This is Part 5 in a five-part series on Willetts: Introduction; part 1; part 2; part 3; part 4.
The last two installments of this multipart review of David Willetts’ A University Education analysed the rationalisation of the two core functions of the modern university, as envisaged by Alexander von Humboldt in the early 19th century: teaching (part 3) and research (part 4). This installment completes this analysis, following the addition of a ‘third mission’ to the university within neoliberal marketisation: ‘knowledge exchange’. The introduction of this new mission—pursued aggressively by Willetts’ successor, Jo Johnson—represents not only a fundamental attack on the academic profession, but also a desperate attempt to marshal the knowledge-producing powers of universities to kick-start a stagnating post-crisis global economy.
Although only in its infancy, the third performance management system for English higher education, the Knowledge Exchange Framework (KEF)—which completes the set alongside the Research and Teaching Excellence Frameworks (REF and TEF)—may turn out to be the most devastating to the academic profession.
While the REF and the TEF ‘nudge’ the core functions of the 19th century modern university, research and teaching, towards a neoliberal governance agenda, the KEF explicitly and directly imposes the needs of an increasingly desperate monopoly capitalist system as it faces an intractable long-term economic crisis.
For decades, the so-called Haldane Principle—which protects academic freedom from interference from government—has been considered, even by Margaret Thatcher, sacred. But now, a Conservative government freed from compromise with Coalition partners and bolstered by its own narrative of austerity, has its sights set on finally disregarding this Principle.
The austerity agenda, now ten years in, has not helped the UK economy recover, and if anything has lengthened and deepened the recession resulting from the 2008 Financial Crisis.
Rather than address the underlying causes of this recession—which is, as monopoly capitalism theorists point out, in fact a return to the norm of stagnation that haunts the capitalist system of accumulation—the Conservatives have returned to well-worn neoliberal themes: human capital theory and Silicon Valley style ‘disruption’.
The 2017 Industrial Strategy—a remarkable document that seems to recognise the problem of stagnation while making every attempt to obscure its significance—calls for renewed investment in niche, highly advanced technologies and the skills development needed to support these proposed economic growth areas.
Universities play a key role in this strategy, providing both the skilled workforce required for these new industries—that in fact only make up a tiny proportion of the economy overall, which is dominated by mainly non-productive services—and ‘impactful’ research.
However, for Willetts, an important aspect of such impactful research has been forgotten: research and development (R&D).
R&D is the kind of potentially monetisable, useful research that companies should be investing in to generate ‘organic’ growth (as opposed to ‘inorganic’ growth coming from acquisitions and mergers), but are not currently pursuing due to unfavourable economic conditions and acute risk-aversion.
Today, the key problem for neoliberal governments like that of the UK is how to incentivise companies, especially big multi-national corporations—which are currently sitting on billions of dollars of unproductive yet liquid capital, and working well below productive capacity—to invest in such organic innovation.
The neoliberal solution is to provide universities as outsourced R&D factories for multi-national corporations, in the naïve hope that by subsidising private-sector R&D, companies will keep some element of production in the UK, re-balancing our own services dominated economy.
Thus, by connecting the dots of performance management systems like the TEF, REF and now the KEF with larger scale initiatives concerned with overcoming the acute stagnation of a global neoliberal economy that has run out of steam, we can see the true direction of travel of marketisation.
Although currently only a tentative set of largely unconnected proposals, the KEF—which according to Louis Coiffait’s (Wonkhe) latest intelligence, could represent a sizable £14 billion carrot for universities—is the final piece of the puzzle and the biggest threat to the academic profession so far.
The invention of research
Returning to his theme of the history of universities as subsequent waves of market disruption (see Pt 1), Willetts recounts the creation of the “research-intensive university”—which still provides a model for universities worldwide—at the hands of Wilhelm von Humboldt in 19th century Germany.
In a short policy paper “which proved to be one of the seminal documents in the emergence of the modern university”, according to Willetts, Humboldt proposed that “the “university should become a centre of research” (p. 90).
Willetts explains that before this, research—by which he means science—was mostly conducted outside universities, in independent academies. Universities had become dominated by religious conservativism, and were hostile to the new science.
Crucially, the modern German university established the autonomy of research from state interference: “Göttingen was the first German university to break free from religious censorship and establish philosophy as the dominant discipline. Kant’s essay The Conflict of the Faculties uses this pre-eminent role for philosophy to place academic study above censorship.” (p. 91)
While this model was exported to the U.S. during the late 19th and early 20th centuries, Willetts criticises the UK for “lagging behind” Germany and the US, slow to realise the power of scientific research for building what David Edgerton calls the ‘warfare state’ (p. 94).
This situation eventually changed, prompted by the First World War, which showed just how advanced Germany had become because of its rapid industrialisation in the late 19th century, within which the new universities played a key role.
Richard Haldane, an intriguing figure in early 20th century British history—Secretary of State for War 1905-12, raised to the peerage as Viscount Haldane in 1911, Lord Chancellor between 1912 and 1915, finally joining the Labour Party and again serving as Lord Chancellor in 1924 in the first ever Labour administration—exerted a lasting influence on British higher education.
Haldane recommended in 1904 the creation of the University Grants Committee, a body composed of academics who would together advise the government on where public funding for higher education and research should be allocated.
Then in 1918, Haldane recommended that research, while funded by the government, should be under the control of the autonomous UGC, which would be free from political and administrative pressures that might discourage research in certain areas.
Meanwhile, new ‘redbrick’ universities were set up to meet the new economic research needs, based on the Humbodltian model, thus also importing the strong institutional basis for institutional autonomy that came with this model: the freedom to choose what to teach (Lehrfreiheit) and the freedom to choose what to research/study (Lernfreiheit).
So, when the UK did finally pump money into university R&D after the Second World War, it only strengthened the independence of academia, with individual institutions and national funding allocations governed collegially by academics.
In practice, then, what became known as the ‘Haldane Principle’ formed the ‘de facto’ basis of academic freedom in the UK, until the 1992 Further and Higher Education Act codified this Principle for the first time in law.
Willetts is extremely ambivalent towards institutional autonomy. Firstly, he sees the Haldane Principle as the basis for the continued tendency of academia towards ‘scholasticism’, the “classic weakness of academic research”: “looking inwards not outwards” (p. 254).
As noted in Pt 4, for Willetts this tendency is exacerbated by the REF, which puts “relentless pressure on academics to produce papers that are going to be assessed by fellow academics as of the highest quality and frequently cited” (p. 253).
However, we also argued that while the REF reinforces the power of ‘star academics’ to resist marketisation, open access licensing, MOOCs and centre-periphery casualisation actually re-capturing the value created by these academics through
More importantly, for both Willetts and his successor Jo Johnson, the Haldane Principle prevents the UK government from directing research—specifically R&D—towards the wider economic needs of neoliberal capitalism.
Willetts confesses that, while the Haldane Principle is “right”, it does “not fully resolve the task of finding the right and respectful way of linking university research and public policy” (p. 110).
With so much prestige and research activity concentrated in autonomous universities and protected by the Haldane Principle, critics argue that the balance of power is with the university ‘providers’ not the Research Council funders, which means that ministers require a certain amount of ingenuity to deliver any more detailed strategy than excellence everywhere. (p. 114)
What happened to R&D?
Willetts spends a long time in his account of research in A University Education lamenting the loss of publicly-funded R&D outside universities.
The account of the origins of the research-intensive university is designed not just to give historical context, but, like the revisionist history earlier in the book, is there to distinguish ‘bad monopolies’ that undermine ‘diversity’ from the ‘good monopolies’ that drive competitive change.
We saw in the opening chapters how the mantle of Oxbridge autonomy has fallen on more and more universities. So a university founded by the local business community to meet their needs becomes increasingly detached from these origins. It operates in an environment where there is only one way of being ‘good’ and that means becoming a prestigious research-intensive university. (p. 264)
Willetts again attacks the REF for exacerbating the alleged inward-facingness that comes from institutional autonomy. Teaching and applied research “do not score well in the university rankings”—which it is true, as league tables are disproportionately weighted in favour of academic research—and other kinds of activity focused on “local or national priorities loses out.”
Public research institutes seek the safe haven of a university and research becomes predominantly a university activity. So there is a limited range of funding streams and a limited range of types of institutions doing the research—notably the research-intensive university. Diversity is lost. (p. 264)
This alleged prejudice against publicly-funded R&D is traced back to that bastion of academic self-governance, the University Grants Committee: “After the Second World War there was a fear that science unconstrained by the ethical framework of the humanities and Sir Walter Moberly [head of the UGC from 1935 to 1949] argued that scientific research should therefore best be conducted on a multidisciplinary university campus.” (p. 97)
Even Thatcher is scolded for her attitude towards publicly-funded R&D. Perhaps surprisingly, she wasn’t interested in subsidising applied research for businesses: “Government should concentrate on funding basic science and leave its application and development to the private sector” (Thatcher, In Willetts, p. 261).
Thatcher was responding to a proposal by Victor Rothschild, which Willetts enthusiastically approves of in the book. Rothschild proposed a what Willetts calls “a kind of dual system”:
On the one hand there would be a science budget focused in blue skies research and academic excellence and protected behind the bulwarks of the Haldane principle … [On the other hand] separate from a general science budget, [government] departments should become contractors, buying the research that was needed for their priorities. They might even use the funds to run their own research institutes. (p. 260)
Willetts obsession with departmentally commissioned R&D is bizarre as it seems to contradict the direction of travel he himself initiated with the marketisation of higher education.
Firstly, such direct purchasing of R&D with public funds would be an example of old fashioned statism, rather than the kind of competitive, indirect funding he prefers for non-R&D research and HE teaching.
As Willetts himself points out, such funding—as it comes out of departmental budgets—would be subject to changes in government priorities and to budget cuts if costs needed to be slashed.
Furthermore, if departments did run their own institutes, employees in these institutes would be civil servants and subject to public sector standards of pay and terms and conditions, which are predominantly set by national agreements between employers and public-sector trade unions.
Most bizarrely, Willetts suddenly, somewhere near the end of the chapter on universities as ‘drivers of innovation’, gives up on the idea of publicly-funded R&D outside universities and the Rothschild proposal
In the end, Willetts “recognises the obvious”: “British universities are where most of our publicly-funded research happens.”
Therefore, rather than redirecting funding away from these universities towards third sector research institutes, the “university takes on a broader role as the driver of innovation” (p. 267).
The university may not have sought economic greatness but finds greatness is thrust upon it. The role of the university is brought into every discussion of growth, innovation, and productivity. As well as teaching and researching they take on what called a ‘third mission’ of promoting economic growth. (p. 267)
One metric to rule them all
Jo Johnson—who succeeded Willetts as Minister for Universities and Science in 2015 and oversaw the implementation of the TEF—is also ambivalent about what he calls “curiosity-driven research”.
On the one hand, such research is of “vital importance” and the UK’s status as “research superpower”—based on ‘field-weighted citation impact’ measures—is something “to be proud of and respect.”
On the other, “high-quality publications do not by themselves guarantee impact in the world at large”, nor is there “a simple linear relationship between academic excellence and economic growth.”
“If the research that goes on in our universities is to have the greatest possible impact, our universities need to be deeply connected to the wider world. This is an important challenge in any advanced economy.”
Johnson points to the “outsize role” that UK universities play in the country’s “research and innovation system.” “Over half of the money the UK taxpayer provides for R&D goes to the higher education sector – £4.8 billion out of £8.8 billion in 2015.”
“The result is a far greater proportion of R&D—26% – takes place in our universities than in comparable countries, with 20% in France, 17% in Germany, 13% in the U.S. and 12% in Japan.”
But Johnson draws a much clearer conclusion than Willetts: this public investment “brings with it increased responsibilities.” In other words, like ‘curiosity-driven research’ and teaching, ‘knowledge exchange’ (KE) must be performance managed.
“Because they loom so large in our research ecosystems, it is particularly important that universities engage with the wider world, and help to ensure that their work leads to wider social and economic benefits.” Johnson proposes a series of measures to bring KE—the new “third mission” of universities—in line with both the wider rationalisation of higher education and the needs of neoliberal capitalism.
Firstly, the impact weighting of the REF2021 should be raised to 25%. In fact, as Johnson notes, this decision had already been taken by HEFCE and UKRI, and he “welcomes” this “greater emphasis.”
Secondly, twelve more ‘Science and Innovation Audits’ (SLAs)—a government-led initiative designed to “help local organisations map their research and innovation strengths and identify areas of potential global competitive advantage”—should be undertaken.
And finally, a new performance management system, the Knowledge Exchange Framework —which I argue, rather than the TEF (and contra Andrew McGettigan), is the ‘one metric to rule them all’—should be introduced.
It is noteworthy that the UK university system has public frameworks to track two of the missions of universities—the REF for research and the TEF for teaching—but nothing for the third mission of knowledge exchange and engagement.
Given the importance of knowledge exchange to the national mission of universities, I believe there is a strong case for doing more to measure how good a job universities are doing and to link funding more directly to such an assessment.
I see a key role for an enhanced performance assessment in creating a constructive competitive dynamic between institutions that incentivises them to make the most of opportunities they have for knowledge exchange.
However, while Johnson notes that the UK government has the “building blocks” for the KEF, as well as “considerable amounts of relevant data”, information about “excellent (KE) practice” is “hard to access.”
Additionally, such information is not “weighted to reflect the differences in size and research income between different institutions.”
In a moment of frankness regarding the real function of such assessments, he admits that this limits the capability of a future KEF to identify the “outperformance and underperformance” of universities.
The return of stagnation
But where does the ‘knowledge exchange’ (KE) agenda come from?
As Professor Dame Ann Dowling explains in the 2015 ‘Dowling Review of Business-University Research Collaborations’, “business-university collaboration has been an exceptionally popular target for reviews and studies in recent years”—see Figure 1— something she considers “not surprising given the significance of research and innovation as drivers of a knowledge-based economy.”
Figure 1: Recent Reviews addressing Business-University Collaboration. Source: Dowling Report, p. 11.
Dowling also points to the “several important developments in the UK research and innovation landscape” leading up to 2015, including: “the growth in innovation funding through Innovate UK, establishment of the network of Catapults, introduction of Local Enterprise Partnerships (LEPs) and the conclusion of the first Research Excellence Framework (REF).”
But Dowling returns repeatedly to one, over-arching factor, mentioned in pretty much all the policy-based justifications for increased university-business interaction from Willetts to Johnson: “the need to boost UK productivity.”
As Johnson explains in the Foreword to the Dowling Review: “Excellent research, as well as being worthwhile in its own right, is vital to tackling the productivity gap that is the foremost economic challenge facing this country.”
“Business research and development is the foundation of productivity and growth; university research collaborations have a vital role in providing business with new processes and technologies, highly skilled people and access to world-leading experts.”
In other words, this isn’t just the usual ‘human capital’ argument for expanding while privatising higher education in advanced economies.
There is a startling recognition in the Industrial Strategy white paper is that a deep problem is haunting the British economy: stagnation. A condition Marxian political economists Paul Baran and Paul Sweezy argued was the “normal state of monopoly capitalist economy” (Monopoly Capital [New York: Monthly Review Press, 1966], p. 108).
Expanding on this pathbreaking work, John Bellamy Foster and Fred Magdoff explain in The Great Financial Crisis (New York: Monthly Review Press, 2009) that the “enormous productivity of the monopoly-capitalist economy, coupled with oligopolistic pricing, generates a huge and growing surplus, goes beyond the capacity of the economy to absorb it through the normal channels of consumption and investment.”
As a result, the capitalist system is constantly required to find new ways of externally stimulating ‘effective demand’ to counter-act this norm of stagnation, for example through civilian government (the welfare state) and military spending, the expansion of the sales effort (marketing/advertising), and most recently, speculative finance.
However, all of these artificial stimulants “prove inadequate to support the economy over time, since bigger and bigger injections [are] needed just to keep it going.”
Stagnation doesn’t mean that there is no growth, but rather that the economy functions “well below its potential—with appreciable unused productive capacity and significant unemployment and underemployment.”
The problem of stagnation can be evidenced by data on the current state of the UK economy.
According to Trading Economics, capacity utilisation in the UK “decreased to 81% percent in the first quarter of 2018 from 85% in the fourth quarter of 2017.” (NB: Capacity utilisation in the U.S. is even lower, just about rising to “78% in February from 77% in January of 2018”). This means that about a fifth of our productive capacity is not being used.
Despite the claims by the Conservatives that the employment rate (the proportion of people aged from 16 to 64 who are in work) is now the highest since comparable records began in 1971, this has been achieved through an increase in precarious work. Figure 2 shows that employment numbers have in fact only just returned to approximate pre-2008 levels.
Figure 2: Unemployment rate in UK 1971–2016 (Source: ONS).
Out of this recovery, 43% of this growth actually comes from self-employment—the so called ‘gig economy’ (Figure 3). According to the Labour Force Survey, the number of self-employed in the UK “increased from 3.3 million people (12.0% of the labour force) in 2001 to 4.8 million (15.1% of the labour force) in 2017.”
Figure 3: Self-employment as a proportion of new jobs (Source: TUC).
The situation in the UK is only one part of a larger, global stagnation problem, that in fact began before the 2008 Financial Crisis. According to Foster and Magdoff, “the total cash available to corporations, just ‘sitting in the till’ at the end of 2005 was, according to Barron’s, a record $2 trillion” (Great Financial Crisis, p. 37).
For Ursula Huws (Labor in the Global Digital Economy: The Cybertariat Comes of Age [New York: Monthly Review Pres, 2014]) the 2008 Financial Crisis merely coincided with a crisis of profitability for international capital that was already undergoing massive restructuring.
While 2007 “represented a peal in global investment flows”, the number of ‘green-field FDI projects’—a type of foreign direct investment (FDI) in which a company builds its operations in a foreign country from the ground up—“actually decreased” by 6% to 11,703 in the year.
This indicates that though the process of concentration was accelerating, there was actually a slowdown in the generation of new production.
In other words, the largest transnational corporations (TNCs) were sustaining their profits not so much as a result of new production but through the cannibalisation of pre-existing production capacity. Without some new source of commodities from which to generate surplus value, the preconditions were in place for a decline in profitability.” (Huws, p. 120)
As argued in previous instalments, the marketisation of English higher education is driven by these macro-economic changes.
Opening up the accumulated public wealth contained in some of the world’s best universities to private capital is one short-term solution to this crisis of profitability.
Forcing those universities that do retain their public function and ‘quasi-public’ status to perform R&D for corporate capitalism is another.
Sausage factories
Scene in the sausage room at the P & M Packing Company. Source: U.S. National Archives & Records Administration.
The (Conservative) UK Government’s 2017 Industrial Strategy—which, among other things, has a whole section on universities and knowledge exchange, announcing the introduction of the KEF and the increase of impact weighting in the REF to 25%—is an astonishing document.
In the section ‘Ideas’, it admits to four fundamental challenges facing the British economy that seem to come straight out of, and confirm, monopoly capitalism theory.
The first, arguably most serious, challenge is that “neither the government nor the private sector is investing enough in R&D.”
The following diagram included in the document shows nicely the problem with ‘innovation’:
“Over half of UK firms are innovating,” Industrial Strategy: Building a Britain fit for the future, UK (conservative) Government white paper, p. 60.
Although the graph is meant to show that the UK is innovating well, when the figures contained in the graph are actually broken down, it shows, if anything, the kind of serious lack of innovation that monopoly capitalism theorists see as a sign of stagnation.
For a start, the headline claim is that only half of UK firms are innovating. Furthermore, of all the types of investment illustrated by the graph, only one can be characterised as the kind of investment that actually adds something: the introduction of new products.
And even then, for monopoly producers, a large part of this 36% will mean line extensions or rebranding/repackaging of an existing products rather than genuine innovation. In other words, a percentage of a third of a half of firms in the UK are innovating.
For the Conservatives, R&D is the solution to the UK’s underperforming—or stagnating—economy, exacerbated and extended by austerity.
We need more “lively and thriving start-ups” and publicly-subsidised universities “need to do more to ensure that [this R&D] translates into improvements in earning power.”
Part of the problem, the manifesto admits, is that the UK economy is “dominated by services”—which by definition don’t produce anything—and what little R&D exists is “concentrated in a small number of big businesses and in a small number of sectors such as pharmaceuticals, motor vehicles and technology.
This is as clear acknowledgement of the oligopolistic nature of global capitalism as you will get from a neoliberal tract like the Industrial Strategy. “Indeed, just over three quarters of private R&D investment in the UK is driven by 400 businesses.”
What the Conservatives can’t admit is that no amount of R&D will do anything to address wage stagnation, which is not the direct result of low productivity but of the weakness of collective bargaining in the UK.
Strong unions—not hamstrung by repressive laws like the Trade Union Act 2016—and full employment are the drivers of wage growth, while wages are actively undermined by the growth of precarious work and self-employment.
The second challenge has already been mentioned: private companies and universities need to do more to commercialise R&D: “our world class science and research does not always feed through to world-leading home-grown businesses.”
Again, the impact of monopoly capitalism is indirectly acknowledged: when ideas are developed they are “bought by businesses overseas”:
We are good at low-cost innovation and flexible start-ups but the long and patient process of getting a new technology to market is difficult. As a result many of our innovative businesses are nimble, flexible and imaginative but do not grow to be substantial, big or strong. There are exceptions, but in general British businesses’ R&D tends to favour quick routes to market, rather than long development times, and selling businesses to growing them.
The point about monopoly capitalism theory isn’t that competition doesn’t exist or that there aren’t any small or medium sized businesses (SMEs) with competitive advantage. The point is that these businesses and their practices do not represent the norm.
Furthermore, while these ‘innovative, nimble, flexible and imaginative’ start-ups and SMEs may grow fast and disrupt existing markets, as soon as they are established and clearly profitable, monopoly interests usually swoop in and buy them out.
The third challenge, according to the Conservatives, is the London-centric nature of the UK economy. This challenge is barely addressed, with the strategy proposing some undeveloped and woolly ideas about regional “ecosystems” and “clusters” as potential solutions.
However, the Conservatives have been over the last few years pushing ahead with their devolution agenda, which does not refer to the devolution of some budgetary and policy areas (for example, higher education funding) to Scotland, Wales and Northern Ireland, but to the creation of regional ‘combined authorities’ (CAs).
As Richard Hatcher argues, business leaders sit directly on the boards and committees of these CAs, rather than merely advising local government as has been the case with the Local Enterprise Partnerships (LEPs).
Additionally, the political function of the CAs is to defer responsibility for austerity onto regional authorities, with the elected Mayors becoming distractions from the real source: central government. By asking local people to vote for a leader of something they know little about, due to the obscurantism of devolved governance structure, the blame as always lands with ordinary people.
The fourth and final challenge is the one most directly relevant to universities: how to square the circle of international competition and the collaboration that is a necessary part of the idea of the ‘community of the competent’ that John Dewey argued was the basis of academic freedom, and therefore the academic profession.
It is this contradiction that held back earlier reformers like Margaret Thatcher: what happens to knowledge and education when they are instrumentally directed to narrowly economic ends?
Again, this question goes right to the heart of the capitalist model of production. As Karl Marx explained, the extraction of surplus involves at its most basic level a conversion of quality into quantity: of labour into labour-power, of use into exchange, of the individual into the mass.
But as Marx also pointed out, the annoying fact for capitalists remains: real people have real needs that must be met for commodities to keep circulating, profit to be extracted and the system to retain its legitimacy.
Higher education is no different. It’s primary functions are education and research, the further it strays from these activities in the pursuit of economic objectives, or ‘nudged’ towards them, the more its ‘quality’ is undermined.