University Inc.

The pernicious effects of corporate influence.

By Virginia Myers

University Inc image, On Campus 2015The president is a CEO. The strategic plan bristles with marketing schemes and business partnerships. Corporations are installing offices and think tanks on campus, staffing them with administrators who have never heard of John Milton, that icon of academe, but are enthralled with that other Milton, free market economist Milton Friedman.  

Welcome to University Inc. On campuses originally designed as havens for learning, the pursuit of knowledge and the exploration of higher truth, the air is now thick with corporate influence and its companion, a thirst for profit. It’s not just an integration of practical job skills and headier concepts from Philosophy 101—it’s a corporate takeover.

This is not new: It was 2005 when Jennifer Washburn published her book University Inc., an overview of cozy university-business relationships that reached back to the 1990s, when the University of California, San Francisco and Boots Pharmaceuticals delayed the publication of research on thyroid medication, and Novartis-Syngenta tried to bury research at the University of California, Berkeley on the herbicide atrazine and sexual abnormality in frogs. Washburn highlighted pro-Enron studies produced by Enron-funded professors at the Harvard Business School, and the patenting of a human gene discovered at a public university so that a private company could profit.  

But the trend has accelerated, with privatization of K-12 schools and the pernicious influence of big money—like Charles and David Koch—an increasingly common and ubiquitous presence on campus. Where university faculty and staff once stumbled over words like branding and marketing, we now accept them as part of the educational landscape. Professors market their courses with online videos meant to charm potential students into enrolling—because in some places, professors get paid more if they fill more seats in class. Some people call that bean counting.

Why does it matter? Well, you try teaching an overenrolled classroom, stuffed to the gills because the university can make more money per class if you just put a few more chairs in the back. Or try to publish research that could harm the company for which that new student center is named. Want to sit on the hiring committee for the next biology professor? Sorry, that seat’s taken by the folks who are funding the chair. 

Ka-ching! Education has become a $1 trillion business, according to the Education Industry Association, the aptly named “professional” organization that helps “education entrepreneurs” find “potential customers” and “form strategic business partnerships, gain business skills, acquire industry data and understand/influence public policies.” The description is from EIA’s website, which is  heavy on business jargon and notably short on equity and access to education.

Start it up

At the State University of New York, businesses are literally moving in. The SUNY Tax-Free Areas to Revitalize and Transform Upstate New York (START-UP NY) invites businesses to relocate onto state-funded public university grounds, and gives them a free pass on taxes for 10 years if they do. The idea is to increase industry-sponsored research and enrich student experience, but it could come at great cost: The private enterprises are not necessarily aligned with the academic mission of the university and may compete with existing programs. They could siphon off already limited campus resources, including maintenance and support services. There is no guarantee that once the tax break disappears, the companies will stick around to fulfill whatever programming they’ve begun. 

The United University Professions, which represents faculty and staff at SUNY, is also concerned that criteria for participation is vague and that the impact on curriculum and academic workload is unpredictable. As the program rolls out, some businesses are planning to participate in curriculum development and expansion; others look forward to using existing support services, an incentive offered by some schools. “We have examples of business proposals that do not bode well for students or our members,” says UUP Secretary Eileen Landy. At SUNY Cobleskill, for example, Landy says the business plan states businesses and faculty will “design and implement student research and/or class projects.” 

“We’re not sure if faculty are guaranteed a real say in any of this, or if services typically provided by SUNY employees will shift to private businesses,” she says. “We want answers.”

UUP is using the Freedom of Information Act to request copies of every business application submitted to campuses, and is urging members to question campus leadership on issues such as the role academic and professional employees will play before and after plans are finalized; whether businesses are required to conduct impact studies to measure potential strain on campus resources; how work performed by businesses similar in scope compares with work done by public employees; and the number and types of jobs created.

“UUP isn’t going to blindly follow the governor or chancellor down a path that jeopardizes the public university, our members, or the patients and students we serve,” says Frederick Kowal, president of UUP, who has spoken passionately and frequently about the issue. “We’re going to do our research to ensure START-UP NY is a true benefit to the public.”

All Koched up

Of course, not all business-education partnerships are bad. Universities can benefit from philanthropy, and corporations, with all their resources, are a logical source. But the degree to which universities have turned to the corporate world is turning our public campuses into privately funded endeavors. 

Of particular note are Charles and David Koch, billionaire brothers known for their right-wing politics, aggressive stance on privatization and corporate interests. Koch companies are involved in a vast array of industries, including fuel, building and consumer products, electronic connectors, fibers and fertilizers. Also, their involvement with the American Legislative Exchange Council (known as ALEC), a corporate advocacy group wielding vast influence over state legislation, has been widely reported.

These two are also infamous for their stance on the environment. They give millions to organizations that fight environmental regulation and want to limit taxes on industry. The Justice Department nailed Koch Industries in a suit claiming it was responsible for more than 300 oil spills and 3 million gallons of oil spilled into lakes and rivers; Koch paid a $30 million civil fine. Koch Industries was also found guilty of negligence and malice in the deaths of two teens after an explosion from a leaky butane pipeline. And Koch Petroleum Group pled guilty to covering up environmental violations involving 91 tons of carcinogenic benzene discharged from one of its refineries.

Their attention to higher education is troubling, at the very least. Charles Koch, in describing how to advance the cause of free market capitalism (understood to be an unfettered, profit-first endeavor), once suggested four avenues: education, media, legal challenge and political action. “I do maintain that the educational route is the most vital and most neglected,” he said.

That was in 1974, and the age of neglect is over. In just five years, between 2005 and 2013, the Koch brothers spent at least $68 million on college and university campuses, paying for faculty, research and publications. The nonprofit activists at UnKoch My Campus currently list 398 institutions that have accepted Koch money, and their online database continues to reveal Koch influence on campuses across the country. George Mason University, a public university in Virginia, leads the list: It has accepted $34.6 million from Koch. At a preconference workshop preceding the AFT/NEA National Higher Education Conference this March, AFT and NEA members used the online database to look up their own universities and discover their own Koch money. Among some of the larger donations: $1.7 million at West Virginia University, $187,900 at San Jose State University and $92,230 at Michigan State University.

Florida State University has one of the most compelling stories. When a faculty member heard—through bridge game conversation—about Koch investment on campus, the effort to uncover any possible influence began. Emails and other public records (described in the Tampa Bay Times and by Dave Levinthal at the Center for Public Integrity) revealed  an agreement between FSU and the Charles G. Koch Charitable Foundation that stipulated that, in return for a sizeable donation to the school’s economics department, Koch would appoint the advisory committee that would select professors. Koch also wanted to conduct annual evaluations. 

“There is no free lunch,” noted faculty member Bob Benson in an email to other faculty. If the department was not willing to restrict hiring to Koch-approved faculty, Benson said, Koch would not fund them. According to UnKoch My Campus, Koch offered to pay Benson an additional $100,000 to stay on as chair of the department of economics so that he could secure the Koch contract and presumably represent their interests. Koch also paid a graduate assistant, Matthew Brown, $500,000; Brown was instrumental in crafting the Memorandum of Understanding that outlined Koch’s agreement (see “Koch Case Study” on page 6 for more). 

Samantha Parsons, a student at George Mason University, was surprised to find so much Koch money at her school. But it wasn’t just money: Charles Koch is on the board of directors for the school’s Mercatus Center, which receives $10 million, and he is the chair at GMU’s Institute for Humane Studies, funded at $18 million.  

Alerted by faculty, GMU students mobilized and began looking into the influence Koch might be exercising, but they got nowhere. “When we were denied access to our contracts with the Charles Koch Foundation, we became outraged,” says Parsons. “Although GMU is a public university, we have a private 501(c)(3) established called the GMU Foundation that accepts all private donations. This makes all records, contracts, grant agreements, etc. private; no one affiliated with the university can access it.” The students thought this was “absurd” and started to campaign for transparency—thus far, unsuccessfully. 

“We cannot say what exactly the Kochs want in return for the funding because our administration refuses to disclose grant agreements/MOUs,” says Parsons. But she and other students have put two and two together. “Considering GMU continues to get a great deal of funding year after year, and the faculty in our economics department are often affiliated with other Koch-funded think tanks, curriculum focuses on free market economics, and much of the research produced by the Mercatus Center is focused on deregulation and supports industry interests, we can assume (and connect the dots) that GMU is obviously giving Koch something they appreciate,” says Parsons. “It is as if our university’s name and prestige is being used to push forth ideology and research that benefits the corporations that are funding it, which I believe is a significant conflict of interest.”

Transparency has heated up the fight at the University of Kansas as well, where students filed a Kansas Open Records Act request to find out whether there are strings attached to the $1.4 million the Kochs have donated to their school. The money helped establish the KU Center for Applied Economics. Its founding executive director, Art Hall, was chief economist for the Koch Companies Public Sector, a lobbying subsidiary of Koch Industries. Critics contend that Hall continues to lobby, but now under the guise of academia.

KU charged the students $1,800 to obtain the records they wanted, and now they are stalled, because Hall has sued the university to prevent it from releasing the information.. He says the effort represents a violation of his academic freedom. 

Staff at UnKoch My Campus say this lack of transparency is part of the Kochs’ modus operandi: The organization cloaks its strategy in the respect usually reserved for academics and think tanks, “helping” them publish research that supports pro-corporate, free market ideology. At the same time, it hides behind a screen of privacy. 

“When Charles Koch finances the very idea of ‘economic freedom’ and then bankrolls university departments to teach the concept to its students, he is doing so at the expense of another crucial freedom: academic freedom,” states UnKoch My Campus on its website.

Job factories or institutions of higher learning?

Performance-based funding is another threat to academia, and it is especially evident in the governor of New York’s proposed budget. In that proposal, 10 percent of campus funding would be withheld until campuses create performance improvement plans that include experiential learning as a graduation requirement and a bonus for campus presidents who participate in START-UP NY, among other undisclosed goals. It could make universities dependent on pleasing budget-making state policymakers who favor graduation rates and job readiness over academic rigor, the liberal arts and critical-thinking skills. Such an approach could threaten free-thinking academic inquiry,  close down programs that don’t “perform” by meeting “targeted occupations lists,” and even soften graduation requirements to artificially elevate graduation numbers. 

“This is an attack on our academic independence,” says UUP’s Kowal. “We are the ones who create the courses and set requirements for graduation. The governor offers no resources or guidance as to how this would work, especially with most liberal arts degrees.”

In Florida, performance-based funding has already punished New College of Florida, a small public liberal arts college in Sarasota. Its graduates include students who went abroad to study on scholarships at places like the University of Oxford; others joined the Peace Corps, and some took jobs outside the state. “Some people would consider studying at Oxford or joining the Peace Corps a success,” says Kowal. 

But according to the performance metrics, which are based on how quickly graduates are employed and how much money they make, these students were failures, and the school lost about $1 million in state funding as a result.  

In part because many liberal arts graduates experience a lag time of about 10 years before their salaries jump ahead of their peers, performance-based programs typically favor technical education. Departments that teach literature, philosophy and the arts lose faculty and funding while science, technology, engineering and mathematics programs thrive. When Florida Gov. Rick Scott famously framed anthropology as useless and suggested shifting state funding to fields more directly associated with the job market, he was just demonstrating the tip of the iceberg in the business of higher ed: If there is no return on the investment, why bother? 

Scott’s remarks prove why faculty members, not government policymakers, should decide academic direction and content. “There are entire worlds he needs to learn about before making these comments,” said Tom Auxter, president of United Faculty of Florida, in an article in Inside Higher Ed. “It’s not for the governor to say.”

The governor of Wisconsin has also tried to hijack the direction of higher education. Earlier this year, Gov. Scott Walker slipped language into his budget that would have stripped the University of Wisconsin’s core mission of the “search for truth” and the intent to “improve the human condition,” and changed it to a new goal: “to meet the state’s workforce needs.” Walker later claimed the effort was a drafting error, but his intent to prioritize job fulfillment is undeniable.

How much do you make?

Tracking graduates to see which degrees earn the highest salaries has become a popular state sport. The Georgetown University Center on Education and the Workforce has used census information to do this, but the new reports come from state-generated data. In Tennessee, a report produced jointly by College Measures and American Institutes for Research showed health professions graduates from the University of Memphis earned the most (nearly $60,000) and those with degrees in philosophy and religious studies from Austin Peay State University earned the least ($20,500). 

But the concept is seriously flawed. By tracking only the first year after graduation, the university misses the delayed monetary success common among liberal arts graduates. It also leaves out students who move out of state, those who are entrepreneurs or self-employed, and federal employees. And it does not consider choices like graduate school or public service, such as a stint in AmeriCorps, a “success.”

Noting that students care about whether their tuition money—and student debt—is buying them a place in the job market, the Chronicle of Higher Education quotes Mark Schneider, vice president of College Measures, which was responsible for the report: “This is consumer-driven. This is perfectly consistent with the needs of students.” Talk about business-speak.

All this focus on monetary success means programs that put the public good before profit are suffering. Last year, three centers in the University of North Carolina system were shut down: They studied the environment, voting rights and poverty. Critics charge that East Carolina University’s Center for Biodiversity, North Carolina Central University’s Institute for Civic Engagement and Social Change, and particularly the UNC School of Law’s Center on Poverty, Work and Opportunity in Chapel Hill, which was led by an outspoken critic of North Carolina’s Republican-controlled Legislature, were targeted by the conservative state government for closure. Not enough economic oomph in the concept of social justice?

“Maybe the goal is not to get a technical job the minute you get out of college,” argues Auxter, in Florida. Instead, he suggests, “the goal is for you to see the big picture, globally, to understand something about the world.” 

The concept that a college education is solely designed for the benefit of the individual graduate is flawed. But so, too, is the notion that it must build the state’s economy, or enhance the opportunities that economy affords to profit-driven corporations. The academic Terry Eagleton, in the Chronicle of Higher Education, suggests universities should maintain the traditionally established distance between themselves and society at large, “allowing them to reflect on the values, goals and interests of a social order too frenetically bound up in its own short-term practical pursuits to be capable of much self-criticism.” Regrettably, he notes, “institutions that produced Erasmus and John Milton, Einstein and Monty Python, capitulate to the hard-faced priorities of global capitalism.”

Eagleton is also dismayed at the co-opting of serious academic pursuit for more popular studies: “vampires rather than Victorians, sexuality rather than Shelley, fanzines rather than Foucault.” That notion extends to the grandiose attractions universities build to attract tuition dollars: luxurious dormitories, opulent athletic centers and food courts where toque-headed chefs carefully plate dishes of halibut with saffron beurre blanc. 

And when students are treated like customers in the classroom, professors are confronted with the demand for a return on tuition: good grades that may or may not have been earned. 

Faculty for sale: the exploitation of cheap labor

In a world of cost-benefit analyses, contingent faculty—those who are paid per course, with no contract beyond the current semester—have risen to the top—that is, the top of the list for cheap labor, with no benefits, few resources (like office space) and salaries at a fraction of what full-time faculty are paid. This is all great for the bottom line, but disastrous for academic freedom. Hired on a semester-to-semester contract, contingent faculty are often so fearful that their contracts will not be renewed that they avoid ruffling feathers among administrators, thus quashing the intellectual risk-taking that makes academia so rewarding for faculty as well as students.

Contingent labor is changing the very nature of higher education, from a stimulating, well-supported venue for healthy inquiry and exploration to a grinding and predictable training program, a “factory that mass produces college graduates,” as James Castiglione, former president of the Kean Federation of Teachers in New Jersey, describes it. Castiglione was commenting on a policy at Kean University that required professors to keep time sheets, which is anathema in a world that was once so far from that of the hourly worker. “The time sheets are effectively treating faculty not as … scholars, but as 19th-century factory workers,” he says. 

Let’s get back to the books—and we don’t mean accounting

There are so many pieces to the fight against corporatization that the effort can seem fragmented. But the point is unified: Remember, at its core, the mission of a university is to maintain academic integrity. Jobs are important, but if we lose our integrity, we might as well be a corporate training center—designed for profit, not for knowledge.

The fact remains, however, that running a university costs money, and much of the businesslike evolution in academia has been driven by want. Not enough money to hire a full-time tenure-track professor? Grab someone from the pool of contingents. Can’t pull from the endowment to pay for your research? Seek out a corporate donor. 

With state budgets shafting public universities, it’s no wonder colleges are turning to other sources for money. Half of the nation’s public colleges now receive less than half their revenue from state budgets. Rising tuition reflects the trend: In the last 15 years, tuition went from covering just 24.5 percent of the costs of public higher education, to covering 47.1 percent in 2014, according to the State Higher Education Executive Officers Association. Louisiana Gov. Bobby Jindal proposed cutting $141.3 million from his higher ed budget next year; Wisconsin’s Walker wants to slash $300 million over the next two years. One of the most effective things we can do to preserve academic integrity is to insist on public funding for public institutions. Unions must mobilize and convince legislators that this is a priority.

Union contracts can also be influential. The United Faculty of Florida’s current contract is very specific about protecting academic freedom for “a community of scholars engaged in the pursuit of truth and the communication of knowledge in an atmosphere of tolerance and freedom,” and also preserves faculty rights to define course content and engage “frankly and forthrightly” in scholarship and discussion. And at schools like Johns Hopkins University, faculty are creating statements of academic freedom with their administrators and students.

It is just one way that we bring back into focus our mission: to educate, not to profit.



Political parties, anti-public intellectual pundits, and mainstream news sources view the purpose of higher education largely as a workstation for training a global workforce and generating capital for the financial elite. … Under such circumstances, it becomes more difficult to reclaim a history in which the culture of business is not the culture of higher education.  Higher education ... once functioned as a crucial reminder of … the potential role it might play in attacking social problems and deepening the promise of a democracy to come. …  Today, it is fair to say that Dewey’s once vaunted claim that “democracy needs to be reborn in each generation, and education is its midwife” has been either willfully ignored, forgotten or has become an object of scorn.

Henry Giroux, professor of English and cultural studies, McMaster University,
and keynote speaker, 2015 AFT/NEA Higher Education Conference


The real issue is the corporatization of higher education. It’s not that the Kochs are pushing a specific ideology, it’s that this ideology—the idea of capital growth and profit—has taken the label of truth. Colleges are expected not to produce truth but to produce profit. We cannot hold [colleges] accountable to truth and look to them for truth if we’re going to require them to be accountable to anything else. Academic freedom is freedom from obligations to anything other than truth.

Schuyler Kraus, president of Students for a Sustainable Future at Kansas University


AFT On Campus, Summer 2015 Download PDF (2.18 MB)
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