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Transatlantic moves to the market: the United States and the European Union

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Abstract

The theory of academic capitalism is used to explore US and EU marketization trajectories. Comparisons are made along the following dimensions: creation and expansion of intermediating organizations external to universities that promote closer relations between universities and markets; interstitial organizations that emerge from within universities that intersect various market oriented projects; narratives, discourses and social technologies that promote marketization and competition; expanded managerial capacity; new funding streams for research and programs close to the market; and new circuits of knowledge that move away from peer review and professional judgment as arbiters of excellence. We also consider the status of fields not closely integrated with external markets, and see fragmentation of the humanities, fine arts and (some) social sciences to be a sign of research universities marketization. We conclude that the US and EU are following very different paths to bring higher education closer to the market. The US move to the market was incremental and frequently led by a wide variety of non-governmental organizations, often with strong ties to the for-profit sector and participation by segments of universities prior to federal legislation or mandates. The European Commission is reverse engineering Anglo-American higher education models to reconstruct technologies of governance in uniquely European contexts that embed competition in nation-state initiatives. Although the discourse surrounding university marketization promises growth of high paying jobs prosperity, evidence to date suggests very uneven results for both the US and EU.

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Notes

  1. The relationship between states, blocs, and markets is complex and requires careful consideration. On the one hand, the US and EU are similar federal entities. Both have indirect governance authorities over separate, but interconnected higher education systems and both have direct funding roles, particularly in academic R&D. They are also similarly large higher education markets. In 2007 there were 17,151,223 tertiary level students enrolled in the 18 EU countries that are OECD members, and 17,755,887 students were enrolled in US institutions (OECD 2009). However, the US is a sovereign nation state and the EU is not. We refer to markets as both bounded tariff areas for the trade in higher education (a German student in Britain is not participating in export education but a Canadian student is), and as constellations of organizations that generate private wealth (e.g. the biotechnology market). We understand nation states as bounded geographic entities over which public administration has legal authority to control and regulate social and economic activities. We see the EU as a state-like federal entity that intermediates relations between states and a European market though normative (Frameworks and Open Method of Coordination for example) and coercive (funding streams) channels. The EU has focused on transforming the relationship between states, universities, and markets along two primary lines: first, by leveraging universities as institutions vital in the generation of wealth and global economic competitiveness; second, by transforming states’ role in higher education governance to center on oversight and enforcement of market accountability (Kwiek 2008).

  2. Social sciences are complex, with some disciplines thriving relative to others, such as economics and anthropology, as well as increased stratification within broad disciplines, such as the prominence of neo-classical quantitative economics versus political economy.

  3. Although not pertinent to this analysis, another difficulty with neo-institutional theory is that organizational fields are conceptualized as flat, located on a single social plane, which means that the consequences an organizational field may have for organizations above and below it, orthogonal to it, or unable to enter it are not addressed. For example, by focusing on the networks that knit research universities into a field or sector, institutional theory disregards the part these organizations plays in social stratification both with regard to education and research.

  4. Some neo-institutionalist theorists deal with change by invoking a sort of punctuated equilibrium model, making the case that there are exogenous changes—for example funding crises—to which the field then responds, with organizations/universities within the field following the lead of high status institutions, attempting to recreate the stability of the field (Romanelli and Tushman 1994). However, this overlooks the part that organizations/institutions may play in advancing change, as happens for example, when universities lobby for legislation such as Bayh-Dole (1980) which granted universities the right to ownership of patents disclosed by faculty working on federally funded research grants.

  5. We find this melding of discourse and social technologies so compelling that we have added it as a formal, separate analytic element of our theory of academic capitalism. As with all theories, elaboration occurs. We drew heavily on Foucault in our 2004 formulation of a theory of academic capitalism, but did not include governmentality and discourse as formal elements, or more importantly, the melding of discourse with social technologies. We grateful to the work of Bruno (2009), Pestre (2009), and Pestre and Weingart (2009) for their conceptualization of these ideas.

  6. Although we always attended to resources in building our theory of academic capitalism, we did not use new funding streams as a formal element, and thank Brendan Cantwell for drawing this out.

  7. Private non-profit universities in the US are chartered by the state in which they are located, but relatively independent from the state. However, they often benefit from state student aid programs, bonding authority, and loan programs, and always benefit from federal student aid and loan programs, and many benefit from federal research grants and contracts. Public universities are sometimes have constitutional autonomy from the states in which they are located—as is the case with the University of California (UC) system—although despite constitutionality, the state still is able to intervene in internal affairs, as indicated by then Governor Ronald Reagan and the UC system (Slaughter 1980). Personnel at public universities are not part of state civil service systems, and public research universities are not completely dependent on the state for funds—on average about 22%, although the percent varies from a low of 7–8 to a high of 33–40—comes from the state. Other funds come from the same sources as those available to private non-profit universities: student federal financial aid, federal grants and contracts, foundations, donations, endowments, income from intellectual property, industrial funding. Whether public or private, American universities have to balance between the state and the private sector with regard to funding and autonomy, in the sense of the ability to act independently, is always precarious.

  8. For historical continuity of corporate CEOs on American research university boards see Veblen (1918), Sinclair (1923), Beck (1947), Smith (1974).

  9. In Finland the protests were directed not to autonomy in general, but to the narrow way in which autonomy was defined. Critics thought the new law emphasized financial and administrative autonomy rather than academic freedom. Critics also viewed the reform as promoting inequality among universities, given the concentration of funding on Aalto University, now a private foundation. Personal communication with Prof. Ilkka J.Kauppinen, March 1, 2010.

  10. According to Eurostat, part-timers went from a high of 49% in 1998 to a low of 37% in 2003, and then began creeping up again.

  11. The categories of basic and applied have become problematic in the US where an increasing number of scholars (see Brooks 1996; Stokes 1997; Branscomb 1997; Slaughter and Rhoades 2005) see the categories as lacking meaningful precision given the mobility of scientific knowledge with regard to source and use. There are also difficulties with these categories in Europe, although these focus more on epistemological issues (see Latour and Woolgar 1979; Dasgupta and David 1987).

  12. The COMETT programs fall under the umbrella of vocational training policy in the Education, Training and Youth policy area within the European Commission. For summaries of the COMETT I and II programs see the following web pages: http://www.europa.eu/legislation_summaries/education_training_youth/vocational_training/c11015a_en.htm; http://www.europa.eu/legislation_summaries/education_training_youth/vocational_training/c11015b_en.htm.

  13. We considered analyzing state moves toward the market, as have occurred in the Netherlands and Germany, and also in the several states in the US, which work with universities to promote economic development, but did not, because marketization is proceeding so rapidly that to address the topic would require another paper.

  14. Most countries classify students from aboard as ‘international’ and count only those students who enter their country for the primary purpose of undertaking a program in education. However, 6 EU countries including France include all ‘foreign’ students—that is students who are not citizens—in their international education statistics.

Abbreviations

CEO:

Chief Executive Officer

EEA:

European Economic Area

ERC:

European Research Council

ERT:

European Roundtable of Industrialists

ESMU:

European Center for Strategic Management of Universities

EU:

European Union

GDP:

Gross Domestic Product

KLC:

Knowledge Innovation Communities

NGO:

Non-Governmental Organization

NPM:

New Public Management

NSF:

National Science Foundation

OECD:

Organisation for Economic Co-Operation and Development

OMC:

Open Methods of Coordination

R&D:

Research and Development

STEM:

Science, Technology, Engineering and Mathematics

TQM:

Total Quality Management

US:

United States of America

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  1. Institute of Higher Education, University of Georgia, 212 Meigs Hall, Athens, GA, 30602, USA

    Sheila Slaughter

  2. Department of Educational Administration, Higher, Adult and Lifelong Education, College of Educaton, Michigan State University, 418 Erickson Hall, East Lansing, MI, 48824, USA

    Brendan Cantwell

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Slaughter, S., Cantwell, B. Transatlantic moves to the market: the United States and the European Union. High Educ 63, 583–606 (2012). https://doi.org/10.1007/s10734-011-9460-9

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