Bacon & Espresso: The Moneyness of Money

By Glenn W. Wekony

How is academic freedom and the corporatization of the university tied to this article’s title?  In a word: commodities.  This article will not discuss how the commodity and option markets work.  Instead it will show, from this capitalist’s point of view, how everything is tied together.  Gas prices, interest rates, even coffee and pork belly prices, all are just like tuition costs, and the rate of inflation in all of them – particularly that last one – has a significant effect on one’s academic freedom and the corporatization of the institution they attend.

Let us first get some definitions out of the way.  Commodity can be defined as anything that is clamored for – think Starbucks.  As for money, that’s just cash, right?  Well, not exactly.  Currently the Federal Reserve Board and its chairman Ben Bernanke, commonly known as “The Fed”, have set interest rates at one percent, which means that federal loans for education, if they have an adjustable interest rate, should go down.  As for Moneyness, let us say for the purpose of this article, the intrinsic value of . . .

Academic freedom, in the liberal sense, is a form of free speech.  One can do and say anything at anytime, whether it is offensive or not.  No, I cannot yell ‘fire!’ in a movie theater when there is not a fire or go unpunished for, say, threatening the president’s life.  That would be crossing the line.  So what if a large university has a corporate sponsor like ABC Big Tobacco, should that university’s administration sit idly by while ABC endures endless public scrutiny for selling what it sells?  And what if the university’s own students provide such scrutiny, should this be allowed to continue?  On the issue of academic freedom, the answer is yes.  But what would ABC have to say about this?  It might be something along the lines of, Wait a minute, if we are going to sponsor you, and in turn you endorse the criticism of our product, then should we continue to give money to your university?

ABC would be right in saying this, and would be justified in withholding funds.  Why would a person or corporation pay to have their product verbally trashed?  This affects the university in two ways: first, it violates a boundary set by ABC, and second, it deprives the university of the necessary funds to provide scholarships and other opportunities for its faculty and students.  This leads us to the issue of tuition loans.

Money is now a commodity, it is in demand and as students, we desperately need it.  There’s no getting around this fact.  Unless one is fortunate enough to have a rich uncle or trust fund (luxuries this writer does not possess), then we need to take out loans.  Scholarship monies and state tuition assistance can carry one only so far.  Even if you have all the tuition bases covered, you still need to cover housing, transportation, food, caffeine for those late-night cramming sessions and lastly, books.  So, how is all of this going to be paid for?

One dangerous trend that continues to affect many students on many a college campus is the onslaught from credit card companies.  This is easy credit for those who have had none in the past and most likely cannot properly manage their credit.  This type of corporate sponsorship, where the university allows credit recruiters to set up shop on its campus to ply their wares, is predatory and the university is guilty as well.

Universities of all shapes and sizes seem to have changed since the 1960s.  They seem far more interested in raising money than providing a quality education at a relatively low cost.  Student loans, usually provided by private banks, allow universities to raise tuition rates beyond the normal inflationary rates.  This is how most universities get away with tuition hikes that outpace inflation.  Another problem affecting students is that universities do not reign in costs.  An example of this is higher salaries for university presidents, along with a few other perks.  It all adds up.

Most universities are operated like not-for-profit organizations.  Perhaps this structure should be changed?  If universities are allowed to get in bed with corporations, then we should have lower tuition costs, and restrictions should be in place to reign in other costs.  Universities could also establish banks to provide low-interest loans.  Many students, upon graduation, will be steeped in debt.  Perhaps loan-forgiveness programs could be established for individuals who go on to work within certain industries; this is already being done by private individuals, through donations ear-marked for that very purpose.

In closing, this writer would be most fortunate if he could find a corporate sponsor to assist with his tuition costs.  He will graduate with much less debt and it will allow him to expand his job horizons.  If done properly, corporatization and academic freedom need not suffer or change how universities think and do business.  Boundaries are established to protect everyone’s interests.  However, we do not live in a utopia.

Then hopefully it is articles like this that will increase awareness, and influence certain individuals to discuss and debate these matters, thus making the open exchange of ideas a more desirable attribute.

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Glenn Wekony is a first-year graduate student in the Department of Global Finance. He is a member of the Federalist Society, and his personal hero is Gordon Gekko.