University, Inc.

Corporations have engaged in a hostile takeover of universities worldwide, especially public research institutions like UT-Austin. Corporations - with their emphasis on profit, hierarchy, and "useful" knowledge - are transforming the University from an institute of higher learning to a corporate campus. From the proliferation of credit card booths to the most complex of research agreements, Corporate America exerts an undue amount of direct and indirect control over the lives of students, faculty, staff, and administrators. For an overview of university corporatization, see Nick Schwellenbach's Interview with Jennifer Washburn, author of University Inc: The Corporate Corruption of Higher Education.

Throughout its history, the American university has played an integral role within the corporate/military state. Several scholars have analyzed this role and divided it into four distinct periods: the creation of the "land grant" colleges at the end of the 19th century (eg. UT-Austin in 1883), the industrialization and militarization of the universities during the First World War, the mass university education and military spin-off technologies that marked the Keynesian period following World War II, and, finally, the transformation of the university into a direct profit-making function of capital in the 1980s, what Robert Ovetz refers to as "entrepreneurialization", which is still occuring today.

The Cost to Students

For public research universities such as UT-Austin, the role of university is to serve outside interests for private gain. Administrators dub it the University's essential role of "public service", but it is obvious that it is quite simply corporate and military interests who are served. The University is viewed as a slush fund, an indispensible source of wealth, through its endowments, grants, donations and other finances, and the process of entrepreneurialization is carried out to benefit the few at the cost of the many - essentially privatizing the profits and socializing the costs.

Knowledge Factory
The Process of Technology Transfer from a Research University
"Assessing the Effectiveness of Technology Transfer Offices at U.S. Research Universities"
The Journal of the Association of University Technology Managers
Volume XII (2000)

Understanding this mentality that nearly every public voice of UT administrations carries is central to understanding the crisis that university administrations perpetuate today. The crisis is simply UT administrators and bureaucrats funneling money to overt money-making arms of the University (the enginnering and business schools) at the expense of every undergraduate and graduate who has to pay to attend the University. UT administrators address this crisis not by critically examining where the money is going and where it isn't, but by claiming that we're somehow "broke" and need more - from tuition and tax dollars. Money is UT is never destroyed or wasted; it's simply redirected. This is how students can see the broken bathrooms in Garrison Hall and wonder where the money raised from steep tuition increases is going. In this arrangement, students are treated differentially: those with high market value are more useful to the University; others are wasting the University's time.

UT is by no means alone in experiencing this crisis. The transitions in the corporate university described above had one constant: the necessity of the university to the functioning of capital - whether this implies the training of workers, instilling discipline, performing corporate or military research, or producing intellectual capital and patented technology. Over time, an increasing amount of federal legislation has had universities nationwide acquiese to this ever-changing corporate agenda, a change one can see through the legislation concerning the transfer of technology.

Companies sink money into certain departments at UT expecting a return on their investments: trained docile workers. As the University becomes beholden to the financial and ideological demands of its financiers, it must answer to corporate demands. What Enron, Ford, Lockheed-Martin, and other such companies want is a cheap training facility for information-age workers. It is hard to argue that graduate students or faculty do not directly benefit, at least monetarily, from working on these corporate projects. However, these companies are not interested in the cultivation of knowledge or the advancement of civilization or the intellectual journey of individuals, i.e. "academic freedom."

A corporate campus is one in which the Business School bears the moniker of a used-car baron, while schools without market value fall into neglect. In reality, all students are being cheated out of a well-rounded education of personal discovery and liberation. What good is a university if it only offers people the minimum skills required in the marketplace? University, Inc. is an ethically and culturally bankrupt institution run by green eye-shaded corporate managers, useful only for perpetuating the corporate system.

Corporate Welfare: The City-State Model

As the latest stage in collegiate corporatism took hold in the 1980s, UT had an important cheerleader: George Kozmetsky. He openly advocated for better uses of the university to serve outside interests, like his own: the RGK Foundation profited handsomely largely through Kozmetsky's efforts. As chief economic advisor for the UT System Board of Regents for decades, Kozmetsky strongly encouraged an increased effort in technology transfer, a process which takes publicly funded research from institutions like UT and commercializes them, i.e. puts the research on the market for private gains. Kozmetsky's heydays were in the 1980s, as tech transfer soon populated university research labs across the country and across UT. Ronald Reagan's fruitless "Star Wars" research projects wasted billions of taxpayer dollars, redefined corporate research at universities, and lined the pockets of the state's economic development leaders.

Kozmetsky will be best remembered for efforts to take tech transfer to a higher level, and the result was what he called The Technopolis. Techno- is obviously short for technology, and -polis, the Greek word for city-state. The Technopolis reflects a merger of state and corporate interests to build the modern city, "'a balance between public and private sectors' ... centered around high-tech industry". Basically, the university first receives a corporate or military research grant, then develops the technology for tech transfer, and then allows chambers of commerce and corporations to let it hit the market and capitalize on the profits, which is in turn not widely shared with students. Two interesting notes:

  1. The Technopolis is as every bit as planned as the Soviet-style countries in the Eastern Bloc that were collapsing as Kozmetsky was re-shaping UT's economic policies. Universities were expected to meet and confer with industrialists - those who would most handsomely gain from this endeavor; the three levels of government: federal, state, and municipal; and other "support groups" like chambers of commerce. In an effort to "find ways to cooperate while competing," the Technopolis lacks only the centralized economic planning in order to be called Communist.

  • The Greek city-states were largely homogenenous and very proud of their individual city-state in ancient Olympic competitions. This can serve as a precursor to homogeneous, docile UT students too preoccupied with rooting for their hometown Longhorns to not give attention to pressing student issues like rising tuition or corporatism.
  • The Technopolis took hold in the late 1990s, after UT's under-surveilled private investment arm UTIMCO was formed, during the much-publicized tech boom. UT's private investors took money designated for students to pump up the Austin tech bubble, through direct investments in venture capital, that eventually burst and cost students millions upon millions of dollars. Although industrialists were dismayed with the shortcomings, they felt no reverberations or consequences as it was only student money that they lost. Students felt the shock over the years with reduced library hours, neglected buildings on the main campus, teachers and staff laid off, and eventually the passing of tuition deregulation in spring 2003.

    Conclusion: Don't Screw Students

    Libertarians from the left to right must be infuriated at this corporate welfare. It carries a heavy price, and unfortunately those most affected are completely oblivious to the entire process. Our buildings house the research projects, our fees subsidize the infrastructure, and our graduate students and faculty spend time not in a classroom learning but in labs on research to explicitly subsidize outside capital. The University acts as a slush fund simply because economic developers have taken control of it and won't relinquish control without a fight from a unified student front. Students are far from "consumers of university services," as administrators have called us; we are the University. It's our tuition dollars that are wasted. It's our academic experience squandered. This isn't so much a call to end economic development as much as it is to take back what's ours.


    A Case Study of Corporatization: See our Freeport Files


    Corporate Profile Pages

    Alcoa, Inc.
    Alliant Techsystems
    Conoco Phillips
    El Paso Energy
    Optive Research

    Washington Advisory Group, LLC(pdf)
    Washington Advisory Group, LLC(pdf) (Information regarding their contract with UT;
    from the July 7th UT Board of Regents meeting agenda)

    Technocratic Reading Material

    Corporations that have licensed technology from UT since 1998

    Technology Development and Transfer, FY 2001-2002(pdf)
    report issued by the Texas Higher Education Coordinating Board's Division of Finance, Campus Planning, and Research (November 2002)

    report from the UT System updated 11-26-2002

    Contracts Reported to Texas State Agencies and Institutions of Higher Education, FY 2002(pdf)
    report issued by the Legislative Budget Board of Texas (December 2002)
    note: to view University of Texas contracts, click on "Education" under "Bookmarks" and scroll down to UT


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