The emphasis, Newfield believed, had shifted away from the social structure of knowledge creation, which is inherently democratic, toward something managerial. That shift triggered an involvement in organizational theory through which Newfield came to understand American society as both corporate and knowledge-based. His dissertation later became The Emerson Effect: Individualism and Submission in America, which was published in 1996 by the University of Chicago Press. Newfield later authored Ivy and Industry: Business and the Making of the American University, published in 2004 by Duke University Press, and wrote an afterword for Cultural Critique and the Global Corporation, published in 2010 by Indiana University Press.

Capping this career arc studying the American university as both institution and cultural signpost, in 2011 Harvard University Press published Unmaking the Public University: The Forty-year Assault on the Middle Class. And that—along with his blog Remaking the University and frequent contributions to Huffington Post, Inside Higher Ed and The Chronicle of Higher Education—have made him one of the most influential speakers on the state of higher education today.

With a studious level of economic detail, Newfield is able to unpack the problems with our higher education system through presentation of the economic, intellectual, political and social forces that structure universities, along with the various publicly professed missions that guide them. By scrutinizing missions, budgets and other university documents, Newfield’s research upends many of the supposed truths that members of academia have been asked to believe, revealing the degree to which research units depend upon student tuition dollars, the extent to which public-private partnerships have transformed universities into the R&D wings of corporations and the relationship between rising student debt and access (or lack thereof) to affordable higher education.

Newfield’s scholarship on Emerson meshes with his work in what is now called “Critical University Studies” via an ongoing commitment to thoroughly understanding how the interplay of individualism, liberalism, the middle class and corporate forces fuels our nation’s aspirations to democratic ideals and the way this interplay forges the material thought points of democracy as revealed through our social and educational institutions. His latest book, The Great Mistake: How We Wrecked Public Universities and How We Can Fix Them, published by Johns Hopkins in 2016, begins to address both the causes of where we find ourselves today and the possible solutions to reverse the decline of America’s public university.

According to Newfield, the great mistake has been to adapt to a policy world that assumes the superiority of the private to the public sector for every good or product, including education. And what’s truly at stake, more than the university functions of job training or the mass production of degrees, is the crucial social outcome that public universities provide: the democratization of intelligence.

“We’re at a crossroads,” he says. “The current business model is unethical and it’s suboptimal and ineffective for society, yes, but it’s also financially unstable.”

If the private sector wasn’t already powerful under the neoliberal democratic Clinton and Obama administrations, Donald Trump’s victory in 2016 means that the federal government is now controlled by people who see no point in any public system that is independent of private self-interest. For them, there is no public interest and no public institution that isn’t bad, if not pointless, compared to its private version.

“If we don’t know why universities are public and if we don’t know what ‘public’ really means—if we don’t know the power of the public—we’re not just wrecked: we’re gone,” says Newfield. “The private good framework has been subducted on the campus because the framework says to public research university faculty that if we withdraw from the social demands and the public sector politics of enclosure and equality we will be better off.”

Newfield argues that this belief is incorrect, and that research greatness depends implicitly on the public mission of the university. Restoring our public good ambitions and thus enabling public good funding structures is the only remedy that will restore the public university’s economic vitality.

Democratic Intelligence

So what is public? “‘Public’ is about the egalitarian, full development of the entire society,” argues Newfield. “It is the permanent rejection of the rule of elites. It is also the rejection of identity-based forms of stratification.

“The university was always meant to be America’s honest living,” he continues. “It was not slavery; it was not the settler-colonialism of the American West; not the gung-ho acquisition of Pacific islands; it wasn’t Jim Crow; nor was it the extraction of raw materials. It is often complicit with these things, and yet it is also the source of the production of thought that would help overcome them. The university represents the possibility of creation via our own laboriously developed genius. The university enables a genius that we take from nowhere else, but that we create ourselves. We often fail at this, and yet we endlessly seek it nonetheless.”

This ideal of a public mission has requirements, however. In 1879, James B. Angell of the University of Michigan said that, “So long as the poor have anything like an equal chance with the rich of developing their intellectual power, we have little to fear from an aristocracy of wealth; but let wealth alone have the highest intellectual training, let the poor as a class be shut out from the schools of generous culture, and we must either consign the control of all intellectual and political life to the hands of the rich, or else have a constant scene of turbulence. Bitter class hatred would be inevitable.”

This warning came two years after a brokered presidential election ended racial reconstruction in the south and 14 years after the end of the Civil War. When Angell spoke of turbulence and hatred, he was referencing events within his own lifetime. As federal troops withdrew from the South, with Jim Crow rising in their wake, the public university was a critical fulcrum in building an integrated society. Angell demanded tax-based support for the university and showed how little it would cost each citizen. And then he concluded: “This prosperous state of Michigan has, through the wisdom of her founders, succeeded in furnishing the higher educations of all her sons and daughters, without distinction of birth, race, color or wealth.”

In Angell’s eyes, the state university was the public good that would allow society to develop without civil strife. But it could only do this as an inclusive institution, accepting of women as well as men, black as well as white, poor as well as rich. The public university would not build an aristocracy—even an aristocracy of talents. It would be directly tied to society through tax support. The university would be a school of generous culture, where the poor would have the same elevated and liberal learning as the rich.

Angell’s thinking shows that, 135 years ago, there were already three core public university features; features that Newfield identifies in his research. First: no exclusion by race, class or gender; second: public funding; and third: the goal of providing higher education for all. But despite the public obligation to fund public universities, and despite the public’s resulting ownership of, and commitment and connection to higher education, state funding for students has fallen nationally every decade since the 1970s. Angell’s second pillar has been fundamentally destabilized.

Newfield’s research shows that the top half of the U.S. student population by income is the best in attainment in the modernized world, while the bottom half is one of the worst. A Georgetown Center For Higher Education and the Workforce report called “Separate & Unequal” shows data on new entrance rates to two different types of colleges and universities: one selective and the other open access. The great majority of new, white students went to selective, non-open access schools that have more money to spend per student and produce greater graduation outcomes, while the majority of Latinos and African Americans went to open access schools, which have less to spend and much poorer outcomes as a result.

“In some ways, we are in the midst of our own Civil War moment,” says Newfield. “We have a society that is divided by race, by class, and divided by level of education. We have a tale of two countries, and the gap between these two countries is getting worse. We are living Angell’s nightmare.”

Pushing Privatization

Who, or what, caused these changes? The prime suspect is always public funding cuts. State legislatures are disinvesting: that is, it’s not that the money doesn’t exist—state governments just aren’t spending it on universities. In this standard hypothesis, state legislators cut public colleges, and the voters let them because voters no longer care about public goods. Therefore universities have had no choice but to look to private revenue streams.

“Privatization isn’t the problem in this model, but the solution,” muses Newfield. “It’s actually saved us. The university has found new revenue streams like tuition from students; but it has also found philanthropy, research partnerships, real estate revenues and many others. So the prime suspect now is the legislature and the tax revolt against the public sector.”

And anyway, this standard hypothesis goes on to say, there is no alternative. Advocates for private funds argue that such funding didn’t change university values: universities are still focused on the public goods of teaching and research, have maintained academic freedom protections and have no single external masters. And much of that is quite true. Privatization, they argue, has brought public universities closer to the aims of the knowledge economy, as defined by both Democrats and Republicans over the last four decades, in which all value is said to be produced by the private sector.

In this model, the tech sector, for example, would be given a free hand to innovate and to use universities as research satellites within the neoliberal framework. In the Democrats’ version of neoliberalism that advanced with the election of Jimmy Carter in 1976, and then became dominant with the election of Bill Clinton in 1992, privatization has seemed better than what universities had before. Privatization grew the tech economy and showed that universities could generate business and profits.

“The invocation of the usual suspects has elements of truth,” acknowledges Newfield. “State legislative cuts are a major villain, there’s no doubt about it. But state legislatures did not act alone.”

Newfield started to look for other culprits in the damaging of public universities many years ago when he noted the narrowness of the benefits that were beginning to flow to the UCSB campus from private money. Philanthropy made a few things better on campus, mostly for very high-status fields, such as theoretical physics, or potential moneymakers like material science. In general, however, it neglected overall operations. In fact, he discovered, the pursuit of private partnerships moves university funds away from non-market activities like construction and basic research—including basic STEM research.

“What if, I began to wonder, the phenomenon known by this mouthful word ‘privatization’ is not the solution but, in fact, the problem? What if privatization is not the cure, but the disease?” posits Newfield. “What if the university’s various sufferings—high tuition, insufficient research funding, faculty adjuncting—has another source, which is a budget system that links these problems together.”

This system subsumes the legislative cuts; it compels them and it makes them worse. Newfield describes this system in the form of a decline cycle that is driven by privatization. Privatization isn’t a sideshow in the political economy; it’s a primary mode of concentrating wealth today, of shifting public assets into the private earning system. It increases the crisis of economic inequality and reduces our ability to address common social problems with common capabilities—Emerson with a neoliberal vengeance.

Decline of the Public Good

During the 1980s, universities began to retreat from their public good status. They accepted the conservative claim that the free market economy is more efficient and more fair to the public sphere and, as a result, began to play up service to private interests. Universities simultaneously began to downplay their universal mission to society as a whole, in favor of service to technocratic powers in Silicon Valley, Hollywood and Wall Street, for example. In particular, universities began to stress that college graduates have higher salaries than high school graduates.

“Higher salaries is a private market good, but it’s only one of several types of goods that the university offers society,” Newfield comments. “Unfortunately, it’s virtually the only one that we talk about now. We stopped saying that the public university is about learning for the entire population in diverse institutions of equivalent quality. We thereby have ignored the non-market value, the indirect value, the social value that universities produce.”

These values came to comprise what economist Walter McMahon called the university’s “dark matter” that policymakers, parents, students and administrators couldn’t see. People lost sight of the university’s contributions to personal health, to non-governmental civic organizations, to everyday problem solving capabilities, to family peace, to personal happiness and to social cohesion.

Given the assumption that public goods were terminal, universities began to focus time and money on finding bigger and better private revenues. Institutional resources moved toward growing and managing these private revenues on a range of complex projects, from research to real estate. Outside sponsors and research had come to universities because that’s where the great researchers are, but also because that’s where the research discounts are. Outside sponsors, corporations, foundations, the federal government and state governments naturally tried to get as much activity as they could for as little of their own money as possible.

“What do the universities do when they negotiate with someone like Phil Knight, the head of Nike? For every dollar Nike puts into Stanford’s new Knight-Hennessy scholarships, they get another dollar out of Stanford as well. Such matches are typical,” says Newfield. “The lesson is that new revenue streams aren’t free. Revenue streams cost money.”

Making matters worse, public universities—which have less money than elite, private universities—pay twice as much of their internal funds than private universities do to subsidize research. Every dollar of research expenditures requires 25 cents of internal funds out of public universities. So, while politicians and regents think research is a big moneymaker for universities, in fact the universities lose money on research.

“Engineering, natural sciences, life sciences, nursing, law—these are money-losing divisions in the amount of $20 million per unit or so. Social sciences, business—they make money,” says Newfield. “And the way that you are solvent as an institution at the end of the year is you move money from the profit-makers to the losers. This is as it should be, if you think of the university as a public good: we share resources, we help each other out, we do cross subsidies because we want everybody to thrive.

“We need more research—including more STEM—not less, and we need to be able to afford to lose more money than we are currently doing,” argues Newfield. “But in a privatization framework, these losses are often denied because, of course, they are shameful in a profit-oriented framework.”

The result is, among other things, financial losses for the university itself: The university helps the private sector access public money while losing money in the process. Alternative revenue streams, bond sales, real estate development, philanthropy and tech-based operating efficiencies generally make up less than 5 percent of revenue. Given the new revenues, and also the new costs and the new subsidies that are being provided for outside sponsors, the public university knows perfectly well that its best net revenue stream is student tuition. It therefore raises the price of the college product far more than inflation year after year. For decades, the university’s first reflex for covering new costs has been the tuition hike.

“We’ve been told that state cuts cause tuition hikes,” says Newfield. “The people that have been watching the tuition hike process for years—especially state governors and state legislators—they see universities get money every year from their students, and every year university budget reports are packed with juicy revenues: medical billings in the billions, real estate returns, bond sales, borrowing from our own pools of unexpended funds. So the governor says, ‘Well, since you have so much of your own money, you don’t need ours.’

“The point is that societies work within complex feedback loops, not one way linear causalities,” he continues. “In any given year, universities may hike fees in response to a specific legislative cut, and that does happen, but over time the leaning is the other way around. You, the university, will hike, so we, the legislature, can cut. These legislative cuts are a major assault on the educational welfare of, now, two generations of students, and they are a major instance of structural racism and of naive, backward market formalism.”

How are students going to cover these hikes? “Their ever-increasing tuition is climbing at a faster rate than average incomes, particularly for the bottom 60, 70, 80 percent of people in the United States that have barely seen a raise since the 1970s in real dollars. The answer they receive is to take out loans,” says Newfield. “We’ll bring in private sector solutions, and we’ll grow the loan industry. Then every kind of student can pay for college. And pay, and pay, and pay.”

Across the country, low income students borrow as much as middle class kids. The result is the some $1.3 trillion of student debt that continues to grow after the Great Recession of 2008.

“Student debt is recession-proof. It’s a great business for banks, though not for students or for colleges,” Newfield says. “Mountains of debt are piled onto society’s most vulnerable people: kids who are just starting out and whose futures are, in fact, changed forever because of it. Public universities share the blame with high cost private universities of changing college graduation from a launching pad to a vulnerability.”

The Great Mistake

Finally, in the early 2010s, state legislatures started to freeze tuition hikes and close that money spigot. This has caused universities to focus on finding efficiencies, but has not meant asking faculty and staff for internal help in redesigning old processes. Instead, it has meant hiring consultants and third party vendors. And this leads to what Newfield considers to be the single greatest mistake an organization can make, which is to offload parts of its core competency. In the university’s case, this competency is undergraduate instruction.

One example occurred in 2013 when San Jose State University turned some remedial engineering courses over to the company Audacity. Adoption was driven not by educational evaluation, but by the privatization model in which entrepreneurs supposedly function, at even core university practices, better than private and public universities do. In signing deals with educational technology companies before faculty were able to review the potential effects, administrators broadcast to the wider society that a private, online education company could run a college as well, or better than, the existing college.

“In this new, half-privatized system, education (if you can pay for it) doesn’t work as advertised,” Newfield says. “All-in-all, U.S. bachelor degree attainment doesn’t go up, but down. The U.S. was first in global attainment in the 1960s, and now it’s 12th or 16th (depending on how you measure) in what is supposed to be the world’s leading knowledge society.”

Public universities have always been the key agent in bringing attainment to lower income and first generation students, and in producing racial equity and integration, which are all prerequisites for democratic intelligence. Growing resource skews mean that these institutions no longer serve that function.

Grossly unequal funding generates re-segregation instead, in which lower income students in much larger numbers go to community colleges with the least amount of money spent per student. Higher education has, for generations, been a highly visible site of racial integration. In recent decades, this has been framed by the political right as a “taking” or “diluting” of white property, which quietly justifies giving less money per student to the types of colleges that have a higher proportion of students of color.

“Though university communities are very supportive of diversity, this has not meant increasing racial equality,” Newfield points out. “What began to occur is what I call ‘pseudo-integration,’ in which the college system produces its own forms of racial inequality; not through explicit exclusion, but through unequal funding. It’s a form of structural racism.”

A bachelor’s degree has long been the entry ticket to the middle class. But universities have now split the middle class into unequal pieces. Graduates of elite, private schools do well, as do many graduates of public flagships like the University of Hawaiʻi at Mānoa. As we move down the stratified ranks of the university system to the open access sector, the struggle increases. When public colleges don’t have the money to upgrade the capabilities of graduates, as is now the case, college skills become commodity skills. We increase our individual productivity and we do not, as we used to, pay for that incremental improvement of that investment in ourselves, either with money or with time, energy and intelligence.

“The rule for the globalized economy is this: If you are a worker of medium skill, which can be duplicated by hiring people in other countries, we pay you low wages,” says Newfield. “This used to be only a problem for blue collar, non college-educated workers. That is no longer the case.”

The problem was brought home to the heart of Silicon Valley in 2017 when UC San Francisco started to outsource the exact Information Technology jobs for which the university prides itself on preparing its graduates.

Universities have spent 40 years increasing the share of teaching done by contingent from one third, to two thirds, to now about three quarters of the professoriate. Universities have thus done their part to break the productivity wage on their own campuses. “And since we pay some holders of doctorates wages that make them eligible for food stamps, the university has become popularly associated with debt and a life of demanding and precarious work, if not regular underemployment,” says Newfield. “If we define the middle class as a state of relatively self-determined economic stability, as it was once thought to be, the United States is now ‘post-middle class.’”

The stratified university system played a major role in helping this outcome happen. “In other words, the university did not oppose Hillary Clinton’s 2016 campaign declaration that blue collar skills were obsolete and had a declining, marginal place in the rising economy,” explains Newfield. Now, the same exact thing is happening to white collar skills, declined by a replacement of similar jobs overseas in countries like India and Indonesia. And the university system has so far done nothing to address this in terms of either increased general quality, policy interventions or attacking the complacency that surrounds the issue now.

“And so we have, together, made a series of interpretive mistakes about the large socioeconomic trends that favor markets and technosolutionism,” Newfield says. “But the power of these trends is no excuse for misinterpreting them as inevitable or unopposable. At the end of it, we’ve lowered the value of public universities to society and to their graduates, while destabilizing our own finances, our faculty and funding for research.” Indeed, the great mistake is to forget that the public university is the foundation of the American middle class and, more broadly, of democratic intelligence, progress and the ability of a society to adapt to the global challenges of the 21st century.

“What we’ve wrecked is our own financial institutional stability, which we need in order to deliver for the public, for students and for knowledge itself,” says Newfield. “The public university system is delivering inequality and insecurity now. It is complacent in the decline of its own constituency. All this has to be brought to a stop.”

The Path to Recovery

The good news, according to Newfield, is that we can reverse this downward cycle. And we can begin to do this by starting with a better interpretation of the trends that are driving the national direction. Better interpretations will create a new ethos in society, which will create a new paradigm, which in turn generates new policies.

“The University of California system has been continuously increasing the share of research that is supported by institutional funds, which come out of students through tuition. If we zero that out, we can actually save 10–15 percent of a research university’s core budget,” says Newfield. “How would we possibly pay for this? In the recovery cycle I outline in The Great Mistake, the government would pay for this by directing the funds for basic research that they now give to the private sector back to public universities.”

Universities currently spend more than $15 billion a year supporting the research of outside sponsors. The federal government gives various industries 14.3 billion to do research that is mostly about their own products. This industry money could be rerouted to universities, allowing them to spend internal funds on educational upgrades instead of research deficits. This would include crucial expenditures on the arts, humanities and social science research, fostering creativity and free thought—essential pillars of democratic intelligence.

“Our students need to know all the ways to have more real control over their lives and their society. The university must reflect two characteristic facets of democracy, and one of them is creativity sprung from the self trust of its members,” Newfield explains. “The other is exposure to discord and the fundamental divergence of standards, precisely because of this creativity, that is the source of its strife. Self-trust is the essential prerequisite of creativity, as is working with contradiction and dissonance—what we now call cultural conflict and racial diversity.

“Democratic citizens have to be as familiar with the process of knowledge creation as with established knowledge itself,” he continues. “They have to see that all learning is research learning, and then be the kind of people that can practice this.”

The first step is setting a goal of zero student debt for bachelor’s degrees and then calculating how much students can pay to have zero debt at graduation.

“My crude estimate is around $4,000 per year for the full cost of attendance. Interestingly, the California legislative analyst’s office issued a report on debt-free college that calculated that it would cost the University of California $300 million additional dollars to buy out all of the debt of its 235,000 students. This is less than 10 percent of its tuition revenues,” says Newfield. “If we use the Lumina Foundation’s rule of 10, then the total bill per year for debt-free bachelor’s degrees for the country would be $200 billion. This amount is almost exactly the same as what we now spend on our current financial system—the one that continues to increase student debt.”

In other words, we can already afford to buy debt-free college. And we should do it soon, because the financial structure that is already in place now is only making the situation increasingly grim. The best way to eliminate debt is to eliminate tuition over the long run. The group Reclaim California Higher Education has calculated what would happen if California eliminated tuition in all three state systems (not just the UC system) and then replaced all of the lost tuition money with state money. This would cost the average California taxpayer an additional income surcharge of just $48 a year.

“It’s not the money. It’s the politics, and it’s the bad interpretation of the trends that are underlying it,” says Newfield. Extending creativity learning to the entire public university system means, over a period of years, bringing funding for community colleges and regional colleges up to a reasonable standard similar to what flagship students are getting. According to Newfield, this would start a process of convergence again with what private universities are spending on their students, eliminating the current tiered system in favor of equalizing student expenses regardless of the incomes and economic values of different school districts. It will take a project like this to catalyze delivery of the overall system’s democratic promises.

The next step would be for universities to lobby tirelessly for an economy that pays their own graduates the full value of their productivity. Universities must push for a renewed productivity wage and denounce off-shoring, out-sourcing and adjuncting policies that hurt their base: the people who actually do the work, research and learning at an institution. This economic promise must become a fundamental right of the graduate once again.

A maximum consumption of the educational product across the whole society; passionate advocacy for great research and public support for its full costs; a rebuilt public funding system that eliminates student debt; unique training on a mass scale for regular students; and supply-side pressure to restore the productivity wage for the sake of all working people, starting with college graduates: achieving these goals would rectify the great mistake, according to Newfield.

“Public higher education is, perhaps, more relevant than ever in the era of the Trump Administration,” says Newfield. “Donald Trump has made enormous promises to his base. He promised to make America great again—he promised to make the American economy great again, and he promised to make it great again for people who do not have a college degree. He now has to deliver on these promises, and he can only do this if he properly funds the open-access institutions that do so much of the heavy lifting.

“We, in academia, need to set the standards and frame the debate to rebuild the public system that Republicans need to work as much as Democrats do,” Newfield continues. “We need a re-democratized public system that is obsessed with high quality. It should be a popular system based on racial inclusion and created for absolutely every person in the country. It must offer concrete public goods to working class people. It must function as an entitlement for non-college people as well. It must be on the side of regular folks that have felt excluded from it for a long time. We can live up to the realization of the public university and we must, for the sake of our own consultancy. As we must build equal justice for all, so we must build equal education for all.”