Bologna, or The capitalization of education

At the end of 2009, German students once again took to the streets and occupied their universities in protest at current study conditions. At core, the protests were aimed at the massive changes in the organization of higher education introduced by the Bologna Process. And rightly so. It is by no means mere “technical mistakes” that are to blame for the difficulties in “implementing” the university reforms, as the German minister for education, Annette Schavan, has claimed. Quite the opposite: this argument shifts the responsibility for the current crisis from politics to the university, while avoiding a discussion of the underlying problems.

In Germany, the Bologna Process signifies a cultural revolution. It completes a fundamental transformation, one that has long been underway, in how education and employment is provided – and finally overcomes opposition to this transformation, albeit not among the students.

The “Bologna Process for the Creation of a European Higher Education Area” is supposed to open up national education systems to the process of European integration. However the restructuring it has initiated does not only consist in the formal standardization of university degrees: the result of Bologna is an increasing stratification and hierarchization of national educational institutions. The transnational integration of the national education systems is accompanied by national disintegration. That, in a nutshell, is what makes the entire process so controversial.

The battle for prestige: How markets mediate between education and employment

Under the new conditions, education no longer tends to be designed as a collective social good (by academic and professional associations) and is instead traded as an individual good and a commodity on the global education market. In the new academic capitalism, everything revolves around the profits brought by investments in human capital. The battle for educational prestige becomes more acute and drives up the cost of education. The only ones able to succeed in such a system are those who, thanks to wealthy parents, got a head start in kindergarten, primary and secondary school. One just needs to look at the US and the UK to observe this.

Free markets replace professional structures as the intermediary between education and employment. This creates deep insecurities. In Germany there exists a developed tradition whereby education (academic title) is closely connected with employment (professional position). Underpinning this system are fixed professional identities formed by the Fachgesellschaften (field-specific associations of e.g. chemists or physicists) or by the Berufsverbände (professional associations of e.g. doctors, lawyers, architects, engineers or teachers) appointed by the state for the task. These professional identities tie courses and qualifications (state exams, diplomas) to job descriptions in professional praxis.

The new BA courses cannot do this. They provide only basic competencies, releasing graduates onto a job market that, because it lacks clear job profiles, is far less prepared for them. This means that whatever one has learned on a BA course needs more than ever to be supplemented with additional qualities of self-presentation and self-marketing and through so-called life-long learning.1

Because one can longer impress employers with one’s professional profile, more must be invested in one’s personal profile: periods spent abroad, social competence, confident manner, eloquence, not to mention the prestige value of one’s academic title. As the prestige value of an academic title becomes more important than its purely objective value, what will become important in the future is not so much which academic title one has earned than which university has awarded it.

A battle for prestige is developing that leads to a progressive increase in the cost of academic titles. This can be observed particularly vividly in the US, where university tuition fees have skyrocketed: there, a four-year BA course can cost anything between 40 000 and 180 000 dollars. Like in the football Champions League, the educational establishments with the most prestige and the most consistent success on the education market are the ones with the most capital behind them. They join alliances of European elite establishments whose academic luxury sets them apart from the mass of other universities, thereby widening their lead ever further.

Rapid change at the expense of students

This dramatic change in the universities brings significant problems associated with the transition. Those who defend the old professional world and its monopoly on knowledge – the university professors and associations – have squeezed as much as possible from the old diploma courses into the new BA courses. As a result, BAs are full to bursting and many students overstretched. This can be seen from the student dropout rate, which in part is even higher than before.

In the effort to control everything, students are subordinated to an examination machinery that rewards survival strategies yet fails to elicit creative minds capable of thinking independently. Moreover, the ratio of tutor to student remains far from one that would allow genuine supervision. That is one of the main reasons for the student protests.

A crucial role is nowadays played by the accreditation agencies – a role that will increase in the future. The agencies issue the “stamp of quality” to courses leading to BA or MA qualifications on behalf of the accreditation councils. The aim in the medium term is to ensure on the one hand that courses can be studied, and on the other hand that they serve the demand of the market.

However by reducing courses to whether or not they can be studied, the BA will at best become an all-round qualification that enables its holder to work at a mid-level position on a mid-level income. Anyone who wants to achieve more must go on to obtain a Masters degree. This will mean that places on Masters courses, of which there are far too few, will be fought over even more fiercely than they are today. In the long term it is likely only around 20 per cent of BA graduates will receive a place on a MA course. That is how it looks in other countries, for example the US.2

The “mistakes” made in the enlargement of the universities in the 1970s are thus being painfully “corrected”. Instead of expanding the technical colleges to account for 70 per cent of all students, which would have been realistic and more successful in practical terms, preference was given to expanding the universities by the same amount. This development is completed with the eight year secondary school, all that needs to said about which is that it no longer concludes with the old Abitur. The BA acts as a further qualification for mid-range occupations on a mass level, and only in the top percentile for continuing academic study at the MA and Ph.D. levels.

The BA is basically a mix of the top-class at a Gymnasium (secondary school for academically-inclined pupils – trans.) and what used to be the first year of university. That it nevertheless claims the large part of teaching activity of university staff means a significant loss of status for the mass of university tutors, while those tutors who are able to concentrate mainly on their doctoral students gain status. The lowering of the state wage for university staff that at the same time permits a supplementary income is already adjusted to this.

Education as commodity: The new power of the market

The crucial question is now what structure the accreditation agencies can bring to the new market for university courses, now that the monopoly on knowledge and professions once held by the associations has come to an end. The accreditation agencies are often seen as replacing governmental and legal control of university courses, and thus as offering universities and the academic disciplines more autonomy. This is incorrect, however.

In reality, the associations have until now played the leading role in governmental control, namely through their design on behalf of the state of the examinations system (Rahmenprüfungsordnung). Governmental control provided university courses with legal protection against extra-academic demands from the commercial sector. The basis for this was Alexander von Humboldt’s organizational model for the University of Berlin (and later for all German universities) founded in 1810. Governmental protection of academia against the commercial demands of the economy and public administration remained in place for almost 200 years. However the handover of control to the accreditation agencies is a crucial step towards discarding this protection. Without governmental protection, universities will for the first time be exposed to purely economic demands on the education market.

It will depend on whether the academic associations manage to impose their interests upon the accreditation agencies as they were able to do with the government. On first reflection, one might suppose that this will happen: the accreditation of university courses takes the form of peer review and the associations have representatives in the accreditation councils. However the associations’ connection to the accreditation councils is much looser than it was to the commissions that used to design the examinations system, which as a rule were staffed by the associations themselves. The staff of the much more numerous accreditation councils are selected independently by the accreditation agencies, meaning that there is no direct loyalty to the academic associations. More crucial still is the accreditation commissions’ focus on how readily universities courses can be studied and whether they are geared towards demand. This focus clearly indicates an end to the previous fixation on academic quality.

The logic of accreditation optimises supply twice over: supply for the primary demand of the students and for the secondary demand of the employer. The weight has now shifted significantly to the demand side. This also means that university courses and academic titles lose their character as collective goods conceived as being beneficial to society as a whole and instead take on the character of individual goods the value of which is determined by instrumental considerations (regarding supply and demand). As a tradable commodity, the quality of education can be determined solely in terms the benefits it offers to the supply and demand sides.3

If they are to survive on the market, university courses must be marketed strategically, all the way up to offering extensive services as employment agencies. The result is that advertising and PR assumes a scale that obscures the actual contents of the course. While courses might be very similar in terms of their content, the ways they are promoted vary greatly – and hence what they cost. In order to rank well in the inevitable league tables for placing graduates, a new department needs to be created to keep the records. In the system of total surveillance, nothing remains unsupervised.4 This comes at a cost.

Marketing instead of expertise

In terms of the content of university courses, genuine differences can only be generated with difficulty, since knowledge as a global common good is now available more or less to the same extent everywhere: a run-of-the-mill professor that takes care of his or her students can communicate a great deal more knowledge than a busy Nobel Prize winner. This means that profit-oriented university-cum-businesses must invest a great deal in supervision ratios and in the marketing and presentation of their courses and services, in order to be able to demand higher fees. This is only possible by lavish investment in infrastructure, be it in equipment, in the library or in faculty staff. This is how a premium segment of extremely expensive university courses sets itself apart from the mass products belonging to the medium price-range and the cheap products in the lowest price-range. In the US, BA certificates are available from the rich, private universities in the premium segment, from state universities in the medium price segment, and from community colleges in the lowest segment. Once education has been reduced to a marketable commodity, the luxury of the product is determined in the first instance by the prestige value of the academic title, which in turn determines the money that can be charged for that product. Education thus mutates from a collective good brokered by the state into a good whose value is taken on trust, and ultimately into a prestige object whose value is determined by its degree of exclusivity.

The exclusivity of an academic title in turn depends on how selective the admissions procedure for the course is. The more the number of applicants exceeds the number of admissions, the more selective a course of study is and the higher its prestige value is deemed to be. Universities that act as businesses must do everything they can to attract as many applicants as possible. In this game, education becomes a crucial resource of capital accumulation in the competition between universities-cum-businesses. Education becomes human capital invested in so as to extract profit.5

Education as auction

As an important growth industry, education attracts more and more investment. The unique thing about this growth market is that, in the absence any way of ascertaining the real value of an educational product, it is the prestige value of the academic title that determines investment and profit. This leads to a race to outbid competitors for exclusivity. Exclusivity can only be achieved via academic luxury, in other words with expensive research facilities, well-stocked libraries, the best supervision ratios between students and prize-winning academics, luxurious leisure facilities from swimming pools to concert halls, and of course with an impressive campus. Alone a comparison of campuses reveals the huge difference between the luxury establishments in the USA, some with assets of up to 36 billion dollars before the financial crisis, and German universities, which inevitably resemble prefabricated socialist architecture. The loudly trumpeted German “Excellence Initiative” can do absolutely nothing to alter this.

It is obvious that academic capitalism gives rise to new monopolies. These replace the academic associations’ monopoly over knowledge and the professional associations’ monopoly over the professions. Today’s monopolists are the elite providers of expensive and prestigious academic titles in the premium segment. Their titles provide access to the top jobs in the economy, politics and administration. In short: the battle for prestige in the new academic capitalism can only be won with money. This goes for large investors (the state, the economy) exactly as it does for small investors (students); their common quest for excellence is in reality a quest for “prestige”.

The new education market hence becomes just as closed as were the monopolies of the academic and professional association in Germany up to now. Yet whereas the associations in the old federal-pluralistic German university system were integrated into the state, and subsisted on a relatively equally distributed funding without tuition fees, the monopoly of academic capitalism is very different. Its range has become global. Elite universities must use their wealth to distinguish themselves from the mass of universities in the middle segment, charging exorbitant fees for prestige reasons alone. On top of this they constantly increase their capital stock via fundraising, investment from industry and income generated by patents.6

In the global battle for academic prestige, ever larger sums of capital must be invested in the most prestigious universities in the premium segment – not for objective reasons but for symbolic ones. Because the mass of universities in the middle segment take their lead from the universities in the premium segment, they also need to increase investments so as not to fall behind yet further. The result is a permanent competition to outbid the other, and this has to be financed by increasing levels of debt. Calculated conservatively, the cost of a place at Harvard University already exceeds that of a place at the Ludwig Maximilian University in Munich ten times over. Harvard, as the leader of the international educational race to the top, forces competitors to permanently re-arm, requiring ever higher investments for academic titles whose real value is identical.

“Strong” universities, weak state

Of course, it is much easier to mobilize the required capital in a country with low tax rates than in countries with higher rates where the state still bears greater responsibility for shaping society and where less is left to the free-play of forces.7 Nevertheless, in Europe too there are now pioneers pushing forwards and showing other universities what needs to be done in order to belong to the exclusive club of world-class universities. In the German-speaking space, the Swiss Federal Institute of Technology (Eidgenossische Technische Hochshule/ETH) in Zürich is considered to be a leader. In the course of the abolition of disciplinary identities, the Dr. Ing. title was absorbed into the general title Cr. Sc. ETH. This sends out a clear signal that the university no longer considers it desirable to share an engineer as a public good with other Swiss universities, and instead wants to market a unique product. The investment it demands for this can be inferred from the staff statistics. For the professors alone there is a supervision ratio of 1:39. For the academic staff as a whole, also including those not involved primarily in teaching, there is a supervision ratio of 1:2.5.8 In a European comparison, those are very favourable supervision ratios. However at an American university of comparative standing, for example the Massachusetts Institute of Technology (MIT), the supervision ratios are even higher: around 1:10 for professors and 1:1 for the entire staff.9 Compared to the ETH, let alone the MIT, the ratios at the Technical University in Munich are considerably lower: 1:64 and 1:6 respectively.10 In the international competition, the American universities set the mark. That means that if European universities want to keep up they must invest more in supervision ratios.

Given the scarcity of public finances in Germany, the only way to catch up would be to involve large numbers of staff employed at non-university research establishments in teaching. The more universities enter the competition, the more they will try to supplement their capital with sponsorship money and by increasing tuition fees. That in turn makes studying in the premium segment increasingly expensive, for students too, as one can clearly observe in the US.

How sustainable is academic capitalism?

Reasons for America’s exceedingly high levels of national and foreign debt can to a large extent be traced back to the commercialisation of education. Most Americans rack up debt not through unnecessary holidays but because of the huge costs involved in educating their children. Just as the financial and economic crisis that followed in the wake of the subprime crisis has raised doubts worldwide about a capitalism based on permanent outbidding, so there is good reason to question the sustainability of an education system that subscribes entirely to an academic capitalism based on the very same principle. This is all the more the case for the late imitation of academic capitalism with means that are anyway in short supply. If Germany does go down this track, then what the German chancellor has called the Bildungsrepublik (republic of education) will surely find itself down a blind alley.