Santa Barbara on December 24, 2023   

In the May Revision of his January budget proposal for 2025-26, California Governor Gavin Newsom cut his cut to the two state university systems. 

 CSU Chancellor Mildred García wrote, “The May Revision reduces proposed cuts to the CSU to 3% or $143.8 million of ongoing funding – down from the 7.9% or $375 million cut initially set forth in the governor’s January proposal.”  UC got the same percentage reduction of the January cut—from nearly 8%, announced a week or so before Trump took office, to 3% now.

 

García went on to note that the Compact continues to exist at the convenience of the Governor and thus isn’t really a “Compact” in the normal sense.  “It’s like the father who announces, ‘I have a compact with my children not to spank them—except when I really need to spank them.” Sorry, I misquote. García’s only comment was, “However, the 2025-26 CSU ongoing multi-year compact funding ($252 million) remains deferred until fiscal year 2026-27 to help address the state’s budget shortfall.”

 

García added, “I commend and appreciate Governor Newsom for taking a thoughtful and measured approach to addressing the state’s fiscal challenges, while recognizing the unique and invaluable role that higher education institutions, and the CSU in particular, play in driving California’s workforce and economy.”

 

Not to be outdone, University of California President Michael V. Drake wrote, 

We are deeply grateful to Gov. Newsom for recognizing the value of the University of California’s contributions to our state in the May Revise. This is a challenging budget year for California, and our state leaders are facing very tough choices. Even in this difficult moment, the Governor has reduced the University’s cut from 8 percent to 3 percent, demonstrating his strong commitment to California’s students. His proposed budget minimizes cuts to vital student support services and preserves critical investments like affordable student housing construction.

 

The top managers at CSU and UC regularly teach their students and the public that Newsom is a sturdy hero of higher education funding.  If you criticize Newsom’s budgets for your campus, you in effect criticize your president, chancellor, and university officials, even though they've already done the maximum.

 

UC’s Executive Vice President and Chief Financial Officer Nathan Brostrom presented the cut-of-the-cut budget to the Board of Regents on May 14th (Item F4; video is from Finance and Capital Strategies Committee starting at 14’30.”  Here’s the summary slide.

Figure 1

 

 

I recommend ignoring the rightward columns, in which we imagine that the state stops hurting UC and turns over a new leaf. This is still very bad news. The ongoing $129 million state cut is oblivious to the cuts tsunami coming from the federal government, in the ten dimensions I outlined in my last post (Liner Note 25).

 

In his Remaking post, “Manufactured Austerity,” Trevor Griffey laid out the history of the negotiations. He noted the injustice of the January plan: 

Budget cuts negotiated in 2024 seemed like a done deal. Then something unexpected happened: new, more optimistic revenue forecasts came in, and the state of California entered 2025 with a projected $363 million budget surplus.

 

The Governor could have proposed to use some of this money to give a reprieve to the UC and CSU systems, or try to sustain the compact another year. 

 

Instead, the Governor’s January budget proposal reduced planned cuts to state agencies, while leaving the 8 percent cut and compact deferral in place for UC and CSU. 

 

The May Revision is a partial correction of that extra cut meted out by the governor and legislature to UC and CSU. But it’s still a cut in the worst year in my lifetime for U.S. colleges and universities. 

 

Where did the Department of Finance and the California legislature get the idea that it would be OK to replace the Compact increase with a $129 million cut?  

 

At Cal Matters, Mikhail Zinshteyn has reported,

The chair of the Assembly’s budget subcommittee on education finance, David Alvarez, a Democrat from Chula Vista, asked UC senior officials how much the state could cut and still leave student academics largely unaffected, including graduation rates and other endeavors that “ensure that student access remains the same.”

 

For UC San Diego Chancellor Pradeep Khosla, the answer was about $30 million, much less than the roughly $73 million in state cuts the campus would absorb under the current plan.  Systemwide, the UC’s 10 campuses could tolerate an ongoing cut of $125 million, said Seija Virtanen, a UC government relations official.

 

Mystery solved. The new cut idea came from UC officials themselves. Khosla told the Assembly Budget Committee that UCSD was cool with a $30 million cut three weeks after he told his campus community that they face cuts of $75-$500 million. Virtanen said a $125 million cut would be tolerable. UC’s cut was $129 million.  

 

The official UC discussions take place in a short-termist bubble in which only the most recent increments are in public view. The repressed pattern is a quarter-century of cumulative shortfalls.  

 

I’ve updated the blog’s ongoing calculations for the UC budget (CSU isn’t here) to reflect the May Revision.  If you’d like more background or a refresher, see “The Essential Charts.”  For Newsom’s funding pattern see “Shortfall.”

 

Figure 2

 

Here you see several lines.

 

The red line tracks the state's actual general fund allocation in nominal dollars.

 

The blue line is a benchmark, tracking growth in state per-capita income.  This measures the strength of the economy as it exists in people's pockets.  It goes up 4-5 percent a year most of the time.  

 

UC enrollment did not stay flat through this period, but increased by about 50 percent. The yellow line takes the per-capita income benchmark (blue line) and corrects it for actual UC student growth. 

The purple line is the California state budget (right-hand scale).  State government--health, corrections, transportation, K-12 education, etc--has grown at around the same rate as personal income.  California doesn't have an exceptional government, measured by growth rates.  It has an average-growth government--except for higher education, which state government has made sub-par.

 

Note that none of this data is corrected for inflation.

 

If a state wanted to fund an agency in an average way, it could use several metrics.  It could increase that agency’s budget at the overall government median.  The red line would track the purple line. 

 

Or it could increase that agency's revenues at the same rate as per-capita income. The red line would track the blue line. (In such a case, the legislature wouldn’t be treating that agency as more special, but just letting UC or CSU or public health or transportation grow with the state.)

 

Or the state could also acknowledge the growth in that agency’s service obligations, like enrollment growth.  In this case, the red line would track the yellow line. 

 

You can see that none of these average treatments take place.  UC’s state general fund revenues have fallen steadily behind the state in all three measures. And UC officials seem not only to be okay with this, but to co-create the substandard increases over years.

 

I’ve never understood why they do this, or why UC people don’t try in an organized way to make them stop. But here we are.

 

The traditional excuse was that UC will made up for state cuts with increases in student tuition. This has always been unpopular with the California public, so the line was that UC is compensating for state cuts by triple-charging international students, and this it’s a win for the state taxpayer.  When the taxpayers’ 4.0 or 4.3 GPA kids were getting rejected in large numbers from the flagship campuses with the highest shares of international students, parents complained, and the state negotiated campus-by-campus caps. Resident tuition got frozen by Jerry Brown (thanks to student protests) in the early 2010s, and the “cohort” tuition replacement makes little revenue difference. 

 

Long story short, if you calculate net tuition income, taking out some big expenses no longer covered by the state, you get this chart.  The green line adds UC general funds and net tuition income to state general funds.

 

Figure 3

 

Any way you slice it, the University of California has been underfunded by the state throughout this century. 

 

After these many years of substandard funding, UC (and CSU) are now woefully exposed to the ax-murdering of federal agency grants. At CUCFA, Eric Hays has calculated (conservatively) a UC-wide loss of $421 million in federal research funds from just one of the ten types of cuts—NIH reductions in indirect cost recovery rates to 15%.  

 

Damage is settling in everywhere. The system has frozen hiring on all campuses, amid various campus measures.

 

I noted above that UC San Diego, Chancellor Pradeep K. Khosla warned of cuts on April 1^st.

We are unable to predict exactly what the losses will be, but our initial scenario planning models indicate possible reductions ranging from $75 million to more than $500 million annually. In preparation, I have asked budget offices to model a 2.5% to 12.5% budget reduction based on these initial scenarios. We will continue to evaluate the data and further refine the range of our estimates.

 

That was the last update on his page.

 

At UC Santa Barbara, the chancellor has asked units to prepare for across-the-board cuts of 10%.

 

UC Santa Cruz already had a $107-111 million structural deficit before Trump’s election, and faces cuts and layoffs.  Students are noticing educational effects.

 

UC Davis was already projecting a doubling of its core funds deficit to $90 million, and now expects further losses due to federal cuts of $118 to $408 million.  The chancellor's statement following the May Revision (h/t Mikhail Zinshteyn) declares a $53 million deficit on tuition and state funds, and a prospective $500 -$907 million deficit adding federal sources at the campus and medical center combined.

 

And so on. 

 

The financial information is woefully incomplete. It doesn’t tie specific levels of cuts to known policy variations.  There are no “bridge funding” policies of the kind I discussed in Liner Note 25. There are no elements of a coming plan. 

 

Researchers across the system engage in pure guesswork trying to figure out the near future of their research and of their students and staff. What kind support institutional support might they have? Nobody knows. 

 

This atmosphere may explain why the chair of the Santa Barbara division of the Academic Senate resorted to writing, “I like to think that the temporal rhythms of institutions—which can admittedly be frustratingly slow, particularly in relation to the frenzied pace of the news environment—are ultimately going to be our best defense.” Perhaps that’s the function of opacity too: the psychic defense of knowing little and thus having a reason never to be ready with a large and possibly successful counteraction.

 

Pressure seems to generate many bad ideas on high.  Faculty have had to spend time this year opposing ideas like converting the 7 quarter-based UC campuses to the semester system (look at the work already poured into this), or UCOP forcing universal adoption of root-level surveillance software on all UC computer hardware without consultation (this UC Irvine Senate resolution against the plan passed with a 94.9% yes vote). 

 

Unquantified, undebated budget calamity is also behind serious challenges to UC’s educational core. At the UCLA Faculty Association blog, Dan Mitchell summarized part of EVC Darnell Hunt’s commentary like this: 

 

After the student-worker strike a couple of years ago - which boosted labor costs - and given the current outlook of reduced federal and state support, the number of PhDs UCLA can train is being re-examined. The job outlook for PhD graduates has also been diminished by federal policy. Some departments in the past created sections staffed by PhD student TAs in order to support those students. Now only needed sections will be staffed. And UCLA is looking at whether even needed sections might be replaced by such tech alternatives as AI and remote/hybrid classes.

 

Hunt is suggesting a major shrinkage of UCLA’s doctoral programs, which will make undergraduate majors unteachable, which would require conversion of a large share  of instruction to online or “AI” instruction. Some unknown large proportion of graduate students would disappear, and undergrads would have college on their phones. 

It’s hard to imagine a better way to dismantle the UCLA product and brand--not to mention knowledge creation and public benefits.  And yet there seem to be private talks going on about this at senior levels. 

 

None of these budget disasters are acceptable. I hope more people will fight them furiously.

Dear UCR Senate Colleagues:

As everyone prepares for Spring Quarter “remote learning” classes, i want to offer some advice and insight that is informed by what’s been happening at other UC campuses and universities around the country.  As always, feel free to email me at my personalUCR email address if there’s anything you think i should communicate to campus administration and leadership.

1. “Remote learning” is an emergency measure.  These teaching adjustments are temporary ones.  Treat them as such, even if the suspension of in-person classes is extended beyond April 3 to the full Spring Quarter.  We’ll be back in the classroom after we get through this crisis.  We do not need to magically transform ourselves into YouTube or TikTok stars!  We just need to get through this period as functioning teachers.

2. Don’t pressure yourself to produce the equivalent of serial TED talks, Academy Award-winning documentaries, or high profile Netflix specials.  Instead, teach to the best of your ability, don’t worry about “production values,” and work with the tools you’re most comfortable using. Communication with our students is the most important thing, and this emergency situation doesn’t change that. Consider low tech and no tech solutions to engage students as well. The “Keep Teaching” UCR website is a one-stop resource that is constantly being updated, so please use it:  https://keepteaching.ucr.edu/

3. Emergency remote learning is not a backdoor to coerce the faculty into permanent online teaching (or de facto strikebreaking).  Any proposed permanent online curriculum must be fully reviewed by the Academic Senate’s Committee on Courses, as well as the faculty Executive Committees at each College/School, at a minimum.

4. Please offer concise, constructive feedback to the hard-working staff who are supporting us with daily updates of the UCR “Keep Teaching” website!  This team works out of the Center for Teaching and Learning (also known as XCITE, Exploration Center for Innovative Teaching and Engagement), and has pledged to me that they will be as responsive as possible to faculty input.  I recently learned that a total of six staff members (including the Directors) are tasked with running remote learning for the entire campus.  Campus infrastructure in this area is extremely limited.  Feel free to reach out directly to [local emails omitted].

Stay safe and healthy, everyone.

dylan

Dylan Rodríguez
President-Elect, American Studies Association (2020-2021)
Chair of the Academic Senate, UC Riverside Divisio (2016-2020)
Professor, Department of Media and Cultural Studies
University of California, Riverside

by Jonathan Rees, Professor of History, Colorado State University, Pueblo

A few weeks ago, I heard from one of my former students who was upset that I had begun teaching online.  She’s a traditionalist, who didn’t appreciate it when I very politely suggested that she needs to get with the times.  “A robot will be teaching your classes in 10 years,” she told me.  Her underlying message here was that online teaching has to be robotic and automatically inferior to the face-to-face variety.  My immediate reaction was to wonder if replacing me with a robot was even possible.

You’d have to be living under a rock to be unacquainted with the idea that automation has become a job killing-machine, and that the situation will only get worse in the future as those killer robots get smarter.  Rather than recap all that literature here, I will simply point you to a good argument that Brian Merchant makes in Gizmodo. “A robot is not ‘coming for’, or ‘stealing’ or ‘killing’ or ‘threatening’ to take away your job,” he argues.  “Management is.”

That’s certainly true for any factory setting.  There is no economic requirement that every turn of a screw that can be automated must be automated.  However, the potential cost-savings of a robot arm doing that job is so great that countless factory owners have embraced automation.  As a scholar of industrialization, I’m very familiar with the ways in which managers once broke jobs down into their component parts.  This practice is widely associated with the turn-of-the-twentieth-century management consultant Frederick Taylor.  Once this division of labor is employed, it becomes possible to replace skilled workers with less-skilled, lower-paid workers – or these days – robots.

“We ought to resist the Taylorization of academia,” writes the popular and prolific academic Tweeter Raul Pacheco-Vega.  “The more time I spend actually concentrating in my work, just reflecting, reading, writing, analyzing data, I realize that we need time, we need space, we need the right conditions to undertake scholarly pursuits. In fact, I’m not convinced that some of the many tasks that professors perform on a daily basis can be automated.”  Of course, heartfelt pleas like this won’t stop academic managers who prioritize efficiency over educational quality from trying to implement their vision nonetheless.  But even if managers want to bring automation to college teaching, whether this goal is even possible deserves close consideration.

While it’s tempting for faculty to see the struggle between quality and efficiency as a clear cut example of good vs. evil, higher education has already benefited from a little automation when it gets properly employed.  For example, there’s an automated program on my campus that tells me or students what graduation requirements whatever student in my office still needs to complete.  Looking through all those requirements had once been the most time-consuming part of the advising process, and students often made mistakes when they tried to do this themselves.  This tool has immeasurably helped everyone involved, but the real problem with automation in a university setting is deciding exactly which parts of the higher education experience are improved by automation, and which ones are unacceptably degraded.

In his book Coders, Clive Thompson argues that the main inspiration for much of the technological innovation of recent years comes from computer programmers aiming to eliminate repetitive tasks.  Don’t want to send a hundred thank-you notes or go shopping for groceries?  Automate the process.  If the computer can’t do what you don’t want to do by itself, it’ll find somebody somewhere who is willing to do it for you.  What has changed in recent years is that Artificial Intelligence (AI) has become good enough that computers can now eliminate repetitive tasks that are actually rather complex.  Algorithms might not do the job quite as well as their human counterparts, but the people doing the automating may very well not care.  Still, here's the catch: faculty do so many different kinds of things that we would have to be replaced by at least several different machines of widely varying effectiveness - and possibly a whole army.

The Academic Division of Labor

When I say the word robot, what do you picture?  C-3PO?  Twiki from Battlestar Galactica?  The Cybermen from Doctor Who?  To borrow a distinction I picked up from a robotics engineer named Tim Enwall, these are multi-task robots who “can understand all languages, process any question, identify and manipulate any object, cover any terrain, etc.”  In fact, “No company in the world can come anywhere close to meeting these expectations right now nor any time soon.”

Robots today are mostly single-task creations, designed to perform one function like turn a screw or weld two pieces of metal together.  They may be guided by computers, but even the most powerful computers cannot master all the functions that a skilled human worker can perform easily.  This is especially true of skilled knowledge workers.  One of the problems with the automation debate is that many of the people who are trying to engage in it from the pro-worker side tend to conflate automation, artificial intelligence, and actual robots. 

Teaching is just one of the functions that modern professors perform.  In my case, my contract requires me to teach, conduct research and perform service.  Each one of these tasks can be broken down into a series of sub-tasks.  For example, lecturing, despite the ideas of the people behind Massive Open Online Courses (or MOOCs, as we used to say back in 2013), is only part of teaching and hardly the most difficult part of teaching at that.  The hard part is helping students process what they’re learning so that they can master its intricacies.  AI can ask follow up questions about whether you really know the Spanish word for “horse.”  Which machine will evaluate your student’s interpretation of Cervantes’ message at the center of Don Quixote? 

In my discipline, I have evolved into something of a heretic.  I no longer see the point of lecturing at all when the vast majority of information I can convey could simply be Googled up on demand whenever a student potentially needed it.  Granted the average Wikipedia page wouldn’t be as good as my lecture, but it would be good enough for most students’ purposes.  The same thing would be true of whatever automated MOOC lecture a student might watch.

Rather than lecture every day, I now try to teach history as a process – namely the research process.  Even in my online survey class, I guide students through source acquisition, evaluation and the writing process so that they can appreciate where history originates rather than simply memorize facts that might help them win on Jeopardy someday.  In all of my classes, a lot of those efforts involve digital tools that can help students contribute to the vast pool of historical knowledge rather than make believe that that pool of knowledge does not exist so that I can continue to run my class like history professors did during the late-twentieth century. 

In this day and age, every class on a university campus has to be about the Internet to some degree or another because the Internet permeates so many aspects of modern life.  To ignore that in your classroom is clear evidence that you are not equipping your students with all the knowledge they need to thrive after graduation.

In terms of faculty research, I know that computers can write something that passes for symphonies now, but they still can’t visit archives and go through boxes.  Scan every document in every archive in the world and you’ll still need humans to go through all those documents in order to craft some of them into a compelling narrative.  Of course, engineering and science research will never be automated because that’s where the money is.  Automation in this instance would be just another excuse to establish the “humanities in crisis” narrative that predates the Internet, let alone the possibility of faculty robots. 

Win/Lose

The idea of automating service is a goal that both administrators and faculty could conceivably get behind.  After all, who likes going to meetings?  Let the robots decide the best way to keep the university’s lights on and let me go back to my research and teaching.  On the other hand, committee meetings are the place where the faculty most often exercise their role in shared governance – perhaps the most important thing about colleges and universities that separates them from other places of employment. 

In academia, despite a long tradition of faculty autonomy, the barrier between the professional and the personal has become increasingly hazy because of technology.  There are now countless examples of faculty who have gotten into trouble for things they have tweeted in their capacity as citizens which have gotten them in trouble to one degree or another in their professional capacities.  This threat to academic freedom has come about because of technology, and that same technology offers our employers an added incentive to replace us.  Service is one thing that on-campus professors do that separates them from remote faculty.  Automate that process and the migration to offsite labor will accelerate.

The situation is different for faculty who choose to perform any aspect of their duties through technologies that their employers don’t control.  I send most of my professional emails through Gmail rather than my university account.  Gmail is far more useful to me than the one my university provides on the basis of storage space alone.  As a program, I think it’s also organized more logically than the Microsoft product that I’m supposed to use.  In exchange for access to Gmail, I let Google mine the words they write so that they can show me better-targeted advertisements.  I get something good for no money, but in exchange I give up a little bit of my privacy.

In his book Winners Take All, Anand Giridharadas notes that Silicon Valley types refer to this kind of thinking as a “win/win” situation.  For that to be true, the victory of the consumer wouldn’t have to be complete.  If I don’t care at all about Google and its advertisers knowing the topic of my emails, then I’m certainly better off using Gmail than an inferior alternative.  There are advantages and disadvantages to exercising this kind of autonomy, but the right to make these decisions is a right worth fighting for because the faculty’s very existence might ultimately be at stake.

This is particularly true when you consider technology in a classroom setting.  It is extraordinarily convenient for faculty and students to have homework modules packaged with their online textbooks, but what happens if your administrations prefer to cut out the middleman and deal directly with publishers?  After all, it’s publishers, not faculty, who can easily tweak questions.  They’re the ones who keep the course data.  Any administration could conceivably contract directly with publishers who would use faculty advisors from different campuses in order to centralize the writing of both content and exams. Faculty would then become nothing but glorified teaching assistants. 

This worst case scenario here requires predicting the future, but there are nonetheless plenty of examples of faculty losing their traditional prerogatives to technology that I can cite now.  The most omnipresent is the very existence of the Learning Management System (or LMS).  Invented in the 1990s so that universities could cash in on the distance education craze quickly, it has now become a stalwart presence in online and face-to-face classes alike.  On the one hand, it is a convenient way to exhibit copyrighted material in password-protected spaces and to show students how they’re doing at any point in the class, but most of them are extraordinarily difficult for faculty to customize.  We, in turn, are forced to change the way we teach to reflect the platform our administrators contracted for rather than bend the Internet towards whatever way we want to teach.

Apply job selection software to an academic setting and it becomes possible for a university’s  Human Resources department to oversee the selection of tenure track faculty, a process that was once the near-exclusive province of the professoriate.  Automate a process at the heart of a faculty member’s job – like essay grading – and questioning why we need faculty at all becomes practically inevitable.  The problem with these win/win situations in higher education is that faculty seldom win in the long run.  Once we give up a prerogative to our administrations through the use of technology it is going to be increasingly hard for anyone, especially future faculty members, to ever get it back. 

A Hostile Takeover of the Virtual Classroom

None of this means that all forms of academic automation are evil by definition.  About twenty years ago, I learned how to use Microsoft Excel and have used it ever since – not for my research, but for my grades.  I’m not a math guy at all, so it once took hours for me to generate students grades even when I employed a calculator.  Now, after writing one simple function at the end of every class, I can produce grades for any class I teach in about twenty minutes.  The lesson here is that faculty have to be the ones to decide when to automate parts of their work and which parts of their work should be automated.  The benefits from faculty controlling the way that technology gets used in their classroom involve not just creating better classes, but in improving both the morale and effectiveness of students and professors alike.

The problem with using Excel to calculate grades is that students can’t see their marks at any moment during the semester.  Yet the fact that online gradebooks hadn’t been invented yet didn’t prevent me from knowing my grade over the course of the semester back when I was in college.  I took the formula on the class syllabus, plugged in the grades I’d gotten to whatever point of the semester we’d reached and (despite my limited math abilities) figured out my grade myself.  I think it’s a good thing that students can both save time and will likely check how they’re doing more often over the course of the semester, but the fact that administrators can also see what grade students are earning has huge potential drawbacks.

The most benign suggestion that I’ve heard is that faculty should use the Learning Management System more often so that data from our gradebooks can be used to promote student retention argument.  In the long run, this means using big data to study the problem across disciplines.  On a more basic level, if the university knows when students are doing poorly, then they can send out warnings automatically, long before I even notice there’s a problem.  What I resent here is the idea that I may have to move my entire class onto a computer program that defines both the way that I interact with my students online and the structure of the entire class in exchange for a few days of early warning time and the other potential benefits of big data. 

This is not a win/win situation.  It is a hostile takeover of the virtual classroom.  Faculty and their administrators could probably work out a way to use their Learning Management Systems to improve student retention without too much trouble, but only if they are all sitting at the same table.  The problem is that if faculty don’t even recognize that their prerogatives are being violated, they won't  ask for a seat at the table, and their voice will surely disappear before too long.

In their 2014 statement on “Academic Freedom and Electronic Communications,” the American Association of University Professors suggested, “Online teaching platforms and learning-management systems may permit faculty members to learn whether students in a class did their work and how long they spent on certain assignments. Conversely, however, a college or university administration could use these systems to determine whether faculty members were logging into the service “enough,” spending “adequate” time on certain activities, and the like.”  It is not a big leap from that point to suggest that the failure to meet the goals set by monitoring software could be used to justify the replacement of teachers with artificial intelligence.

The most dangerous aspect of introducing new technology into college classes of all kinds is that it might convince both edtech companies and many college administrations that they know how to teach better (which often just means “more efficiently”) than we do.  When the decision to employ education technology is made exclusively by management, a structural imperative tends to move that technology towards its most evil iteration.  The battle for the academic means of production is a battle over priorities.  If faculty accept automation on its face for the sake of our temporary convenience, or have no role in its implementation at all, then we will have no right to complain if or when the robot professors actually arrive.

Higher ed policy is suffering through a long siege  of intellectual gridlock.  The default result is what I've been calling permausterity, a chronic funding shortage for public colleges that now rests on a chronic lack of confidence in the job they're doing.  This has become a vicious cycle that feeds itself.  

Making matters worse, faculty responses are fragmented, when faculty respond at all.  Some of the most eloquent voices are increasingly disenchanted: William Deresiewicz got so much pushback for his recent piece, "Don't Send your Kid to the Ivy League," in part because he seemed to be saying that even our premier universities are turning America's most successful students into mercenary sheep.

(1) Why Can't College be Cheaper?

Dr. Deresiewicz's piece upset many supporters of the college ideal (e.g., Jim Sleeper), and one reason is that it seemed to lend credibility to this year's leading higher ed question: "is college worth it?" If Yale sucks too, why not give up on rebuilding funding and learning and get on with the inevitable consolidation of higher ed into two dozen university-corporations along the lines of the media industries and IT? The Apollo Group could provide the management, Coursera the online platform, Pearson VUE the assessment, and Harvard-MIT-Stanford the quality control.  Three percent of the college population could still go to prestige-brand research universities and liberal arts colleges, which is about the percentage that goes to them now.  Everyone else would, in this scenario, get converted over 10-15 years to varying combinations of blended learning and online-only. In spite of the MOOC ebb that began last summer, tech-based disruption and downsizing remain at the top of the national higher ed agenda.   

There are good disruptions that should be implemented, bottom-up, in universities, and also obvious reasons not to turn universities into digital learning corporations.  One of these reasons has to do with how people actually learn (as opposed to how they receive and replicate information packets). Some of the growth in student services is a market-driven "amenities race," but much of the growth comes from new structural support for better learning. Fixing the country's educational levels is going to require more and not less money for student services, more and not less funding for active learning, and more and not less payroll to hire permanent faculty.  Adjunct Nation has new allies in Congress, which will also support a deeper discussion of educational quality. We need post-contingent education (see, for example, Jennifer Ruth's recent posts (here and here).

Another large cost is research.  The country expects the vast majority of its basic research to come from universities.  And yet few policymakers and general voters understand who pays for research and how much it costs.  The traditional funders have been the federal and state governments, but states have been reneging on their side of the deal for years, leaving the feds in the lurch.  At the same time, the feds have been partners in this decline, having never explained to state policymakers, much less to voters, that they did not fund the full cost of research.  Admitting that research loses money has been taboo, since it conflicts with Washington's demand that science lead directly to economic growth.  States have cut funding in part because they didn't know they were in effect also cutting economically strategic STEM research.

But in the last few years things have been looking up.  Washington D.C. agencies are finally going public with their concern that we don't know how to pay the full costs of university research after all.

(2) Research Shortfalls are Real

In 2012, the National Science Board published Diminishing Funding and Rising Expectations: Trends and Challenges for Research Universities, and in the same year the National Research Council of the National Academies released Research Universities and the Future of America. Both criticized the states' wholesale retreat from public funding.  Both reports noted that universities are increasingly on the hook to pay for research from their own internal funds--even when the research has an outside sponsor. Institutional funds are now the "second largest source of funding for academic R&D, accounting for $11.2 billion of the $54.9 billion of academic spending on S&E [Science &Engineering] R&D in 2009" (NSB p 16).  The NRC report stated that "The institutional contribution to research has been growing faster than federal funding," which, they added, diverts money from necessities like instruction and maintenance (NRC p 125).

Then, this past June, the Council on Governmental Relations, a leading research university lobby, chimed in with the same message and more graphic detail.  Under the title, "Finances of Research Universities," its report offers a good primer on the differences between private and public university funding and then gets into some of the gory details of research costs.  If one of your summer resolutions is to tone up your skill with calculating F&A overhead on MTDC, then this is the report for you.

The big takeaways are that universities' internal funds are the fastest-growing source of research funding, and that universities' share is large.  The total university contribution has grown again since the NSB and NRC reports, from $11.2 billion to $13.7 billion per year.

Over the period from 1976 to 2012, the share of R&D expenditures assumed by colleges and universities has grown faster than any other category. Institutional Funds accounted for 21.6% of all R&D expenditures in 2012 (adjusting out the ARRA effect) as compared to 12.0% of all R&D expenditures in 1976—a growth factor of +80%.

COGR provides a number of interesting tables, using in many cases data from the NSF's Higher Education Research and Development Survery, or HERD). Here is one:

Reseach and Development (R&D) Expenditures by Funding Source as a Percentage of All R&D Expenditures

State support for R&D is a third of what it was pre-Sputnik (1956) (although unadjusted totals continued to grow).  Federal support, though much more stable, is now heading back down towards its pre-Sputnik share. Over the same period, universities have doubled the size of their piece of research funding. Their share has doubled since the 1970s, in spite of excellent growth rates of federal research funding--or actually, because of this federal growth.  In 2011, a useful article in Nature pointed out a further problem, which can be seen in one of its figures: 

Public universities do twice the dollar amount of research that privates do, and yet spend twice the share of their own funds in subsidizing it (24% vs 12%).   Hence the title question, how can public research universities afford to do the research society does in fact want?

Back to the COGR report, which concludes with some bureaucratic fighting words:

The university subsidy is a legitimate issue and one that use be addressed honestly and constructively by all stakeholders.  [Forcing] universities to fund real, unreimbursed costs through non-federal revenue sources [makes them] potentially reduce investments in core missions and infrastructure. Ultimately, this impairs a university's ability to strategically plan and invest in its future research enterprise. (23)

In other words, concealing true research costs hurts the overall university while also hurting research.

I'm happy that a high-level organization is now explicitly saying that unrecovered research costs "are a financial burden with severe implications for the future productivity of research universities" (19).  This is progress.

(3) How Much of the Research Shortfalls are Recoverable?

There's a big wrinkle we now need to consider.  What kind of research costs are universities covering through their Institutional Funds? 

Universities need to support extramural research with outlays for facilities and administration (F&A), whose reimbursements have been capped at 26% since 1991, though only for universities. They also need to build and renew overall infrastructure and pay for research that isn't supported by outside sponsors (which includes nearly all research in the arts, humanities and qualitative social sciences).  They must help start new labs, sometimes build new buildings for them, seed new projects that may attract outside funding at some future date, and provide bridge funding for faculty who are in-between grants but have labs to run and grad students to train.  A combination of these and other activities accounts for the $13.7 billion that universities spent of their own money on research in fiscal year 2012 (out of a total of nearly $66 billion).  (The NSF breaks down costs by university in this table.)

The NSF tries to figure out how much money goes to various research categories through the HERD survey mentioned above.  The COGR report cites its findings as follows:

Of the $13.7 billion, 56% ($7.7 billion) was in the form of direct funding for faculty or student research projects, 9% ($1.3 billion) was devoted to cost sharing, and almost 34% ($4.6 billion) represented unrecovered indirect costs. (2012 HERD Survey)

In other words, somewhat over half of university research expenditures supports the research of their own faculty and students. A third goes to cover costs incurred by sponsored research that are not covered by the sponsors. Another tenth goes to cost sharing, which always involves sponsored projects. Summing up these figures, we might conclude that 44% of Institutional Funds subsidize extramural sponsors, while 56% cover internal research projects.  All of these costs are within the normal scope of research university activity--and, to get pious for a second, form part of its obligation to society.

But is this breakdown correct? The COGR report suggests it is by singling out the $4.6 billion as the main subsidy burden universities bear. It equates, in the report's terms, "to a staggering multi-million dollar obligation per university," and raises a "widespread concern as to the sustainability of the significant investments made by research universities" (19). COGR thus implies that only about one-third of universities' research outlays could be recovered by fixing reimbursement policy.

Other documents tell different tales.  The COGR report itself offers a case study (Chart 13, p 20) of a "Private Research University, Southeast."  This university spent $505 million on research but received $390 million in revenues, which required it to chip in $115 million of its own money.  So nearly 23% of this university's total research costs came from Institutional Funds.  The line-item breakdown of expenses lists University-Funded Research at $33 million, or  a bit over 28% of the Institutional Fund contribution.  This is half of the average for "direct funding for faculty or student research projects" in the HERD survey.  (It is also only 6.5% of this university's total R&D expenditure.)

To take a further case: when the University of California's Commission on the Future tried to get a handle on the university's costs, they summarized research losses like this:

In recent years, the University has received over $3.5 billion per year in extramurally-sponsored research grants, of which over $780 million per year is designated for indirect costs such as facilities support and research administration.  But the actual indirect costs of extramurally-funded research are estimated to be $1.5 billion. (page 111)

UC was thus losing $720 million a year on a research gross of $3.5 billion. This meant that 20.6% of its R&D expenditures came from internal funds, which is very close to the national average.  But this statement suggests that sponsored research caused the entire shortfall.

So we have three stories about the extent to which research universities must spend more money than the public understands in order to cover costs on behalf of research sponsors. 

1.  A third (or at most 44%) of Institutional Funds go to subsidizing costs of sponsored research, costs that the private sector would likely insist be paid in full.  About 56% goes to non-sponsored or "internal" research for faculty and students.
2. Something like a quarter of Institutional Funds go to non-sponsored research.  That leaves three-quarters supporting extramurally sponsored research. 
3. More or less all Institutional Funds go to filling in these shortfalls in sponsored research funding.

Which story is correct? I think the best answer at the moment is all of them, depending on the university. Wealthy private universities may well be close to (1), spending most of their internal funds on their own faculty's non-sponsored projects.   Less wealthy privates and some major public research universities may be close to (2). Both of these stories are about major research losses of somewhat different sizes.

The extreme case of (3), in which nearly all Institutional Funds subsidize sponsored research, may be right for the case for which it was developed, the University of California.

To check whether this could possibly be true, I offer some seat-of-the-pants numbers for one campus, UCLA.  It has formally recorded Institutional Funds expenditures from at least two sources, its Academic Senate Committee on Research, and the Office of the President's Research Grants Program Office (RGPO). The former, in the pre-cut year of 2007-08, dispensed about $2 million in travel and research support.  The latter, over a three-year period 2010-13, spent $44 million per year (  Annual Report page 25).  (I apologize for mixing years but here I'm just going for scale).  I'll assume that UCLA got about one-fifth of RGPO system resources based on its large size.  That means the campus spent $11 million of Institutional Funds through formal channels on faculty and student research projects in a period when it was grossing around $1 billion a year in extramural research funding.  In other words, UCLA spent 1.1% of its Institutional Funds on designated faculty research. 

(UPDATE 04/15: Having looked again at the RGPO awards for the relevant period, I think UCLA's share may be half of my estimate here. It's hard to say because they do not publish dollar amounts.  In addition, newer COR reports are online. Award totals are the same in 2013-14 as in 2007-08, my baseline here. The 1996-97 COR award $1.9 million, which is about $2.84 million in 2013-14 dollars: UCLA's COR now awards about half the amount it did 20 years ago.  "Half" seems to be the theme today: RGPO has awarded about half the number of multi-campus grants in this cycle compared to the last.)

This is obviously not the whole picture of internal research funding, but we don't have public information on the use of discretionary funds retained at various administrative levels--but also no reason to think a large percentage of this unknown figure goes to non-sponsored faculty research.  Throw in the fact that Committee on Research funds go to some extent to top up extramural grants. You can then see why the UC Commission report rounded up to the claim that essentially 100% of Institutional Funds go to paying for unreimbursed indirect costs of extramural research.

The implication of all of these stories, especially 2 and 3, is that public universities can pay for research, but, as we go forward, only if federal, state, and private funders stop asking them to subsidize a large chunk of indirect research costs.

(4) A Few Steps Towards Improvement

Regardless of which story is correct for a given university, they all point towards the following list of to-do's.

A. University administrations should say openly and often that research loses money. It must be publicly supported because it loses money.  The more fundamental the research, the greater its long-term social potential, the more likely it is to lose money for years if not decades. The Internet provides an easy example of this point. 

B. Point out that effectively freezing public funding to hundreds of research universities is undermining the country's research ecosystem.  Converting higher ed to online, in whole or in part, will wreck that ecosystem.

C. Act on these NSB, NRC, and COGR calls "to cover the full costs of research projects and other activities they procure from research universities in a consistent and transparent manner" (NRC Recommendation 6, p 122).  (It is already official University of California policy to charge sponsors enough to "cover all expenses, direct and indirect" (APM-020 Revised Regulation No. 4, II. 3)  Set up a multi-year plan for fixing at least the one-third of the problem that all agree is attributable to sponsors' underpaying of indirect research costs.

D. Sort through Stories 1-3 above. Get clean numbers, campus by campus, for "indirect indirect" costs--all the set-up costs that support extramural research rather than research that is ineligible for extramural funding. This will mean distinguishing clearly that research which, for historical and institutional reasons, depends wholly on Institutional Funds. It will also mean campus admins publishing those numbers to their communities, so that they can be understood and discussed.

E. Identify and quantify the needs of the large, complicated sphere of this (mostly) qualitative and/or truly experimental research that cannot receive external sponsorship. Explain why its ineligibility to receive external sponsorship follows from the historical shape of Western scientific, military, and industrial development rather than from a lack of merit or social value.  (This needs to be done for a society that doesn't generally understand market failure, spillover effects, or noncommercial social value.) Then make sure that this research has equal or superior claim to Institutional Funds.

Universities need finally to get ahead of the curve on research costs. If they don't, the "unbundling" pressures will only increase.

Must innovation disrupt everything so that society might have new and better things? Widespread fatigue with this idea inspired a number of headlines last week.  "The Emperor of "Disruption Theory" is Wearing No Clothes," exclaimed one response.  Paul Krugman described a "careful takedown," suggesting that the whole era of innovation might collapse from its own overhype ("Creative Destruction Yada Yada.")  Jonathan Rees referenced an "absolutely devastating takedown."  All three were talking about Jill Lepore's much-discussed New Yorker critique of prominent business consultant Clayton Christensen's theory of "disruptive innovation." Prof. Rees concluded, "Like MacArthur at Inchon, [Prof. Lepore] has landed behind enemy lines and will hopefully force the enemy to pull back and defend ideological territory that they thought they had already conquered."  Obviously something is up when one historian compares an article by another to the "decisive" amphibious assault against the North Korean army early in the Korean War.

What's up is pervasive anger at the corporate and political classes that have used the theory of disruptive innovation to justify an endless procession of company downsizings and closings over the past thirty years (photo credit: Bill Bamberger).  People are also angry at the belief of many advocates that resistance is futile and resisters are losers.  Prof. Lepore spoke for this sense of exclusion when she wrote that in order to avoid actual debate, "disrupters ridicule doubters by charging them with fogyism."  Innovation, she wrote, has become "the idea of progress jammed into a criticism-proof jack-in-the-box."

The stakes of this debate about innovation are high.   Corporate America, health care, manufacturing, and the contemporary university have all tied their reputations to their delivery of innovation. Innovation comes with lots of turmoil, unilateral management decision making, and interference with how people do their jobs.  The critiques of the Lepore article didn't justify disruption as innovation so much as they affirmed that there is a lot of disruption:  responses from Digitopoly, Vox, Forbes and the Wall Street Journal tried to refight the debate to a draw.   In an interview, Prof. Christensen countered some of her examples while describing her piece as a "criminal act of dishonesty--at Harvard of all places!" (He also seemed to invite her over to talk innovation theory.)

I don't want to try to referee the debate through the examples in Prof. Lepore's piece, but to provide a better socio-cultural context for it, in the hope that the debate will continue.  The main point I will make here is that we can't overcome disruptive innovation unless we realize that it isn't a theory of innovation but a theory of governance. "DI" isn't about what people actually do to innovate better, faster, and cheaper, but about what executives must do to control innovative institutions.  Prof. Lepore's work will be wasted unless we can move from disruptive to sustainable innovation, which she argued is better than the disruptive kind.  But we won't get sustainable innovation until we identify its opposition in current managerial culture.

(1) From Schumpeter to Christensen

A little backstory may help here.  Prof. Christensen is now the most prominent heir of Joseph A. Schumpeter's twin definition of capitalism as the source of all meaningful innovation in life, and of innovation as "creative destruction." For both of these thinkers, the entrepreneur is the fountainhead of new value, and capital must be pulled out of less productive uses and allocated to the entrepreneur, who is the privileged source of all future of wealth-creation.  In Schupeter's view, governments, publics, regulations, communities, traditions, habits, faculty senates, teacher's unions, zoning boards, homeowner's groups, professional organizations, and, last but not least, business corporations, do not create value but interfere with its creation. All that is solid must be melted into air for the entrepreneur to be free to innovate and thus transform.  The resulting wreckage and waste is part of progress, and must not be reduced through regulation.  This is true for shuttered factories, and also for high levels of inequality: both are part of liberating the entrepreneur to create the greater wealth of the future.

Although years of reading Prof. Christensen makes me think he's personally humane, his theory is the business world's single most powerful rationalization for disrupting every type of humane condition, such as job security, tax-funded public infrastructure, or carefully nurtured, high-quality product lines.  Prof. Lepore was right to state, "Disruptive innovation is competitive strategy for an age seized by terror."  Disruption feeds on major and also minor terrors, like being left behind by a change deemed unavoidable, or being excluded from debate about the costs and benefits of undermining entire regional economies by offering tax breaks to companies that offshore production.

One outcome of the theory of disruptive innovation has been the shocking complacency of the U.S. political class about the national devastation wrought by deindustrialization. We have a "rust belt," and ruined cities like Newark and Detroit, and wide areas of social and economic decline amidst enormous wealth, because business and political leaders were taught by consultants like Prof. Christensen that capitalism must destroy in order to advance.  Journalists might come along and chronicle the horrible human costs of the decline of the steel industry in, say, Youngstown, Ohio (see the Tammy Thomas sections in George Packer's The Unwinding (2013). But by the time someone like Mr. Packer arrived, decline has been baked into the regional cake.

The theory of disruptive innovation was arguably head baker, for it taught politicians in Youngstown and elsewhere that industries like steel and their unionized employees had been judged by an impartial market to be uncompetitive.  Consultants would routinely opine that the only logical response to falling profits was the mass layoff and/or factory closure. In The Disposable American (2007), Louis Uchitelle pointed out that layoffs were not wars of necessity but wars of choice, and yet to say that deindustrialization expressed a cultural entitlement rather than an economic law was to stick one's finger in the dike.  Slowly but surely, Youngstown and everyplace like it no longer had economies that supported a broad, stable middle class. In addition, like Beckett's Godot, the renewal to which this disruption was to lead never actually showed up.

Thus Prof. Lepore's critique of disruptive innovation tapped into a pervasive, long-term anger about ruin in America and an anger at the corporate and political classes that deemed ruin necessary.

(2) Jill Lepore's Critique

In "The Disruption Machine," Prof. Lepore held Prof. Christensen's theory to rigorous evidentiary conditions for historical claims, and found that "none of these conditions have been met." (Score Humanities 1, B-Schools 0!--there's a disciplinary matchup in her piece that Michael or I will come back to another time.)   She suggested not just that disruptive innovation doesn't work as advertised when transferred from, say, specialty steel manufacturing to educational services, but that it didn't work well even when applied to manufacturing.

Crucially, Prof. Lepore concluded that "sustaining" innovations--which continuously improve a product--are far more successful that Prof. Christensen's theory admits.  Discussing a core Christensen example, the disk-drive industry, Prof. Lepore posited a more accurate history,

In the longer term, victory in the disk-drive industry appears to have gone to the manufacturers that were good at incremental improvements, whether or not they were the first to market the disruptive new format. Companies that were quick to release a new product but not skilled at tinkering have tended to flame out.

In other words, sustainable innovation works as well as or better than disruption, but the U.S., thanks to figures like Prof. Christensen, wasn't allowed to have it.  Americans could have developed advanced skills for advanced manufacturing and services as did Germany, Japan, China, Sweden, et al, but nooo--economists and business theorists taught that it was uneconomical to invest in all the Tammy Thomas's of the country so that they could "tinker" brilliantly for the sustainability of U.S manufacturing and its heartland cities.

I agree with Prof. Lepore's demonstration of Prof. Christensen's fallibility, and with the conclusion that disruption is a false idol.  It has indeed produced neither social progress nor economic success as such. But it's one thing to critique disruptive innovation, and another to change it into sustainability.   Prof. Christensen has and will continue to promise enormous irreversible change in articles like "MOOCs' disruption is only beginning"--and so will American capitalism in general. To disrupt disruption, particularly in a service sector like higher education, we need a better appreciation of the deeper purpose of disruptive innovation I mentioned above.  The history suggests that Prof. Christensen became influential  because he enhanced an top-down kind of innovation management, not because of his insights about innovation as such.

(3) The Revolt Against Managers 

Prof. Lepore juxtaposes Prof. Christensen to Michael Porter's strategy-based model of "comparative advantage." But Prof. Christensen isn't so much the un-Porter as he is the un-Peters--Tom Peters, that is.  In the mid-1990s, the management book to beat was still In Search of Excellence (1982), which Mr. Peters co-authored with Robert H. Waterman. These two management consultants did a particularly good job of facing up to the decline of American manufacturing, particularly in relation to Japan, which had been influentially analyzed in works as different as Chalmers Johnson, MITI and the Japanese Miracle (1982), Barry Bluestone and Bennett Harrison, The Deindustrialization of America (1984), Michael J. Piore and Charles F. Sabel, The Second Industrial Divide (1984), and  Rosabeth Moss Kanter, The Change Masters (1985). By the time David Harvey's The Condition of Postmodernity (1991) came along to declare a fundamental change in capitalism's mode of production, prominent business writers had been trying to revive capitalism by exposing the deficiencies of top-down corporate management.

Most famously, Mr. Peters and Mr. Waterman decorously criticized management's selfish cynicism about the capabilities of their employees.  They argued that American executives adhered to an outmoded Theory X, "the assumption of the mediocrity of the masses.” Executives wrongly believed, in the words of Theory X's codifier, the MIT industrial psychologist Douglas McGregor (1960),  that the masses “need to be coerced, controlled, directed, and threatened with punishment to get them to put forward adequate effort." Theory Y, which Mr. Peters and Mr. Waterman upheld, like McGregor before them,  "assumes . . .  that the expenditure of physical and mental effort in work is as natural as in play or rest . . . and the capacity to exercise a relatively high degree of imagination, ingenuity, and creativity in the solution of organizational problems is widely, not narrowly, distributed in the population" (emphasis omitted, 95).  (For a discussion of MOOC-based Theory X in higher ed, see "Quality Public Higher Ed: From Udacity to Theory Y.")

In Search of Excellence implied that American management was holding the American worker back.  The way to compete with Japan, Germany, et al was general employee empowerment.  I understand that the only management book to outsell In Search of Excellence in the 1980s was Stephen Covey's The Seven Habits of Highly Effective People, which was in a different way also addressing the empowerment needs of the ordinary employee. Extending the argument, Mr. Peters called a later tome "Liberation Management (1992), claiming that a kind of self-organized worker activity would grow the company's bottom line through the creative pursuit of higher quality.   Oddly enough, this kind of  "human relations" management theory surged during the Reagan years. One culmination was Post-Capitalist Society (1993),  in which the dean of management theorists, Peter Drucker, prophesized the replacement of the firm's managerial layers with the "intellectual capital" of knowledge workers, who would use their pension-based ownership of their companies to take capitalism away from passive capitalists and their managerial proxies.

(4) Innovation as Governance

I retell this history to help us avoid interpreting Prof. Lepore's account to suggest that Clay Christensen's rise was based on a series of misreadings  of corporate histories that never got fact-checked by his propagandistic discipline.   To the contrary, Prof. Christensen became a pivotal figure in management history by using innovation to re-empower management.  We can see him, in retrospect, as offering a comprehensive antidote to what American capitalists could only regard as the poison of neo-workplace democracy.  Some 1980s business blockbusters were telling stockholders and executives to share power with a new, insufferably smart-ass "no-collar" generation of knowledge workers, and that only this concession would turn the tables on the Japanese.  Many owners and executives must have felt that this price of recovery was too high.

Prof. Christensen was not working alone, of course: the "shareholders revolt" inspired by another Harvard B-school professor, Michael Jensen, was very important, as were other theories and corporate movements. But Prof. Christensen's role was particularly important in "learning organizations" (the subtitle of a 1990 blockbuster, by Peter M. Senge, that disruptive innovation also eclipsed).   Had the future belonged to the Peters, Druckers, and Senges, universities might by now have subjected financial management to the judgments of the collegium, in Jim Sleeper's term. In a post-capitalist university, administration would execute decisions made by faculty and staff collaborating with students in everyday administration and in strategy. But universities have gone in the opposite direction, with their managers controlling not only the allocation of resources but the composition of teaching staffs while, in the online era, shaping the curriculum and its delivery.   If in the 1970s it made sense for Barbara and John Ehrenreich to speak of a joint "professional-managerial class," by the end of the 1990s, managers had broken away from professionals in healthcare, K-12 education, and academia. Management had the easiest time maintaining its authority when it spoke on behalf of innovation.

Prof. Christensen, in short, offered an antidote to an unexpected return of neo-workplace democracy. His work circulated widely in firms who wanted to avoid losing to more "innovative" competitors. But even in those contexts, his work was less about maximizing innovation and more about controlling it.   His theory has rested on three main axioms.

First, as I've noted, he assumed that losing major industrial sectors to other countries is a natural law of capitalism, not a mistake of American management.  This is the meaning of innovation -- it destroys incumbent sectors in the process of creating new ones.  So stop worrying and learn to love the bomb that blew up your (old, less valuable) industries (and communities).

Second, your employees' genuine love of excellence is not the solution: it's the problem.  They will keep making better, higher-quality products (Theory Y is true!).  Meanwhile, disruptive innovation will steal your market share with crappier, lower-quality products at new, low low prices.  Your employees do want to focus on higher quality and smarter technology.  But these are always, in the Christensen model, "sustaining innovations," which are bad for profits.  So a firm needs to lower the quality of goods like photocopying or college teaching.  Prof. Christensen often goaded managers with the inability of great firms with great products to develop worse stuff quickly enough to save themselves. To move downmarket fast enough, they must control their excellence-oriented, highly effective, quality-focused workers, and resubjugate them to the firm's value proposition.

Third, this control must be exerted by management.  It is management that must interpret market requirements, and do so without concern for the human interests at stake and then compel employees to comply with these. In the Christensen antidote to a kind of shared governance with knowledge workers, management had a whole new lease on life and, indirectly, a gigantic claim to company resources. Companies should manage innovation with structures like "heavyweight teams."   Prof. Christensen defined what might have seemed a return of executive Bonapartism as the objective transmission of market signals.  You don't like your product line downgraded or your laboratory closed? Don't blame the messenger! The management team is just transmitting market signals without fear or favor. In the case of university "reform," the management team transmits a preconceived mission: The Innovative University recounts how senior managers at BYU-Idaho pushed through unpopular changes like the elimination of sports teams and summer teaching breaks on the basis of unilateral decision rights--in their case rooted in collaboration with the senior leadership of the LDS Church itself.  (BYU-Idaho has an interesting teaching model that deserves independent analysis: my point here is that it was imposed through top-down managerialism wearing innovation's clothing.)

There's a further aspect of this third feature of the Christensen antidote to knowledge-worker autonomy.   In contrast to professional authority, which is grounded in expertise and expert communities, managerial authority flows from its ties to owners and is formally independent of expertise.  Management obviously needs to be competent, but competence seems no longer to require either substantive expertise with the firm's products or meaningful contact with employees.  The absence of contact with and substantive knowledge of core activities, in managerial culture, function as an operational strength.  In universities, faculty administrators lose effectiveness when they are seen as too close to the faculty to make tough decisions. In the well-known story that Prof. Lepore retold, the head of the University of Virginia's Board of Visitors decided to fire the university president on the grounds that she would not push online tech innovation with the speed recommended by an admired Wall Street Journal article.  The Christensen model does not favor university managers who understand what happens in the classroom and who bring students and faculty into the strategy process.  For employees and customers are exactly the people who want to sustain and improve what they already have, which in disruptive capitalism is a loser's game.

The power of the Christensen script can be seen in the care with which MOOC advocates have been following it since 2012.  They first cast universities as overbuilt incumbents, the kind of places that do indeed hire nonfaculty professionals at ten times the rate of full-time tenured faculty in order to chase high-end customers and avoid the less demanding and underserved masses.  Second, MOOCsters slammed instructional employees as opposed to innovation: articles or books by analysts like Mark C. Taylor, Ann Kirschner, and Richard A. DeMillo heaped scorn on what Dr. DeMillo called "faculty-centered" universities. Third, during the 2012-2013 boom, MOOC entrepreneurs bypassed faculty to connect directly with venture capitalists, politicians, business leaders, and senior university managers.  One triumph of the campaign was the Udacity-San José State contract for three MOOC courses, which must have been the first time in history in which a university's outsourcing contract for one department's remedial curriculum was signed in the presence of the state's governor.  2014's MOOC business plays have continued the outreach to academic managers and the sidelining of teaching professionals (e.g., UC Berkeley, or Udacity's "nano degree").  MOOCs moved in so easy because they fit with the managerial ascendency over the professional authority of professors--the key institutional goal of disruptive innovation.

(5) Towards Sustainable Innovation

Let me steer this discussion back to universities. We need a new era for them, in which they are allowed to find sustainable financing and to support sustaining innovations.  (Something analogous needs to happen for industries that have huge social value, like polymer solar cells, but that can't attract private capital.)   Jill Lepore's critique of Clayton Christensen's historical errors moves us in this direction by discrediting disruption-as-such.  But her effort won't last without broad faculty support for restoring the status of professional knowledge in relation to its decades-long undermining via the theory of disruptive innovation.

One traditional ground of faculty resurgence is to affirm its professional rights and privileges.   This is important, but will not be enough to emerge from a period in which these rights are exactly what disruptive innovation discredited.  The same goes for what I've done here, which is a kind of Foucauldian analysis of innovation as a mode of governmentality.  This is a necessary but not a sufficient condition of moving toward post-disruption.

We also need faculty to tie their professional expertise to the university's anti-elitist, pro-democratic social mission. Michael and I have been posting for a while on faculty- and student-centered higher ed, in company with the MOOC-based focus on learning, which, shorn of the medium's imperial pretensions, was all to the good.

Ironically, faculty can also get help from Clay Christensen's work, where a democratic impulse survives its deep managerial bias.  For example, the impetus of the BYU-Idaho experiment in The Innovative University was the democratic goal of higher quality for more students at a reasonable cost (251).  Figuring out which costs are necessary and which can be dumped required, as it always does in Prof. Christensen's work, asking two questions: (1) what job does the "customer" want done ( not what product does the customer want to buy); and (2), what jobs can the university "do uniquely well."

The Innovative University's answer to the first question was this:

the job that students and policymakers need done is the bestowal of the insights and skills necessary not to just make a living but to make the most of life.  A college degree creates its significant wage-earning advantage because it is designed with more than mere economic goals in mind.  Among those extra-economic goals are the jobs of discovery, memory, and mentoring, jobs that traditional colleges and universities perform as few other institutions can. (331)

This is a fairly basic statement, but it grounds even the "disruptive" (cut-rate) university in human development rather than job training.  It also leads to refocusing the university on its core elements: "(1) discovering and disseminating new knowledge, (2) remembering and recalling the achievements of the past, and (3) mentoring the rising generation" (331).  Again, the formulations are not ideal,  and yet even a university that has been businessed by an innovation gang would look, for example, to reduce the administrative bloat that has raised student costs and disempowered educational staff.

In the company of thousands of educators who've spoken out, Prof. Christensen is right that universities need to recover their educational focus.  It's just not his model of disruptive innovation that will achieve this.  The process cannot be lead by managers and must be lead by faculty and students.  The historical tragedy of the Schumpeter-Christensen model is that it elevated a managerial class that opposed the democratization of invention we now can't do without.  The good news is that there's no reason to make the same mistake twice.