During the 1990s, a rationalization of the workplace in American universities occurred, a process that critics described with terms like privatization, neoliberalization, financialization, and commericalization. By the late 1990s, however, the leading edge of this restructuring shifted from the university’s rationalization to its integration as a site of accumulation and investment in the circulatory system of capital. Notably, however, our discourse hasn’t changed, and today we continue to talk as if all that was happening in the university was the same process of rationalization. This is not to say that words like neoliberalization or privatization have nothing to tell us, but rather that, because the majority of gains were received from these changes by the end of the 90s, these words no longer capture the leading edge of change in universities today. [….] What we want to do here is to briefly outline the new insertion of the university into the reproductive circuits of capitalism.
The university is no longer primarily a site of production (of a national labor force or national culture) as it was in the 1970s and 80s, but has become primarily a site of capital investment and accumulation.
There are two key mechanisms through which the university has been coupled into circulation—or, to be technical, coupled into the circulation of both productive capital and money capital. The first is the cycle of wealth transfer that moves federal dollars directly into corporate and bank coffers. [….]
The second mechanism, the emergence in the post-crisis context of capital over-accumulation—that is, a surplus of capital with no profitable investment outlet—has helped to transform universities into privileged sites of capital investment. Due to market conditions and credit availability, universities have been able to increase tuition without limit (for example, at the University of Michigan, tuition has gone up 297% since 1990), which in turn has driven up their credit ratings and made borrowing cheap for them. As a result, banks, hedge funds, and institutional investors have begun investing heavily in and through universities, buying up construction and other bonds as well as student loans. In this way, some of the money that once was put into the faltering credit and mortgage markets has found a new home in the student loan and secondary student loan markets.