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We republish the first of three extracts from Henry Heller's new book The Capitalist University, which resonates with the marketisation of HE in Britain


Henry Heller The Capitalist University: the Transformations of Higher Education in the United States, 1945-2016 (Pluto Press 2016)

In the first part of the twentieth century the influence of big business and private foundations over American universities steadily increased. These trends were already strong following World War I but became overwhelming during World War II and the Cold War. Businessmen and corporate lawyers came to dominate university governing bodies while private foundations acquired extraordinary influence over university-based research and the organization of the disciplines. In a more belated fashion the influence of government over universities expanded during World War II and the Cold War. Much university research was harnessed to winning the hot and cold wars while contacts between top academics and administrators and the state deepened. Following the end of World War II the government at both the federal and state level financed a massive expansion of university enrolments, infrastructure, and research.

Universities became an element in what has been called the ideological or non-coercive apparatus of the state. They came more closely under state control and their teachings helped to tie students more closely to the existing political and social order. At the same time the growth in the size and functions of universities made them more and more resemble private corporations even though many were public institutions. With their president and trustees at the top, provosts and deans, chairs of departments, ordinary faculty, graduate and undergraduate students, and non-academic staff, universities had a corporate chain-of-command and division of labor. The façade of the ivory tower, the disinterested pursuit of learning and the public good were nonetheless insisted upon even as the outside influence increased enormously. The fig leaf of university autonomy was maintained because it kept the government at a certain distance while serving the interests of private business overall, and fed the illusions of faculty about their intellectual independence. As the number of administrators grew the internal operations of universities multiplied and assumed a hierarchical character that reduced what there was of faculty internal self-government. The specialization of learning into departments largely separated from one another rewarded research and publication at the expense of teaching and the acquisition of a global view of knowledge. Marxism, which had acquired a certain limited influence during the Depression and World War II, was more or less proscribed during the Cold War. Communists or their sympathizers were silenced or dismissed.

Prior to World War II the middle class sent their children to colleges and universities in growing numbers. Between 1919 and 1941 enrolment quintupled from 250,000 to 1.3 million. Part of a process of class reproduction, the offspring of the middle class went to college to find prospective mates and make social contacts. In the course of acquiring higher learning students received a discipline which enabled them to manage and control those socially beneath them. As such they acquired the education necessary to become entrepreneurs, engineers, physicians, lawyers, managers, administrators, and educators. The number of institutions of higher learning in the United States was vast, numbering around 2,000 in the first part of the twentieth century, of which some were private and others controlled by state governments. Of the private colleges there were some of high quality like Williams, Wesleyan, Carleton, Oberlin, and Pomona, and a great number which were ordinary or mediocre. A few private schools with large endowments were among the elite, like Ivy League Harvard, Yale, and Princeton, which devoted themselves to educating the upper reaches of a ruling class that was increasingly recruited nationally. Indeed, attendance at these schools became a marker of upper class status—and still is. It was widely understood that upward mobility went with acquisition of a university degree and attendance at a prestigious school was particularly desirable.

Other colleges and universities that were mainly public institutions had clienteles composed of the sons and daughters of the regional business and professional elites. A few public institutions like Berkeley and Michigan were distinguished. Most of the top private and public schools at the beginning of the century have retained their dominant role to this day, having the largest endowments and attracting the most distinguished faculty and researchers. The upper tier of colleges and universities set the tone of learning and scholarship for less distinguished establishments. Universities benefited from their alma mater role, attracting the largesse of local and national elites based on loyalties formed through their networks of fraternities, team sports, and alumni organizations. The structure of the emerging American system of colleges and universities essentially mirrored that of the American ruling class. It constituted a mechanism for reproducing that class across the country.

Once upon a time the clergy and local politicians had had an important say in how institutions of higher learning, both private and public, were governed. But by the 1930s religious and local political influence was waning if not completely gone, and governing bodies, especially in elite institutions, were increasingly dominated by the business class and corporate lawyers who loomed over what was by now the phase of monopoly capitalism. Through their control of governance and the flow of philanthropic cash, from 1880 to 1940 large corporations assumed indirect control over the major research and educational institutions and harnessed them to meet their needs. This was simply a reflection of the overwhelmingly dominant position that business and private corporations had assumed in American life. The universities’ connection with business needs to be underlined as it was extremely close and ongoing. The muckraking author and socialist Upton Sinclair, for example, described Columbia University, which he had attended, as ‘the political university of the House of Morgan, which sets the standard for the higher education in America.’ Stanford and the University of Chicago, two of the top 20 American universities, were created directly out of the fortunes of the Stanford and Rockefeller families. Universities nonetheless continued to enjoy a certain internal autonomy and there was lip service given to the pursuit of the public good and academic freedom. Such freedom was sharply qualified with respect to cases of sexual or political deviance.

Aside from training the managerial and professional class, a growing body of research activity in the social sciences, sciences, engineering, and agriculture was carried on based on grants from private businesses, foundations, and government. Research and graduate training at this point were confined to no more than 20 institutions in the Ivy League and major state universities like Illinois, Michigan, and Berkeley. The role of big business over the organization and research activities of American universities was extraordinary. Research in the humanities and social sciences was largely made possible as a result of the funding of private foundations. As a result, the influence of business over universities loomed even larger. Somewhat overshadowed by the greater role of government from World War II onward, the neoliberal period has seen a revival and even deepening of that influence.


1. Christopher Newfield, Ivy and Industry: Business and the Making of the American University, 1880–1980, Durham NC: Duke University Press, 2003, p. 78.

2. Thorstein Veblen, The Higher Learning in America: A Memorandum on the Conduct of Universities by Business Men, New York: A.M. Kelley, 1965, pp. 63–7; Clyde W. Barrow, Universities and the Capitalist State: Corporate Liberalism and the Reconstruction of American Higher Education, 1894–1928, Madison: University of Wisconsin Press, 1990, pp. 31–59; David Smith, Who Rules the Universities? An Essay in Class Analysis, New York: Monthly Review Press, 1974; Neil Smith, American Empire: Roosevelt’s Geographer and the Prelude to Globalization, Berkeley: University of California Press, 2003, pp. 37–57.

3. Jonathan R. Cole, The Great American University: Its Rise to Preeminence, Its Indispensable National Role, Why It Must Be Protected, New York: Public Affairs, 2009, p. 38.

4. Newfield, Ivy and Industry, p. 27.

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