Higher Education – a risky business

It was the universities pension strike in England last year that drew my attention to financial risk as a feature of the landscape in higher education. I was aware of risk in relation to private sector markets and business. Something that was brought to the public’s attention during the Global Financial Crisis (GFC) in 2008. The film, The Big Short, dramatized the risk taking and fraudulent modelling that led up to the GFC .

The pensions strike was prompted by universities wanting to – or at least some did (and especially mine) – ‘de-risk’. That is, they wanted to reduce their exposure to losses in case the Universities Superannuation Scheme (USS) became unviable. The question is then, why the imperative to de-risk, and why now?

Public spending restrained – credit unleashed

The question is best answered by considering the political economic trajectory that advanced economies have been following in recent decades. In the UK, an important point of transition was in 1976, when the then Labour Chancellor of the Exchequer, Denis Healey took out a loan, on the UK’s behalf, from the International Monetary Fund (IMF). And as a condition of that loan, the UK had to reduce public spending. Although Healey was not the major villain here, the real villainy was from the subsequent Conservative governments and to some degree the New Labour government. The primary objective of the Thatcher government between 1979 and 1992 was to reduce the size of the state and roll back public spending. The New Labour government continued fiscal conservatism but promoted income distribution.

Most voters accepted this and accepted the analogy that the national economy was like their own personal finances. That a reduction in outgoings is, on the whole, sound economic practice and represents prudence. It is an application of the Micawber Principle at the macro level.

The problem is, of course, that unlike a household economy, income and expenditure are dependent on each other in a national economy. A nation state with a sovereign currency is a closed fiscal system. If there is a reduction in state spending, then this reduces the amount of state-created money within that system. The only means by which money can be created is through private-sector banking, though a mixture of secured and unsecured loans. A reduction in state spending depresses demand because people have less cash in their pockets, that is unless you encourage people to take on loans. This is exactly what happened in the UK from the 1970s onwards.

In 1971 reforms were made to the banking sector which liberalised credit; further deregulation took place in the 1980s making it much easier for anyone to get credit. The introduction of right-to-buy marked the expansion of secured debt. It had the effect of coupling consumer spending and economic growth increasingly to debt and inflating house prices. Figure 1 (by Steve Keen) illustrates this (and I have a print of this on A3 on my office wall because it is so significant). We see an unprecedented expansion of private-sector created money (the red line) or “money created from nothing”. The blue line, credit, is the annual change in debt.

Figure 1 UK Debt and Credit from https://neweconomics.opendemocracy.net/the-ten-graphs-which-show-how-britain-became-a-wholly-owned-subsiduary-of-the-city-of-london-and-what-we-can-do-about-it/

Risk and speculation

Private credit is but one way of seeing the character of capitalism that we have experienced in the UK for the last forty or so years. Another way of framing this is through considering value extraction through speculation.

Speculation, originally a word to denote the sensory experience of sight and vision, has also come to mean seeing into the future or drawing abstract conclusions about what might happen. In the Netherlands in the early seventeenth Century, there was one of the world’s first speculative economic events – Tulip Mania. This was a result of advances in the Dutch financial and banking system and the introduction of futures trading rather than the existing existential bills of exchange. This meant that buyers could buy produce that had not already been grown or commodities that had not already been made and it was possible to sell that contract before the goods had been received. This permitted a speculative market based on what something might be worth in the future. The value of futures contracts was dependent on the confidence that traders had in the valuations of future worth.

Tulip Mania resulted in a speculative bubble in which investors obsessively speculated on the price of tulip bulbs and it is believed, at the peak, prized bulbs were equivalent to the price of a family home in Amsterdam. Whether this is true or not, we do know that in the end the bubble burst and many people lost everything and more.

What we see here is an emergent relationship between risk and capital, or at least the emergent practices for financial speculation. Like all subsequent bubbles it is those with the most accurate and most up-to-date information who can extract value. The ‘punters’ are easily left without shirts, or homes or with debts.

Future value and risk

Humans, as conscious beings, have a propensity to become preoccupied with the future.

Hundreds of millennia before cities, agriculture and the other civilisational trappings with which we presently identify the human, Palaeolithic humans ‘awoke to the predicament of ourselves in time’ (Frank 2011: xviii). This predicament marks the realisation that irrespective of what we do in life, death marks the finitude of earthly existence. Our inherent ‘being-towards-death’ (Heidegger 2010) is the inevitable context of all human action and the driving force behind ‘our determination to live in such a fashion that we transcend our tragic limitation’ (McManners 1981: 2). (Stevens, 2015, p. 44).

The preoccupation with future outcomes becomes increasingly pronounced at the same time as capitalism develops during the early part of the modern period. A little later, mathematical grounding was developed by the Bernoulli brothers in the seventeenth and eighteenth centuries. The new theory considered both probability and consequences – that is, not just the likelihood of something happening but also what might happen, or the utility of outcomes. And here we see the beginnings of risk modelling, and alongside the emergence of humanistic Enlightenment rationality: a seduction into the belief that world can be tamed by an abstract model. The flip side of the coin to risk (as it were) is uncertainty – which is the reality that we really don’t know what will happen in the future.

Frank Knight’s 1921 book, Risk, Uncertainty and Profit, makes the distinction between calculable predictions and the incalculable unpredictable. This locates a site of entrepreneurship, where risk can be modelled. And much of the latter half of the twentieth century has strongly featured risk models as part of financialization: sophisticated insurance products, hedges, swaps and spread betting. These are the means by which ‘risk’ is monetised or in Marxian terms how the means by which value can be extracted.

Risk modelling can be compared to land enclosure, primitive accumulation or in David Harvey’s terms accumulation by dispossession (Harvey, 2004) but at an abstract level. We are dispossessed of agency on abstract matters where a proprietary model can be used to quantify risk. Effectively we pay rent on these functions: any financial transaction we are engaged in has a risk valuation attached to it, so there is a rent or interest to charged to us. Uncertainty is like a wilderness beyond the ‘enclosed’ risk, it is ignored because profit cannot be made from it, in the same way the rents cannot be charged for the wilderness that is beyond that which is enclosed.

We have seen then an expansion of financial risk modelling as part of daily life in an advanced economy. However, a latter turn has been the socialisation of risk as identified by Giddens amongst others (Reddy, 1996).

While the socialisation of risk suggests that we are sharing risk, what it really means is that the state is not underwriting risk as a result of fiscal conservatism and austerity. The state is no longer, as Francis Baring put it, the lender of last resort in the sense that quantifiable modelled risk has been appropriated by the private sector. Yet, the state is the lender of last resort in regard to uncertainty. The response of the UK and US governments to the collapse of banks during the Global Financial Crisis illustrates this. Leading up to this the state allowed the banking and financial sector to model, monitor, manage and self-regulate society’s risk. When it was found that they couldn’t, and hadn’t, the state then had to underwrite the consequences of the uncertainty that the financial sector had ignored. And they had ignored it because uncertainty unlike risk offers no opportunity for value to be extracted. Subsequently the UK government socialised the losses.

The valorisation of risk and higher education as a derivative market

Value extraction from risk is reminiscent of Marx’s conceptualisation of value extraction through M-M’ – money begets money (Marx, 1867/1981) i.e. through transformation and transactions relating to money. The calculation and modelling of risk does itself become a kind of commodity (I am not going to delve into this here, but it does have the characteristics of money too, as an exchangeable representation of worth). It is also dependent on who calculates the risk (power, authority and trustworthiness) that influences ‘worth’ of the risk. From this then we have a market for risk, venture capital and credit, with margins of relative worth, of different financial products, and therefore a means of extracting value by brokering the sale and purchase derivative financial products.

For example, when a wealthy and well-established university (or one of its colleges) decides to issue a bond to raise capital, it is not just a credit transaction, but a credit transaction that has with it a quantification or model of associated risk. What financial institutions are looking for is low risk loans to balance up riskier loans. The financial institution can then offset low-risk lending with higher-risk speculation and venture. The overall assessment of the financial institution’s viability is used then to attract investors and raise capital. For a university raising capital having a low-risk (or high credit rating) means that they can borrow at a low rate. In turn, the university can construct buildings with the capital and secure rents from their operations e.g. teaching and research.

Effectively, the 1988 Education Reform Act and subsequent policy has transformed England’s university into a derivatives market from previously being a public provision. And the risk of this enterprise is socialised amongst staff and students. Indeed, uncertainty is also socialised, because it will be staff and students that will make the personal and financial sacrifice when higher education institutions fail.

The discipline of de-risking in the University

De-risking presents a new form of disciplinary regime within public institutions. The socialisation of risk involves workers having to manage the contribution to perceived organisational risk. Risk is passed down, individuals within the organisation, as much as they might be seen as a unit of entrepreneurship, are also a unit of risk. In higher education this manifests as casualisation – an army of precarious post-docs, research assistants, zero-hours contract teachers, temporary workers and precarious support staff. They can be hired and fired and short notice. The hiring institution can limit the variability of labour capital and avoid over capacity. It can maximise income from branding, intellectual property and, as I have already pointed out, the securing of rent from capital investment in buildings. The central university is taking a rent for all the teaching and research activity, as a return on capital investment.

De-risking in the Faculty of Education

The riskier (the uncertain aspects of the university operations) that is the actual teaching and research has increasingly seen the risk underwritten by the staff and students. The initial teacher education programme (the postgraduate certificate in education, PGCE), is highly regarded. It recently received the highest grading by the inspectorate, Ofsted, who took the unusual step of not making any recommendations on how to improve the programme. The current and previous Vice Chancellors have heaped praise on the PGCE programme, it aligns closely with University’ mission of ‘doing good things’. It is one of the few areas in which scholarship and teaching are directly engaged with disadvantaged and vulnerable children and young people. Consequently, the programme is complex, it involves managing partnerships with schools and having working relationships with individuals across institutions. It relies heavily on establishing and maintaining mutual understanding, resolving disputes and conflict, managing competing priorities and different purposes and ensuring there is a shared understanding of the programme. Inherently, it is risky, or to be consistent with the definitions that I have already used, it is uncertain. Necessarily, with such complexity and uncertainty, the PGCE requires financial support and a long-term commitment to it from the faculty and the university. However, within the risk-averse practices of university of administration, it is not forthcoming. What is experienced then by the staff is an allusion toward possible closure of the course (unless you make it successful). It is not what the university is going to do support the programme, the question is put to the staff – what are you going to do to make the programme a success? This is the institutional socialisation of risk. Of course the University is happy to enhance the worth of its brand with such a programme, but only if the staff working on it are prepared to take the responsibility for it. Responsibilities which include large workloads, managing complex relationships and presenting the programme in its best light to the government’s inspectorate. And over time we have seen the number of academics working on the PGCE diminish and replaced by part time teaching associates who are on more precarious teaching-only contracts.

There is a similar story to be told with the undergraduate education ‘tripos’ programme. A rich and complex interdisciplinary bachelors degree course. There are similar ongoing questions about its viability or how it can be simplified and rationalised. There are significant numbers of hourly paid supervisors and teaching-only contract lecturers.

There is a danger that the discipline of de-risking could result in the Education Faculty being a rarefied grad school, and with increasingly more evaluative research, research contracts with business, governments and the third sector, rather than asking the fundamental questions about education and its role in society.

I will conclude with Susan Robertson and Chris Muellerleile’s conclusion in their book chapter Universities, the risk industry and capitalism: a political economy critique:

… we need a different conceptual grammar to talk about the transformation of the university in the 21st Century; one that has the potential to recover the revolutionary potential of the academy in creating knowledge – without reverting to a script that romances the pre-1970s academy. This means also putting risk in its place socially, politically and economically. It means resisting the temptation to talk of the calculating university, as if this was an ontological state of being. Instead we need to see risk imaginaries, technologies and tools, as either wittingly or unwittingly being promoted or legitimated by those who benefit from the growth of the risk industry (Robertson & Muellerleile, 2016, p. 20).


Harvey, D. (2004). The ‘new’ imperialism: accumulation by dispossession. Socialist Register, 40 The new imperial challenge, 63–85.

Marx, K. (1981). Capital: a critique of political economy. (D. Fernbach, Trans.) (Vol. 1). London ; New York, N.Y: Penguin Books in association with New Left Review. (Original work published 1867)

Reddy, S. G. (1996). Claims to expert knowledge and the subversion of democracy: the triumph of risk over uncertainty. Economy and Society, 25(2), 222–254. https://doi.org/10.1080/03085149600000011

Robertson, S. L., & Muellerleile, C. (2016). Universities, the risk industry and capitalism: a political economy critique. In R. Normand & J.-L. Derouet (Eds.), A European politics of education: perspectives from sociology, policy studies and politics (submitted manuscript, pp. 122–139). New York, NY: Routledge.

Stevens, T. (2015). Cyber security and the politics of time. Cambridge: Cambridge University Press. https://doi.org/10.1017/CBO9781316271636

A critique of the University of Cambridge’s external financing approach from the perspective of modern money theory

Remarks for the discussion at the Senate House, University of Cambridge on 6 November on the use of funds from £600 million bond issue

Deputy Vice Chancellor.

The Council has already approved of raising external finance by issuing bonds of up to £600 million. And I understand that this discussion is about the use of the funds raised. But I thought it important to explain that there are potential societal affects as a result of this kind of debt financing, since no Regent or any other person has done so previously, and that a stated aim of the University is to benefit society and not to act in a way that is detrimental to it.

I will try and explain as briefly as I can.

My starting point is a simple incontrovertible truth about a national economy, that is, the sum of individual deficits must equal the sum of individual surpluses. To illustrate this, if there was just me and the Deputy Vice Chancellor on a desert island where we agreed on an issued currency, if I was in deficit, that is earning less than I spent, necessarily the Deputy Vice Chancellor would be in surplus, earning more than he or she spent.

Within the closed monetary system of a national economy no one other than the state can create or destroy currency. Therefore, the sum of deficits must equal the sum of surpluses.

Let us now aggregate. If we consider three aggregations, as is the practice in national accounting, public, private and overseas: ‘public’ represents government spending and revenues, ‘private’ represents household and business spending and income, and ‘overseas’ represents imports and exports. Using the same reasoning about individual deficits and surpluses, the sum of public, private and overseas deficits and surpluses must be zero.

The UK economy generally has an overseas deficit, we import more than we export. Therefore, the rest of the world is in surplus with the UK economy. In managing an economy, a government should ensure that the private sector is running a surplus so that people, households and businesses can accumulate savings to cope with changes in the economy. The normal operating condition of public finances is in deficit. This ‘sectoral balance’, as it is called, reveals that a national economy is nothing like the economy of a household or business.

But UK governments over the last forty years have become preoccupied with treating the national economy as a household and a key economic mission has been in balancing the books or reducing the deficit or recently in its more extreme form, ‘austerity’.

What is the effect of this? Overseas deficits have remained broadly constant, so reductions in public sector deficits have resulted in the reduction in private sector surpluses. This reduction in private sector surpluses does not affect the sector evenly. The poorest households become increasingly indebted and the credit is provided by the wealthiest in the private sector. Austerity exacerbates a private debt-based or rentier economy, where existing wealth is expanded through debt interest and rent. As the state withdraws from using fiscal policy, in other words, as it stops investing, private debt and credit become the dominant economic form.

So, as government attempts to reduce public deficits, by cutting spending on things like higher education the poorest in society are under increasing financial pressure. Meanwhile universities are forced to raise finance in other ways and this simply adds to the problem.

There is a further consequence of public deficit reduction that was recognised by both Marx and Keynes. When conditions lead to a private debt-based economy or rentier economy, the investor is less likely to invest in the productive economy. That is in enterprises that deliver the things that we need as a society. In a debt economy demand is fickle, it is reliant on household debt and inflated assets. The risk of making profits from lending is much less than investing in the productive economy. Investing in manufacturing, for example, becomes much less attractive, it is much more attractive to live off interest and rents. This has an impact on jobs and on the creation of long-term meaningful work. This contributes to undermining liberal democracy (see for example the EU referendum result, or the US presidential elections in 2016).

So, there is a great deal of demand for debt, it is bought and sold and traded like a commodity. Financialization is the business of using low-risk low-return debts such as that generated by the University’s bond scheme and using it to construct portfolios that feature a balance of high-risk speculative investments and safer investments such as government bonds. Financialization involves securing marginal profits from speculating on debt, interest and risk using sophisticated financial products. This kind of financialization led to global and political crises in the 1920s and a major financial crisis in 2008 (among others). By entering the debt economy, the University contributes to the problem.

It may seem expedient to the Council to proceed with this proposal since the University must sustain its work. I accept that the decision has been made. However, I just wanted to explain that this is not a politically or economically neutral endeavour. From our privileged position we have a duty to offer moral and intellectual leadership and must at least be aware of what we are complicit to in issuing over £0.5 billion of bonds. I welcome the Vice Chancellor’s commitment to more robustly challenging government’s higher education policy, but we must match this with our actions.

Dr Steven Watson

Faculty of Education and Wolfson College

For further reading on modern money theory:

Mitchell, W. F. (2016). Modern Monetary Theory and Practice: An Introductory text. CreateSpace Independent Publishing Platform.

Nersisyan, Y., & Wray, L. R. (2016). Modern Money Theory and the facts of experience. Cambridge Journal of Economics, 40(5), 1297–1316. https://doi.org/10.1093/cje/bew015

Wray, L. R. (2012). Introduction to an alternative history of money. Working paper, Levy Economics Institute of Bard College.

Wray, L. R. (2015). Modern money theory: a primer on macroeconomics for sovereign monetary systems (2nd edition). Houndmills, Basingstoke, Hampshire ; New York, NY: Palgrave Macmillan.

Apparently there are too many PhD students

There have been some conversations in the University, I understand, that there are too many graduate students competing for too few academic jobs. There was some discussion also that we should reduce the number of graduate students. While the first statement might be true, I take issue with the second.

Globally, there might be finite resources and funding for academic work. Certainly in England, I suspect (I am not going to look at the data just now) investment in academic work has probably diminished over the last 40 years. If it has not diminished, then the source of that funding has increasingly come from private sources – whether that be applied research for industry and business or debt-funded undergraduate study. Higher education, in England, is a competitive market. This, I believe, is the source of the pressure. Whether that be the result of tightened funding or consequence of the business/corporate market language is immaterial. The issue is, then, the question of whether there is too much demand from people to do scholarly work. Should we be placing a limit on access to research degrees?

I think not.

As each moment passes, each day, as each year, decade or century passes, we create for ourselves a more complex world – a more complicated world. Our capacity for sophistication holds no bounds. Yet, we also create for ourselves considerable problems. The Enlightenment held for us so much promise. With our minds, we had an unlimited capacity to develop technology and prove ourselves masters of nature. The Enlightenment also gave us the belief that we would be able to solve rationally, moral conundrums. However, we have been repeatedly humbled by nature. If we think about the twentieth century, humanity experienced the most violent century in history. The horror and the destruction were way beyond the experience of being violently consumed by a predator. This was violence on a man-made industrial scale and was not designed with quick dispatch in mind. It was constructed withe cruel and horrific vision.

We do need scholarship – active/activist scholarship – that can help us address the complex problems that humanity faces. These problems while they exist in the chaos of nature are the product of human reason. There is something intuitive about nature’s chaos, as living beings, we can cope with the unknowable and the uncertain. I was saying to the trainee mathematics teachers on Friday, each of us as individuals, has a surface with an almost infinite area. The contact between each of us and our environments is infinite – or approaching infinity, to be more mathematically precise. There is an infinite exchange of data. If we were to remove our cerebrum – the part of the brain responsible for rational thought – then using our limbic brain we could continue to live our lives. We can cope – and we have to cope – without the power of reason, because there is simply too much to reason about.

Antonio Damasio’s book Descartes’ Error begins with the story of Phineas P. Gage, who suffered a life changing accident while at work in the summer of 1848. Gage was a 25-year-old construction foreman. He was working in the construction of the railroad in Vermont. As they blasted through rock to allow the railroad to proceed on a straight course, Gage was setting charge. At four-thirty on a hot afternoon, he put powder and a fuse in a hole. He was distracted momentarily and began tamping down the charge before the man helping him had had chance to cover it with sand. Gage was tamping down the powder directly with an iron bar. The iron bar as it struck the rock caused a spark. The explosion is considerable. The iron bar enters Gage’s left cheek pierces the base of his skull goes through the front of his brain and exits from the top of his head at high velocity. The iron rod apparently was found more than a hundred feet away, covered in blood and brain matter.

What was surprising was that Gage was not killed instantly. And despite serious damage to his brain, he recovered and lived for another 11 years. Of course, the accident resulted in dramatic changes to his personality, Phineas Gage was no longer able to respond to people in a measured way, and within the norms of politeness. However, he did live and Gage’s horrific accident demonstrates how much we rely on our limbic brain – or indeed how little we need our cerebrum.

Rationality in the contemporary university is so heavily influenced by Enlightenment, philosophy. I was only this afternoon listening to Terry Eagleton’s Luxembourg lecture from 2013 in which he talks about culture wars: in the post-Enlightenment, a position of privilege was given to science and there was a devaluation of the humanities. We turned our attention to rationality and treated the arts and humanities as frivolous and valueless. Now our science and our economics (and indeed the condition of contemporary societies) have led us back to a point at which we must critique the Enlightenment. We have created one big stubborn humanity-sized knot, a global scale conundrum of rationality. Our belief and thought, or the belief in the power of thought and rationality, has left us with one big mess. We face global problems with the environment, inequality, poverty and an unprecedented scale of human movement. Rationality is not going to be enough to solve it. Universities in their present form are not going to solve it, and scholars thinking in the way they do not going to solve it. We need the affective, intuitive narrative dimensions of the arts and humanities. We do need critical and embodied scholarship. Scholarship that has the boldness to go beyond the Enlightenment and go beyond Descartes’ Error. Embodied scholarship does not simply take place in the ivory tower it has to be out in the real world amongst people and amongst practice – day-to-day practice as Lefebvre stressed to us.

I know, that some of the most important work I do as a teacher educator, is with professional practitioners in public services. They experience, and they feel every day practice, they feel and experience the impact of our institutions and our policy on many individuals who are powerless. They are engaged in theory and practice. One is not privileged above the other. They must have the experience of doing pure research, but with the framing and experience of the everyday and of practice.

Or, might I be a farmer-scholar? I could spend part of the week working at growing food for me, my family and the community and for the rest the week. I could engage with work at a more theoretical level in relation to what I do now or concerned with the growing food.

The answer then to the excess of research students, is not that we have too many people wanting to be academics, it is that we have to reframe academia and what academic work actually is. To do this we have to think beyond the Enlightenment.

Multiplication – the privilege of mathematical thinking

I love John Mason. It is always a pleasure to listen to him as he takes you with him through his exploration of mathematical thinking and learning: “sit there and close your eyes and imagine a number line…” He takes you on a journey of ideas, connections and new understandings of the relationships between concepts and ideas in mathematics.

This evening we explored multiplication in the Faculty of Education.

But it is not the wonderful session that I want to talk about. It is my theme of not Mathematics Education (nME). A kind of meta- hyper- mathematics education. I mentioned to John that I was interested in nMEHe looked puzzled, but not dismissive, John is always interested in thinking. I talked about how we had been through a period of relative stability in mathematics education research (I was talking about neo-liberalism). It is the liberalism that it is important in mathematics education research, it allows the freedom of thought and builds on the constructivism following Piaget and Vygotsky: constructing worlds of meaning and mathematical imaginaries as part of the process of learning (and doing) mathematics. It is the neo– in neo-liberalism that has contributed to deepening inequality in the last forty years.

Neo-liberalism, while it indulges some in this kind of constructivist thinking, it is for those, primarily, who have the time and luxury to indulge. If you want a sense of the mathematical indulgence that is associated with social class read G H Hardy’s Mathematician’s Apology. It is an apology for the fact that his position, wealth and privilege gave him access to think about pure mathematics. Wonderful things ensue, of course – the contribution of pure mathematics is without any doubt. Hardy explains how the pursuit of mathematics for its own sake and without purpose often leads to useful applications. It is the pursuit for no particular purpose that makes pure mathematics productive. But it is, in the context of liberal economics with its implicit utilitarianism, limited to a selected elite.

“Ah!” You say, “mathematics is meritocratic, it is blind to socio-economic status, class or even background.”

Well, no it isn’t, the fact that some children from disadvantaged backgrounds get to study mathematics at top universities insufficient to support this claim. Disadvantage children who progress to study mathematics in leading universities generally have a combination of talent, some luck and often or not a great deal of support. Sadly, there is often an unspoken appeal to competition or even social Darwinism: surely it is a fitting way to select the best. Probably not: the top universities’ mathematics departments are by-and-large filled with students who are from middle class or privileged backgrounds.

Let me explain why this (and I can go back to John Mason’s talk for this). Clear your minds – imagine a number line. Now imagine that number line is an elastic band. Stretch it out to three times its length, on what number would the original ‘4’ be. This is the basis of mathematics learning – of rich deep and agile mathematical thinking in which we explore concepts and relationships.

Now imagine that you are 13 years-old, you have one parent. They may be in precarious, low paid work, they may be struggling with their mental health because of debts. They may be struggling with alcohol, they might be worrying about paying the rent or getting evicted. You might live on a road where families face all sorts of difficulties in work and in keeping a roof over their heads. A community working and living precariously. You might have been pushed out of the shiny academy because you are distracted and can’t follow the strict and daunting behaviour policy. Your school is facing problems because there are lots of kids like you facing challenges, the teachers are tired and stressed. They haven’t got the patience for the kind of stuff John is doing. They love it, they love what he does. But they are so so tired. Even if they can, there is lots going on in your head, even your loving parent can’t shield you from their own or even the community’s anxiety and deepening sense of hopelessness.

Now tell me how you are going to shut all this out  – this noise – and imagine your number line, even if you have a patient, thoughtful, energetic teacher. How do you stand a real chance? You don’t, it is a lottery for those from disadvantaged backgrounds.

Just before John began his talk, he mentioned the work he had been doing with Cambridge Maths, an initiative run by Cambridge Assessment to develop curriculum. There is no doubt that they are doing wonderful things. I reminded John of Cambridge Assessment’s primary purpose as an arm of the University of Cambridge, in a political and economic climate where the University can’t rely on public funding. Cambridge Assessment is about making money and it follows that Cambridge Maths will have to contribute at some stage. John agreed but argued that any opportunity to develop mathematics education must be taken. He was about to start his wonderful talk and I couldn’t make the following and my final point.

If we really want to make mathematics universal and allow all to indulge in the rich thinking that the study of mathematics promotes, then we have to – we must – start to think critically about it. That is ‘critically’ in the sense of what is driving the agenda: things that are not Mathematics Education – things like political economy. We cannot (must not) put mathematics education in a bubble insulated from political economy. Neo-liberalism fabricates and manufactures consent for economic scarcity (reducing public sector deficits). The consequence is that mathematics education research and development necessarily has to rely on markets and private finance. It is not any-port-in-a-storm to sustain research and development projects; by not resisting we are complicit in the political economy of neoliberalism. If we want universal access to mathematical thinking and a mathematics education for all, then we need to fight for public investment in research and education. We need to campaign against the meanness of economic policy that has marginalised so many and left them without the basic quality of life that creates barriers to the wonderful mathematical journeys that John Mason takes us on.



Anti-semitism: it is time to listen, reflect and learn

The issue of anti-semitism on the left has to be taken seriously. I do not believe that the Labour Party or even the left of the Labour Party is any worse than the rest of society or any other political party. But I do believe that members of the Labour Party have a special responsibility because we value and regard egalitarianism, equality and justice above all else. We have to be held to higher standards. We have to hold ourselves to higher standards.

There are lazy anti-semitic tropes, conspiracy theories, Israeli lobbies etc. We must do better. We can criticise the Isreali government, but we have to be more rigorous and more critical in the choice of language. We must become better educated in the history and culture of anti-semitism – an insidious destructive and evil form of racism.

We must be aware of the different Jewish perspectives on Zionism, nationalism and complexities of religious and political beliefs. There are orthodox Jews who consider anti-Zionism to be anti-semitism there are progressive Jews who make a distinction (see http://www.bbc.co.uk/programmes/b083n15d). My point is we must not be lured into bigotry through intellectual laziness and idle appeals to conspiracy theory. It is worth reading the first part of The Origins of Totalitarianism by Hannah Arendt on the history of anti-semitism. Also, see this brilliant video from Eleanor Penny of Novarmedia.

For those with left views, we must remain focussed on our central project, the class struggle against capital, and for human rights and egalitarianism. We must not get drawn into a culture war by throwing around lazy tropes.

The allegations made against the left in the Labour Party are hard, the feel personal since we value morality and our morality is being questioned. It is easy – and I have seen comrades do this in the last twenty-four hours – to lash out and get drawn into mudslinging and in the worst examples, resort to anti-semitic tropes and conspiracy construct. Please don’t – pull back, reflect, read and consider the long history of anti-semitism. When our morality and moral purpose is publicly interrogated we only humiliate ourselves when we do not take the time to think or to educate ourselves. We do not humiliate ourselves when we concede that our past behaviours may have been misguided or wrong. That is the essence of education.

The last twenty-four hours have been a hard experience, but it also presents us with an opportunity to learn and adapt. If we refuse to do that, if we refuse to learn, then we adopt the bigotry of the far right.

Do I think we should ignore those that have used this situation for political gain? No, I don’t. When I see the likes of Norman Tebbit and Ian Paisley Junior standing shoulder to shoulder with Labour MPs, it makes me sick to the core. But like Mehdir Hasan, I can walk and chew at the same time, I can oppose anti-semitism, I can do what I can to make the Labour Party a safe place for Jews, but I can also call out the smears and political opportunism. The opportunism that in itself undermines and devalues the struggle against bigotry, anti-semitism and anti-racism.

It is important to see Jeremy Corbyn’s response not as a concession, as giving into bullies, but as a self-aware, reflective and intelligent response to the situation. It is an outstanding example for party members.

Out of this, we on the left will be stronger, more educated, more inclusive and even better equipped for a democratic socialist government.

The Higher Education pensions dispute: a perfect storm of neo-liberalism, marketisation and austerity

The current dispute between the University and College Union (UCU) and the representative body of the employers, Universities UK (UUK), is over imposed cuts to pension benefits. According to the UCU, the annual retirement income of academics will be reduced by 10 to 40 percent. This is on top of real-terms pay cuts of 19.5 percent since 2009/101http://www.ucu.org.uk/circ/pdf/UCUBANHE14.pdf, while surpluses in UK Universities have gone up from £1.85 billion in 2014/15 to £2.34 billion in 2015/162Ibid. The accounting model changed in 2016/17 but the sector continued to secure considerable surpluses..

The dispute is more than about pensions though: on the surface, it appears to be a debate about the justification for changes to pension benefits, but beneath is a fundamental argument about political economy and the further push toward a privatised and marketized higher-education sector. Within the sector, within universities, decisions are being made without sufficient democratic scrutiny from members of staff and the wider community. Moreover, many academics may be unaware of the economic underpinnings of what appears to be conflict over pension affordability and university staffs’ pay and conditions. I set out here the underlying political and economic issues that are driving policy in government and that have led to the decision to cut pension benefits. I hope you will see that the pension cuts are the symptom of a deeper malady. I wish to show that the inherent threats to higher education are way beyond being about the comfort of academics in their retirement. And that anyone who believes strongly in the value of scholarship, research and learning should show solidarity with the striking members of the UCU.

I begin with some background to the dispute over pensions and the role of my institution, the University of Cambridge, which along with Oxford has taken a particular stance. I follow this with a quick summary of the economic context. Finally, I bring these elements together and demonstrate that we are in the conditions of a perfect storm for higher education. The underlying debates about the projection and level of risk in the pension fund are connected to government economic choices.

Finally, I argue that universities have a moral duty and should not simply accept the political and economic orthodoxy, rather than acquiescing to the parochial rationality of neo-liberalism and marketization.

Background to the dispute

The Universities Superannuation Scheme (USS) was valued at £41.6 billion in 2014 and £60 billion in 2017. The most pessimistic valuation leaves the pension fund with a shortfall of £5.1 billion in 2017. On the other hand, a best estimate valuation suggests a surplus of £8.1 billion. The question of whether there is, in fact, a shortfall depends very much on the model used to calculate future liabilities, growth and risk. An important factor in this is what is deemed to be an acceptable level of risk. Universities have been particularly keen to reduce the level of risk and a strategy of “de-risking” has been adopted. Equities, are higher risk investments than government bonds or gilts but offer higher returns. However — and I shall explain why in the next section — gilts offer a much lower rate of return than equities. Between 2011 and 2017 the percentage of the USS fund that has been in equities has reduced from 55 percent to 37 percent. While the amount invested in gilts has gone up from 13 percent in 2011 to 31 percent in 2017. Reducing the level of risk leads to a reduction in the rate of returns and is a factor in the pessimistic valuation of the USS fund.

It is the issue of risk that is central to the current dispute. According to Michael Otsuka, who analysed the results of the employers’ consultation over USS3https://medium.com/@mikeotsuka/oxfords-and-cambridge-s-role-in-the-demise-of-uss-a3034b62c033, only a minority (32 percent) of employers were looking for changes to the way in which contributions are set and assets and liabilities calculated. In other words, most employers were happy with the scheme as it stood. However, 73 percent of Oxbridge institutions (which presumably includes constituent colleges as well as universities) were opposed to the current arrangements.

The USS is based on last-man-standing mutuality which means that should all the universities go bust the liabilities would be passed to the last remaining universities. This means that Oxford and Cambridge, as the richest institutions, would bear the liabilities in the unlikely event that the other universities went to the wall. This also assumes that government would not intervene should the whole of the higher education sector go in to complete meltdown.

Otsuka points out that in their submissions to the September consultation on USS both Oxford and Cambridge expressed concern about the level of risk in the last-man-standing scheme. Cambridge objected that:

The University (and the other financially stronger institutions) continues to lend its balance sheet to the sector, which contains the cost of pension provision for all employers. In a competitive market for research and student places the University would be concerned if this appeared to be having an adverse effect on the University’s competitiveness (by allowing competitor universities access to investment financing or reducing their PPF costs in a way that would not be possible on a stand-alone basis).

Within this, Cambridge acknowledges that higher education is and will remain a competitive ‘market’, there is no sense in which Cambridge characterises itself as a public institution there to provide a universally available service in collaboration with the rest of the sector.

This also became evident to me when the government were trying to hurry through the Higher Education and Research Bill at the time the General Election was announced in April 2017. I approached the Conservative Member of Parliament, in whose constituency my Faculty sits, with objections to the Bill. Heidi Allen MP explained to me in her response, that the University of Cambridge had already been in touch with her to explain that they were happy with the Bill as it stood. I am aware how Cambridge, and most likely Oxford too, are seemingly sanguine about the marketisation of higher education and are preparing themselves to exist in this environment.

USS have reacted to a minority (42 percent), of whom, according to Otsuka, Oxford and Cambridge are the most prominent and hawkish members. The majority, however, were happy with the current levels of risk. The UCU describe how on the 23 January 2018, Chair of the USS Board, Sir Andrew Cubie, used a casting vote at a meeting of UUK-UCU Joint Negotiating Committee to remove Defined Benefits from all members of USS. The USS now transfers to a Defined Contribution scheme, where all contributions are placed in an individual investment portfolio. The risk is entirely transferred to contributing members of the USS. It also means a reduction in pensions of between 10 and 40 percent, particularly affecting younger entrants to the scheme.

The national economy does not work like a big family home

It is a common belief that a national economy works much the same as a household; that income must at least equal outgoings and preferably income must exceed expenditure – for that rainy day. Yet, there is a major difference between household economics and a national economy. In a household economy, expenditure is independent of income, one or both can change without really affecting the other. In a national economy, government income or taxation is dependent on its spending. The reason for this is that government spending is the only means by which currency can be introduced into that economy. Government spending creates currency, taxation effectively destroys it.

Within a national economy, all deficits and all surpluses must sum to zero. To understand this, imagine if there were just two people in a national economy. If one person has a surplus, i.e. they have more income the outgoings, the other person must be running a deficit, they must have more outgoings than income. The sum of deficits and surpluses is zero because there is a fixed supply of currency. Now imagine adding more people until there are 60 or 70 million, the sum of deficits and surpluses must still be zero for a fixed supply of currency.

By convention, nations divide economies into three sectors: the public sector (government spending and taxation) the private sector  (households and businesses) and ‘overseas’ (imports and exports). The sum of public-, private- and overseas-sector surpluses or deficits must sum to zero. The UK has an overseas deficit, we are a net importer, so currency is leaving the UK4It is not really leaving the UK, more accurately it means there is domestic accumulation of Sterling as a consequence of overseas trade.. We have a public-sector deficit, government spends more than it receives and the private sector is in surplus, households and businesses have more income than expenditure. It is important to realise that this is an aggregate surplus across the whole private sector, it is just the wealthy individuals and businesses that run a surplus, while poorer households are running a deficit and accumulating debt.

The austerity measures of the last eight years were intended to reduce public-sector deficits. Reducing public-sector deficits while maintaining an overseas trade deficit reduces private-sector surpluses and puts more of the poorer households and businesses into debt. The wealthy are then able to lend their accumulated wealth to the poor profitably.

Austerity uses a household analogy to justify reducing public-sector deficits, where in reality it increases the debts of the less well-off and the wealthy can the profit by lending. Indeed, it is preferable for the wealthy to profit through lending rather than investing in productive business and enterprise. If the poorer are in debt, they will be reluctant to spend, so aggregate demand is reduced making business investment riskier and less attractive.

Austerity is an exercise in trickle-up economics and the poorer are paying rents (that can be rents on property or money) to the rich. This leads to an accumulation of currency and creates a demand for government bonds or gilts as a low-risk means of saving. This is also referred to as the national debt, which is not really debt, but savings. The high demand for gilts (and so-called high national debt) reduces the returns on them. In an investment-led economy, money invested in gilts would more likely be invested in businesses, because government spending and investment increase aggregate demand and the risk of business investment is reduced.

Neo-liberalism: choice and competition

Neo-liberalism is closely aligned to austerity, it is based on the belief that the free market is the most efficient means of exchanging goods and services and that competition results in lower prices, efficiency and improved productivity. A further characteristic of neo-liberalism is the transfer of public services, utilities, nationalised industry and public transport to the private sector. The first moves toward neo-liberalism in the UK were in the 1970s. In 1976, Denis Healey, the Labour Chancellor of the Exchequer, accepted a loan from the IMF, attached to it were conditions that forced austerity, i.e. reducing public-sector deficits. When Margaret Thatcher came to power in 1979 public assets were sold off to individuals and investors, including public housing, utilities and public transport for example. At the same time, there was increased financial liberalisation which facilitated more lending. Outsourcing and private finance expanded through John Major’s premiership and was further extended by Tony Blair during the New Labour government. While it might seem that privatisation reduces the size of the state, the state is still required to fund public services such as health, education, prisons and transport infrastructure Privatisation presents an opportunity for businesses to profit from the provision of public services. Importantly, losses and risk are largely underwritten by the state. The provision of public services by the private sector is an attractive investment: in a period of austerity, with low aggregate demand in the private sector, investing in public service provision with socialised risk, is very attractive.

A further lucrative low-risk investment is the financing of capital projects in the public sector, so-called Private Finance Initiatives (PFI), Public Private Partnerships (PPP) or Private Placements where an institution issues a bond to raise finance.

Privatisation, marketisation, neo-liberalism and austerity are beams of the same sun. They don’t happen without political will and citizen consent; the neo-liberal project has to be lobbied for and promoted. The project has many outriders, think tanks such as the Adam Smith Institute, the Institute of Economic Affairs, and Policy Exchange, all funded by business and wealthy free marketeeers (sometimes transparently but quite often opaquely), to assemble evidence, create arguments, lobby and advocate, through the media, the benefits to the public of choice, competition and private-sector efficiency and innovation. Of course, this is driven more by a fundamental need for capital accumulation, than it is out of a concern for the provision of quality public services. Though the neo-liberal project attracts its enthusiasts and disciples who espouse the benefits of autonomy, individualism, efficiency and innovation.

Neo-liberalism and austerity have been central to growing economic inequality , in addition, the privatisation of public services has contributed to a growing democratic deficit, a powerlessness over the conditions of the community, where service provision is provided by an unaccountable public service . There is a growing inequality in the access to public services, where the principle of universal provision is replaced by an increasing amount of part or wholly private-paying services.

A perfect neo-liberal storm in higher education

The pension issue in the UK’s higher education sector is a perfect storm in the progress of privatisation and marketisation. There are two aspects. Firstly, poor returns from government bonds (gilts) mean that a low-risk investment of the USS pension fund in bonds give returns lower than the consumer price index. Other types of investment, such as equities, are higher risk because of the low aggregate demand in the economy. This is a consequence of austerity and the attempts by successive governments to manage the economy by balancing the books i.e. by reducing the public-sector deficit. Austerity leads to deflationary conditions with low aggregate demand in the economy and high demand for low-return low-risk government bonds. This makes the USS fund vulnerable to pessimistic valuations and to anxious evaluations of risk.

Secondly, the government continues to pursue an outsourced, privatised and marketized model for public services. This is driven by a capitalist lobby that seeks to maintain and expand a rentier economy. The introduction of student loans, tuition fees and subsequent increases are all part of the commodification and privatisation of higher education. The Higher Education and Research Bill that was hurried through before the general election in 2017 further embeds the consumerization of higher education, with the creation of the Office for Students and providing opportunities to establish challenger institution to increase competition in the sector.

The government claims that the reforms introduced since 2010 have resulted in more disadvantaged young people entering higher education, but the evidence suggests that there is an uneven distribution, with disadvantaged students more likely to take up places in less prestigious institutions5https://www.tes.com/news/school-news/breaking-news/new-figures-reveal-dearth-poor-students-russell-group-universities. Further competition and marketisation in higher education will lead to greater inequality, as institutions are forced to compete for the most university-oriented students, generally those from backgrounds with high social, economic or cultural capital.

Higher Education institutions have increasingly adapted to the neo-liberal reforms . This has seen the emergence of ‘New Public Management’ of ‘new managerialism’ as a hierarchical system of control and performativity. The cultural shift is away from democratic governance and collegiate professionalism to executive decision making principally drawing on management accounting and metrics. The disciplining and performative and managerial cultures lead to conformity and undermine academic freedoms except for, say, a few at the pinnacle of elite institutions.


I hope I have demonstrated the connection between the pension dispute, the introduction of student loans, the privatisation and marketisation of higher education and our current national economic policy. For me, as I take part in UCU’s action over the pensions, it is not just about being comfortable in my dotage. I love my job, I love the environment in which I work and I love working with students. There are so many achievements that my institution and the UK higher education sector, as a whole, can be proud of and with which it has led the world. So my motivation is to prevent public education from sleepwalking into becoming a further fragmented and inequitable system. A system that treats students as consumers and undermines scholarly inquisitiveness and the pursuit of ideas, ideas whose inspiration might arise from unusual and unconventional lines of inquiry. The performativity of neo-liberalism fosters a conformity, a narrowness and too often the safe and mundane.

I say we are sleepwalking, because it feels like this here in Cambridge, decision making has become concentrated with a few, no doubt highly-skilled and rational managers. That same rationality appears to have usurped the University’s democratic governance. Of course, it makes sense to reduce the University’s liabilities and exposure to risk to attract private finance, it makes sense to make the University competitive internationally and of course, there is logic in reducing staff pay and conditions to maximise surpluses. But these are rational judgements based on an acceptance that austerity and neo-liberalism are a) necessary and b) the only choice of political economy. It is not the only choice and, as I have argued, austerity is a political choice and not an economic necessity and in accepting it as though it is, we, as a University, make a moral choice. Or worse, we dispense with moral deliberation and accept that growing inequality and a deepening social crisis in society is simply a cost, a risk that can be put into and evaluated in our management analysis. If a university fails to accept its moral mission and fails to engage in genuine democratic moral deliberation over what society should look like, then it has failed as an institution. It may have secured private investment and have good metrics, but, nonetheless, it has failed.

The reason I take action as a member of the UCU is to encourage the higher education sector — and especially the elite institutions — to take responsibility and offer moral leadership. And not to acquiesce to those who look to perpetuate a rentier economy. Universities must offer a robust independent voice based on independent scholarship and promote the same moral purpose and critical thinking in their students.

Finally, I ask: colleagues, students, parents and communities please stand in solidarity with the striking members of the UCU.


Radice, H. (2013). How we got here: UK Higher Education under neoliberalism. ACME: An International Journal for Critical Geographies, 12(2), 407–418. https://acme-journal.org/index.php/acme/article/view/969/823
Stiglitz, J. (2012). The price of inequality. Penguin Books.
Piketty, T. (2014). Capital in the twenty-first century (A. Goldhammer, Trans.). The Belknap Press of Harvard University Press.
Harvey, D. (2011). A brief history of neoliberalism (Reprinted). Oxford Univ. Press.

This changes everything

I was feeling numb at five minutes to ten last Thursday. I had been campaigning intensely for the Labour party – both professionally and in a personal capacity – for months. It came up on Twitter, the mainstream media were saying that exit polls predicted a hung parliament. And while the Conservative party were predicted to be the largest party, the result for me marked a major change in British politics. It was going to be an exciting night.

So it turned out. As the results came in through the night it was clear that Labour had increased its share of the vote from April polls of about 25 per cent to 40 per cent in the General Election. This was unprecedented.

What is so significant, is the election result demonstrates strong support for a radically different economic and social policy. Radically different from the consensus that had existed between the major parties since the 1970s.

Keynes is back baby. The manufactured consent around a liberal/ neoliberal political economy which focuses on controlling public-sector spending and facilitating wealth creation has been shaken to its core. Particularly because it was the cause of the 2008 Global Financial Crisis and it prompted the austerity approach adopted by the Coalition government and Tory governments from 2010 to 2017. Neoliberalism and austerity has undermined public services and exacerbated inequality.

When I say Keynes is back, I mean that we stop the purblind view of the importance of wealth creators, but begin to look again at the role of government spending in creating demand. Wealth creators cannot attract wealth unless ordinary people have sufficient money to purchase things in the economy.

Government can increase that wealth through redistribution (e.g. progressive taxation), increased investment in the economy (e.g. through infrastructure, health and education) and more robust regulation of the financial sector (addressing exploitation of private debt). Since the UK government has a sovereign currency it can use its capacity to spend, tax and regulate to rebalance the economy.

Keynes is back, but it’s been upgraded by contemporary economists. I have written about it in the following posts:



The consequence for teachers, educators and academics is that we have to start thinking differently. We have to think about what education might look like in a post-neoliberal world. Some of my thoughts are in the following post:


Since the Labour Party’s positive manifesto has been welcomed by the country, we must now go further and think about how we transform our education system. Transform from a marketised, privatised and commodified system into a democratic system that serves communities and the nation in an inclusive way. Paying attention to social justice, peace, environment, community cohesion and individual and collective intellectual development. A system that must effectively serve people more and serve less those that run and control it.

Exciting times, I look forward to the debate.


The Labour Party’s radical vision for education: the opportunity of a lifetime

Judging by the polls, as UK Prime Minister Theresa May announced a snap General Election on the 18 April, you would be forgiven for thinking that the result is a foregone conclusion. And, for that matter, with a resounding Tory victory. But this election is anything but a foregone conclusion. It is set to be closer than commentators predict. People must now make a serious choice, a serious decision — rather than simply express a preference.

And already, after a week of campaigning, the polls have narrowed. Even though the Tories continue to retain a commanding lead over Labour Party, it is evident that the Labour Party have gathered some momentum. Compared with the Tories, the Labour Party have campaigned very effectively in this first week.

The following is the standing ovation Jeremy Corbyn received from the headteachers at the National Association of Headteachers (NAHT) conference in Telford 30 April 2017. While I expected him to be given a polite reception, I was surprised by this. There is clearly something in the air.


And so, there is everything to play for.

An end to austerity, neoliberalism and privatisation in education

There probably never has been a more important election for education. The choice between the two main political parties has never be starker. The Tories will continue with academisation, free schools, privatisation, marketisation, a return to selective schools and a school choice agenda. While the Labour Party plans to restore Local Education Authorities and create a National Education Service. The Labour Party plans to bring education back into the public sector.

This general election could mark the end of an education policy consensus that has existed since the 1970s. Since then, education policy has been moving toward marketisation and privatisation. Schools have increasingly come to compete with one another; with an emphasis on centralised accountability (which is frequently punitive); high-stakes assessment and progress measurement; surveillance and performativity; managerialism and hierarchical management structures; intensification of teachers work; and the undermining of teachers’ pay and conditions.

Some argue that these reforms have improved the educational outcomes of many children. They also argue that closer the scrutiny of schools ensures that students make progress and achieve in final examinations. And that this, they claim, has improved the quality of teaching and learning.

These are exaggerated claims, educational reforms have led to more heat than light. There has been lots of noise and increasing demands placed on schools and teachers, yet with very little real insight into the implications of policy. Furthermore, claims made by successive governments are too often based on a selective reading of data. They ignore the complexity of education and identify simple—and frequently overly reductive—measurements to try and determine the impact of policy.

While I don’t personally have a particular passion for international comparisons, the following data visualisation for reading performance in the OECD PISA tests shows negligible change in students’ reading performance in England. There is a similar picture for mathematics and science.

That is not to say that the general level of teachers’ knowledge and skill has not improved over the last 40 years. Education research, theory and practice has developed in that time, comprehensive schools have matured and developed. But this is in spite of policy rather than because of it. I would go as far as to say that marketisation has hindered the progress that teachers, themselves, have tried to make through this time.

A new economics for a post-Keynesian age

It is important to recognise that the Labour Party’s education policy, like its other public sector policies, is based on a different kind of economic approach. All governments in the UK since the latter half of the 1970s have adopted a similar economic approach. An approach that prioritises and privileges the freemarket. The privatisation and marketisation of education is a consequence of this economic thinking. The electorate are encouraged to accept freemarket policy in education because it will supposedly give them more choice. Furthermore, choice and competition will motivate schools and teachers to deliver higher standards. However, there is little evidence to support this conclusion.

Privatisation and marketisation in state education is justified with claims of increased efficiency, higher standards and the advantages of parental choice. These disguise the economic thinking and political choices that drives policy in this direction. The real reason is a response to the problems faced by capitalism more generally. Capitalism is a system of political economy which involves using resources, money and labour to return profits. For 200 years it has been the dominant political economy in the UK.

In the 1960s, capitalism was undergoing one of its periodic crises. Capitalists were finding it increasingly difficult to sustain profit levels. Over the next decade governments used economic policy to make it possible for capitalists to preserve their profits. A key part of which involves reducing the role of the state and the control of state spending. Subsequently, all governments have been preoccupied with reducing public sector deficits. In other words, reducing the amount of public spending and reducing the size of the state. Additionally, and increasingly, governments have privatised and outsourced public services. The argument has been, of course, for efficiency and choice. When in fact the aim has been to preserve profits in the private sector.

A smaller state provides opportunities for private-sector providers to move into providing public-sector services. We have observed this trajectory in the UK, in health, education and even with prisons. While some private providers claim to be not-for-profit organisations, for all intents and purposes, they are capitalist organisations. And necessarily they must accumulate capital. This may not be through generating surpluses or profits, as we might imagine. But it is also achieved through the expansion of their organisation.

In 1988, with the introduction of the Education Reform Act, the process of the privatisation of education was enacted in legislation. City Technology Colleges under Conservative governments in the late 1980s and 1990s were the initiates of privatisation. The New Labour government refined this idea and introduced their Academies programme. The process was further accelerated under the Coalition government where Multi-Academy Trusts were established as private limited companies and billions of pounds of a publicly owned assets were transferred to the private sector. The history of this has been one of cross-party consensus in the privatisation of education by stealth.

This is what is referred to as neoliberalism. It goes under many names: liberal economics, deficit reduction, living within our means and austerity. All these mean the same thing, the preservation of the profitability of capitalism. While I do not intend to go into it in detail here, the reduction in public sector spending leads to increasing levels of private sector debt. In addition, the power of individuals to organise at work and protect pay and conditions is undermined by limiting the powers of Trades Unions. Neoliberalism leads to growing inequalities in society, the rich get richer the poor get poorer and in turn this leads to social unrest . It gives an opportunity for the far right to promote simple divisive answers, attractive to those that have not benefited from neoliberalism.

The following illustrates the trend in wealth inequality in the UK. Notice the upward trend after long period of decreasing inequality in the first part of the twentieth century.

Wealth inequality in the UK


The following shows the growth in wealth inequality (The Gini coefficient ranges from 0 for perfect equality to 1 where one person has the majority of income). Note how this rises in the mid 1970s to the 1990s where it has remained constant subsequently.

The following shows UK inequality compared with other nations based on the Gini coefficient.

This video illustrates the extent of inequality in the UK.

Teachers and schools must cope with the challenges of high-stakes inspection and accountability. Furthermore, they must respond to the social problems created by neoliberalism. The managerial and hierarchical system combined with accountability results in a bureaucratic system. The bureaucracy places further demand on teachers since it undermines their capacity and power to use their judgement in their job. While efficiently run schools are often characterised by systems, rules and procedures, these often become a dominating rather than supporting structure. This limits teacher agency within this environment.

We are in a period of economic change. The Global Financial Crisis of 2008, was the clearest of indicators of the failure of neoliberal economics. Mounting private debt and an unregulated financial sector in the USA led to a truly global financial collapse. Governments, in leading nations worldwide, have subsequently failed to heed the warnings and reform their economies. Instead they have continued with neoliberalism and austerity.

It really doesn’t have to be this way. Governments, like the UK government, can increase public spending with economic justification and keep education within the public sector. The preoccupation with deficit reduction is disingenuous. It is a matter of simple accounting, that as part of the normal operating condition of an economy, where the government has its own sovereign currency, the country will run a public-sector deficit. This ensures that the private sector, that is, people, households and businesses, can hold a surplus. In other words, they can save for a rainy day. The government with its power to create currency does not have to save in the same way, because it has the power to spend when needed.

John Maynard Keynes recognised that when the economy has excess capacity, it is a necessary for the government to inflate the economy through public spending. Currently we have excess demand for health, social care, education and training. By increasing spending, we can fulfil more of this demand, and improve the quality of our education system. This is a necessary and valuable investment in our education system.

Increasing public spending, making taxation progressive (fairer), regulating the financial sector and controlling the movement of capital will reduce the level of wealth and income inequality in the UK.

While the Labour Party has not published its General Election manifesto yet, this has been the essence of the economic policy put forward by Jeremy Corbyn and John McDonnell since they assumed the leadership of the Labour Party in September 2015. It is for this reason, they have been vilified by mainstream media and establishment. This proposal for wealth redistribution is an attack on the 1 per cent, the same people who have controlling interest in the media and in establishment institutions. It is little wonder that Corbyn has been subject to ferocious attacks in the media.

Labour’s education manifesto: the National Education Service

There have been several policy announcements. The most important, and the most overarching policy proposal is the National Education Service. This is analogous to the National Health Service, a cradle-to-grave national service which provides education for all and free at the point of use. This provision is from early years right through to higher education. This provides a complete and complementary collaborative service for the provision of education.
It will not be a fragmented system of providers competing for resources or competing to educate pupils and students who require least investment. The National Education Service restores collaboration. It would put knowledge, skills and experience at the heart of its mission. This is because, under a different economic model, organisations would not be preoccupied with narrowly defined outcomes as they are in the current neoliberal system.

There would be less emphasis on bureaucracy, hierarchy and managerialism. The focus of organisational leadership would be on collectives, comprising stakeholders, practitioners and experts. All with diverse views and experience, but with a commitment to developing education through participation and democratic approaches. Leadership becomes important in a different way. No longer will it be presidential or in the style of a chief executive officer. It will be a role in which the leader must convene and ensure effective participation, deliberation and decision making.

The current neoliberal system tends toward bureaucratic processes, which undermine the power of practitioners to use their judgement. The reality teachers’ day-to-day practice involves moral judgement much more than it does logical or scientific reasoning. Practitioners, teachers and education workers need to be empowered to use their judgement. They also need opportunities to develop and test their judgement, they need sophisticated understanding of their professional learning and development. They also need to contribute to the overall philosophy, rationale and principle of the National Education Service.

To support a National Education Service requires first-class research and development. Currently there are calls to make educational research a science. It isn’t a science. But it can draw on scientific principles. But central to the development of educational policy and practice is the relationship between theory and practice. This means that human judgement must intervene in logically derived conclusions. That is not to say that scientific research is not an important part of educational research. Although, it is a mistake to believe that by simply undertaking a randomised-control trial education research becomes scientific. Merely following scientific procedures does not mean that we have been scientific. The process of educational research has much in common with science in that we scrutinise our knowledge of the world, elaborate on existing theory and attempt to make predictions. The key difference with educational research is that it is in the field of complex human relationships, cultures and practice. It is necessary to recognise that a refutation or a new theory does not by itself change behaviour. Advanced educational research acknowledges the humanity of thinking and behaviour.

One of Jeremy Corbyn’s aspirations is to transfer more power to the people. The participatory nature of the National Education Service allows for greater democratic participation of practitioners and stakeholders. It would also see the restoration of the Local Education Authority. This would also restore education to the ownership of local communities, with local democratic accountability.

Jeremy Corbyn speech to the NAHT can be found at the following:


Further details about education policy have been announced. The Labour Party will reverse the £3 billion worth of cuts that the Tory government have planned for schools. They will also abolish tuition fees for undergraduates. They have announced £160 million worth of funding for arts education. There will be universal free school meals for primary children and the introduction of VAT on independent school fees. They will reintroduce Educational Maintenance Allowance for young people still in education. I also expect to hear further support for Further Education, adult learning and part time courses such as those with the Open University. Similarly, I expect proposals for the funding of higher degrees and research degrees at masters and PhD level. I would also expect to see the recent Higher Education and Research Bill, which legislates further marketisation and privatisation of higher education, to be repealed by a Labour government.

Jeremy Corbyn speech to the NAHT can be found at the following:


While the Labour Party’s proposals are still taking shape, an understanding of the underlying economic vision that is driving policy proposals, means it is possible to give a sense of what a future education system could be like. It would be an inclusive system for the many and not the few. It would promote social mobility, and help young people in becoming educated and informed participants in democracy.

Though there will be cynics who will say this is not possible, who will say that it cannot be done and who do not trust the inherent good nature of humanity. It is this cynicism and apathy that is the barrier to an ambitious future of something fairer and better.

For the first time in my life, we are closer than ever to something truly transformative. And it is through working together, and a belief in something better, that this vision can be realised. It is not dependent on a single leader to deliver it, like in the past, but it is dependent on a political leader to facilitate and empower the many to turn a collective vision into reality. As Corbyn recently described his own leadership style:

For many years, I couldn’t see much beyond how so many political leaders manipulated us while giving in again and again to vested interests. I didn’t want to be like that. And it wasn’t clear to me there could be another way. But I’ve learned there is. Whereas insecure leaders want to feel stronger by asking you to give them more power. I recognise strong leadership as equipping you with more power…Because there’s no doubt that these are anxious times. Individually, more of us face uncertainty at work. Nationally, we wonder how we will make the transition out of the EU in a way that protects jobs and living standards. And globally, we wonder how safe we are as extreme right wing movements and violent conflicts spread. I hope you can see now that there is more than one way to respond. We could seek a fragile calm. And hope someone in power knows what they’re doing and will guide us through. That means looking to whoever’s in charge and welcoming their reassurance. We don’t look further, we don’t ask questions. It’s the response the few have bet on the many settling for. I’m in this job because I believe there is a better way to respond. It’s about rejecting fake reassurances or simple slogans from government. It’s about sharing ideas and deciding upon real and lasting answers. We are not going to have free thinking shut down by a hostile media or an elite that scoffs at anyone who dares to step out line. No, each of us has a contribution to make. We have ideas for a better tomorrow and we are going to respond together. Jeremy Corbyn, Leader of the UK Labour Party, April 2017

Let us not miss this opportunity.

Responding to Teach First’s Social Mobility Report

In many ways I was pleased to see the publication of the Teach First report on social mobility. The publication of this analysis is important in drawing attention to the problems of inequality and social mobility in education.

But it also annoyed me greatly. Because I see that the levels of inequality and lack of social mobility are a result of successive governments’ economic choices. We have, since the 1970s, in the UK and the USA particularly, adopted a system of liberal economics, neoliberalism. The aim has been to reduce the size of the state with controls on public spending and the transfer of public-sector services and nationalised industry to the private sector.

The result of the adoption of neoliberalism has led to an increase in inequality as a result of controls on public spending, regressive taxation and the deregulation of the financial sector  . The barriers to social mobility are attributable to economic inequality . The adoption of neoliberalism creates a system whereby value flows from the less well off to the wealthiest.

As part of reducing the role of the state, public-sector provision has been transferred to private ownership, in the case of Academy schools, or new private-sector not-for-profit provision has been created, as in the case of Teach First. Teach First, like other forms of outsourced public provision, is a product of neoliberal thinking. Teach First’s proposition is that through the deployment of high-achieving individuals in schools, the effects of disadvantage can be mitigated.

I believe this to be wrong, since it is only through economic policy that inequality and poor social mobility can be addressed. That is not to say we don’t need good schools for all and in them skilled professionals, but it is important that we address society’s problems with appropriate policy making as a priority.

Neoliberalism can’t solve the problems created by neoliberalism. It is a paradox. It is with this in mind I was reminded of a great literary paradox and, as you will see, the striking similarities this has with outsourcing the solutions to neoliberal inequality.

Joseph Heller’s Catch-22 (1962) is a dark satirical comedy set in an American airbase in Italy at the end of the Second World War. The story follows the main character Captain John Yossarian and his associates, as they participate in a seemingly endless number of bombing missions over Germany. The ‘Catch-22’, the novel’s leitmotiv, and a term subsequently absorbed into the English language, is a paradox. It is first expressed in the novel thus:

There was only one catch and that was Catch-22, which specified that a concern for one’s own safety in the face of dangers that were real and immediate was the process of a rational mind. Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly more missions and sane if he didn’t, but if he was sane, he had to fly them. If he flew them, he was crazy and didn’t have to; but if he didn’t want to, he was sane and had to.

World War II, although often seen as a geopolitical war, was the consequence of the economic conditions in the preceding period. Liberal economics had prevailed, with substantial deregulation of the financial sector. Speculation and credit ran rife. The bubble burst in 1929, this plunged the US into a deep recession and took much of Europe with it. The instability created by a crisis of capitalism led to the Second World War.

These conditions are not unlike those that led up to the Global Financial Crisis in 2008 and also the inequality we have in the UK now.

Milo Minderbinder, a comrade of Yossarian, is an entrepreneur, a war profiteer. Heller presents him as a symbol of the American capitalist Dream. Initially, Minderbinder’s syndicate, M & M Enterprises appears small and benign. It involves selling and buying eggs in a complex series of profitable transactions. While flying a mission, Yossarian asks Milo why he buys eggs from Malta for seven cents and sells them to the mess hall for five cents. Milo explains that he does it to make a profit. Perplexed, Yossarian asks if he then loses two cents on each egg. Milo explains:

But I make a profit of three and a quarter cents an egg by selling them for four and a quarter cents an egg to the people in Malta I buy them from them for seven cents an egg. Of course, I don’t make the profit. The syndicate makes the profit. And everybody has a share (Milo Minderbinder, p. 265).

Yossarian thinks he is beginning to understand, he asks if the people Milo sells to are making a profit of two and three quarter cents when they sell them back to him for seven cents. He asks: “Why don’t you sell the eggs directly to you and eliminate the people you sell them to?” Milo responds: “Because I am the people I buy them from.” Milo further explains that he initially buys the eggs in Sicily for a cent each. He makes profit of six cents on each egg overall, except when he sells to the mess hall where he makes four cents. The convoluted process is simply to expand the reach of his business activity.

Arguably this is not dissimilar to the complex contractual arrangements we have with outsourced service providers and academy chains. None of which, like Milo, make a personal profit. There is a contract in which Milo’s syndicate benefits from the activity of the enterprise. Similarly, with outsourced business, through its not-for-profit activity, society supposedly benefits.

“Really?” You ask.

“Yes, really.” I say. “Well, make your own mind up.”

However, Milo like all capitalists expands his business. M & M Enterprises are contracted by the Germans to carry out bombing raids for them. The enemy outsources their combat to the enemy. The Americans then end up fighting on both sides in the battle at Orvieto, and bombing their own squadron at Pianosa. At one point Minderbinder orders his fleet of aircraft to attack his own base, killing many American officers and enlisted men.

I did not realise, when I first read Catch-22 as a teenager, how Heller captured the deep irony of capitalism and liberal economics. That the suffering and damage it creates also provides opportunity for profit and capital accumulation.

The mechanisms by which we employ outsourced providers, like Teach First, to address inequality is a business scheme that capitalises on economic failure. If we address the economic issues, we would not need an enterprise to provide the service, the resources could be absorbed into the public sector to contribute to quality education for all.

I  do not wish to denigrate the many good people who work for and have trained with Teach First. No doubt, their motives are good. They want to do the best for the students they teach. My criticisms here, are at the level of political economy and policy, where I challenge the assumption that within neoliberalism it is possible to create educational programmes that promote social mobility and mitigate for inequality that is, itself, a consequence of neoliberalism.

Neoliberalism can’t solve neoliberalism. It’s a catch-22, we have to change the economic system.


Stiglitz, J. (2012). The price of inequality. Penguin Books.
Wilkinson, R. G., & Pickett, K. (2010). The spirit level: why equality is better for everyone. Penguin Books.

The Production of Money: Ann Pettifor’s new book and its implication for school spending

As Ann Pettifor’s book was published, it was both amusing and perhaps a reflection of current times that one of the most complete and effective reviews of the Production of Money: How to Break the Power of the Bankers was in Vogue. The following are some thoughts on the economic system and some observations on Ann Pettifor’s book, which is well worth a read. It is succinct and readable, but still requires some thought and concentration.

My interest in economics has grown considerably over the last couple of years. This was prompted by a more robust anti-austerity line taken by the Labour Party on the election of Jeremy Corbyn in 2015. Like many people, I understood a nation’s economics as much like my own income and expenditure, that it was an exercise in balancing the books. So my initial question was how can a political party be serious about anti-austerity, if the books have to be balanced?Continue reading “The Production of Money: Ann Pettifor’s new book and its implication for school spending”