Press Releases

Given our intimate relationship with the 800-pound gorilla in our midst, Berkeleyans should be racing to bookstores to buy the new book University Inc. by Jennifer Washburn, subtitled The Corporate Corruption of Higher Education, or, as I like to call it, Universities Behaving Badly. If you are interested in the integrity of higher education, academic freedom, the responsible treatment of employees and students, quality undergraduate education, the continued vitality of the liberal arts and social sciences, unbiased research, and public ownership of the discoveries funded by your tax dollars—this might well be the most important book you will ever read. But be forewarned: this is a tragedy, so keep the Kleenex handy. 

University Inc. describes, chronicles, and substantiates what Washburn calls the “single greatest threat to the future of American higher education: the intrusion of a market ideology into the heart of academic life.” Covering private and public universities nationwide, Washburn focuses on the impact of the university’s marketization on the academic and scientific communities. The consequences of this intrusion are so deep and broad, so intertwined, and so disturbing as to be beyond summarizing here.  

Instead I ask: How might the new University Inc. affect the broader Berkeley community? Three of Washburn’s themes shed light on this question: the university as a laundry for federal subsidies to private industry, the university as a profit-making enterprise, and the university as an “engine of economic growth.” 

Historically, the American university has entertained a shifting balance between utilitarianism (which gave rise to university business, law, engineering, and medical schools), and “pure” intellectual inquiry, academic independence, and teaching. During and after World War II, scientific research became an important national resource, and universities became vital if ambivalent partners in military and industrial research and development. Later, in the 1970s, America’s perceived lack of industrial competitiveness culminated in the 1980 Bayh-Dole Act. This critical policy change permitted and encouraged universities to patent and profit from their research, and to partner with private industry in this venture.  

This act essentially made American universities a funnel for money that it would have been politically unpalatable for the federal government to give directly to private industry. It also opened the doors for increasing control over university research by their private industry partners. Unfortunately, “no one bothered to consider how routing industrial support through the university would affect academic freedom—or scientific investigation over the long term.”  

UC Berkeley’s very own Novartis affair, and the accompanying tenure battle of “whistleblower” Ignacio Chapela, illustrates the problem. Investigators concluded that UCB “effectively [allowed] one company to exert a monopoly over the department’s best research, regardless of whether it was funded by Novartis or by U.S. taxpayers.” Translation: American tax money was funneled through UC to Novartis. Worse, a qualified professor was denied tenure by the “budget” committee after he questioned corporate interests. 

According to Washburn, “industry now directly influences an estimated 20 to 25 percent of university research funding overall.” This means that when UCB exercises its immunity from Berkeley’s land use laws and taxes, private industry is a major beneficiary. The federal government funds about 58 percent of university-based research, with universities vigorously lobbying and competing for federal dollars. UC skims up to 40 percent of those dollars off the top for its own overhead, but refuses to give the city any infrastructure support. Meanwhile, the state, which should be safeguarding the university’s educational function, has reduced its UC funding to the point where former Chancellor Berdahl described UC as a “state assisted” rather than a public institution.  

When the profit motive entered university research, universities began to behave like for-profit corporations. Chasing money—and the prestige that attracts it—has created distortions in education. Do undergraduates subsidize research? Some universities now pay “star” professors up to a half million dollars per year, while undergraduate education is “farmed out to the growing army of part-time instructors who receive no benefits and meager pay.” In 1969, 97 percent of professors were on tenure track; now it is 40 percent; America now has an army of Ph.D.s scrounging for steady jobs. Tuition has increased at three times the rate of inflation, while students have become “customers” to be gratified with lifestyle luxuries and high grades rather than outstanding education. Funding is diverted from the humanities and social sciences into the science departments that can bring in industrial dollars.  

In the lucrative sciences, academic collegiality is giving way to squabbles over patent rights, and the “knowledge commons” is increasingly privatized and hoarded. When professors object, universities assuage them by making them stakeholders in university business enterprises. Ironically, most universities make no profit on their patenting operations, so opening the Pandora’s Box of academic damage yields them no benefits. And in the final twist, American universities have gotten so greedy that now their private partners are complaining—and starting to take their research subsidies overseas! 

As Washburn points out, the profit-motivated behavior of universities is a gross violation of the public trust that universities have earned over a hundred years. Universities receive public funding and tax exemptions because they serve the public good, providing well-rounded education, unbiased research, and accessible knowledge. But if universities behave like businesses, shouldn’t they be treated like them—legally and fiscally? And, Washburn asks: “Would alumni continue to give so generously to their alma maters if they perceived them as increasingly motivated by profit rather than serving the public good? Would politicians and taxpayers continue to issue tens of billions of dollars annually to colleges and universities in the form of grants, tax exemptions, and student financial aid?”  

Unfortunately, for the politicians, the answer may well be “yes.” Because as universities view themsleves as for-profit corporations, and compete for bucks and breaks from state and local governments, they have repackaged themselves as “engines of economic growth.” These governments, strapped for money and hoping to duplicate Stanford’s impact on Silicon Valley, are more than eager to take the bait.  

Leaving aside the question of whether “economic growth” is necessarily a good thing, most universities are not up to the task. UC campuses, for example, increasingly keep profit-making projects such as convention centers “in-house,” while deflecting their costs onto their host communities—but what kind of “engine” doesn’t even pull its own weight? And no university can single-handedly jump-start the economic growth of a city or region, which depends on a healthy existing infrastructure and an attractive quality of life. “Any high-tech regional initiative must include the development of vibrant communities…the kinds of places that knowledge workers who drive the new economy gravitate toward and prefer to live in.”  

In other words, the university is embedded in a community that sustains it and is prepared to capitalize on its contribution. UCB has for years been reducing the benefits it provides to the community, while callously increasing its detriments. The city is attracted to flashy projects like the proposed downtown museum complex, perhaps convinced this UC project will be the “engine” that rescues our struggling downtown from decades of bad planning. But when it comes to reaping benefits and avoiding costs, this engine always comes in first. We know that from the fiscal drain and quality-of-life damage that UC creates in other parts of the community. So far University Inc. doesn’t see any “profit” in addressing those problems, preferring to let the city pick up the tab. 

UNIVERSITY INC.:  

THE CORPORATE CORRUPTION OF HIGHER EDUCATION 

By Jennifer Washburn 

Basic Books, 326 pages, $26?