The Absentee Owners of Universities and the Handicraft of Education

Veblen wrote his last major work in 1923 on "Absentee Ownership and Business Enterprise". The phrase "absentee ownership" has resonated with me for a while now when thinking about Universities: with apologies to William Frederick Yeames, When did you last see your Vice-Chancellor?

Veblen's account of the rise of "Absentee Ownership" is his way of describing the progress of economies from industrious handicraft when the resources, tools, techniques and objectives were all close-at-hand for those directly connected with the business of production, and the gradual emergence of capitalisation where owners of enterprises became the 'money men' who traded on the ownership of natural resources and the outputs of businesses, but who were detached from the actual running of those businesses. Veblen's analysis makes possible some fine distinctions in the emergence of capitalism, where absentee ownership was not a uniform development across all fields of industry. In farming, for example, there was ownership of natural resource (the land) but but a form of management which was not absent, being concernfully engaged with the operations of the farm. Similarly, not all heavy industry entailed absent ownership: whilst the handicraft industries evolved to use production machinery, managers would have an overarching vision of where to take their business and how to make the most of the new technological opportunities afforded by the machinery. This too was certainly not absentee ownership.

But when it comes to plantations, slavery, corporate agglomerations, and so forth, it is the capitalisation of the enterprise and the trade in credit which becomes the driving force. Absentee owners do money deals disconnected (conveniently disconnected in the case of slavery) from the realities of the industry itself. This 'New Order' of things generally serves to constrain output so as to keep prices high, thus serving the needs of the over-capitalization of production. The distance of absentee ownership can also exploit cultural and political differences: Veblen points out, with the case of slavery, that whilst the American South was the industrial heartland of the trade, the absentee owners were in the 'liberal' north, trading in New York. In this way legitimated practice rubs shoulders with illegitimate or shady practice. 

Education seems to be going through its own period of industrialisation at the moment, and it is no surprise to see absentee ownership of educational institutions on the rise. It's not just Universities, although they seem to be leading the way (as they certainly have done in America for the last 20 years or so). Even mainstream schooling is increasingly subject to absentee ownership: the UK Academy school programme, the Free School programme and the University Technology Colleges have encouraged private investment in state-funded education creating a breed of corporate 'sponsors' whose "money might" sways policy on curriculum, strategy, technology and staffing. But the current crop of Vice-Chancellors in the UK are the most telling example of absentee ownership. They are very different characters from those who served in that position 20 years ago. Apart from being paid industrial-scale salaries, they are noticeably less present in their own institutions, doing money deals with wealthy businessmen (some of whom are the same characters taking the lead in the provision of schooling!), touring the world selling their brand of education, and lobbying politicians and the establishment for acknowledgements of legitimacy (particularly from Church and the Judiciary), status for themselves or for their financial backers, or political favour in the corridors of power.

The contradictions of the industrialised education system and its absentee owners are manifest. The business of engendering learning remains within the domain of handicraft. Parents are the first source of this, but then it comes down to skilled teachers to listen to and understand their students so as to develop their confidence and ability. That some parents are far more skilled at this handicraft than others will remain a continual source of social inequality which the education system always hopes to ameliorate. If the modus operandi of the absentee owner in industry is to constrain productivity to maximise profits by keeping prices high, how does the absentee owner of an educational institution operate? Surely there is a desire to maximise the production of successful and confident graduates? How could constraint on the production of successful and confident graduates ever maintain the appeal of an educational operation?

Here it is useful to make a distinction between the business of learning and the cultivation of an individual as handicraft, with the conferring of graduate status on individuals. Higher education is a status game (Veblen wrote a earlier book about this). Universities have always constrained the conferring of graduate status on individuals. By so doing, they have maintained their appeal. The rise of the "leisure class" as he called them was primarily a status-seeking process. Higher education institutions effectively admitted people to the 'priesthood' of people who could laud their knowledge and expertise above those around them. "Lauding above" is the principle activity in Universities, occurring not just between the institution and the rest of society, but between individuals in the institution. The controls are simply to do with where the line is drawn as to who is admitted and who is not. Universities, as Illich reminds us, create failure.

The absentee owner of the university acts both as a high priest and as 'captain of industry' in his or her shady dealings with businessmen, the establishment and politicians. His financialized assets maintain their value through the exploitation of his or her status and the constraints on the conferring of graduate status on others. The constraints on the conferring of status are however highly flexible and within the control of the Vice-Chancellor. At will he can confer PhDs (honoris causa), give assurances (if the circumstances are advantageous) that certain things will be so, despite custom and practice in maintaining academic 'quality' within the institution apparently precluding it. In doing so, he has to manage two things: maintaining his own status as the high priest, which is conferred on him by the board of governors, and ensuring that his flexibility for implementing his plans is not curtailed by opposition from workers in the University. The former he achieves by delivering financial returns in the form of economic surpluses. The latter he does by increasingly draconian and authoritarian control of the workers in the institution.

Where does this leave the handicraft of learning? Skilled teachers find themselves in an impossible position. Charged with the care and nurturing of their students in conditions where the actual cultivated benefits in students matter less than the simple "numbers game" on balance sheets of student fee income. In industry, mechanisation allowed the handicraft industries to increase production, yet in education, mechanisation (the internet) has certainly created new opportunities for learning and access to knowledge for those with the disposition to use it (which are generally those subject to the skilled handicraft of parents), but has done little for those who do not have these advantages. Good teachers remain largely trying to hand-spin threads against a background that demands mass-scale production which increasingly constrains their actions within assessment frameworks which preclude hand-spinning. Consequently, the conferring of graduate status becomes a mechanical process of hoop-jumping where contagious absenteeism infects teachers and learners alike: the qualities of the educated mind are substituted by academic credit scores and marks whereupon the criteria for status awards are made. (Of the many amusing Veblen anecdotes was that he would frequently award all his students the same mark irrespective of their achievement!)

Veblen's analysis of absentee ownership is subtle and powerful. In conjunction with his analysis of the Higher Learning in America, there are some very important questions we need to ask ourselves about education. Veblen laid the blame for the first world war on the absentee interests represented by nation states. He foresaw the economic disaster of 1929. Education does not suit itself to absentee ownership. We need management that is present. The best educational managers are like the farmers with one hand in the soil and the other in market. How we find our way back there is an urgent question.