I was reading a
piece over at Salon about online journalism - an excerpt from a book (which I haven't read in full), “Digital Disconnect: How Capitalism Is Turning the Internet Against Democracy” by Robert W. McChesney. . The final paragraph drew a parallel to education that really just said it all:
There is probably no better evidence that journalism is a public good than the fact that none of America’s financial geniuses can figure out how to make money off it. The comparison to education is striking. When managers apply market logic to schools, it fails, because education is a cooperative public service, not a business. Corporatized schools throw underachieving, hard-to-teach kids overboard, discontinue expensive programs, bombard students with endless tests, and then attack teacher salaries and unions as the main impediment to “success.” No one has ever made profits doing quality education — for-profit education companies seize public funds and make their money by not teaching. In digital news, the same dynamic is producing the same results, and leads to the same conclusion.
Oy!
I was reading a piece over at Salon about online journalism - an excerpt from a book (which I haven't read in full), “Digital Disconnect: How Capitalism Is Turning the Internet Against Democracy” by Robert W. McChesney. . The final paragraph drew a parallel to education that really just said it all:
Another irony here is that in the absence of quality education, profits will eventually dry up. Corporate America has been so successful in dumbing us down, they're starting to complain about how their new recruits "can't think outside the box."
ReplyDeleteJust read an article in the Crampicle about this EXACT issue. Employers blame colleges, colleges blame employers, meanwhile the profiteers are busy lining our handbasket en route to Hades. SIGH.
DeleteThe problem with the customer model for university credentials is that it has the same conflict of interest we had with thesecurities rating agencies being paid by the securities there were supposed to be impartially rating (and look how well that worked out).
DeleteIf the customer is the one getting the credential, and the customer is always right, then the credential quickly becomes worthless.
NPR had something similar recently. I'll try to find and post.
DeleteOy!, indeed.
ReplyDeleteMcChesney!!! :)
ReplyDeleteThe author is incorrect - you can make a profit by providing a quality education. You probably get a quality education at Harvard. They are a non-profit school but still manage to keep a few billion in their growing endowment. They get to that point, in part, by making wise business decisions in the same way that a private company would. The only difference is that the company has to make more of those decisions in order to turn a profit (in part because they are not tax-exempt, as a non-profit is). Regardless, Harvard's endowment is not a profit only if defined in a legalistic sense. They accumulate more money than they begin with each year because they provide a quality education.
ReplyDeleteHarvard manages its endowment so that it grows, but do you know where much of that money came from in the first place? It came from donations, money given by alumni and other donors who wished to recognize the quality of the institution, and who also wanted to get a sense of contributing to the university's mission. And much of Harvard's massive current endowment comes not from its core business, but from high returns on its endowment investments during a period of massive growth in the stock market. Not exactly a result of the university's core business--sorry, mission--of education.
DeleteAnd your point about Harvard's tax-exempt status actually supports McChesney's argument. One of the reasons that Harvard's endowment has been able to grow as it has is that the university doesn't have to pay the same sorts of taxes as for-profit businesses, neither on its stockmarket profits nor on its other assets.
For many old universities located in large, expensive cities, one of their main assets is real estate, and in most cases they don't have to pay the large property taxes that their extremely valuable land would otherwise attract if they were a for-profit company. Harvard pays Boston about $2 million a year in lieu of property taxes; if it paid property taxes at the rate that everyone else in Boston does (businesses, homeowners, etc.), it would have to pay about ten times that amount.
And all that is fine. Society has decided, for good reasons, to forgo certain tax revenue streams from non-profit institutions like universities. But that means that, in a very real sense, society subsidizes even expensive private institutions like Harvard. If the university makes a "profit", it does so precisely because society values education as a social good, and is willing to give up tax revenue to support it, and because people who benefited from a Harvard education recognize the university's social purpose, and hand over large donations to help it continue its work.
Harvard itself, like many wealthy, private educational institutions, recognizes that market forces work differently in education. The people who run the university understand that, if they treated it like a business and accepted only "customers" who could afford to pay, they would end up with rich but not necessarily the best students. So they admit students without regard for ability to pay, and make sure that those who meet the intellectual requirements, but who are poor, are subsidized or given a free ride.
But because turning a profit isn't Harvard's primary goal, doesn't that make it a non-profit?
ReplyDeleteYes, most private and state universities are non-profit but that doesn't mean they don't care about money. Providing an education and maintaining a growing endowment go hand in hand. For-profit businesses have the same view. For the most part, you can't run a profitable business without having some non-financial goal, like providing a service or product that people are willing to pay for. Universities do the same thing.
DeleteI guess what I'm getting at is that the non-profit/for-profit distinction is somewhat arbitrary and not a useful way to differentiate good schools from bad. The motives of for-profit and non-profit schools are often the same. Our current for-profit schools fill a niche and it may be the only niche they can expand into at this time, given the enormous start-up costs of running a decent university. Other state schools do just as poor of a job as the more notorious for-profits but don't face the same criticism, which I think is unfair.
From this perspective (which is an interesting and illuminating one, I think), most churches (not just predatory ones) also make a profit, in the sense that they bring in money, in the form of voluntary donations, above and beyond what is necessary to provide the "products" they offer (worship services, education, other programming, attention and guidance from pastors and other staff, etc.). In our church, that money mostly goes out again, in the form of charitable donations, but it's part of our budget (and, as I discovered lately when we had a consultant in to talk about change in the church, churches, like many institutions, are characterized more by the size of their budgets than by the number of people in the pews). We also have the equivalent of an endowment: a separate foundation which receives contributions, sometimes from the living, but often from, or in memory of, the recently dead.
DeleteSo, yes, there's a mission, and a group of people who wish to contribute to that mission (and, at least in the case of my denomination, get a significant voice in shaping that mission, especially if they're willing to contribute time and/or money; one of the signs of health in my own congregation, I think, is that you'll get far more clout by investing time and hard, cooperate work than throwing money around), and contributing money is one way to be part of the mission. I'm not a particularly loyal alum of either of the very well-endowed universities I attended, but I have given both money and time (and tend to give more money when I'm giving more time), and my father (a more typical example of such alums, I suspect) has given substantially in both time and money (relative to his means) to his own alma mater. And, among other things, the very large endowments that result allow these schools to offer need-blind admissions, which, interestingly, may benefit the middle class -- and especially the children of alums, who seem more likely than most people to realize just how generous the subsidies are -- as much or more than the poor, but definitely perpetuates the "brand," and loyalty thereto. It's an interesting, self-perpetuating, cycle -- most a virtuous one, I think, but there are some definite downsides (chiefly perpetuation of elites that tend to be related to each other).
According to a story I heard on NPR the other day, the best way to make money in medicine these days is not to become a doctor, but to become a mid-level or higher executive in a pharmaceutical or medical equipment company (I suspect medical insurance execs do pretty well, too). And the money in higher (and lower) ed is in administration, not teaching (or hands-on research). Anybody see a trend here?
ReplyDelete