What are the tectonic movements of contemporary education?
‘Follow the money’ said Deep Throat.
When with the continuous process of marketization of education, humans became human capital, teachers became producers, training became a commodity and students became consumers, capital asked itself more and more what kind of commodity was education.
Its cost, especially in the case of university education, has grown enormously in the last two centuries and in particular since the seventies of the last century while with the general decline in salaries in recent decades, a degree allows for a return of much lower investment than in the past. The cost of American colleges, for example, is growing eight times faster than wages (Forbes), and tuition after subsidies was 11.1 times higher in 2015 than in 1980.
So it is a commodity that today requires a much higher investments and which has a much lower return than in the past. In light of these numbers, it would seem a commodity not able to arouse the appetites of large investors. It is not so.
In 1999, in the Book of knowledge, the investment bank Merrill Lynch estimated education as a $ 2 trillion global market, with investment and profit opportunities second only to healthcare. In 2013, IBIS Bank estimated it to be worth 4.4 trillion dollars and in 2030 it is estimated to be worth 10 trillion.
From the perspective of the large investor, the limits of the education market are mainly three:
1) The fragmentation of the market which is largely regulated at national level and does not allow large-scale investments.
2) Labor costs represent the second and probably the most significant obstacle to transforming education into a profitable market. According to Justin Wolfers, the production capacity in the last two hundred years, in education, as in other areas, has remained practically the same. To play a Beethoven quartet two hundred years ago it took 4 musicians and 40 minutes, just like today. The cost of that quartet was at the time equivalent to $ 3. Even considering inflation, the cost of the same quartet has increased 20 times, being needed today $ 71. For universities, labor costs in many institutions represent more than 75 per cent of the total cost. The contrast with the manufacturing industries is illuminating. A worker can produce today a much higher quantity than the equivalent worker of two hundred years ago, while it takes a lecturer 2.67 hours to produce a lesson, like two hundred years ago.
3) The third problem is that of control which at the end of the 60s had shown considerable concern.
The solution that the system has identified for the three problems and that all global investors and policymakers have promoted in various ways can be summarized in the following points:
Commodification, globalization and privatization.
All the great international policymakers insist on the commodification of education and its transformation into a product that can be bought and sold. In 1999 the General Agreement on Trade and Services (GATS) of the WTO proposed the liberalization of all services of the global economy including education. Previously and subsequently, privatization policies were suggested by almost all the leading international organizations.
To be attractive to large capital, education must conform and standardize in order to allow targeted investments. In this perspective, the continuous process of standardization of programs, governance and contents is indispensable. The fragmentation of knowledge into competences and skills, the simplification of evaluation and the standardization of accreditation processes aim to make investments possible on a global scale and the reduction of labor costs. The fate of the teaching class seems to be sealed. With the centralization and standardization of contents, the role of the teacher will become that of a simple tutor or a coach with almost exclusively administrative tasks and the production of contents will be centralized in elite places.
In 1971 the future Supreme Court Justice Lewis Powell sent a memo to the American Chamber of Commerce in which he asserted that the American economic system was under attack and that for the business world, political power is necessary, must be assiduously cultivated and when necessary it must be aggressively used, without hesitation and without embarrassment.
Among the measures suggested for the defense of the reasons for the business were proposed greater influence in the recruitment of professors, administrators and members of the ‘boards’, the organization of conferences, the control of magazines and the production of content. Those measures have been supported and imitated globally and education today is much more protected from independent drives and divergent interests than it could have been in the late 1960s.
These currents have found a point of confluence in what has been called the ‘great reset’, which, conceived in another context in 2010 by Richard Florida, was taken up by Klaus Schwab following the global covid emergency. It is known that in the business world what for some are catastrophes for others are opportunities and, in this perspective, all the limits of economics of scale, control, content standardization and labor costs, could find a solution through a digitalization plan, funded by the public for the benefit of the private, to be carried out at an unthinkable social speed outside of a shock economy situation and with a justification beyond the good and the bad of the side effects.
All that remains for investors is to sit on the river bank and wait for the corpse of what was once education to pass.