Formally titled Academic Freedom and the Corporatization of Universities, this incisive talk by Noam Chomsky strikes at the heart of the crisis in the public university playing out across the nation, but especially, as he notes, here in California.

Delivered at the University of Toronto, Scarborough, 6 April, Chomsky’s talk begins with an infamous document we’re discussed here several times before, the infamous Powell Memorandum, created in August 1971 by corporate lawyer and lobbyist Lewis F. Powell Jr. for his neighbor — Eugene Sydnor Jr., Director of the United States Chamber of Commerce. For any analysis of the memorandum’s roots see this [PDF] from economist Michael Perelman.

A former intelligence officer who became a corporate mergers attorney and political strategist for tobacco companies, Powell was nominated for the nation’s highest court eight weeks later — no coincidence we suspect — and donned his robe on 7 January 1972.

Powell’s focus was a call for the takeover of the public university by the corporate sector, and his screed is regarded as a foundational of neoliberalism.

Powell’s goal was to transform public thinking about business on behalf of what Chomsky calls “the masters of mankind.”

One aspect of the corporate takeover, Chomsky notes, began in earnest with Woodrow Wilson’s Red Scare, and has culminated in the destruction of the New Deal consensus through a two-fold campaign to beat back organized labor and seize control of public thought — Powell’s explicit goal.

Chomsky observes that 1960’s activism had threatened corporate control, and Powell’s memorandum reflects business’s response — in which, he observes, members of the Trilateral Commission played a significant institutional role, blaming the turmoil of the Sixties on “too much democracy” created in part by institutional failure of the academy to adequately indoctrinate the young. And, as he notes, the commission was also the source of a significant part of the Clinton administration.

Some highlights of his talk:

One emphasis is the undercutting of the public university as a center for creating independent thought, and one result, he notes, has been the transformation of UC Berkeley into what he calls essentially a privatized Ivy League university, given the ever-soaring student fees.

Next year, he notes, for the first time ever the California system is getting more funding from tuition than from the State of California, and soon only community colleges will be basically state financed, though they are going too. Soon, he says, the state-funded university will become a relic.

The reason for the destruction of the greatest education system in the world is not economic, Chomsky says. Higher education represents only two percent of GDP, and one major cause of superfluous costs is wasted administrative costs.

The great growth in the U.S. economy was essentially fueled by afforded public education and public university research. The dismantling of this system starting in 1970’s is part of a series of moves creating a two-tiered society.

Chomsky says the transformation of the California public education system is undermining the economy, which relies on a skilled workforce and creative innovation. In addition to the enormous human cost, these policies undermine U.S. competitive capacity.

In the years since the Powell memorandum, we’ve entered into a new phase of state capitalism in which the future just doesn’t amount to much. Profit comes increasingly from financial manipulation and corporate polices directed at short-term profit.

polices directed at short-term profit. Universities are considered parasitic institutions because they don’t produce commodities for profit. Fostering pubic discourse and understanding was regarded as a public good.

In this brave new world, academic freedom is reinterpreted to serve the masters of mankind. In a corporate culture, the traditional ideal of free and independent thought may be given lip service, but other values tend to rank higher.

At MIT, when Chomsky joined the faculty over 55 years ago, there were military labs and the academic programs were almost entirely funded by the Pentagon. Under student pressure in the 1960’s a faculty commission was formed in 1969 to examine the impact of the funding, and Chomsky was a member, thanks to student pressure. They found no military work on campus per se, with one exception — the political science department, which was deeply involved in the Vietnam war.

The transformation of the economy from an electronic base to a biology base is reflected in the economy. Now the university-spawned small startups are biology based, with the successful ones bought up by the corporate sector.

The shift toward corporate funding is producing a shift of emphasis in the universities toward more short-term applied research instead of basic research aimed at asking bigger questions.

Corporate funding is more secretive. Where there was once no secrecy and no security and students had free access to labs, there is secrecy today. Corporations can’t compel secrecy, but they can make it clear that you’re not going to get your contract renewed if you leak it to others.

Outside funding, unless free and unconstrained, has other effects on the university as has been proved to significant degree and shifts the balance of academic activity, threatening the integrity and independence of the university precisely as called for in the Powell memorandum. Corporations have to shift as much of life as possible into commodities.

One impact on the university is what’s called efficiency, shifting as much of the corporate burden as possible onto the backs of the public. The doctrine of efficiency as practiced by the university is manifested in increased class size, the displacement of full-time faculty by graduate students, etc. While it looks good on university budgets, the budget figures don’t reflect the human and social costs of transforming the university into a machine for creating products for the market.

The Supreme Court’s Citizens United decision of corporate election finance essentially says corporations can buy elections directly instead of indirectly. Previous decisions held that corporations are persons and that money is speech, setting the stage for Citizens United, while in classical liberalism, to which the neocons pay hypocritical lip service, the only persons are flesh and blood.

The problem of the economies in the U.S. and Europe is lack of demand. If you want to increase demand, you give money to poor people. If you give money to the rich, why should they spend it? They’re going to invest.