Wednesday 15 September 2021

The Banks are Taking over our Universities. Why?

What did I learn at my union meeting (UCU) at Goldsmiths University of London today?

That the banks are taking over universities.

How is this happening and why?

We have to go back to the crash of 2008 caused by the banks overlending, selling debt and leveraging their debts by taking out more loans. To keep money flowing, governments borrowed money and then claimed that they needed to cut public services to pay for this debt. In the case of the UK this is much disputed for several reasons:

a) cutting public expenditure at a time of slump is likely to cut the tax-take and cause more slump.

b) the UK issues currency. It is a large economy. The idea that bondholders were knocking on the UK government's door demanding their cash back is a myth. Bondholders hold UK bonds for decades so that they have steady, certain income. A large percentage of them are in fact people like pension funds held for many of us. 

c) over a third of the government's debt isn't really debt at all. It's created by the government by issuing bonds which the Bank of England buys! It's like buying stuff off yourself and telling yourself you owe yourself some money. That's what they told the British public that and got everyone to believe them. Neat.

So how does this impact on Goldsmiths? 

Because the government claimed that they needed to cut funding of education to 'pay' for the government debt. 

Universities are in debt. Goldsmiths too. 

Universities are trying to deal with this by eg selling off assets, cutting courses, sacking staff. 

Who's 'helping' them do this? Banks of course! Through short and long term loans replacing government funding. And these loans come with strings or 'covenants' which demand that universities should cut this, cut that, sell off this, sell off that. 

This is the new normal 

(Remember it was the banks that crashed the world economy in 2008, so it's incredible to think that they have become the repositories of financial wisdom now. No matter. Read on...) 

What was set up for the public good, for the enlightenment of all, (in name at least) and for the training of the professional layers of society (ie universities) have now turned into the cash cows for banks. The banks have now worked their way into a position of enormous power over the intellectual factories, the generators of knowledge. All that high-minded stuff about research, knowledge for knowledge sake, etc etc is now totally intertwined with the banking imperative that it must be profitable. Education is now formally a product, bought by students. University staff are indeed the workers producing this product, who go cap in hand to banks for finance, who in turn round and demand profitable production ie cut labour costs (ie university workers' jobs, pay, pensions and conditions of work), cut consumer costs (ie student facilities) and asset strip ie sell off property deemed by the banks (or collaborating university management) to be surplus to need. 

It's a grisly picture. Remember it next time you hear someone whiffling on about academic freedom, the pursuit of knowledge, etc etc. 

Meanwhile we have a huge fight on our hand at Goldsmiths and other universities to try to prevent the loss of 80 jobs, cuts to departments and on-site staff.