Monday, August 10, 2015

The Cost-Cutting Approach to Higher Education (reposted)

(The Lafayette Journal and Courier (August 9, 2015) reported that Purdue University would seek a partner firm to establish “income share agreements,” allowing students to borrow from an investment pool for tuition in exchange for committing to pay a portion of annual earnings after graduation. Alternatively, presidential candidates Bernie Sanders and Hillary Clinton are proposing government programs to make college tuition at public universities free.
These latter proposals are similar to programs that helped stimulate American economic growth during the last half of the twentieth century. Rising college costs, expanding university administrations, reducing the range of educational priorities from well-rounded educations to narrow job-linked curricula, and using simplistic metrics to measure institutional success, are all part of a new “crisis” in higher education, My essay below recently addressed the “income share” proposal, the reasons for skyrocketing college indebtedness, and the ways in which the debt problem is being used to privatize higher education.  HT).

Harry Targ : The cost-cutting approach to higher education
By Harry Targ | The Rag Blog | March 25, 2015

WEST LAFAYETTE, Indiana — Purdue University President Mitch Daniels testified March 17, 2015, before a subcommittee of the House of Representatives Committee on Education and Workforce on what he calls higher education reform. He also spoke during that week to the American Council on Education and the Brookings Institute.

A centerpiece of his recommendations was “income share agreements” whereby students partner with investors, particularly alumni, who would provide funds for their education in exchange “for a small share of the student’s future income.”

Daniels was touting this idea in addition to new cost-saving policies at Purdue University, such as offering three-year degree programs, using different metrics rather than course hours to measure student preparation, and tuition freezes. He has also urged a reduction in costly federal regulations.

Although some of Daniels’ proposals and programs at his home university have merit, the conversation he and other administrators around the country are having about rising tuition and the accumulation of years of debt ignore the major reason why costs and tuition are rising. In addition to the cost of higher education attributable to increased faculty salaries, layers of new administrators, and the creation of new luxury amenities to attract students (housing, food, and recreational facilities), tuition has risen because state government financing of higher education has not kept pace with expenditures.

‘Funding cuts have led to both steep tuition increases and spending cuts that may diminish the quality of education.’

The Center for Budget and Policy Priorities issued a report on May 1, 2014 (“States Are Still Funding Higher Education Below Pre-Recession Levels”), which provides data to show that higher education funding remains below 2007-2008 pre-recession levels in 48 of 50 states. This means, according to CBPP, that “the large funding cuts have led to both steep tuition increases and spending cuts that may diminish the quality of education available to students at a time when a highly educated workforce is more crucial than ever to the nation’s economic future.”

CBPP reports that since 2007-2008 state spending on higher education is down 23 percent, or $2,026 per student. Tuition increases have been substantial in public colleges and universities from fiscal year 2008 to 2014, ranging from $253 in Montana to $4,493 in Arizona. In Indiana tuition increased by $1,191 during this period.

CBPP notes that in 1988 colleges and universities received 3.2 times more of their revenue from state and local governments than from students. That ratio declined to about 1.1 times more from government supports than tuition in 2013. Put another way the report states:

Nearly every state has shifted costs to students over the last 25 years — with the most drastic shift occurring since the onset of the recession… Today, tuition revenue now outweighs government funding for higher education in 23 states…

Not surprisingly, Daniels’ idea that students find a rich supporter in exchange for future student earnings came from proposals made by free market advocate Milton Friedman in the 1980s. Friedman, the University of Chicago economist, was the most significant descendent of so-called “free market” economists who believe as did President Reagan that “government was not the solution; government was the problem.”

The privatization of all education is on the agenda of wealthy conservatives such as the Koch brothers.

From the vantage point of 2015, the privatization of all education, including higher education, is on the agenda of wealthy conservatives such as the Koch brothers and the powerful state legislative lobbying organization, the American Legislative Exchange Council (ALEC). ALEC funds state politicians who support the elimination of public institutions, such as education.

Naomi Klein, author of The Shock Doctrine: The Rise of Disaster Capitalism, argued that during periods of economic or political crisis, changes have been introduced to weaken government and the maintenance of public services. The CBPP data suggests that the deep recession of 2008-2011 was an occasion for ALEC and the politicians and educators they support to reduce resources available for higher education.

Despite the long history of government support for higher education, public schools from kindergarten through high school, libraries, roads, and police and fire-fighting services, the recession offered the occasion for influential and wealthy elites to pressure for policies that reduced state financial support for public services and a shift toward their privatization. In addition universities became even more dependent on big corporations, banks, and the military. Finally, tuition increased and students had to pay a higher share of the cost of their education.

Throughout much of U.S. history public education has been seen as a public good.

Throughout much of U.S. history public education, including higher education, has been seen as a public good. The land grant system of public higher education was instituted in 1862. From then until the recent recession, public colleges and universities educated large percentages of the young and generated much of the scientific and technical knowledge that stimulated the U.S. economy, based on substantial public support and low student tuition.

After World War II, returning veterans became eligible for free higher education under the GI Bill. The program led to the training and credentialing of a whole generation of young people who went on to become educators and researchers, and also consumers of products manufactured after the war. The so-called economic “golden age,” from 1945 until the 1970s, was driven by research and development initiated by GI Bill recipients. These college graduates became members of the largest middle class in American history.

As Bob Samuels, author of Why Public Higher Education Should Be Free, put it:

“I actually believe that we should and could make all public higher education completely free. We’re currently spending around $185 billion on higher education annually—which includes spending on for-profit schools, which have very low graduation rates and high debt rates, as well as on merit aid for wealthy students. Given current enrollment, I estimate that it would cost about $155 billion to fund public colleges and four-year institutions completely. My argument is instead of funding the individuals, we should just fund the institutions directly” (quoted in Rebecca Burns, “Why Can’t College Be Free?” In These Times, June 13, 2014).

However, advocates of “higher education reform,” at least those collaborating with economic and political elites who advocate policies depriving government of financial resources, sometimes called “starving the beast,” envision a day when all public institutions are privatized.

There is much evidence that the privatization of education will increase gaps between rich and poor and may leave the latter with inferior educations. The Daniels plan will rely on wealthy benefactors to support students while tuition costs continue to rise and those who still seek a college education will continue to accumulate a lifetime of debt.

Without a return to affordable publicly supported higher education, large proportions of young, intellectually curious, and talented students may be deterred from pursuing higher education which will have negative consequences for the entire society.

Read more articles by Harry Targ on The Rag Blog and

Friday, August 7, 2015


Harry Targ

Not every conflict was averted, but the world avoided nuclear catastrophe, and we created the time and the space to win the Cold War without firing a shot at the Soviets.
Now, when I ran for president eight years ago as a candidate who had opposed the decision to go to war in Iraq, I said that America didn’t just have to end that war. We had to end the mindset that got us there in the first place. It was a mindset characterized by a preference for military action over diplomacy, a mindset that put a premium on unilateral U.S. action over the painstaking work of building international consensus, a mindset that exaggerated threats beyond what the intelligence supported. (Barack Obama, “Full text: Obama gives a speech about the Iran nuclear deal,” The Washington Post, August 5, 2015).

The peace movement has often been faced with a dilemma. Should it channel its energies in opposition to imperialism, including economic expansion and covert operations, or should it mobilize against war, or both. The problem was reflected in President Obama’s August 5, 2015 speech defending the anti-nuclear proliferation agreement with Iran.  On the one hand he defended diplomacy as the first tool of a nation’s foreign policy and on the other hand his defense included the argument that through diplomacy the United States “won” the Cold War, and thereby defeated a bloc of states that opposed capitalist expansion. The implication of his argument was that pursuing imperialism remained basic to United States foreign policy but achieving it through peace was better than through war.

The speech was presented at American University 52 years after President Kennedy called for peaceful competition with the former Soviet Union. In June, 1963, nine months after the Cuban Missile Crisis, which nearly led to nuclear war, and weeks after Soviet leader Nikita Khrushchev’s call for “peaceful coexistence,” President Kennedy responded by urging the use of diplomacy rather than war in the ongoing conflict with the Soviet Union. 

A small but growing number of scholars and activists at that time had begun to articulate the view that the threat of nuclear war, growing U.S. involvement in Southeast Asia, and repeated covert interventions in Guatemala, Iran, Cuba, and the Congo, had to do with U.S. imperialism. The dilemma for the peace movement in 1963 then as it is in 2015 is how to respond to United States imperialism at the same time as supporting the use of diplomacy to forestall wars.

In the context of political discourse in 2015, dominated by “neoconservative” and “humanitarian interventionist” factions of the foreign policy elite, the danger of war always exists. Therefore, any foreign policy initiative that reduces the possibility of war and arguments about its necessity must be supported. The agreement with Iran supported by virtually every country except Israel constitutes an effort to satisfy the interests of Iran and the international community and without the shedding of blood and creating the danger of escalation to global war. 

Neoconservatives, celebrants of war, have had a long and growing presence in the machinery of United States foreign policy. James Forrestal, the first Secretary of Defense in the Truman Administration, was a leading advocate for developing a militaristic response to the Soviet Union in the years after World War II. As historian Andrew Bacevich pointed out, Forrestal was one of the Truman administrators who sought to create a “permanent war economy.” He was, in Bacevich’s terms, a founding member of the post-World War II “semi-warriors.”

Subsequent to the initiation of the imperial response to the “Soviet threat”--the Marshall Plan, NATO, wars in Korea and Vietnam, the arms race--other semi-warriors continued the crusade. These included the Dulles brothers (John and Alan), Air Force General Curtis LeMay, and prominent Kennedy advisors including McGeorge Bundy and Walter Rostow, architect of the “noncommunist path to development,” in Vietnam.

Key semi-warriors of our own day, Donald Rumsfeld, Dick Cheney, Elliott Abrams, Robert Kagan, and others who formed the Project for a New American Century (PNAC) in the 1990s, gained their first experience in the administrations of Richard Nixon and Ronald Reagan. The PNAC view of how the United States should participate in world affairs is to use military superiority to achieve foreign policy goals. The key failure of Clinton foreign policy, they claimed, was his refusal to use force to transform the world. For starters, he should have overthrown Saddam Hussein in Iraq.

The neoconservative policy recommendations prevailed during the eight years of the George Walker Bush administration. International organizations were belittled, allies were ignored, arms control agreements with Russia were rescinded and discourse on the future prioritized planning for the next war. And concretely the United States launched long, bloody, immoral wars in Iraq and Afghanistan.

Humanitarian interventionists, more liberals than conservatives, argued that the United States should use force, but more selectively, to achieve various goals. These goals included interventions that allegedly defended the quest for human rights. Advocates of humanitarian interventionism argued that the United States must use all means available, military and diplomatic, to maximize interests and values. And force need not be the first or only instrument of policy. 

But in the end the humanitarian interventionists encouraged bombing Serbia, intervening in a civil war in Libya, funding rebels perpetuating war in Syria, expanding military training and a U.S. presence in Africa, and funding opposition elements against the government in Venezuela. In addition, with advice from humanitarian interventionists, the United States increased the use of drones to target enemies of U.S. interests in East Asia, the Persian Gulf, and the Middle East.

Neoconservatives and humanitarian interventionists (and in earlier times anti-communists) have led the charge for war-making in the United States since World War II. Between the end of the war and the 1990s, 10 million people died in wars in which the United States had a presence. Hundreds of thousands of young men and women serving in the armed forces of the United States have died or been permanently scarred by U.S. wars. And the physical landscape of Southeast Asia, the Persian Gulf, Central America, and the Middle East has been devastated by war. And in the United States, foreign policy elites, politicians, and think tank experts still advocate violence to address international problems. 

Therefore, in the context of a huge arms industry and global economic and political interests, any presidential initiative that uses diplomacy rather than force, declares its opposition to unilateral action, and challenges the war mindset deserves the support of the peace movement. Given the long and painful United States war system, the battle to secure the agreement between the P5 plus 1 nuclear agreement with Iran is worthy of support.


Monday, July 27, 2015


Harry Targ

David Harvey has written about a “co-revolutionary theory” of change. In this theory Harvey argues that anti-capitalist movements today must address “mental conceptions;” uses and abuses of nature; how to build real communities; workers relations to bosses; exploitation, oppression, and racism; and the relations between capital and the state. While a tall order, the co-revolutionary theory suggests the breadth of struggles that need to be embraced to bring about real revolution.

Harvey’s work mirrors many analysts who address the deepening crises of capitalism and the spread of human misery everywhere. It is increasingly clear to vast majorities of people, despite media mystification, that the primary engine of destruction is global finance capitalism and political institutions that have increasingly become its instrumentality. Harvey’s work parallels the insights of Naomi Klein, Joseph Stiglitz, Robert Reich, Noam Chomsky, and a broad array of economists, historians, trade unionists, peace and justice activists and thousands of bloggers and Facebook commentators.

Of course, these theorists could not have known the ways in which the connections between the co-revolutionary theory and practice would unfold. Most agreed that we are living through a global economic crisis in which wealth and power is increasingly concentrated in fewer and fewer hands (creating a global ruling class). Human misery, from joblessness, to hunger, to disease, to environmental devastation, to state violence, is spreading. And as events since Ferguson have pointed out, the links between class exploitation, structural racism, and patriarchy are inseparable.

But history has shown that such misery can survive for long periods of time with little active resistance. Even though activists in labor, in communities of color, in anti-colonial/anti-neo-colonial settings are always organizing, their campaigns usually create little traction. Not so since 2011. Tunisians rose up against their oppressive government. Larger mobilizations occurred in Egypt. Protests spread to Yemen, Algeria, Oman, Bahrain, and Libya.

Assuming that working people, youth, women, and various professional groups would remain quiescent in the United States, right-wing politicians saw the opportunity to radically transform American society by destroying public institutions and thereby shifting qualitatively more wealth from the majority to the minority. In North Carolina, Wisconsin, and later in Ohio, Indiana, and around the country a broad array of people began to publicly say “no, enough is enough.” Even those with criticisms of President Obama continued their mobilization to secure his reelection and the defeat of the right-wing. Youth, particularly African-Americans, Latinos, Asian-Americans, and Native Americans, have risen up angry all across the United States, increasingly deepening their understanding of and demands for fundamental institutional changes.

The resistance in the Middle East launched in 2011 was about jobs, redistribution of wealth, limiting foreign financial penetration, and democracy. In the United States the issues have been even more varied: the right of workers to collectively bargain, Right-To-Work laws, defending public education, free access to health care including the defense of reproductive rights, and greater, not less, provision of jobs, livable wages, and secure retirement benefits. Police accountability, mass incarceration, and an end of the “schools to prison pipeline” have been increasingly prioritized in mass movements.

Where do progressives go from here? I think “co-revolutionary theory” would answer “everywhere”. Marxists are right to see the lives of people as anchored in their ability to produce and reproduce themselves, their families, and their communities. The right to a job at a living wage remains central to all the ferment. But in the twenty-first century this basic motivator for consciousness and action is more comprehensively and intimately connected to rebuilding trade unions, opposition to racism and sexism, and support for education, health care, sustainable environments, and peace. All these motivations are part of the same struggle.

It is fascinating to observe that the reaction to the efforts of the economic ruling class and political elite to turn back the clock on reforms gained over the last 75 years have sparked resistance and mobilization from across an array of movements and campaigns. And activists are beginning to make the connections between the struggles.

It is too early to tell whether this round of ferment will lead to victories for the people, even reformist ones. But as Harvey suggests, “An anti-capitalist political movement can start anywhere…The trick is to keep the political movement moving from one moment to another in mutually reinforcing ways.”

Monday, July 20, 2015


Harry Targ

A $3.75 billion loan to the British in 1946 and the $400 million loan to Greece and Turkey in 1947 were mere preludes to the much larger foreign assistance program known as the Marshall Plan. Initially after the war Britain, France, and Italy began to recover from the war's devastation, but they suffered major setbacks as a result of the severe winter of 1946/47. Further, economic recovery in 1946 was shaped by a return to the nationalist economic policies of the prewar years, policies that reinforced trade restrictions. However, post-war policies which kept wages low and prices high in these countries were generating increasing opposition from workers, particularly in continental Europe. Due to the economic disruptions of the winter of 1946/47, rising labor militancy, fears of the spread of ideas supporting European independence, and the general shortage of dollar reserves, the United States developed the policy of pro­viding massive doses of foreign assistance to European countries. After two-months of planning among State Department personnel, business leaders, and politicians, Secretary of State George Marshall announced a new aid policy, claiming its prime motivation to be humanitarian:

It is logical that the United States should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no politi­cal stability and no assured peace. Our policy is directed not against any country or doctrine but against hunger, poverty, desperation, and chaos. Its purpose should be the revival of a working economy in the world so as to permit the emergence of political and social conditions in which free institutions can exist (Graebner,154).

After the official announcement of US intentions, capitalist elites in Europe met to endorse the Marshall proposal which called for a four-year assistance program of $22.4 billion. After almost a year of political conflict within the United States, featuring President Truman's call for a struggle against the threat of communism, the Marshall Plan was authorized by Congress. The final appropriation consisted of $13.2 billion. A US agency, the Economic Cooperation Administration (ECA), was created to administer funds, and in Europe the recipient countries added the Organization for European Economic Cooperation (OEEC) to carry out the program.

Legislation and administration of the Marshall Plan funds included numerous internal and external requirements to be fulfilled by OEEC countries. First, the ECA pressured the Euro­pean nations to adopt economic policies that today would be called “neoliberal.” The ECA demanded balanced budgets, stable currencies, high profit mar­gins, low wages, and non-egalitarian tax structures. The impact of the kind of recovery plan mapped out for Europe was to revitalize the prewar capitalist systems. The policies would stimulate economic recovery but at the expense of European workers. The United States Central Intelligence Agency funneled money to anti-communist trade unions and prominent intellectuals to reduce the appeal of European communist parties which were correctly believed to be in a good position to win contested parliamentary elections. The economic assistance programs, the institutionalization of capitalist economics, and the political penetration of European institutions reduced the power of the organized working classes that had shown signs of strength directly after the war. Joyce Kolko and Gabriel Kolko write of the impact of these policies in France:

It was ultimately cheaper to crush a strike, split the unions, and repress the workers than to pay the price of a higher standard of living which the French government and the ECA saw as an unacceptable inflationary thrust that would shatter their plans for a balanced budget, trade sur­plus, high profit, and "reconstruction" conforming to their capitalist model. (Kolko and Kolko 442)

Later the Kolkos assessed the impact of the Marshall Plan (formally designated the European Recovery Program) on European workers:

But for the working class of Europe the ERP experience of capitalist reconstruction was an unequivocal calamity. This class was required to increase its effort in the production process, to abstain from asserting demands, and to reap a falling standard of living and unemployment. A full appreciation of this fact as a crucial dimension for the ERP is essential to understanding the real meaning of the Marshall Plan. (Kolko and Kolko 452).

Marshall Plan pressures on European domestic policies were paralleled by demands on European international economic policy as well. European purchases were circumscribed by pressures from US industrialists and their representatives in Congress and in ECA administrative circles. Some European food requests were denied because U.S. agriculture did not have surpluses to sell and others were added which Europeans did not want. The Kolkos report that the United States shipped 177 million pounds of spaghetti to Italy in 1948. One-fourth of Europe's 1948 request for wheat was shipped as flour, which added an estimated $8 million to its cost. Requisitions for tractors were cut in half to limit Europe's potential as a competitive agricultural producer to the United States. The United States shipped 65,000 unwanted trucks to Europe and drastically cut the requests made by Euro­peans for railroad cars. Marshall Plan policies like these discouraged the use of domestic energy sources and increased escalating oil dependence, which led to a drastic reduction in their use of coal as a prime energy source. Other measures of benefit to the US economy included provisions whereby fifty percent of all aid had to be transmitted in U.S. ships and in­sured by US insurance companies.

Perhaps the aid provision most beneficial to U.S. economic in­terests was the so-called "counterpart" clause, which increased U.S. control of currencies within debtor nations. The Kolkos discuss the clause and its significance for the U.S. economy:

An important tool in influencing the economic policies of the European states during the period of the ERP, counter­part thereafter became a provision of all American aid, as­suming vast proportions in countries like India. Counterpart required the recipients of United States aid to establish a fund in their own currency equivalent to the sums received in dollars. The United States would own 5 percent of this fund and could use it for various purposes, but primarily to purchase strategic material for its own stockpile. The recipient government could use the remaining ninety-five percent for projects America sanctioned. Hence the United States had the right not only to control how the dollars were spent but also to approve the expenditure of an equivalent amount of the local currency. This gave Wash­ington substantial power to exercise over the internal eco­nomic plans and programs of the European states and attained one of the most fundamental aims of American policy. (Kolko and Kolko 380-381).

The collective impact of the Marshall Plan was to incorporate the European nations into a global economic system dominated by the United States. The IMF, World Bank, and GATT set the institutional para­meters for international economic interchanges based on free trade and access by the United States to markets in the non-socialist world; the foreign assistance program structured the economic systems of the European nations such that they would evolve in ways most conducive to U.S. investment and trade. With­out Marshall Plan assistance, Europe might have chosen an economic course that would have restricted external investment, reduced trade on the Continent and particularly with the United States, and, most importantly, might have moved in the direction of building planned socialist societies guided by the criterion of fulfilling human needs. Since European communist parties were popular in the 1940s due to the leading role they played in resistance movements against Nazi occupation and their socialist vision, the Marshall Plan was developed in part as a way to reduce their influence in parliamentary elections. Communist party victories would have had dire effects on the economic and social system of the United States and its world position.

Subsequent to the Marshall Plan years, European nations established institutions to coordinate the production of coal and steel and atomic energy. With their success, European integration led to the creation of a common market, the European Union, and the common currency and banking institutions of the twenty-first century. The thrust of economic and political development from the end of World War II to the present was designed to create a regional capitalist political economy that would lead to the global finance capital of our own day. The Greek crisis today is one outcome of this long history of economic development and underdevelopment in Europe.

Joyce and Gabriel Kolko, The Limits of Power: The World and United States Foreign Policy, 1945-54, New York, Harpers, 1972.
Norman A, Graebner, Cold War Diplomacy: 1945-1960, Princeton, Van Nostrand, 1962.

(Part l discussed the Greek Civil War. The materials for the two essays come in part from prior blogs and Harry Targ “Strategy of an Empire in Decline: Cold War II,” MEP Publications, 1986).