How Public are Public Universities in the United States?

AAU/Australian University Meeting
UC Berkeley
January 26, 2004

"How Public are Public Universities in the United States?"

By Robert M. Berdahl
University of California, Berkeley

One of our colleagues, who will remain nameless, the President of a distinguished public University, was meeting with a newly named Trustee to his University. The Trustee asked him to compare his public University to Harvard, where our colleague had spent time. "Well the primary difference," our colleague began, "is that Harvard is private." "Harvard is private?" the new Trustee exclaimed in amazement. "Yes, of course," replied our colleague. "Who owns it?" asked the Trustee.

Aside from the obvious ignorance about higher education in America such a question reveals about some members of governing boards of public universities, the comment, "who owns the University," is one that numerous critics of higher education have been asking. Some of you doubtless recall an article several years ago in The Atlantic Monthly entitled, "The Kept University," which highlighted the support for research that Berkeley's Department of Plant and Microbial Biology received from the Swiss company, Novartis. I naturally considered the article to be substantially wrong and highly tendentious, but similar articles have even appeared in California Monthly, the magazine published by Berkeley's independent alumni association. And currently we have a highly publicized case in which a faculty member who has been denied tenure, alleges that his failure to achieve tenure is a consequence of his public criticism of the Novartis arrangement.

Several books have appeared recently on the subject of the commercialization of universities, most notably, Derek Bok's, Universities in the Marketplace: the Commercialization of Higher Education, which appeared last year, as did one by our own faculty member, David Kirp, Shakespeare, Einstein, and the Bottom Line: the Marketing of Higher Education.

The critique of corporate influences and models upon universities is not new, of course. Thorstein Veblen voiced such criticisms early in the last century and they have been recurrent for a very long time. Indeed, a not entirely dissimilar debate occurred when the federal government began investing heavily in research in American universities shortly after the Second World War. Then, too, the independence of university research was seen to be compromised.

The focus of these recent criticisms is largely concentrated on the commercialization of the university, the university's increasing ties to corporate America, the transfer of intellectual property obtained at public expense (made possible by the passage of the Bayh-Dole Act)to the benefit of private interests -- corporate entities as well as individual faculty.

Since the passage of the Bayh-Dole Act in 1980, the ties between universities and corporate interests have grown substantially. Industrial support has grown, though it remains a relatively small percentage of research funding overall. This interest in university research, of course, is to be expected in a knowledge-based economy in which most of the new knowledge is being produced in university laboratories. It is no accident that one-third of the bio-tech companies in the world are located in California, most of them within twenty miles of a UC campus, and that a significant percentage of them were founded by faculty at UC campuses. Faculty have become entrepreneurs, started companies, and won support from venture capitalists. Many have moved back and forth across the increasingly permeable boundary between private enterprise and the university.

Moreover, as the major industrial research laboratories that were so inventive three decades ago have gradually disappeared, it is natural that industry should turn to universities.

Universities, chronically in need of money, have encouraged this activity. Competition, the high cost of modern research, the voracious appetite of our universities, increased emphasis upon the research role of our faculty, and the rapid expansion of the known world -- all are factors in changing the landscape in which both public and private universities have operated. For public universities, the steady decline of state support has been a major force as well.

Nancy Cantor once observed that universities are in a constant state of tension between the ideal of the monastery and power of the market. (Perhaps this should not surprise us, for the Church was always also in this tension.)

But clearly the monastic ideal of the scholarly life (with all of its advantages and disadvantages) cannot compete with the pervasive force of the market. Market models shape how we think as a society and they shape how we think within universities. We speak of "cost centers," "revenue centers." Many universities have adopted some form of "responsibility centered management" which puts units "on their own bottoms." It is a means of controlling costs and enhancing and measuring revenues and it has much to recommend it as a management model. But it also tends to define achievement in market terms and allows market considerations to insinuate themselves further into the university.

But the privatization of public universities has been driven far less by these commercial connections than it has been by the alteration of the social contract that formed the foundation for public higher education. This has been by far the most dramatic manifestation of privatization. Mark Yudof has described this:

"For more than a century these two parties [the state governments and their flagship universities] had a deal: In return for financial support from taxpayers, these universities would keep tuition low and provide broad access, train graduate students, promote arts and culture, help solve local problems and perform ground breaking research."

This compact is being systematically set aside. Between 1980 and 2000, the share of state universities' operating expenses paid by the states shrank thirty percent. The share of state revenue going to higher education also dropped by one third -- from 9.8% to 6.9%. In California, UC's share of general revenue has shrunk from 7% to 4%. Nationwide, tuition of public universities has risen 125% since 1990.

Compared to this transfer of the cost of supporting universities from the taxpayers of our states to the students who attend them, the "commercialization" that the critics have warned against pales into insignificance. Indeed, I would argue that the critics are worried about the wrong things. The social implications of this shift to student fees are more profound than any of the other aspects of privatization and I believe they are being largely ignored in the public discourse.

Take Berkeley as an example, and the rest of the University of California by extrapolation. Bear in mind that the University of California has historically been a well-funded public university and that, by comparison, it remains so today. In total dollars per student available from tuition and general revenues, UC has always been among the highest. According to AAU data exchange, state appropriations, fees, and endowments yielded over $24,700 per student for UCLA, $24,000 for Michigan, $23,700 for Berkeley and UC Davis. Wisconsin was at about $17,000, Illinois at about $15,000, Texas (including all income from the Available University Fund) at $13,200, Oregon at $10,000. (These are rough numbers; obviously, costs vary according to program mix.) Nonetheless, UC has ranked high in dollars per student. And the quality has reflected it, with six UC campuses in the AAU.

But, over the last forty years, there has been a substantial shift in where the money has come from. In 1960, the full cost of a resident attending Berkeley was equal to twelve percent of the median income of a California family. By 2003-04, the full cost to a California resident for attending Berkeley is equal to twenty-seven percent of a California family median income. This has happened despite a substantial real increase in median income over the period.

California family median income is $60,000, above the line for eligibility for financial aid. After an earlier proposal for UCLA and UCB to lose all funding, current proposals from the governor to accommodate budget cuts include:

  1. A reduction of access by reducing freshmen admissions by 10%, thus potentially breaching the Master Plan for Higher Education that has shaped California higher education for over 40 years by failing to guarantee admission to all who meet the eligibility requirements.
  2. Increase undergraduate fees ten percent (on top of the forty percent increase over the last two years).
  3. Increase graduate fees forty percent (on top of the forty percent over the last two years).
  4. Increase professional school fees by $5,000 and reduce by twenty-five percent the funding to professional schools from the state.
  5. Reduce the percentage of fee revenue that is recycled into financial aid from one-third to twenty percent.
  6. Reduce the state support for Cal Grants, the state-based financial aid program.
  7. Charge students the full cost of education when they exceed the number of credits necessary to graduate by 10%.

Not all of these actions are feasible, and some will doubtless be revised in the legislature. But they demonstrate the direction in which we are moving and they are very likely to push the total cost of attending Berkeley well past the current 27% of California median family income. Add to this the fact that financial aid has shifted steadily from grant support to loan support, and we see students graduating from college today with substantial levels of indebtedness well before they enter upon any form of postgraduate study.

The consequence of all of this is a growing anxiety among the middle class about the affordability of higher education for their children. And it results in the predictable political response of legislation, like that sponsored by Congressman McKeon to limit tuition increases.

As a historian, I am inclined to compare this process of the privatization of public education in America to the Enclosure Movement in England and Europe from about the 17th to the 19th centuries. The Enclosure Movement in England had profound social consequences. The Enclosures, supported by over 4,000 separate acts of parliament in England, allowed the large landholders to "enclose" the common lands that traditionally had been legally reserved for the yeoman peasantry. Denied access to the commons, where they could graze their livestock, cut wood, fish in streams, the peasants could no longer sustain themselves. They were driven off of the land, largely into the cities and towns, where they formed the basis for the proletariat that provided the labor force for the industrial revolution, and, incidentally, populated the drawings of Hogarth and the novels of Dickens. Oliver Goldsmith's poem, "The Deserted Village" was a commentary on the depopulation of the countryside that resulted from enclosures.

In some significant ways, public universities have been the "commons," providing access to high quality education to those who would not otherwise obtain it. From the creation of the land-grant university system, this commons has been expanding. The GI Bill after World War II produced a social revolution by providing higher education to millions of people who would not otherwise have had it. The growth of public institutions through the 1960s added substantially to the commonwealth of higher education. Today, over 70% of those enrolled in postsecondary education in the United States are in public institutions. The reduction of access to these commons through the privatization of public universities and by limiting access to them may well reverse this pattern and produce a social transformation of an entirely different, and unwelcome, type.