IN GOETHE’S play Faust , a man sells his soul to the Devil in exchange for the promise of youth. Derived from this cultural motif, the phrase “Faustian bargain” refers to any form of agreement that involves a person losing his soul in the process. Derek Bok, the former president of Harvard University, used the term “Faustian bargain” to describe the growing activities of universities in the market place. He viewed the corporatization of universities as constituting a Faustian bargain because their chase after financial benefits eventually caused them to sell their identity of an intellectual community. If universities are supposed to be intellectual communities, how does corporatization occur and affect society as a whole?
The beginning of corporatization
According to Choi Kab-soo (Prof., Dept. of Western History, Seoul National Univ.), when modern universities in the West were established in the 19C, they received full funding from the government because the advancement of knowledge was considered as the main element that facilitates the development of a country. Despite the fact that universities received full state funding, though, they were granted full autonomy from the state, since their role as a public institution to achieve academic progress was respected. Thus, even to this day, the majority of universities around the globe do not even have the concept of tuition. The circumstances are different for Korean universities, however. Universities in Korea have been especially vulnerable to corporatization because the majority of universities are private ones that have to rely on student tuition as their main source of funding. The 2011 OECD Science, Technology and Industry Scoreboard revealed that the government’s contribution in the higher education sector was only 20% in Korea, which i s significantly lower when compared to the level of 80% in Chile, Ireland and Denmark. This undesirable result was due to the sudden increase in demand for higher education after Independence and the Korean War, according to Choi. Staterun public universities were established, but the government was incapable of keeping up with the incredible rise in demand. Thus, it was inevitable for the government to grant individuals and organizations the right to establish private universities to meet this demand. Since then, the Korean government has openly supported the corporatization of universities. First of all, in 2007, the government passed a bill that allows university researchers to patent research findings as his or her property. According to Choi, before the bill was passed, the findings from university research were accessible to everyone, as they remained in the public domain. With this new law, however, corporations and public organizations alike have to pay the patent holder, the university and the researcher, in order to utilize the findings. The government explains that this bill was passed to motivate professors to conduct more high quality original research, but it may only promote research in those fields that can bring financial profits. What is more, the government expanded the number of industries that universities could engage in as a profit-seeking business, opening more windows for universities to act in a corporate-like manner. Of the 102 industries universities were prohibited previously from participating in, all except 19 were announced to be permissible for universities to become active in. The 19 restricted businesses mainly included controversial businesses such as tobacco, gambling and adult entertainment businesses. Apart from these, however, any university can now delve into practically all types of businesses.
Observing university corporatization
A corporate university has so many varied characteristics that university corporatization, or the process of a university turning into a corporate university, is difficult to define in a single sentence. One of the primary aspects of university corporatization is the adoption of corporate-style management, which has occurred through the election of CEO Presidents. Hwang Keum-joong (Prof., Dept. of Education, Yonsei Univ.) noted that the reason CEO Presidents appeared is due to the demand for a leader who could establish a strong economic foundation for a university and guide a university to actively participate in profit making businesses. According to Kim Nu-ri (Prof., Dept. of German Language & German Literature, Chung-ang Univ.), CEO Presidents implement corporate-style management techniques by placing heavy emphasis on efficiency and productivity. As such, reforms such as the reconstruction of departments are pushed through to help attract more students, thus raising the perceived overall productivity and efficiency of the school. In contrast, the most important quality that university presidents were expected to have in the past was strong leadership and deep insight to oversee the scholarly community of a university while providing a critical insight into the wider society. These kinds of corporate-style management approaches came with a change in the decision making process, causing universities to make unilateral decisions like modern corporations do. Traditionally, every member of a university took part in the decision-making process dealing with an important issue. Kim notes that as universities became corporatized, however, and CEO Presidents were elected, what used to be a democratic decision making process has been altered into a corporate-like process. To maximize economic benefits and financial gains, the university chooses and announces the decisions without any discussions with the rest of the professors and the student body. Even in Yonsei University, a lack of communication and resultant protests against the university administration’s unilateral decisions have been witnessed. Important decisions such as sending all freshmen to Yonsei International Campus and closing down Open Majors have all been proclaimed by the administration, without any discussions with the rest of the university community. Secondly, universities in the process of corporatization also possess a profit oriented mindset. Reducing costs in order to increase profits is considered more important than providing a good environment for high-quality education and research. The main way to reduce costs is to reduce upkeep, and a nominal way to do that is to lower the number of professors. The former chairman of the Korea Irregular Professors’ Union, Lim Soon-kwang noted in his dissertation, The Corporatization of Universities and the Part-time Instructor Law, that the most certain way to reduce the labor costs is to reduce the number of professors, who receive a relatively high salary. As a result, Korean universities have a high professorto- student ratio, where a professor is in charge of 23.9 students as of 2012, when compared to the OECD average of 14.9. With fewer professors teaching the students, however, the students end up studying in large-sized classes. In a 2012 analysis of Higher Education Academy Information by Daily UNN, Yonsei University has 152 classes where the number of students taking the course ranges from 101 students to 200 students. In classes with such a large number of students, students have a hard time concentrating and cannot freely communicate with the professor. As a result, the quality of the education that students are entitled to receive is sacrificed in order to reduce the costs.
How it affects society at large
This corporatization of universities is bound to bring changes, many of which are already taking place. First of all, there are concerns that universities will cease to continue in their primary function as a public benefit institution. Both Kim and Choi emphasized the role universities held in being a public institution that should contribute to the public good by focusing on matters that the market ignores. As the market system is heavily influenced by the profit-seeking structure, companies do not invest in areas that bring little profit. Jennifer Washburn, in her book, University Inc: The Corporate Corruption of American Higher Education , talks about the participation of universities in issues related to public health, even in the ones that bring no profits as an example for how universities function as public institutions. Scientists in universities also conduct research to further understanding on the subject, for the humanity’s well being. When universities become corporatized, such functioning as a public institution will decrease. Moreover, the growing corporatization of universities might prevent universities from providing unbiased information to the public. According to Kim, university management encourages university staff to collect independent research funding from corporations in order to save school funds. Receiving financial support from corporations, however, potentially harms the quality of the research because these corporations may heavily influence professors. In his book, Universities in the Marketplace , Bok revealed that 94% of the university research papers related to tobacco companies in any way undermined the dangers of second hand smoking, when only 13% of the researchers unrelated to tobacco companies published the same result. Thus, research resulting from corporate-funded universities is often not only less trustworthy but also contains biased analyses.
* * *
When Korea was under military authoritarian dictatorship, it was university students and professors that led the rest of the citizens into the democratization movement. As such, the role that the university plays in society is crucial, as it critically examines the wrongdoings in society for the healthy development of the larger community. It is not wrong for universities to actively engage in profit seeking activities in that sense, since doing so may enable universities to widen their social participation. We must remember, however, that if such activities become the main focus of a university, there is a risk that the university will lose its essential identity as a public institution.