Mar 222013

Academics, Power and the Crisis of the University by Walden Bello

(based on a speech he gave at Linggo ng KAPP (College of Social Sciences and Philosophy Week), University of the Philippines at Diliman, Feb. 15, 2005. )

The article first came out in BusinessWorld on February 21, 2005.

Walden Bello is Professor of Sociology and Public Administration at the University of the Philippines at Diliman, Quezon City and Executive Director of Focus on the Global South.




Academics, Power, and the Crisis of the University

By Walden Bello


There is a tendency to downgrade the influence of the academe on policy and on power. Indeed, we academics are often faulted for being in an ivory tower. It would be a mistake for us to believe this. It was Keynes, I think, who said that behind the most practical of politicians is the ghost of some half-forgotten philosopher. Academics or, more broadly, intellectuals have been central to the most influential movements sweeping civil society in modern and, one must add, post-modern times. Marx, of course, comes to mind, as does Keynes himself, the Cambridge don who provided the vital intellectual underpinnings of the post-World War II system managed capitalist systems in both the West and the developing world.


More recently, the influence of academia on politicians and policymakers has been most evident in the massive impact of Milton Friedman and the University of Chicago School of economics. The political success of the free market policies of Ronald Reagan and Margaret Thatcher in the West is inconceivable without the intellectual foundations provided by the Chicago School. But even before Thatcher and Reagan, the intellectual power of the Chicago School had manifested itself in the wholesale restructuring of the Chilean economy by the so-called “Chicago Boys” after the 1973 coup initiated by Gen. Augusto Pinochet. From Chile, the neoliberal revolution went on to capture the citadels of power in most other countries in Latin America.


Like Latin America, the Philippines was captured by neoliberal economics.

For those of us who see mainly corruption and the selfish play of interest groups as the driving force of Philippines politics, the role of ideas in policymaking may sound quaint. But think again. Over the last 19 years, we have had a revolution in the Philippines, in case you did not know it. But this has been a revolution that has come from the right, not the left. The vanguard of this revolution, which reached its apogee during the Ramos period, have been economists and technocrats who captured the highest reaches of the academe, government, and business, who were united in the belief that if you engaged in free trade, lowered tariffs, enacted more liberal conditions to attract foreign capital, and reduced governmental regulation of the economy, the result would be growth, prosperity, and the end of inequality. Let the market rule-this was the battle cry of the neoliberal revolution that reached its climactic point during the presidency of Fidel Ramos.


The ideological character of economic policymaking during the Ramos period was partly a reaction toward the Marcos regime, which many in the urban middle and upper-middle classes had identified not only with dictatorship and the loss of human rights but also with cronyism, protectionism and rent-seeking. But more important in my view was the zeitgeist of the Reagan-Thatcher era. Academics and technocrats with advanced academic training were key in this process, and many of them had done their graduate work in the late 1970s and 1980s, when state-oriented Keynesianism lost its luster and neoliberalism came into vogue not only in the economics departments of US universities but also in key local institutions such as the School of Economics of the University of the Philippines and the Center for Research and Communications (now University of Asia and the Pacific).


The “neoclassification” of the Philippine technocracy reached its apogee under Ramos not as a result of a sudden coup but of a gradual takeover of the strategic heights of the technocracy by these free-market-oriented policymakers coming from the academy, government and business. In an interview with my associate Joy Chavez Malaluan, one pivotal figure pointed out that she and her colleagues who played prominent roles in the country’s free-market turn acted not only out of external pressure from the World Bank and the IMF but out of belief: “Imposed, maybe in one way, but on the other hand the mainstream decisionmakers-[the] technocracy and policymakers-also internally believe in that. So there’s a confluence of policy direction Another figure stressed the emergence of a broader “consensus” among the elite and middle class around free market reform: “[No] policy reform becomes credible, workable policies, unless the people accepted. Yes, there were researchers and economics pushing for that, yes there were donor communities pushing for that.but ultimately it is a question of whether the public accept that policy.”


In any event, the “neoclassical revolution” had achieved a critical mass by the time Ramos came to power, and its hegemony was consolidated during his administration. “It’s the dominant sector,” one player put it. “It’s the president, it’s his chief economic advisers, both formal and informal; the House of representatives; the Senate-the mainstream. The mainstream is pushing for liberalization” This player, Gloria Macapagal-Arroyo, was a neoclassical economist and would herself become president in 2001. One cannot find a better statement of how academic hegemony imposed itself on our political and economic elites.


Ramos and his allies in government, business and the academy were all impatient to get the Philippines out of the rut and join the ranks of the vaunted “Asian tigers.” Their view of how their neighbors achieved success was, however, filtered through their neoclassical ideological prism. Against much evidence, they saw the high growth rates of the East Asian and Southeast Asia economies as products of free market policies instead of strategic state interventions in the market. Typical of this selective interpretation of the Asia miracle was the following comment of Jesus Estanislao, Corazon Aquino’s secretary of finance, and a Ramos supporter:”Government takes very good care of macro-economic balances, takes care of a number of activities like for example infrastructure development, and leaves everything else to the private sector. And that is exactly what Singapore, Malaysia, Indonesia and Thailand have done, and that is what the Philippines should be doing, and we are beginning to do it.”


Ideology thus accounts for the speed with which initiatives aimed at deregulating, liberalizing, and further privatizing the economy unfolded.Liberalization was seen to be an essential component of globalization, a process of global integration of production and markets that, according to economic pundits local and foreign could only lead to more prosperity all-around. With the state socialist regimes of Eastern Europe and the Soviet Union having collapsed and the social-democratic, state-interventionist economy of Sweden in disarray, the ideology of liberalization seemed irrefutable. The prosperous state-assisted capitalist regimes of East Asia were, of course, a living contradiction to the neoliberal credo, but even there, technocrats paid profuse lip service to free markets as a smokescreen intended to defuse US pressures on them to open up their markets.


The UP School of Economics and the Neoliberal Revolution


In the Philippines, the bastion of neoliberal thinking has been the University of the Philippines School of Economics. By the early 1990’s both Keynesian economics and radical economics, with which some faculty members had identified in the 1970’s and 1980’s, had been marginalized. The intellectual cadres of the UP School of Economics, along with their brethren from UP Los Banos, staffed the key economic agencies of government, notably the National Economic Development Authority, which provided strong comprehensive guidance for policymaking at the other government units. The result was a remarkable continuity in policymaking from the Cory Aquino administration to the Arroyo governments. As Dr. Cielito Habito, head of NEDA under Fidel Ramos, put it, “We can expect every serious candidate [for political office] to obtain economic advice from largely the same small pool of highly trained ecnomists in the country (unlike lawyers, there really aren’t all that many of us, believe it or not!).”


The result of this revolutionary policy of liberalization led by UP-based intellectuals is now clear for all to see: nothing less than an unmitigated disaster. We have been converted into a net food importing country.


Employment in agriculture has dropped precipitously. Whole sectors of our agriculture, such as corn, are in the throes of crisis owing to imports being dumped on us. As one of our trade negotiators told his counterparts in Geneva before the Cancun ministerial of the WTO in 2003, “Our agricultural sectors that are strategic to food and livelihood security and rural employment have already been destabilized as our small producers are being slaughtered by the gross unfairness of the international trading environment. Even as I speak, our small producers are being slaughtered in our own markets, and even the more resilient and efficient are in distress.”


The results have been equally stark in industry. Doctrinaire liberalization resulted in multiple bankruptcies and job losses. The list of industrial casualties is awesome. It includes paper products, textiles, ceramics, rubber products, furniture and fixtures, petrochemicals, beverage, wood, shoes, petroleum oils, clothing accessories, and leather goods. Our textile industry, for instance, has shrunk from 200 firms in the 1970’s to less than ten today.


The undermining of our industry and agriculture, however, has not been the only negative effect of doctrinaire liberalization. By reducing our tariffs so radically, we also drastically reduced government revenues, thus contributing to the fiscal crisis. Probably, the best estimates of foregone revenue are provided by economist Clarence Pascual of LEARN, who finds that total foregone revenue rises from P58 billion in 1998 to P108 billion in 2003, averaging 2.4 per cent of GDP for the period. These are magnitudes that are, he notes, simply “mind boggling.” These are the magnitudes that led former Finance Secretary Jose Isidro Camacho to admit the obvious: “The severe deterioration of fiscal performance from the mid-1990’s could be attributed to aggressive tariff reduction.”


The crisis of the Philippine economy has been replicated throughout the world. Neoliberal, free market policies have been correlated with rising poverty, growing inequality both within and between countries, and economic stagnation. When it comes to empirical evidence, the battle has long been won by the critics of neoliberalism.


Opposition to Neo-liberalism


There has been rising opposition to neoliberalism, but that has not come principally from within the academic community, unlike the case in the sixties and seventies, when faculty members and students in the arts and sciences, even within what is now the School of Economics, challenged modernization theory and conventional development economics with varieties of nationalist analysis, including the paradigm of nationalist industrialization. Much of the articulation of the opposition to the reigning free market model has arisen in civil society outside the university, among people’s organizations, NGO’s, the environmental movement, non-academic intellectuals, and even dissident capitalists like George Soros.


The following comments may or may not apply to UP, but on the western university scene, after serving as the base for the renaissance of Marxism in the sixties and seventies, the social sciences and literature were drawn in the eighties and nineties to varieties of post-modernist thinking or, as in the case of sociology, to debating these influences in other to save sociology’s status as a science. This is not to say that post-structuralist thinking was not radical. Indeed it was, but radical energies were channeled into intra-university academic politics rather than towards the outside. As the neoconservative thinker Irving Kristol expressed it in his classic put-down of the left, post-modernist radicals in the US shifted their ambitions from seizing political power to seizing the chairmanship ofthe English Department.


An important element in the decline of opposition to neoliberalism and the disengagement of many progressive academic intellectuals was, of course, the collapse of the socialist regimes in Central Europe and Russia and with it the total collapse of the paradigm of central planning. This could not but have a negative impact on Marxist analysis, which had for so long served as the main discourse of radical critique in many intellectual circles both in the West and in the South.


There was, however, one place where there was resistance to neoliberalism within the academe, and that was within the field of political development.

The dispute had to do with the role of the state in development in East Asia, which was the high growth area in the eighties and nineties. Here academic analysts like Chalmers Johnson, Alice Amsden, and Robert Wade led the way in showing how the state in East Asia promoted development by distorting the market rather than by getting itself out of the way of the market. This was an important counterattack on the pretensions of neoliberalism, by academics who felt that the validity of their field, political economy, or the study of the complex interaction between political power and economic arrangements, was under threat by a perspective that saw the state as having little economic role except to expand the ambit of the market. Important as it was, however, this counterattack was not able to stop the IMF and the World Bank from passing off the East Asian newly industrializing countries (NICs) as products of a miracle of the market and governments from continuing to adopt neoliberal policies in the belief that they were the key to development.


For the most part, however, the intellectual resistance to neoliberalism has been articulated mainly by non-academics or by people who were non-university activists first and academics second. Susan George and George Soros exemplify the non-academic intellectuals who performed an important catalytic role in the struggle against neoliberalism. George had no academic affiliation, yet her books How the Other Half Dies, Faith and Credit, and The Lugano Report were on the forefront of the intellectual critique of neoliberalism. Soros’ three books on market fundamentalism have performed a vital role in discrediting neoliberalism in more mainstream sectors owing to his status as a successful global capitalist player.


In the Philippines, the intellectual struggle against neoliberalism is associated mainly with people like the late Junie Kalaw, Nicanor Perlas, Sixto Roxas, Maitet Diokno, Men Sta. Ana, Lidy Nacpil, Joseph Lim, Alejandro Lichauco, and Leonor Briones. There are, of course, more people that deserve to be named. The common characteristic of these individuals is that they have pursued their intellectual activism largely in a non-academic context though they may have maintained academic links or even held academic positions. This was in large contrast to the neoliberals, whose power base was really their intellectual stronghold at the University of the Philippines School of Economics. The debate between the anti-neoliberals and neoliberals raged outside, but it barely touched the University of the Philippines. Indeed, some say, it has been sometime since a debate of earthshaking intellectual proportions has rocked the university.


The University: Haven of Critical Thinking?


Some would say that the image of the university as a debating society of rival schools of thought, one that is as hospitable to the left as it is to the right, is an idealized model that does not fit historical reality.


Left-wing Cambridge in the 1930’s, Berkeley in the 1960’s, UP in the 1960’s, in this view, were more the exception than the rule. It is not surprising that the neoliberal revolution began and entrenched itself in universities like the University of Chicago or UP since, according to this view, universities, despite their image as catalysts of critical thinking, are inherently conservative institutions geared at maintaining the current configuration of economic and political power. This is not, of course, a simple process, and proponent of this view would be the first to claim the relative autonomy of the cultural realm. Nevertheless, in the last instance, they claim, the university promotes system maintenance.


These critics would go on to cite not only Marx but also Nietzsche who could only really flourish once he got out of the confines of the University of Basel. Then there was Jean Paul Sartre, the towering figure of French existentialism, who stayed away from an academic career for fear that it would compromise his thinking. These critics would not deny that radical perspectives can find a foothold in universities but they would claim that the really innovative work is done on the outside and only gradually make its way into the university. It is worthwhile examining these issues with respect to UP. Such an investigation, carried out with sensitivity, can provide us with very important insights into the process of the formation of intellectual hegemony both within and outside university walls.


But whatever the results of this investigation, one thing is indisputable:the contribution of university-based intellectuals to elaborating a paradigm or paradigms that break with the reigning neoliberalism would be greatly appreciated.. Neoliberalism is in crisis, everywhere. But like the dead hand of the engineer on the throttle of the speeding train that is about to round the bend, its policies continue to rule for lack of viable alternatives. Without credible alternatives, policymakers fall back on the failed policies of liberalization, deregulation, and privatization despite the empirical evidence from over two dismal decades. University-based academics, including those in our college, can provide these alternatives with solid intellectual foundations. Otherwise, the crisis of neoliberal ideology may lead not to change but to chaos and stagnation. Crisis, we must recall, does not always result in the seizure of opportunities.



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The date posted here is due to our website rebuild, it does not reflect the original date this article was posted. This article was originally posted in Yonip in March 30th 2005




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