusion, with the result that the people entrusted with our institutional responsibilities have subverted the democratic process, using political power instead to block and divert any effort to lessen their hold on the wealth of the nation.
Nussbaum writes, "Intense lobbying killed Glass-Steagal, the regulation of most derivatives trading, the expansion of bank rules governing leverage, and the simple failure to oversee and stop corruption in the mortgage business." This is only the tip of the iceberg, with such corporate lobbying and influence entrenched in organizations such as the WTO and WIPO. What possibility there was that free elections informed by a free press could influence the levers of power has been effectively eliminated by corporate ownership of both.
The same sort of lobbying permeates educational institutions. While schools offer standardized testing and universities offer peer review as evidence of their impermeability, there is substantial evidence that both test scores and research results are fudged in order to meet the needs of practitioners and their well-placed sponsors. We see this at the state level, as states manage their own criteria, at the school level, as poor achievers are dropped from the tests, and at the test level itself, where students were encouraged to cheat.
And what are we to say about newspaper reports criticizing public education when one of the major educational testing companies in the country is also the publisher of one of the major newspapers? Or when research institutes are overseen by corporate sponsors. When articles are ghostwritten by corporate authors? Or when entire fake journals are created in order to bolster a company's financial position?
It is telling that, as Bloomberg reports, "the Washington Post Co.'s Kaplan unit and four other for-profit colleges are being investigated by Florida's attorney general for possible misrepresentations about financial aid, recruitment and accreditation." Or that the Charter School Scandals blog has a seemingly endless supply of material.
If there was ever any innocence and purity in the academic institution, that day is long gone. From lobbying to manipulation to outright fraud, corruption's insidious grasp has taken hold at all levels of our educational institutions.
5. Democracy -- Nussbaum writes that "by equating lobbying with freedom of speech (a serious mistake), the Supreme Court is allowing unions and companies to directly use their own funds to secretly finance ads." Leaving aside the fact that union wealth is much less than corporate wealth, the underlying observation -- that the political process has been subverted by wealth -- is sound.
Winning an election requires exposure to a large number of potential voters, and because this exposure may be purchased only from expensive corporate-owned media sources, winning an election requires enormous wealth or financial support, something which from time to time may be obtained by outsiders, but which is regularly available only to the wealthy or well-connected.
Institutions do not foster democratic proclivities. If anything, they foster the contrary. It is no accident that colleges and universities began as and remain elite institutions, open mostly to the affluent, and hardly to the people as a whole. It is no surprise to see university administrations responding to budget shortfalls, not by reminding politicians of their mission to foster an intelligent and well educated populace, but rather by calls to allow tuition to rise without limit.
Richard Hall's analysis of the funding crisis in (British) education is a case in point. While it seems true, he writes, that "the impact of crisis is used to justify a tightening and a quickening of the dominant neoliberal ideology," it also seems true that the institutions have brought a lot of it on themselves. "In particular we might now revisit the critical work on the neoliberal university, the student as consumer and the marketisation of HE, in order to critique and negate the path that we are pushed towards." As David Jones argues, "It's the focus on the product that has led university leaders to place less emphasis on the process and the people."
James Vernon writes, "Administrators have grown fat, plumping up their personnel, enlarging their office and buildings, as well as inflating their salaries. Most damagingly they meekly accepted the economistic logics that drove the auditing of productivity and were naive enough to believe that the introduction of fees would supplement, not replace, state funding. They have turned away from the public they are supposed to serve in the quest for new 'markets': professional schools, overseas students, and creation of empires with institutions that franchise their degrees."
If there were any sense that educational institutions ought to be serving democracy, this has long since been subverted by the reality that educational institutions serve themselves.
6. Ingratitude -- perhaps worst of all, the managers and leaders of our institutes seem to feel it is all owed to them. They seem to feel that, because they have acquired inordinate amounts of wealth and power, that they are therefore somehow deserving of it. There is no sense whatsoever that their power, influence and wealth are produced by the people they ostensibly manage.
There is no sense whatsoever (as evocatively portrayed in the recent Robin Hood movie) that leaders need the people they lead. That kings need their subjects. That institutions need their clients. Rather, we see across the board, from university administration, to institute boards, to corporate managers, that the institute is a good in itself, productive of all its own wealth by its own virtues (thanks to its managers, of course) and owing nothing -- no loyalty, no gratitude, no reward -- to those individuals who made it possible.
We have read a lot about the entitlement of university professors and tenured school teachers, but these are people relatively low in the system. The higher up the chain of command, the greater the sense of entitlement, as though being on a longer lucky streak was more reflective of personal accomplishment than a shorter one.
Far more damaging than tenured teachers are boards of education who believe they can re-interpret science and politicians who invent new forms of mathematics and determine what is most appropriately read, and all manner of educational mismanagement. Far more damaging than stuffy university professors are enormously wealthy financiers who redesign entire education departments on a whim, who through connections and influence foist an unproven pedagogy on teachers and students.
What is odd to the point of astonishment is the unending certainty by those high in the education administrative world that they are morally and intellectually right, so much so that no amount of evidence would sway them from their course.
To these six points adduced by Nussbaum I would add another:
7. Incompetence -- it often seems that society advances not because of its leaders, but in spite of them. The great advances of our time, and of times before, seem to have resulted from individual initiative, while those emanating from institutions can be counted on one hand (and all seem to have to do with preparing for or waging war).
To the extent that an institution relies on its leadership for direction and insight, it is incompetent, incompetent not simply because of the untrustworthy nature of its leaders, but incompetent simply because its leaders are not up to the task of comprehending and managing ever more complex enterprises.
Incompetence is often viewed as a problem of government and bureaucracy. And to be sure, there is no shortage of examples of government short-sightedness and ineptitude. But it is illogical to suppose that the solution to the incompetence of a large and bureaucratic government organization can be addressed by handing the function over to an even larger and more bureaucratic private organization.
Incompetence is a structural problem, not a government problem. David Jones describes it as it applies to educational institutions. "When it comes to e-learning (and universities in general) teleological or plan-driven processes have become dominant. Not only that, I argue that for the type of activity and context in which e-learning operates, plan-driven processes are completely inappropriate."
Corporations and other institutions are as incompetent as governments, and for the same reasons. There is no shortage of evidence for this, from business ventures (like 'new Coke' or the Edsel) that flop on launch, to long-standing misapprehension of the marketplace, such as that seen in the American auto industry, to an inability to understand its own financial instruments or legal undertakings.
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In short, representative democracy has failed. Our leaders, entrusted with the sovereign, institutional and corporate wealth by voters, stakeholders and shareholders, have stolen it. They have now usurped these institutions for their own purposes, turning against the population those very instruments designed originally to advance our wealth, enlightenment and self-governance. It is tempting to want to say that it is the managers themselves that are at fault, representing as they do the most greedy, untrustworthy, corrupt and ungrateful, elements of society, but it is hard not to raise questions about a system itself which has resulted in the elevation of the criminal class to power (or, perhaps more accurately, has fostered the creation of a new criminal class out of those with whom it has entrusted power).
And I am concerned that measures intended only to preserve our wealth and position within this social order do not address this failure. I am concerned that measures intended to remind institutions of the agreements they made -- agreements about retirement, agreements about education, agreements about a fair wage for a fair day -- will succeed in winning only grudging acquiescence of only some of these concessions from a management class that has no intention of honoring any of the agreements it has made in order to achieve power. We should instead be looking at how to create a social order in which our agreements cannot be voided by a leadership intent only on increasing its own power. The institution we create leverages vast resources and creates untold wealth, but we are held hostage by those into whose hands it places that power.
We must take matters into our own hands. For example, I do not accept the conclusion that the use of the Internet to educate ourselves is some sort of surrender to neoliberalism. Far from it; it removes us from the sort of bondage that allows such a government to withhold, as though by some sort of right, our natural inheritance, our access to the knowledge and cultural capital of society as a whole. It is only from the perspective of people as consumers or recipients of an education that online learning appears as a devolution of individual rights to commercial culture; but if in place of the educational institution we create our own form of learning through free association with each other, then we create an educational system that cannot be abridged, cannot be held hostage, cannot be sacrificed to corporate or proprietary interests.
Today, the dominant values promoted by our institutional forms of governance are power, ownership and control. We represent as more valuable institutions that are able to manage more people, move ever greater resources, amass ever greater quantities of capital. That is how online education comes a canard; it appears to represent the devolution of our rights and interests into the mysteries of an ever greater, ever more distant, institutional mass. But such a mass, far from being an instrument, becomes an entity in its own right over time, subverting those very purposes to which it was originally put. We need to design forms of social organization based on different values, forms that promote stewardship, agility and stability, forms that draw on and enhance our inherent capacities as collections of individuals, rather than forms that magnify or amplify the abilities -- and ambitions -- of single ones of us.
People today are beginning to realize, I think, that the solution of the problem of institutional excess does not lie in the creation of more institutions. The solution to the problem of the corruption of mass movements does not lie in the creation of yet another mass movement. The solution to the problems of greed and entitlement in our leaders and elites does not lie in the creation of more leaders and elites. The way to end war is to cease waging war; the way to free us of our chains is to cease forging chains. We secure our own right in society by securing the right of each and every member of society, by working not as in a bond, but by virtue of free association, of cooperative exchange of mutual value, with natural limits to the right to own, and possess, and control.