For-profit education? Capitalism – in reality – depends on subsidies from the public

A lot of discussion has been taking place lately about the role and impact of private institutions of higher education in the UK in the last couple of weeks. Is the introduction of for-profit, private universities in the UK going to be a good thing or not? Given the need to investigate complaints from students who have gone through the private for-profit colleges in the USA?

Of course, those who support the idea believe that by introducing ‘competition’, prices for undergraduate programmes will be pushed down. At least in theory. Trouble with mainstream economics is that it is always – ‘in theory’.

Little of it actually works in reality (partly because people don’t fit into economists’ conceptions of humans as ‘rational’ or ‘utility-maximizing’ actors – homo economicus is an abstraction with little basis in reality, let alone as an expression of how humans actually think and act).

Indeed, most of the experiments with privatization and de-regulation only works with heavy doses of public funds to make these experiments ‘profitable’. Whether it has been the privatization of public utilities, as Thatcher et al. did, or whether it is the Private Finance Initiatives (PFIs, UK) or Public-Private Partnerships (P-3s, Canada), these processes always involve ensuring profits and long-term subsidization of private corporations (or at least their profits and executive bonuses). Always, of course, at someone else’s expense – usually the public’s! (Although their ‘front’ or ‘astroturf’ groups always claim to have taxpayers’ concerns at the forefront but they act more as support groups for corporate marketeers.)

The various free-trade agreements are primarily about ensuring that the public has little or no control over what corporations do and act as little more than legal means to ensure that they extract yet more money from consumers and workers (via laws). They can sue governments for the latters’ attempt to exercise democratic control and so on.

And, then, if you factor into the costs all the enviromental degradation, to which it is usually left to the public (i.e. taxpayers) to pick up the costs of clean-up, you have to wonder how capitalism (as a system) pays for itself, except by transferring money from the people who work to the corporations via the state.

The idea of the huge increase in students’ fees for tuition in UK universities is also an aspect of this process of privatization.

Funny, why is it with all this ‘competition’, which was supposedly to enhance the future of the finance industry, was it de-regulated, when we found out a wee bit later that the system nearly collapsed and had to be bailed out by the state?

Of course, it didn’t stop the executive class from claiming ‘bonuses’ for nearly destroying the system from which they benefit so much. Why did we bail them out? And, if we bailed them out because they screwed up, why are we listening to them, let alone permitting them to be paid bonuses while ordinary middle- and working-class families suffer?

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Filed under Economics, Education, environment, Higher Education, Uncategorized, Wages, Work and working conditions

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