The bitter struggle for the soul of education

I am not under any romantic illusion about the strike, about striking even. Sure, the sense of solidarity and the camaraderie of colleagues and supporters are fantastic. As is the chance to reimagine the way we do things in higher education. But we are in dispute with our employers. Our professional working relationship is disputed and this is disruptive and leaves strikers deeply conflicted. Striking involves much considerable emotional labour.

After six days on strike there is a sense that this is going to be a long struggle. I began to feel this way at the end of last week. The strikers I have spoken to suggest a similar reading of the situation.

That is not to say that there has not been some shift by the employers’ representatives, Universities UK (UUK) and UCEA, both have offered to reopen talks. This has been achieved as a result of strong strike action by UCU members across 60 institutions in the UK. Last time we struck in February 2018, the feel of the action was one of nervous energy, of excitement. Many of us were new to this kind of action. We didn’t know how the strike would go and what impact we would have. We did have an effect though, we forced the establishment of a Joint Expert Panel to improve the transparency and accountability of the pension scheme. The fact that USS and UUK then backtracked from the findings approved by the JEP is a big part of why we are back out on strike. The character of the current strike is one of gravity; activists, strikers and supporters are increasingly clear about the scale of the struggle ahead. This is matched by growing belief that this fight can be won.

The other part of why we are on strike is pay: pay and the gender and ethnic pay gap. What the (University and College Union) UCU has exposed at both a national level and within individual universities is the shocking level of precarity in the sector. I don’t think I have had a sense of the scale of it until our General Secretary, Jo Grady, came to speak to Cambridge UCU before the end of the strike ballot. But more importantly from the local work done by the CUCU Raise the Bar campaign on casualisation. The scale of the problem in Cambridge is much more considerable than the University of Cambridge would have us think. What we see is a picture of higher education as a vast army of precarious and casualised staff, with a decreasing proportion of permanent tenured position. According to the UCU, around 70% of the 49,000 researchers in the sector remain on fixed-term contracts, with many more living precariously on contracts which are nominally open-ended but which build in redundancy dates. There are 37,000 teaching staff on fixed-term contracts, the majority of them hourly paid. In Cambridge, almost half the undergraduate teaching is undertaken by people in precarious employment.

The accounts of precarious working in Cambridge have been heard on strike rallies and in teach outs during the recent strike action. They have been shocking and are at odds with the University’s projected image. Reputation has become all for Cambridge. The vast expenditure on selling, preserving and extracting value from the University’s brand cannot disguise the deceit. For UK higher education is now a part of the gig economy, a sweatshop of precarious workers. Many precarious workers are lured by misrepresentations about the quality and reputation of the UK higher education. There have been some truly heartbreaking accounts of people thinking they have got a job at a world-leading university only to find that they are working for a temporary employment service that disbars them from putting the University of Cambridge on their CV, they have no holidays and no sick pay. If they factor all the things they do in trying to make a sustainable living like applying for jobs or making grant applications then their pay falls woefully short of what is needed to live on. Mangers’ justification in terms of the advantages of flexible working or when senior tenured university office holders characterise precarious staffs’ experience as a normal rite of passage, they sound really empty and out of touch to the individuals who experience the harsh reality and indignity of precarious working.

Let us see it for what it really is: UK Higher Education is now operating as a pyramid scheme.

So why is this turning into such major dispute? The reason for this (and I have written about this previously) is that pay and pensions are really on the symptom of underlying causes. The primary issue is in the role of the state in education. Or we should say lack of state involvement. The sector relies on debt funding, from students but also in raising capital. It relies on contract research or third-stream income, like from Cambridge Assessment here in Cambridge. The calculation and minimisation of risk in each institution is an essential feature where the state no longer underwrites public institutions. Naturally, there is a drive to reduce risk, one way of doing this is to make increasing numbers of staff bear the risk through precarious employment. The injustice is that this falls on new and junior staff, while established staff can enjoy quite a good secure and privileged existence. I do not wish to create antagonism between precarious and tenured staff but I do encourage senior staff with secure employment to show some solidarity with the precarious university worker. Please join staff and students on the picket line, join the UCU if you are not a member.

The current dispute between the UCU and universities is a battle for the heart of higher education. I would say it goes beyond that, it is a struggle to sustain the principle of a universal right to free lifelong learning and academic freedoms.

Designing freedom – principles for a cybernetic university

I feel it necessary to begin with a reminder of what I’m talking about when I refer to cybernetics. Since ‘cybernetic’ can evoke a range of ideas which might include cyborgs (human-machine hybrids), systems and control, general technology and the Internet, robots or perhaps just a replacement of human interaction by machines. But when I’m talking about cybernetics what I mean is a view of the world as interactions of complex dynamic systems. Some of those dynamic systems are man-made and artificial, much of our environment is ‘natural’ and populated by evolved (and evolving) living things.

What I’m getting towards in this post is to consider what a university might be like if it were designed using cybernetic principles. But before doing that I need to put forward some of the underlying principles and ideas of cybernetics to help you to think in a cybernetic way and key to this is the dynamic system.

Dynamic Systems

A very general account of what a dynamic system involves considering the universal system, i.e. the universe, as a dynamic system of matter and energy. The universe consists of subsystems which are not only dynamic systems of matter and energy in their own right, through the universal dynamic system they are in a constant state of interaction with the universe and other systems. The subsystem can be characterised as an entity, as having form, but in cybernetic thinking these are the outputs of the subsystem and not its processes.

Stafford Beer highlighted this distinction: that dynamic systems can be seen as an entity, that is its ‘form’ in terms of its outputs, or it can be seen as a ‘dynamic system’ of behaviours and processes (Beer, 1974). The dynamic system view emphasises more strongly the relationships and interactions between systems since they are part of a universal dynamic system of matter and energy. The classical view of entities seeks to understand the relationship between the form of those entities, this is the case with Newtonian physics. Quantum theory presents us with a dynamic and stochastic system.

So far, I have described what we could call the ‘natural’ world or at least insofar as to say the parts of the world that are not alive. Living things are special kinds of dynamic systems. They have evolved to become self-conscious and self-aware – I don’t profess to say that all living things are self-conscious and self-aware, I just want to present a definition of living things as a process. The process leads to agency and that is an ability to perceive self-control and a claim to have some degree of conscious control over the natural world and environment.

Consciousness also leads to production, to manufacture and fabrication; we are able to make tools and imbue in the form of those tools a design. Tools are artefacts with purpose. As well as the significant material tools such as the wheel or the pulley system, humanity has created the immaterial and intangible tools and systems to organise and systematise language, thought and society. We have created an artificial world based on our collective experience of living in that world, but one that has become increasingly abstract and alien to dynamic systems, but which remains, paradoxically, – because it is part of the natural world – a dynamic system.

I have classified the world into three types of dynamic systems: the natural world, the living world and the artificial world.

Dynamic systems must adapt to the changing environment in which they exist, otherwise they do not survive, they do not remain viable. Stafford Beer illustrates a non-surviving dynamic system as a wave approaching a beach. It demonstrates the principles of fluid dynamics, it might be said that the wave obeys the principles of hydrodynamics, but ultimately it becomes unstable and ‘breaks’.

Organisations and institutions must remain viable, while also being dynamic systems. Here, I am going to consider Stafford Beer’s idea of the viable system model (VSM) to consider how a university might remain viable within a changing environment.

Viable systems model (VSM) and human society

A VSM is a dynamic system that is capable of adaptation to a changing, complex or unpredictable environment. Living things are demonstrably consistent with VSMs, that is they can adapt to and respond to a complex social and physical environment. Dynamic systems are viable because they can deal with and respond to complexity. It is no surprise that Beer developed the VSM with reference to living things.

Human beings use a culturally compiled and genetically embedded capacity to identify patterns in complexity to help them respond to their environments – to allow them to steer their way. Humanity, for something of the order of 10,000 generations, has been psychologically, anatomically and physiologically adapting in response to its environment. It has passed on information genetically and socially to allow the next generation to adapt more effectively (Harries-Jones, 2010). As civilisation has emerged, this adaptation has also had to respond to a world created by the imagination of humanity, the dynamics systems of government and institutions: the hierarchies, structures and systems of society and its organisations, institutions and firms.

The capacity for pattern matching to guide individual action relies on the 100 billion neurons in the human body. What we sense is an incomplete picture of the world, it is the excess or redundancy of neural networks that allow the construction of an excess of different patterns which may complete the partial picture of reality and match that to what is in memory and embedded in our DNA. Pioneering cybernetician, Warren McCulloch, developed an account along the following lines:

Redundancy ensures that any element in the neural network is repeated, and repeated, and repeated. Instead of being a supernumerary feature of the neural network, the very primacy of its redundancy ensures an extremely high chance that whatever information the nervous system receives is coincident with something in the world… (Harries-Jones, 2010, p. 2368).

The individual human being is equipped to be a VSM with their capacity to respond to a complex and changing environment. Collectively, human beings with even a primitive form of communication, have a greater collective power as a VSM. The implementation of a system of power and hierarchy results in structures that potentially limit the viability of subjugated individuals or groups, because they are then subject to abstract rules. We can see here how a Hobbesian social contract emerges, where the individual concedes a degree of liberty in order to accept the security of the state. This also assumes that the ‘untamed’ human is a savage and it is a necessity that order prevails. Hobbes sees the exchange of liberty as natural and necessary. From a cybernetics perspective we can see civilisation and belonging to a state compromises the VSM. While people living in civilised society can do so healthily and productively, there are groups and individuals that will become unstable. Contrast this with Rousseau who believed in the creative completeness of the free individual, that humankind is not savage au naturel.

According to Marx, it was the division of labour, the artificial formatting of society in response to the dynamics of capitalism that leads to alienation.

Let us suppose that we had carried out production as human beings. Each of us would have in two ways affirmed himself and the other person. 1) In my production I would have objectified my individuality, its specific character, and therefore enjoyed not only an individual manifestation of my life during the activity, but also when looking at the object I would have the individual pleasure of knowing my personality to be objective, visible to the senses and hence a power beyond all doubt. 2) In your enjoyment or use of my product I would have the direct enjoyment both of being conscious of having satisfied a human need by my work, that is, of having objectified man’s essential nature, and of having thus created an object corresponding to the need of another man’s essential nature. 3) I would have been for you the mediator between you and the species, and therefore would become recognised and felt by you yourself as a completion of your own essential nature and as a necessary part of yourself, and consequently would know myself to be confirmed both in your thought and your love. 4) In the individual expression of my life I would have directly created your expression of your life, and therefore in my individual activity I would have directly confirmed and realised my true nature, my human nature, my communal nature.

Our products would be so many mirrors in which we saw reflected our essential nature (Marx, Comments on James Mill, 1844).

The compromise of individual viability as a result of our attempts to organise society in abstract ways represents a cybernetic account of alienation. Instead of using our intuitions to navigate our place in the world we are subject to an artificial hierarchy in which we are engaged in a rational puzzle, where the rules of the game are defined by those with privilege and power. When we get to the subunits of society, departments and institution, we see the same system of hierarchy and control.

VSM in organisational design

Beer was a successful post war operational researcher in the UK’s newly nationalised industries. It was in the steel industry under an economy actively managed by the state, broadly under the principles put forward by Keynes, that Beer began to develop a cybernetic model of organisational design.

An important observation for Beer was that it was not the steel rolling mill’s output that was the defining feature of the mill, it was its processes and the way in which it could respond to external changes. His interest in developing ‘variety’ to respond to the context led him to some early experiments in biocomputing. He attempted to use iron filings to act as an interface with pond life to provide a living neural network. This failed but was pioneering work in the field.

The VSM was a later iteration for Beer, his model for the organisation of a firm was based on the human body. It had five hierarchical systems, but not hierarchical in the same sense as many organisations are currently formatted, where there is a system of rules and controls. The hierarchy in Beer’s cybernetic design was based on information flows rather than rules or constraints.

Figure 1 Metaphorum’s simple VSM

System 1

System 1 represents the operational aspects of the organisation. In the above example, this is a commercial enterprise involving the buying and selling of commodities (there may be some transformation as part of that process).

For the two decades or more, we have increasingly seen the student and the researcher as funder, as a customer. Whatever the framing the university’s primary function is to provide education, scholarship and research for the benefit of society. Metrics have become increasingly important in a marketized higher education system. This metrification and datafication of complex systems like health and education can create really perverse incentives in the operation of university departments. While there are industries whose operations are reasonably quantified, the information about the process in a university must primarily be qualitative to reflect the complexity. There is a need to manage spending of course but to what extent does this need to be related directly to the process of research and teaching, apart from to say how much each programme is allocated?

System 2

System 2 represents the information channels and bodies that allow the primary activities in System 1 to communicate between each other and which allow System 3 to monitor and co-ordinate the activities within System 1.

A small faculty or department can have informal channels of communication and systems of communication. The social life of the department is hugely important in allowing these channels. Communication must have face-to-face embodied engagements to allow individuals the opportunity to communicate at an emotional level as well as in communicating rational detail. System 1 and 2 are operational and should be autonomous. It is the perspective of proximity that individuals and groups in localised operations that make them best placed to make decisions about their operations. The point at which information must go to system 3 is when there are events and experiences that are outside the usual range of operation. This is the cue for systems 3, 4 and 5 to compare this experience with what is happening across the organisation and in the wider context.

As with system 1 there is an increasing datafication of these communications, a range of indicators and performance figures must be compared with other departments and benchmarks. The performance in system 1 operations becomes limited to the targets and benchmarks, rather than attending to the more open-ended operations of teaching and research. In England we have the REF (research excellence framework) and more recently the TEF (teaching excellence framework). These ‘performance-related’ measures present a narrow definition of research and teaching and in respect to the REF, research funding is allocated on the basis of performance in it. It is of little wonder that the faculty or department discuss targets, performance indicators, unit costs and quantifiable outputs at length but pay little attention to the actual processes or in understanding the organisation. Strategy in the contemporary institution is about hitting targets rather than developing an adaptable institution. Metaphorum make some further observations about system 2.

System 2 deals with the inevitable problems which emerge as a number of autonomous, self-organising operational parts interact.  There will be conflicts of interest which must be resolved. System 2 is there to harmonise the interactions, to keep the peace, to deal with the problems (http://metaphorum.org/viable-system-model).

It is possible to imagine a university department or faculty made up of a number of teaching and research system 1 sub-units and system 2 providing the links and organisation between them. The emphasis in Stafford Beer’s work is that system 1 operations must have maximum autonomy. These are self-organising and self-managing units but linked together through system 2 communications.

System 3

System 3 is the first layer of management and is concerned with synergy. It surveys the interacting operational units from a more detached position, it is looking to find ways in which operational units might collaborate more effectively. It is not looking to manage performance but to seek opportunities in which operational units can collaborate or work together more effectively.

System 4

Has an outward looking perspective, it is looking to provide information about changes to the environment, i.e. threats and opportunities. System 4 provides the means to cope with a changing environment.

System 5

Is the highest level of management in an institutional subunit. Its role is to develop the values and vision of the system through the development of policy. It creates identity, ethos, ground rules under which everyone operates. In my own faculty, this would likely be the Faculty Board.

The recursive university

The VSM is a recursive model where viable systems contain viable systems which use the same principles. So in the University of Cambridge, we might see a faculty or department as a system 1 to 5 VSM. At school level, as a collection of departments and faculties, a higher-level VSM with a system 1 to 5 model, where system 1 operational units are the faculties and departments. A further layer is required at university level. A university involves at least three tiers of VSM.

The politics of VSM

Before contrasting this proposed cybernetic design for education with the current model, I want to deviate into the political perspectives. Because the way in which I have presented the VSM is as hierarchical, that is in spite of me stressing the autonomy of operations, it is fundamentally about rules and subordination. Or at least that’s how it might look. Swann sets out to rehabilitate cybernetics to consider (as I am attempting to do here) the potential for radical and alternative forms of organisation (Swann, 2018). Swann looks to an anarchist cybernetic, but first distances anarchism from characterisations of chaos and disorder, but as a doctrine that seeks emancipation. Moreover, anarchism became established as an emancipatory movement but contrasting with statist socialism that was a significant interpretation of Marx. There is in anarchism a strand that emphasises the self-determination of the individual and small groups, which rather resonates with the cybernetic empowerment of the adaptive individual. The question is, how do we build systems of government and institutional organisation to maximise the liberties of the individual? For Hayek, this was largely an impossibility and that market exchange should be the organising principle. Since this exchange deals at a stroke with uncertainty and unknowability. We have been through a forty-year period where this ideology has been dominant and we now, hopefully, see it at an end; as the scale of inequality, fraud, corruption and damage to society and communities becomes increasingly evident. The cybernetic view is that individuals can and do know, just not in the abstract sense of a pure knowledge, but in the process of action and decision-making within contexts, much as in the tradition of the pragmatists, C S Peirce, William James and John Dewey.

In Chantal Mouffe’s recent book Toward a Left Populism, she repeats an earlier motivation she held with her collaborator Ernesto Laclau:

…to question the belief held by some people on the left, that to move towards a more just society, it was necessary to relinquish liberal-democratic institutions and to build a completely new politeia, a new political community from scratch. We asserted that, in democratic societies, in our view could be carried out through a critical engagement with the existing institutions (Mouffe, 2018, p. 39).

What Mouffe is putting forward is to use both the raw political force of direct action and left populism but to build within this a radical redesign of existing institutions, to give them a strong democratic foundation and that promotes human flourishing. It is likely that the design work has been initiated and developed by Stafford Beer. And it is a good point to be reminded that Beer’s hierarchy is a structure of communication and not a structure of power and control.

Beer tells the story of his first meeting with Salvador Allende, elected President of Chile in 1970 and the world’s first elected democratic socialist. Beer presented his VSM model to Allende, who had trained as pathologist. Beer explained how Allende understood completely the analogy of human physiology in organisational design. When Beer pointed to the system 5 element, he said he expected Allende to say “El Presidente” but instead he said, “El pueblo” – the village. Allende perhaps envisaged the inclusive democratic and community orientation of the VSM. It is likely that instead of seeing the VSM as a top-down autocratic and bureaucratic, it was a model driven by people for the people. At least this is how Beer recalled it. Beer went on to develop Cybersyn to manage the economy in Chile, this was halted when Allende was murdered in a coup in 1973 which was supported and most likely orchestrated by the CIA.

But on Mouffe’s principle of populism, direct action and radically reforming institutions, what is there in this as a political project? There are two dimensions to this the first to push back against the existing capitalist hegemony, since this is the system that provides the conditions in which our institutions become increasingly hierarchical and underpinned by power and control. Populism has the force to highlight this as an injustice and to expand a social movement, direct action can be used to force negotiations by using a mass force to redress the imbalances of power that would want to retain the status quo. But beyond this we do need to construct possible futures and the key one is how we organise our institutions and workplaces.

About two years ago I was thinking about what the key features should be in political action in our institutions to force change. I came up with three themes: democracy, scholarship, activism and solidarity (Watson, 2017). Thinking about cybernetics has allowed me to develop these themes further:

  • Democracy – is the participation of individuals in society and their contribution to shared decisions. The VSM provides a blueprint for an organisation of not just institutions and firms, but also of society.
  • Scholarship – this is the intellectual engagement; a cybernetic view of the world lights up all sorts of possibilities in terms of scholarship. While this might continue to be basic research, the practical, the real-time and the applied become live and real.
  • Activism – one can be an even more motivated activist when there are possibilities and those possibilities are realisable.
  • Solidarity – just as with activism, there is a sense that these four aspects of political action are all connected and none of these processes can work without a deep sense of solidarity and collectivism.

Concluding remarks

It has been a long and speculative journey for a blog post. In its writing, I have clarified some of my thinking and left some areas unexplored, notably I have not yet endeavoured to contrast the current operations of the University of Cambridge, for example, with the cybernetic views. That became too big a project for this post. This might be because, I couldn’t get away from thinking about the institution in wider society, there felt something unreasonable in trying to redesign an already privileged institution. However, there is an opportunity to think about what Cambridge does in leading society and part of what it must do is think about how its institutions might use VSM to model this for society and be a part of radical changes in society and the world. But at the moment it is ground down by the risk averse culture that is being used as a disciplining force, which in my view is making it less stable and limiting its genuine contribution to making the world a better place.

References

Beer, S. (1974). Designing freedom. Chichester, England: John Wiley & Sons.

Harries-Jones, P. (2010). Bioentropy, aesthetics and meta-dualism: the transdisciplinary ecology of Gregory Bateson. Entropy, 12(12), 2359–2385. https://doi.org/10.3390/e12122359

Mouffe, C. (2018). For a left populism. London ; New York: Verso.

Swann, T. (2018). Towards an anarchist cybernetics: Stafford Beer, self-organisation and radical social movements. Ephemera: Theory, Politics and Organization, 18(3), 427–456.

Watson, S. (2017). A manifesto for control: democracy, scholarship, activism and solidarity. In L. Rycroft-Smith & J.-L. Dutaut (Eds.), Flip the system UK: a teachers’ manifesto (pp. 68–75). London: Routledge.

 

Designing freedom – cybernetics and the fallacy of de-risking in Higher Education

Having completed an analysis of the systemic problems with my own institution(s), it is now time to think about what needs to be done. Much of what I have been doing follows a rather orthodox approach of labour-capital antagonism – a so-called ‘class struggle’. While this is an important political motivation, it is not enough. It was a reasonable strategy in nineteenth century industrial capitalism, where the working class as a homogenous group were engaged in a struggle against industrial capital. And to some degree, this approach was successful in delivering social justice.

However, as Marx predicted capital adapts; the system of capitalism adapts and takes on new and more complex forms integrating consumption, finance, credit, risk and derivative capitalism. The ‘system’ – the global system (which I am not going to go into here) – has become complex. The kind of capital and labour formulations of the early twenty-first century can no longer be characterised as a system of two groups: bourgeoisie and proletariat. Arguably, each of us has some stake in capitalism, as much as we might have an aspiration for social democracy or democratic socialism.

This then is my starting point, a complex system of capital, humanity, institutions, technology, environment and culture. Let us subject this to the cybernetic thought of Stafford Beer, primarily drawing on the six radio broadcasts given in 1973 as the thirteenth series of Massey Lectures (Beer, 1973), this was brought to my attention, as was Stafford Beer, by the podcast, General Intellect Unit (General Intellect Unit, n.d.)

Dynamic systems and institutions

Let me begin by illustrating what Beer means by a dynamic system. In his first lecture he uses the example of a wave on the ocean, a wave approaching the beach, with its ‘happy white crest’. The wave is a dynamic system (Beer, 1973). Beer contrasts dynamic systems with entities, a dynamic system is defined by its behaviour and an entity is defined by its characteristics. The wave, Beer explains

…consists of flows of water, which are its parts, and the relations between those flows, which are governed by the natural laws of systems of water that are investigated by the science of hydrodynamics. The appearances of the wave, its shape and the happy white crest, are actually outputs of this system (Beer, 1974, p. 4).

It is the outputs of the system that are the characteristics of that system if it is treated as an entity. In the wave, it is the way that the system is organised that results in its behaviour.

Social systems and institutions (I am thinking here of universities and their subunits, faculties and departments) are also dynamic systems, where their outputs are a result of the behaviour of those dynamics systems in a complex environment. Figure 1 illustrates a simple model of an institution as a dynamic system. The poles with guy ropes represent the formal propositions that people hold in that institution. The ball represents a point that at any moment is the net output state of a system. The cat represents the effects of a complex and uncertain environment (Beer, 1974).

Figure 1 Beer’s model of an institution as a simple system

The assumption is in a risk averse institutional culture (see my previous post), the institutional propositions define the output, they ignore the perturbations introduced by an uncertain environment (the cat in Figure 1). Beer goes on to define relaxation time, which is the time it takes for the representative point (the position of the ball in Figure 1) to reach stability after a perturbation.

In Figure 2, Beer shows how in larger organisations relaxation time is likely to take longer. If everyone in that organisation, Beer says, has complete freedom then instability is likely to amplify and lead to catastrophe.

Figure 2 Complexity of the larger organisation

How organisations de-risk in Beer’s terms

How do institutions cope with complexity, uncertainty or as Beer calls them ‘arbitrary interferences’ (i.e. the cat)? In my previous post I demonstrated the mechanisms of control through de-risking at the University of Cambridge. I am not going to entirely resolve the characterisation I presented there with Beer’s observations here. I am just going to set things up, in order that I can proceed in a future blog.

According to Beer – and remember, of course, he is of-his-time in reflecting on organisations, culture and economy – there are three main ways in which institutions try to defend against instability as a result of complex organisations in complex environments.

  1. The boss controls the freedom of his subordinates – in Figure 3 this is shown by the manager with control ropes connecting to his subordinates.
  2. Another method is to introduce ‘rules’. These are rigid connections that connect the threads operated by individuals in the organisation (it looks like a spider’s web).
  3. The institution does not accept interference and exerts control over those with whom it interacts. In Figure 3 someone has shot the cat.

Figure 3 How institutions attempt to mitigate for complexity and uncertainty

Ashby’s law of requisite variety

This is a relatively simple notion. Although Beer pointed out that if there are many individuals in an organisation, all with complete freedom, then perturbations can lead to greater instability. So an institution does need some kind of organisational system, cybernetics tells us that we should treat it as a dynamic system. The strong temptation for managers is to treat the institution as an entity, defined by its outputs, and then to introduce constraints (as in Figure 3) to preserve the characteristics – to preserve the entity.

The law of requisite variety tells us that for dynamic systems it is only ‘variety’ that can absorb ‘variety’. This means that where there is complexity and arbitrary perturbations, the institution needs to preserve variety – its capacity to respond creatively – in order to respond to the external variety i.e. the complexity of the environment.

The problem is with the methods of mitigating for external ‘variety’ using hierarchical control or rules, is that variety is reduced within the institution as a system. This, counter intuitively, creates potential instability because these approaches are likely to be catastrophic, the institution renders itself incapable of responding to external perturbations. In fact, the University of Cambridge found itself in this kind of situation in the first half of the nineteenth century. The governance approach allowed the right of individual veto (one of the most conservatising systems of governance), which meant the university was incapable of responding to a changing external environment. In the end the state had to intervene with a Royal Commission in 1852, followed by one in 1872 and a third in 1920.

Let me look at variety in a different way. Gregory Bateson equates redundancy with variety to explain our capacity to manage and make sense of sensory inputs. We have an excess of neurons which are able to configure and pattern in numerous ways to fill in the gaps and make sense of our experiences (Harries-Jones, 2010). It is this pattern matching process that is central to a dynamic system’s capacity to respond to a complex and changing environment, where there is uncertainty and missing information. The same system redundancy and variety is required in an organisation in order that the system can adapt, learn and respond. Ashby’s law of requisite variety restates this, that there must be variety in the system to match the variety of the environment to allow adaptation. This is how dynamic systems survive and also why ‘happy white crests’ which are governed by the laws of hydrodynamics represent an instability and the onset of a ‘personal’ catastrophe.

Final comment

In this post, I have explained the ideas of dynamic systems operating in uncertainty and complexity. It leads to the conclusion that is a requirement that an institution must preserve variety in order to adapt to a changing context. This suggests that the Higher Education sector is being lured into strategic error by responding with de-risking and organisational conservatism. The next question is what can be done? We are faced with a capital labour-struggle within a complex system. Therefore, what we must do is use the established forms of direct labour action but also look toward how universities must be re-designed to facilitate variety, freedom and adaptability. This I will address in my next post.

 

References

Beer, S. (1973). Designing freedom. CBC Massey Lectures. Retrieved from https://www.cbc.ca/radio/ideas/the-1973-cbc-massey-lectures-designing-freedom-1.2946819

Beer, S. (1974). Designing freedom. Chichester, England: John Wiley & Sons.

General Intellect Unit. (n.d.). Designing freedom. Retrieved from http://generalintellectunit.net/e/031-designing-freedom/

Harries-Jones, P. (2010). Bioentropy, aesthetics and meta-dualism: the transdisciplinary ecology of Gregory Bateson. Entropy, 12(12), 2359–2385. https://doi.org/10.3390/e12122359

 

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).

References

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.

Workplace nursery provision: that’s a good thing right?

This post follows my previous on a proposed new nursery at the University of Cambridge. Following a campaign by staff in the Faculty of Education, the university balloted eligible staff (mainly academics and senior administrators) on the proposal. The Grace (Cambridge’s term for a proposal) was passed by 777 votes to 151. This means that the university will progress to looking for a provider to run the new nursery.

The campaign against the proposal began with very local concerns about the impact on the Faculty of Education and the staff. Those interests are set against what might be argued to be the greater good. The greater good being much-needed childcare provision in the university. As we started to look into the university’s proposal, we found that there were issues that should be of general concern:

  • Equality and diversity – the cost of nursery provision (as it is in most private nursery provision) is £1000 per child per month. Even with government subsidy and salary sacrifice, lower paid workers in the university cannot afford this or any childcare. Given the ethnic representation in the lower paid group, this provision contributes to increased inequality within the university workforce.
  • Marketisation and privatisation – nursery provision has shifted from being a public provision (often run by local councils) to being privatised provision. This results in a fragmented system that is underpinned by investor returns and what appears to be lower quality provision. Marketisation also contributes to inequality since competition results in winners and losers.

So in answer to my question: nursery provision is a good thing right? The answer here is ‘no’ – it contributes to inequality and threatens diversity in the university. It contributes to further marketisation and privatisation of nursery provision, where we should be demanding universal free childcare.

My main point is that institutions like the University of Cambridge have the power to use their institutional voice to challenge government policy on nursery and childcare provision in England. Staff can use their collective voice to demand the university do this.

The proposed nursery is a highly political issue and we should be critically informed and act appropriately.

The frustration (and anger) in my previous post was impossible to hide, especially toward what I considered to be, the self-interested behaviour of the better-paid staff in the university who supported this proposal. My anger has now subsided (a little), I am now more motivated to encourage colleagues and the university to think about the political and economic aspects of the university’s current policy toward workplace provision. It needs to be seen for what it is – a piece of austerity in our own backyard and a contribution to the continued break up of universal free public childcare and nursery provision.

These things are part of the deepening of inequality in society, the fracturing of communities and, yes, they contribute to the dissatisfaction that is fueling growing far-right sentiment. We, as staff in the university, need to be critical and take responsibility. We must act beyond our immediate self-interests. We must force the  – our – university to start making a stand.

Which side are you on? Self-interest versus solidarity in higher education union organising

Workplace nursery and childcare provision in the University of Cambridge falls well short of the demand for places. In recent decades in the UK nursery provision, which used to be run by councils, has been privatised. In the privatised system supply has not kept up with demand and employers have come under pressure to provide workplace nursery and childcare places.

What I want to focus on here is the problem of self-interest amongst academic staff. There are a significant number of academic staff who are supportive of the proposed additional nursery provision and will turn a blind eye to the conditions of lower-paid staff. This is of even greater concern when there is a degree of equivocation about the proposed nursery from the Cambridge University Branch of the University and College Union (CUCU). This is the representation of self-interest and a strategic error by the union’s branch executive in my opinion. What I argue here is that to be effective in future action, UCU must build and organise from the bottom up, it must act in the interest of all staff, not just in the interest of academic staff.

This all comes off the back of the biggest strike ever in the UK higher education sector which was a bitter dispute over pensions between the universities’ representative, Universities UK (UUK), and the University and College Union (UCU). That strike was successful because support and assistant staff and students supported UCU’s action. My view is that we can influence the university to be more forthright in opposing the current marketisation and financialization of higher education, but that can only be achieved by organising with all staff at all levels. The UCU cannot achieve it on its own. If we allow ourselves to be divided through self-interest, then we will lose.

Background: the proposed nursery and local union organising in the university

The proposed nursery building is to be built on the car park of the Faculty of Education, in Hills Road in Cambridge, I am the Faculty’s UCU representative. There are approximately 200 full- and part-time staff in the Faculty. I represent around 70 or 80 UCU members, the membership is mostly made up of academic staff, but there are also academic-related staff, researchers, assistant staff and doctoral students.

The Faculty UCU is the largest organised representative staff body in the Faculty. Following the pensions strike, Faculty union members have been motivated to take a collective and active role in the Faculty. There was a general view that collective decision making and collegiality had to be fought for both in the Faculty and in the university. Our aim after the strike has been to ensure that staff in the Faculty are represented more effectively.

The issue of the nursery came to a head when a notice was published in Cambridge University’s weekly journal The Reporter in May 2018. A Faculty UCU member alerted me to the apparent advanced stage of the proposed nursery planning, it seemed like a fait accompli. We quickly assembled a working group and found that there was strong feeling about the proposal from assistant staff. It will greatly affect them if car park access is lost; public transport is inadequate and many, because of house prices in Cambridge, live a distance away. While the university has said that alternative parking provision would be provided, staff have little faith in this. I get the impression from assistant staff they just feel that they have been ignored on this issue. And while some of their arguments might be dismissed as nimbyism, I believe they have not been adequately consulted and they would be disadvantaged if the proposal was to go ahead. My instinct as UCU rep was to work together with all staff in the Faculty to oppose the proposal, not principally based on local issues, but on wider concerns about financialization, governance (i.e. lack of consultation) and equality and diversity.

We petitioned for a ‘Discussion’ in the Senate House to be followed by a ballot on the proposed nursery. ‘Graces’ or proposals, ‘Discussions’ and ballots are the pillars of university democracy in Cambridge. Discussions allow members of the Regent House to present arguments for and against issues of concern to the university, there is no debate and limited right to reply, but ‘remarks’ (i.e. the speeches) are transcribed and published in The Reporter. The issue of membership of the Regents House led to much debate in the Faculty because most assistant staff are excluded from membership and therefore have no right to speak or vote. Membership of (or the roll of) the Regents House (a body which dates back to the thirteenth century) is limited to University Officers; effectively academics, academic-related staff and senior administrators. In sum, not only would assistant staff be adversely affected by the proposed nursery, they could not access the democratic processes that exist in the university to fight their corner.

Union and academic staff equivocation over the proposed nursery

In the Faculty, I became aware that the strongest opposition to the nursery proposal is from assistant staff. The nursery will affect them most and they are the least likely to be able to make use of the new provision. I believe most UCU members in the Faculty are also opposed to the proposed nursery. However, I have been made aware that some academic staff in the Faculty are either supportive of the nursery proposal or are undecided. More importantly, the official response of Cambridge UCU Branch to my request for support on the issue also resulted in equivocation. This is their statement:

Owing to the documented need for expanding childcare provision at the University, CUCU’s executive committee does not feel able to oppose the building of the proposed nursery, but we feel it is important that the concerns of members in the Faculty of Education are widely known. We note, in particular, the issues raised about consultation with staff and of affordability across the University’s childcare centres, which CUCU’s Equalities Working Group will be seeking to address in the coming months

In response, I acknowledged that I thought the politics of this situation was difficult: nursery provision is in great demand and that will benefit, particularly, women, versus what appears to be NIMBY-motivated opposition. There is, however, more to this especially in respect to governance (lack of meaningful consultation) and issues around affordability, equality and diversity.

Organising from the bottom up

Following on the from the pension strike I have, along with union colleagues in the Faculty, attempted to develop union organisation across the Faculty. I have encouraged assistant staff to join Unison and to coordinate our work in representing all staff. This approach, I find is not unique or without precedence. In the second edition of Notes from Below1http://notesfrombelow.org/issue/technology-and-the-worker, there are series of articles considering union organising in the technology industry. An anonymous software engineer explains that most employees in large tech companies are not six-figure salaried software developers, there are large numbers of support staff and service staff. In attempting to organise in the tech industry, the author explains how organising is more successful when they organise from the bottom. Those workers on middle and higher salaries are less motivated to organise but respond as service staff become increasingly organised. Better paid staff are likely to be aware of the injustice and exploitation in the organisation, but they can be indifferent because of their material conditions, they find themselves in an ambiguous situation in relation to capital and labour.

This is similar to the situation in the University of Cambridge, where permanent academic staff have relatively higher salaries and better conditions of work and benefits. The union organisation in the university contributes to a two-tier system, with UCU representing academic and academic-related staff and Unison or Unite representing assistant and support staff. During the pension strike support and assistant staff were –  even though many did not take action – supportive of UCU members in their action, as were the majority of students. I would argue that the strike was so successful because of the support from non-unionised assistant staff and students.

Strategically, Cambridge UCU should be doing more to organise from the bottom up and building solidarity. The effects of current economic and higher education policy are likely to continue into the future. We will only change things by building a movement based on a broad coalition of higher education staff. If UCU is to be successful in future disputes which there are likely to be, it will need the support of staff across the university. Turning our backs on assistant staff at the moment is counterproductive.

The danger of self-interest

In my speech in the Discussion, I made the point that £1000-per week childcare is unaffordable for many lower paid staff. I calculated that a couple with two children earning £60k per annum and living and renting in Cambridge would struggle. I therefore conclude that those supporting the proposed nursery are doing so largely (and perhaps understandably) out of self-interest – they are those who can afford childcare. I also hear the argument that more workplace nursery places will benefit women who continue to be the main carer. However, it is important to listen to the lowest paid women, this from a colleague, a member of staff in the Faculty of Education and a single mum.

I have to work a minimum of 16 hours a week to claim help towards my childcare costs (ie nursery from 9 months – 3 years). In reality, I have to pay for 17 hours a week to cover drop off and pick up.

17 hours a week childcare a month amounts to about £510 in my case.

The government pays up to £300 of that amount. It is capped so that you can only claim help towards a certain amount. Any hours you work over that you have to pay the full price yourself. So, for example, if I wanted to work full time, my wage would be around £1300. My childcare costs would be £1275 for the month, with £300 help from the government, I would be working to pay for childcare.

The proposed nursery will not change her material conditions, it offers her no opportunity to advance her career. Furthermore, since my colleague is trapped by childcare costs in low pay because of the lack of support from the university or government, her conditions contribute to the university’s gender pay gap.

Why then would there be limited support from academic staff and such equivocation from CUCU executive, when the university’s proposal has so many flaws and is not inclusive? Any nursery provision in the university should be available to all. If we support egalitarian principles, equality and inclusivity, why would we support exclusive nursery provision? Furthermore, why would we – why would anyone – support provision with such a flawed consultation process that it has allowed little or no representation from the lowest paid staff in the Faculty or university?

The only real explanation is self-interest, that better-paid staff believe that their needs should come before other lower paid staff. The self-interested perspective of some academic staff at the university is worrying. I imagine that the entitlement and privilege inherent in this institution can easily prepossess the attitudes of academic staff, even union members and members of CUCU executive. Of course, it might be claimed that academic staff in the university make important contributions through research that has the potential to influence many people’s lives positively. It can be argued that academics in the university should be given preferential treatment. I, however, strongly disagree with this. The work of academic staff should not be seen as the brilliance of individuals but the culmination of collective effort. No one in the university can do anything without buildings, facilities, libraries, administrative or technical support. The environment that inspires us is repaired and renewed by maintenance staff, cleaners and gardeners.

It is easy to believe that as academics in the University of Cambridge we are somehow special and while there are some very talented people working in this and other universities, the opportunities that we have had to succeed and excel are a result of a lot of luck. I know how I came to be an academic here and much as I would like to think it is my innate genius, I have to concede that it is largely serendipitous. Of course, I have worked hard and taken the opportunities that have come my way – nonetheless, my success and opportunities are underpinned by good fortune. If we forget this, we slide into arrogance and ignorance and become consumed with self-interest. The positions we hold come with them a great deal of responsibility. It is important that we respect that responsibility and act in the interest of all the members of the university.

We can only bring about change through collective solidarity. If staff and, in particular, union members allow themselves to be divided over this controversial issue of a nursery then nothing will change.

What should we do?

What can we do about this – about the University’s opaque and expedient financially-led decision making and about the wider political-economic context that has propagated the current conditions? It is necessary to resist, but not alone – not as individuals. We have to oppose and demand transparency, democratic decision making, fairness and equality collectively. We must insist that the University, instead of acquiescing to the conditions of fiscal conservatism and economic liberalism, that has turned education into a crapshoot, uses its institutional capital and international reputation to put pressure on governments to properly fund education – through fiscal means and not through private finance, student debt and excessive amounts of applied research. It is only through collective solidarity that these changes will happen. On the issue of the nursery, it is necessary to build collective solidarity among all staff; academic, academic-related, researchers, teaching associate, assistant and support staff.

As a union, we must organise from the bottom up. If we allow divisions through self-interest things will not change. The university will continue on its current path of marketisation, financialization, private capital accompanied by downward pressure on staff pay and conditions.

The question you have to ask is which side are you on? Self-interest and capital or equality, fairness and staff solidarity?

… and three days to recover: an open email to faculty colleagues about the UCU strike action

The text of an ‘open’ email I sent to the University of Cambridge, Faculty of Education, University and College Union members, but also addressing all members of the Faculty Community

Thursday 9th March 2018

Dear Faculty of Education UCU members and non-members,

It is hard work withdrawing your labour.

I would like to begin by pointing you to this evocative Twitter thread by Tyler Denmead – words, ideas, feelings and images from the Faculty of Education picket line, it is a wonderful documentary of that experience.

This action has been tough: tough on those striking but also tough on those who have chosen not too. As we approach a day of truce, indulge me in giving this some thought.

I grew up around the North Nottinghamshire coal fields. Although my family did not work in coal mining, the three nationwide miners’ strikes of 1972, 1974 and 1984-85 had a lasting effect on the community in which I grew up. The 1974 strike was a bitter dispute which led to the fall of the Conservative government. The 1984-85 strike was brutal, bitter, divisive and tinged with revenge. Prime Minister Margaret Thatcher, who was Education Secretary during the Heath government, that was deposed by the miners in 1974, was out to settle the score and to destroy the most powerful trade union, the National Union of Mineworkers. She did this in part, it was revealed later, by funding the Union of Democratic Mineworkers which supported miners in going back to work in order to break the strike. While the Yorkshire miners remained loyal to the NUM, the Nottinghamshire miners split and the UDM attracted increasing numbers. I witnessed the bitterness and brutality as the rift cut through families and communities. I am sure those scars remain in the former mining communities of Nottinghamshire to this day.

In those working-class communities, the divisions were clear, there was no grey-in-the-middle, there were no complexities of Ofsted, complex student needs or management responsibilities. As a miner you were either on strike or – forgive me for using the pejorative term – you were a scab. In our situation, it is far from binary, and from speaking with Faculty colleagues involved in the strike action, I believe everyone is well aware of this. The Faculty community – UCU members and non-members – are divided in that some have chosen to strike and some not. The reasons on each side are undoubtedly both complex and profound; so far I have witnessed nothing but respectful behaviour for each other’s position. They are, however, deeply conflicting positions.

I believe that as this action continues, and if those with the power to permit a speedy resolution fail to engender such, we will all become increasingly tired and there is danger that tempers become frayed and frustrations surface. Respectful disagreement in a divided community can degenerate into misunderstanding and mistrust. This could do lasting damage to our professional community. I don’t want that and neither do, I believe, my colleagues on the picket line.

I just want to say, on the eve of the one day’s break in strike action, that I have nothing but respect for colleagues who have chosen not to strike and that will remain whatever happens. Notwithstanding, it is my strongly-held view that if we all collectively make a stand against the decision to cut defined benefits from our pensions – a decision that is merely the visible part of fundamental and damaging transformation of the UK HE sector – we can stop it. These changes are not inevitable, but they will be if we do not draw the line and make a stand at some point.

While the strike action will have a lasting effect on the culture of the Faculty, the questions that are put in this dispute – that have divided us – are necessary to ask. The democratic governance of this institution at all levels has been increasingly marginalised and fundamental strategic questions have not been deliberated upon by all the members of the University. I will take the liberty of assuming that for those for and against strike action, these observations are not contested. What is contested is, how and when we do something about it.

In what is a deeply difficult time for our professional community, I believe that we can and will come back from this stronger and we will restore the warm and neighbourly professional community that existed before this dispute. In the meantime though, I will, as I expect others who are taking part in the strike action will do, put my full effort into the action that the UCU has democratically agreed to take. I will argue my position robustly and attempt to persuade others to participate in the action, but I will do my utmost to respect different views and with respect for my colleagues who have chosen not to strike and I expect you to tell me if I don’t.

At least we do not have Margaret Thatcher, Robert Maxwell and MI5 conspiring to drive a wedge between us.

In solidarity with all,

Steve Watson

Faculty of Education UCU co-rep

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 2009/102http://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 2015/163Ibid. 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 USS4https://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 UK5It 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 institutions6https://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.

Conclusion

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.

References

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.