A Response to Yudof's Theory

Managing Intellectual Labor:

A Response to Yudof's Theory of Hybrid Universities

By John Pruett
October 2003

Come and Take it, suckas

"...University teaching is bound to be free, or the university would die, and the spirit of inquiry is necessary for the attainment of truth..."

--- UT Bulletin No.2135, "Religious Liberty at the University of Texas," June 20, 1921, p.9

With the beginning of a new school year, fundamental changes are underway; several of which will reverberate for years through the corporate entity we refer to as the University of Texas. Some policy changes were prepared and articulated by UT administrators years in advance but are now materializing in concrete forms, others have been ongoing structural changes (both at the state and university level) that are continuing to transform our university, but there have also been many changes that are unexpected or counterintuitive. Through examination of the multiple systems, actions, and forces at work within this state-sponsored program of managing educated labor in Texas, a coherent and dynamic framework can be discerned which will allow students to arrive at a more developed understanding of the changes currently shaping our lives, as well as prepare us with the knowledge required to develop our own coherent strategy. Such a strategy can then be implemented in a way that will reshape the product of the university machine so as to meet our own demands, expectations, and desires.

The University as a Geometrical Construction

We, the students at the University of Texas, are the fundamental key to the evolution of higher education and as such possess the power to determine the course of this evolution. We are seen as both the prize and product of an educational geometry composed of three angles - namely, the students, the interests of capital, and the state government. The resulting triangle is the university in which we find ourselves. Understanding this triangular relationship, the current chancellor of the UT System has developed a strategy to better manage the interactions between the three distinct components within a changing social dynamic.

Mark Yudof has played a role in, as well as studied institutions of higher education since his years as a student at the University of Pennsylvania, where he received his bachelor's degree in 1965 and a law degree in 1968. After graduating, Yudof began his career as a faculty member at UT-Austin's School of Law. He later became the dean of the school and finally attained the position of executive vice president and provost of the university. From 1997 until 2002, Yudof held the position of president and CEO of the University of Minnesota, Inc. but moved to Austin, Texas after the UT Board of Regents approved his appointment as chancellor on June 21, 2002.

In an article[1] appearing in Change magazine, Yudof analyzes the geometric framework mentioned above but, by describing this framework in terms of monetary flows (i.e. tuition, profits, and state appropriations), does so in a way that masks the underlying social relationships between the three sources of power (i.e. the state government, the private interests of capital and students). Although a monetary analysis is adequate for Yudof's purposes, we must bear in mind that individuals and groups ultimately make the decisions that determine our lives, not an "invisible hand".

In general, Yudof's theory attempts to reconcile this trilateral power relationship with the evolutionary changes taking place in higher education through the creation of what he coins the "hybrid university". According to Yudof, "The challenge for these hybrid institutions will be to retain the best of their public traditions while adapting to a more privatized model". The hope is that these new institutions will be able to effectively regain control and management over the educational community. Within a geometrical model of power, he proposes widening the angle belonging to the private interests of capital in order to offset a shrinking state government. However, in order for this new model to work, students must first accept having costs transferred onto them. Even then, in the words of Rousseau, "An agreement has assuredly been made, but that agreement, far from ending the state of war presupposes its continuation."[2] It remains to be seen whether or not students will continue to give in to the burden of ever-greater tuition increases, but the changes Yudof envisions are already underway at the University of Texas.

State Appropriations

"Politics is governed not by moral principles, but by power."

--- Joseph Goebbels, "Knowledge and Propaganda" (1928)

In keeping with the mantra that individual and group decisions determine outcomes, the current budget crises in US universities (UT included) are the result of formulated policy decisions and changing power relations. Yudof observes that, "In fact, in good times and bad, under Democrats and under Republicans, the actual story is a long-term trend toward lower or static state support, in relative terms, for public research universities." Thus, decreasing state appropriations, both in real numbers and as a percentage of the overall university budget, are not isolated reactions to decreased state budgets or economic downturns.

George Caffentzis, an associate professor of philosophy at the University of Southern Maine, examines the efforts by universities to regain control of intellectual labor after the social upheavals of the 1960s in his article "Throwing Away the Ladder".[3] He concludes that the "'Fiscal' crisis is not only punitive, like bankruptcy, but also a reshaping activity, where the immediacy of monetary power seems to have the efficacy of a natural force. In this fiscal panic there was a marked shift from state investment coming in the nature of block grants to university building or student aid offices to demanding more 'accountability' from individual universities as to their allocation of state funds while putting more restrictions on the use of student aid." This strategy has resurfaced again and again over the course of the past thirty years.

Yudof agrees with Caffentzis on many of the empirical phenomena that have occurred in higher education - including the increased disparity between the educated and uneducated in the workforce (i.e. increased "private return on investment"), more direct aid to individual students, decreased state appropriations and increased market "accountability" for universities. However, Yudof mistakenly emphasizes "the graying of America" when explaining decreased state appropriations while ignoring the changing social dynamic within the universities themselves. This error is inexcusable considering that Yudof was attending college during the student movements of the 1960s. Also, he assumes that a trade-off exists between funding for higher education and funding for healthcare without demonstrating a direct link between them.

A student at UT-Austin, Robert Ovetz, while writing his dissertation in 1996 concludes, "Campus administrations circulate a mythology of declining state revenues even as they have increased over the last decade in actual dollars".[4] As Ovetz later demonstrates, UT is no exception. The situation today at UT appears to be no different than when Ovetz was attending. The Chief Financial Officer (CFO) of UT-Austin, Kevin Hegarty, stated in a news release that "to meet its budget this year, the university found it necessary to reduce its expenditures by $40 million".[5] These cuts include: $10 million from renovation and repairs, $2.5 million from credit card policy changes and "transferring transaction charges to cardholders", $2.5 million from office supply changes, a substantial $25 million from departmental cuts including the elimination of 500 jobs, as well as various other restrictions and cuts that will continue over the next year.

Contrary to UT-Austin's $40 million dollars in budget cuts, current state appropriations to the university have increased 0.12 percent to a total of $758.6 million for this biennium[6], and the Board of Regents for the UT System recently approved a 5.1 percent budget increase over the last fiscal year for the UT-Austin campus to a total of $1.4 billion.[7]

Although budget increases at UT-Austin are not necessarily indicative of the UT System as a whole or of higher education across the US, a disparity between the enforcement of institutional austerity and increasing overall revenue reveals that budget cuts imply more than a reaction to declining state-level revenues. Policy decisions being formulated are counterintuitive with a program of mass public higher education, and processes underway could possibly change the face of public education for a long time to come.

The Private Interests of Capital

"I saw the best minds of my generation destroyed by madness, starving hysterical naked, dragging themselves through the negro streets at dawn looking for an angry fix..."

--- Allen Ginsberg, Howl, 1956

"Profits", "dividends", "rates of return" - these are the benchmarks by which the future "hybrid universities" shall be judged or so sayeth Yudof, our wise and valiant sage. The great messiah of higher education has spoken: "For me, the unvarnished truth is that the extraordinary compact between state governments and their flagship universities appears to be dead". Whither shall we go, oh great one? The answer: Into the "invisible" hands of capital! The market shall save us!

For Yudof to merely propose greater ties between the university and the needs of business would not befit a "hybrid university". What the university needs is a corporate model itself. In fact, according to Yudof, "Legislatures and universities, influenced by increased private-sector efforts to emphasize quality and employ continuous-improvement models, now have the tools to benchmark achievements and lapses, even if, as I often find myself compelled to point out, students are not widgets."

The restructuring of the university into a corporate model is most visible today at the UT System health institutions (i.e. Medical Branch-Galveston, Health Science Centers in Houston and San Antonio, M.D. Anderson Cancer Center-Houston, Health Center-Tyler, and Southwestern Medical Center-Dallas). In the Capital Improvement Program (CIP) for FY 2004-FY 2009 approved on August 7, 2003, the Board of Regents allocated over $4.59 billion dollars for new CIP projects - of which, 71 percent are dedicated to health-related projects and 29 percent to academic-related projects. Hospital revenues, tuition revenue bonds and revenue financing bonds account for around 66 percent of the total funding for these projects; with almost half of the revenue financing bonds derived from M.D. Anderson Cancer Center. These trends in project distribution are likely to continue since healthcare and health research are highly profitable markets and the federal government has shown renewed interest in biotechnology with bio-defense applications. In point of fact, over the past three years health-related CIP projects have grown from $1.76 billion to $3.24 billion (almost doubling), whereas academic-related projects have risen from around $1 billion to only $1.35 billion.

Yudof knows an untapped market with profit potential when he sees one: "The private sector is not likely to pick up the slack in expensive program areas like medicine, for example; the country's newest private medical school opened 23 years ago." And with UTMB-Galveston set to receive Homeland Security Dept. subsidies for a national bio-defense laboratory, a market for biotech R&D will be practically a given. However, Yudof would do well to keep in mind the warning of Federal Reserve Bank of Minneapolis researchers Art Rolnick and Rob Grunewald after they conducted a study of commercialized university research at the University of Minnesota (where Yudof was formerly president).[8] They concluded, "ironically the more successful the university might be in turning out patents and financially successful products, the more likely the returns are negative."

Within the academic arena, the same profit-oriented design is in the works. Ovetz clarifies the interrelationship between academic departments, state subsidies and privatization: "Although state revenues are not rising as rapidly as the overall budget, the money is available nonetheless since more than one half of the budget is 'unallocated', i.e. that it can be used however the UT-Austin administration wishes. In effect, if a program refuses or is unable to entrepreneurialize it falls under the pressures of austerity since it is completely dependent on relatively declining state money."[9]

Thus, if an academic department is not able to generate its own funds, then it must face a stagnant or shrinking budget. To this effect, Yudof recommends "hybrid universities" "look more methodically at whether units and programs can support themselves through tuition dollars, and whether cross-subsidizing other programs is either appropriate or sustainable."

Recent cuts in the Center from Mexican American Studies (CMAS) are an excellent example of the top-down, "hybrid university" model that Yudof touts as the new face of higher education. Not only is CMAS slated to receive a 10 percent budget cut, but CMAS director Jose Limon also announced the elimination of CMAS Books, the in-house publishing arm, on June 3rd. Limon made the announcement without any consultation with staff or the executive committee. Although CMAS Books editor Victor Guerra suspects foul play on the part of CMAS director Limon, he attests to the fact that CMAS Books had not been turning a profit. Likewise, Timothy Dunn, an assistant professor of sociology at Salisbury University in Maryland, remarks that "Every university press loses money; it's only a question of how much. As much as the university may try to mimic the corporate model, the university press is still a role that no one else is able to fill. The scholarship needs to be out there and [UT] is now giving up [a publishing program] that is leading the nation in an area of importance."[10] Dunn had worked closely with Guerra during the publishing process of his book The Militarization of the U.S. -Mexico Border: 1978-1992.

A similar situation faces other departments and programs at UT-Austin, such as Texas Student Publications, which publishes the Daily Texan and is a self-supporting "auxiliary enterprise" (similar to the athletics department).[11] Even though it is self-supporting, the department does receive a small amount of funding from student fees. Cutting TSP's budget would not affect the university's overall fiscal measures, but this funding has allowed the CFO Hegarty to conclude, "We're not going to allow people to think that, 'The exercise of reducing expenses ... relates to everybody but me'" because "All facets of this university need to represent what we believe this university needs to be. ... We want to make this a more efficient place." In other words, administrators must make an example out of certain "inefficient" programs so that market discipline will become instilled in faculty and staff.

This discipline is necessary to the inner-workings of the "hybrid university" and the realization of profits. Faculty must pursue the acquisition of grants and endowments as well as conduct profitable research if they are to remain competitively employed. To this end, faculty must feel a certain level of job insecurity by increasing turnover levels, thus the necessity for intermittent periods of layoffs and salary freezes (a similar phenomenon is visible with staff workers). Despite eliminating 500 job positions over the summer period, administrators recently allotted $1.8 million in order to hire 30 new faculty members.[12] Through this process, tenure-track faculty are also slowly phased out without being replaced. In sum, labor within the university assumes its apparent power relationships as a result of tactical austerity.


"Come on, come on/You and whose army?/You and your cronies/Come on, come on/
Holy roman empire/Come on if you think/You can take us all on"

--- Radiohead, "You and Whose Army?"

Now we turn to the one irreplaceable component of the university - the students. Without us the university would dissolve into oblivion; without us the university would cease to be a site for the production of intellectual labor; without us it would cease to be a "university". Given our position, we are thus invested with an unusual power, but administrators seek to marginalize this power. We are written off as consumers or as products, but we are workers. Although we are unwaged, the work we accomplish (our burden) is not insignificant. We feel this workload when we take on waged jobs to pay for tuition, when we stay up all night studying or writing papers, when we participate in work-study, when we struggle to make our classes and when we're taking exams that will rate our progress as workers. We sacrifice our time, our health and our lives in order to reach something better, and we must acknowledge this fact.

The trilateral relationship of power within the university structure has been brought sharply into focus since the conclusion of the 78th regular Texas legislative session. Outside of state appropriations, three significant changes for Texas public universities were cast into legislation. The first two, omnibus deregulation and indirect cost recovery, affect the operational functioning of the university directly. Omnibus deregulation allows greater discretion on the part of administrators and the Board of Regents by reducing the amount of information that UT-Austin must file with the state. It also invests them with more control over hiring and firing faculty and staff as well as the power to determine when employees receive raises or take leave.

Indirect cost recovery will allow the university to receive reimbursement for government or private use of university facilities, primarily in research areas. Reimbursements cover costs associated with managing the facilities, depreciation of equipment, wages for teaching and research assistants, general maintenance, etc. The legislation also stipulates that money derived from indirect cost recovery must be channeled back into research and can not be used to decrease general revenue appropriations to these projects. For UT-Austin, this will mean a $39 million increase in funding for private sector and government subsidized research.

The third outcome of the 78th legislature, and the most important for students, was tuition deregulation. This legislation had been actively pursued by UT's administration and, despite student efforts to fight its passage, was finally approved due to UT's power within the legislature and Yudof's personal connections to several key representatives. It was argued that tuition deregulation would be the only way for universities to compensate for anticipated cuts in state appropriations, cuts that never materialized at UT-Austin.

Thus, decision-making on tuition rates was taken from the hands of legislators and given to the Board of Regents, who now have the ability to set varying tuition rates for individual campuses, departments and course levels. Although Tuition Policy Committees have been established for UT (one at the system level and one at each campus), these committees serve a mere advisory function without enforcement capabilities. Furthermore, informed students have been denied entry to committee meetings based on the premise that they are financial in nature and so should remain closed. This lack of student voice must be rectified.

According to Yudof, "the first challenge for hybrid universities will be to increase tuition dramatically in order to remain viable and competitive with the eminent private research universities" (emphasis added). With tuition deregulation, tuition is set to go up all across Texas. The University of Houston has already announced that tuition at it's main campus will most likely increase 21 percent, and other universities have followed suit with smaller increases.[13] Tuition levels at UT-Austin for the spring semester of 2004 have not been finalized, but they are also sure to go up.

Yudof makes a token effort to appeal to the majority of students at UT-Austin by stating, "With an eye toward market competition, perhaps public research universities can invest a relatively modest amount in these departments" (i.e. liberal arts and humanities). However, after understanding the profit-oriented approach of "hybrid universities", it is safe to assume that funds will go to departments that are generating revenue (regardless of what they are), especially if "cross-subsidization" is abolished.

Tuition revenues will not only be used to determine funding for individual departments but will also be used to assist in the financing of new CIP construction projects through the use of tuition revenue bonds.[14] As of August 1, 2003, the UT System had accumulated $492.3 million in outstanding debt from tuition revenue bonds which represents 26 percent of the overall debt load carried by the system. For 2003, the regents have approved $140.9 million in tuition revenue bonds; the majority of which go towards projects at health-related institutions. It is time for students, as intellectual labor at the university, to stand up and vehemently voice our indignation at paying more to fund construction while we suffer academically with crowded classrooms, reduced services, and under-funded departments.

In December 1964, on the steps of Sproul Hall at the University of California-Davis, Mario Savio proclaimed, "we're a bunch of raw material[s] that don't mean to have any process upon us, don't mean to be made into any product, don't mean to end up being bought by some clients of the University, be they the government, be they industry, be they organized labor, be they anyone! We're human beings!" Almost forty years after this proclamation, we remain passive workers. We are the pets of this "ivory tower". This will soon change.

Student dissatisfaction with our own depraved state, our own poverty, our rape by the powers of technocrats, managers, government and private interests shall not go unavenged. The University's triangular foundation of power must be dismantled and destroyed. Our proclamation shall serve as the harbinger to a new sort of "hybrid university" - one where the students decide for themselves how we shall learn, and administrators are reduced to the dustbins of history. Our "hybrid university" shall be free to all.

[1] Yudof, Mark. "Higher tuitions: Harbinger of a Hybrid University?". Change (Magazine). March/April 2002 Issue. Another version of this article also appeared in the January 2002 issue of the Chronicle of Higher Education. All Yudof quotes that follow are taken from this article.

[2] Rousseau, Jean-Jacques. The Social Contract. Penguin Books. 1968. p.58.

[3] Caffentzis, George. "Throwing Away the Ladder: Universities in the Crisis". Zerowork #1. 1975.

[4] Ovetz, Robert. Entrepreneurialization, Resistance and the Crisis of the Universities: A Case Study of UT-Austin. Dec. 1996. p.52.

[5] "University assessing expenditure options limited by tight budget". UT Office of Public Affairs. August 28, 2003.

[6] "Significant Outcomes of the 78th Legislature for the University of Texas at Austin". On Campus. June 30, 2003. p.3.

[7] "UT approves $1.4B budget for Austin campus". Austin Business Journal. August 7, 2003.

[8] Rolnick, Art and Rob Grunewald. "The University of Minnesota as a Public Good". Fedgazette. November 2001.

[9] Ovetz. p.53.

[10] Smith, Jordan. "Closing the Books: UT editor says Mexican-American imprint was shuttered as a whistle-blower retaliation". Austin Chronicle. September 12, 2003.

[11] Nichols, Lee. "UT: Tighten Whose Belt?". Austin Chronicle. March 7, 2003.

[12] Grant, Angela. "Overpopulated colleges may receive new faculty". The Daily Texan. September 8, 2003.

[13] Brulliard, Nicolas. "State colleges increasing tuition rates". The Daily Texan. August 11, 2003.

[14] "Revenue Debt Capacity Presentation to the Finance and Planning Committee". UT System Office of Finance. August 6, 2003.