(Pix source here)
I have been studying the approaches of Marxist Leninist societies--businesses and governments--especially in the way in which institutions founded on Leninist principles with Marxist objectives relate to markets. The traditional view of such systems viewed markets with suspicion and sought to substitute an objectives based central planning apparatus--driven by a well trained and motivated bureaucracy--for the choice and efficiency structures of the market. The idea was that better choices would be made and more efficient use of productive forces could be sustained. But at its foundation was the Leninist notion that market driven choices were inherently ideologically tainted against which a bureaucracy of planners was necessary to avoid the errors of popular choice in the service of the construction (or preservation ) of a Marxist society.
That approach was transformed in the decades since the breakup of the old Soviet Union. Over the last 40 years two distinct approaches have arisen. The more traditional Central Planning Marxist-Leninism continues to embrace at its core an anti-markets principle and the object of the state is to remake individuals to better suit the needs of central planning. The other, Markets Marxism, increasingly embraces markets and markets based mechanisms as a means of social, economic and political progress compatible with the state's long term objectives. In that case markets are the means used to achieve objects, as opposed to the traditional Marxism in which the objective was to avoid the market. (Discussed HERE).
Yet, one might ask, why would a site focused on university governance have any interest in Leninism and market ideologies? Because, it seems, universities in the West (and large western multinational enterprises) appear in the early 21st century to be the heirs and most vigorous centers of anti-market, central planning ideologies in both their operation and in the institutional cultures that they advance. The result, of course, is highly ironic where these institutions are meant to serve as the knowledge production foundation of political-economies founded on both principles of representative democracy and of markets. But irony is the stuff of dinner parties. There is real effect as well--internal central planning in the knowledge production and dissemination industry substantially determines who decides what one learns, how on studies and what knowledge is produced. The power over those decisions has been shifting from individuals and from the stakeholders within the university, to bureaucracies asserting managerial controls through the exercise of administrative discretion. In centrally planned economies, the result is usually a substantial loss of productivity, a shifting of the focus of productive capability, and the loss of innovation. Have American universities now adopted cultures of central planning or Markets Marxism as the basis for their operations?
Nearly fifty years ago, David Elton Trueblood noted
Now nearly all institutions of higher learning have "plans." These involve the probable number of students, the character of the educational opportunities offered, the amount of money needed, and the particular image which the institution is expected to project on the world. The plan of most seems to involve getting just a little larger than they are now.
At the present time, the American Association of Colleges, through a grant from the Eli Lilly Endowment, of Indianapolis, employs three men, all of them former college presidents, to spend their entire time in going from campus to campus in order to encourage wise planning for the future. In many ways this is producing improvement in our institutions of higher learning. Buildings no longer appear haphazardly but are frequently more pleasing in appearance, because they are integrated into a preconceived plan of development. So important is this aspect of our academic life that, in most of our institutions, the money-raising department is often called the office of development, and here, development means planning. (David Elton Trueblood), "The Problem of Central Planning" Mises Daily Articles Mises Institute April 8. 2010).
Trueblood, of course was referencing the increasing development of cultures of strategic planning within enterprises--including states, universities and businesses. And, indeed, all societies have come to understand the value of strategic planning for aspects of the internal governance of institutions--including states, enterprises and universities.
Strategic planning in organizations originated in the 1950s and was very popular and widespread between mid-1960s to mid-1970s, when then people believed it was the answer for all problems, and corporate America was “obsessed” with strategic planning. Following that “boom” strategic planning was cast aside and abandoned for over a decade. The 1990s brought the revival of strategic planning as a “process with particular benefits in particular contexts” (Mintzberg, 1994). . . . SWOT [strengths, weaknesses, opportunities, threats] analysis model dominated strategic planning of the 1950s. “The 1960s brought qualitative and quantitative models of strategy. During the early 1980s, the shareholder value model and the Porter model became the standard. The rest of the 1980s was dictated by strategic intent and core competencies, and market-focused organizations. Finally, business transformation became de rigueur in the 1990s” (Gouillart, 1995).
Subsequent newer models of strategic planning were focused on adaptability to change, flexibility, and importance of strategic thinking and organizational learning. “Strategic agility” is becoming more important that the strategy itself, because the organization’s ability to succeed “has more to do with its ability to transform itself, continuously, than whether it has the right strategy. Being strategically agile enables organizations to transform their strategy depending on the changes in their environment” (Gouillart, 1995). (Alexandra L. Lerner, "A Strategic Planning Primer for Higher Education" (1999) p. 5; citing Gouillart, F. (1995, May-June). The day the music died. Journal of Business Strategy, 16(3):14-20.).
Even its strong echoes of modern Leninism provide little to fear. See, e.g., Leslie Young, "Central Planning Vs. Market Economy: A False Dichotomy," Forbes (14 Oct. 2015). This is especially so in the context of education where we are told:
Universities are driven to engage in a strategic planning process by a variety of forces. These include: increasing demand for higher education concurrent with a decline in government funding, changing student demographics, and a need to compete with the emerging models of higher education while keeping the essence of a traditional comprehensive university. A strategic planning process can help prepare a university to face these emerging challenges. (Alexandra L. Lerner, "A Strategic Planning Primer for Higher Education" (1999).
John Bryson, a decade earlier noted the conceptual structures within which the strategic planning cultures of the modern university emerged:
To cope with these various pressures, public and non-profit organizations must do at least three things. First, these organizations need to exercise as much discretion as they can in the areas under their control to ensure responsiveness to their stakeholders. Second, these organizations need to develop good strategies to deal with their changed circumstances. And third, they need to develop a coherent and defensible basis for decision making. (John M. Bryson, "A Strategic Planning Process for Public and Non-Profit Organizations," Long Range Planning 21(1):73-81 1988).)
The common threads of planning are communication, education for accessing resources distributed through administrative decision making, the reactive nature of planning as a response ot unfavorable changes in circumstances, and the integration of operations. (E. Gordon Gee, and James F. Williams II; "Introduction," in Strategic Planning in Higher Education: Implementing New Roles for the Academic Library (Routledge, Haworth Press, 1991) p. 3).
This sort of culture of planning produces the now ubiquitous 5 and 10 year plans that were once the sole domain of Marxist Leninist states (e.g., China) but are now central to the cultures of enterprises (including universities) in market economies. See, e.g., Northwestern; Cornell; Georgia State University; Boston University; University of Pittsburgh; The George Washington University; and Penn State.
But what are the differences between the Five Year Plan of the People's Republic of China and, say Cornell or Penn State? To some extent each is meant to control and make fundamental choices about the objectives and approaches to actions internal to each organization. In the case of China the internal is a state; in Cornell's case it is the university. Cuba's strategic plan identifies the core mission and values of the state, the role of administrators in controlling the means of production and then identifying the strategic sectors to which planning will be directed (e.g. here), but so do university plans. Consider this from es Penn State's.
This plan begins with a reaffirmation of Penn State’s mission as the Commonwealth’s land-grant University. Core institutional values are identified and defined, followed by the articulation of foundations that will support every step of the plan’s implementation. These foundations are aligned with the imperatives outlined by President Barron. Five thematic priorities follow—emerging strategic areas of emphasis where Penn State has identified significant opportunities to achieve strong, positive impacts, but not at the exclusion or minimization of other important endeavors. Supporting elements identify areas in which operational attention will be required to achieve the plan's goals, while implementation approaches frame broadly how the University will move forward—from plan to relevant follow-up action to, ultimately, impact. (Penn State p. 3).
And, indeed, modern strategic planning tends to use market mechanisms for internal structuring, even as it uses planning to maximize the value and potency of its operations within markets in which it is a player. "Ultimately, the notion of strategic planning—especially for a university—is no longer a static, specific-goal-driven process. We must be adaptive, and use real-time information and developments as they become available to inform and guide us in the direction that is most effective for the University." (Penn State p. 2).
The question, then, becomes, who is the "we" and the "us" that will make decisions that touch on the operations of the university, the delivery of its knowledge dissemination business and the control of its production of knowledge.
Traditionally, and for a while during the middle of the last century, the "we" and the "us"referenced the loose partnership that was known by its ideological slogan--shared governance. That in turn, was built on the underlying assumptions of the professional stature of faculty as the knowledge holders for the delivery and production of knowledge, and the expertise of administrators (drawn form the faculty in operations, and otherwise in finance). Strategic planning involved not merely the engagement of faculty in its production, but also the engagement of faculty for its implementation, on the basis of faculty expertise that was undisputed. This produced internal markets for the efficient allocation of resources with the administration providing stabilizing effects for long term operations. This internal market then produced efficient enterprises better able to compete in external markets for students, grants, and the like.
But strategic planning has moved closer to central planning as the internal character of the university has changed. Education has become a commodity. Faculty is now fractured into tenured, contract and piece work "classes." These class divisions have had profound effects of the old premises of professionalization and on the faculty as the source of expertise on both the production and dissemination of knowledge. The authority that this expertise commanded has slowly migrated to the administrative apparatus. And the faculty has fractured into a shrinking traditional segment--now increasingly dependent on the administrative apparatus, and a growing group of others increasingly deployed as factors in the production of knowledge dissemination (and sometimes even creation) over which others have the control to direct. Moreover. class divisions could be exploited to move authority from faculty as a unit to administrators as faculty, like other factors in the production of revenues for the institution could be seen as consumables rather than as participants in the internal markets driving enterprise efficiency and sound choices. One moves from an internal governance model that resembles Markets Marxism to one much more closely aligned to central planning Marxism.
One should emphasize that the American university might not have driven this movement toward planning alone. Indeed one might suggest that, instead, American universities are merely complicit in a process that is driven by the state. The Federal government, along with a number of states, have for years sought to assert greater control of the business of education for its own ends. And the mechanisms for that effort required stripping the university of its internal democratic and market based organizational forms and substituting the more manageable administrative apparatus that mimicked government organization itself. That deadening process--one quite suitable perhaps to government, has not produced the sort of felicitous results one might have expected. But it has made it easier for university administrators and their counterparts in the governmental bureaucracies, to engage in a dialogue of control that is supported by a complex web of administrative regulatory governance techniques--information gathering, compliance, monitoring, and accreditation. Eachj of these, in their own way, contributes to the transformation of the university, and of the business of education, from a markets driven to an administrative model, and substituting market forces for the exercise of administrative discretion by state and university bureaucracies.
And it is at this stage that the American university finds itself, and that frames the question of strategic planning and its character. What starts out as strategic planning that provides a framework within which the enterprise may maximize its internal operations and most efficiently participate in external markets in which it sells its products and services, can end as a culture of central planning where all discretionary decision making is transferred to a bureaucracy that provides a substitute for internal market. And this transformation has significant consequences. It fosters a culture of administrative discretion as the internal mechanism for governance in lieu of the more traditional internal markets for efficient decision making and resource-revenue allocation. It substitutes the authority of the administrator for the decision making of the collective faculty in matters where they were once the drivers. The difference may be subtle but profound. It makes possible everything from the recreation of the university as a knowledge factory, to the ability of administrative officials to create assembly lines of made to market education services (e.g., here). All of this is achieved not through markets but through the planning and centralized decision making structures that now dominate university administration.
Thus back to Trueblood and the quotation above. Trueblood was not worried about strategic planning; he was worried about central planning both within and outside the enterprise., that is within the systems in which they operate. He was worried about the totalitarian aspect of central planning. Here we move beyond strategic planning to something quite distinct--in enterprise cultures that abhor the workings of markets in internal governance and which substitute command driven planning for efficient market based decision making, that substitute ultimately requires the shift of authority over all choices to the planners themselves. The danger of this sort of totalitarian substitution for individual decision making transforms social and economic activity from one based on the actions of individuals to one grounded int he exercise of administrative discretion by a bureaucratic apparatus. That produces dangers to the system beyond the effects on the internal governance of an enterprise or university. That is central planning as a internal mechanism for ordering the governance of enterprises, including the university, may produce strong external effects on the construction of those spaces where markets operate and on the perspectives of those whose activates are instrumental for the effective functioning of markets. The fear, in other words, was of Soviet totalitarianism, then understood as the control of all aspects of life by a Communist Party apparatus, but now better understood, as the abhorrence of markets and the substitution of planning and administrative discretion for the exercise of individuals or institutional choices in all aspects of life. The issue, then, was the consequences of an anti-markets ideology that recharacterized choice as aspects of administrative discretion within systems in which only administrators were empowered to exercise discretion.
In the short term, perhaps, this enhanced planning model--one that embraces the totalizing control elements of central planning within the enterprise may prove too hard to resist. But especially in industries that are charged with the production and dissemination of knowledge, it is likely to have substantial long term negative effects. De professionalization and the movement of discretion from faculty to administrators will only accelerate a process through which knowledge production flees the university to the think tank or industry. The administrative management of content and form of knowledge delivery will substantially reduce the capacity of universities to produce--and more substantially reduce incentives to delivery anything but what is bargained for. The possibility of innovation in knowledge dissemination will move from the university to specialized organizations providing services for those enterprises able to pay for them.
And that is the ultimate problem of the totalitarian bent in administrative management of large enterprises through central planning--the inevitable destruction of all incentive to innovate and the likely reduction in productivity--however that is measured. It is not for nothing that one of the last remaining central planning states continues to bemoan the lack of discipline drive, motivation and productivity of its workers--even as it seeks to control not merely labor markets but also wages and the forms of productivity. This begins a never ending cycle of productivity and innovation reduction producing greater efforts at controlling workers and more closely regulation their work behaviors. Ultimately, as int he case of Cuba, such states move from central planning of productive forces to the effort to socially re engineer the individual herself. And that is a likely pattern that both business and universities may face as their response to issues of innovation and productivity is to more vigorously embrace and expand central planning and the authority of its bureaucracies.