Research and Finance

Christian Marazzi

Translation by Arianna Bove

In a recent article(1), Donald J. Johnston, Secretary-General of the Organisation for Economic Co-operation and Development (OCSE), in reference to the results of the 2003 PISA enquiry (Program for International Student Assessment), claims that as education systems are confronted with fierce international competition for job creation, the demands of new technologies and the greater needs of the knowledge economy, they are likely to evolve through shock therapy. 'Education systems are highly complex. To be effective, they must respond quickly and appropriately to changing economic and social environments. Paradoxically, information on new methods and approaches that can help education providers to tailor programs and improve learning results is hard to find and even harder to implement. Something akin to an electric-shock treatment is often needed before reforms are even considered'. Aside from the recurring problems experienced in education in recent years - equality of training standards, lack of teachers, reassertion of continuous adult training and the ethnic and cultural diversification of the students population - the major obstacle is seen to be the inadequacy of education funding. According to Johnston, all OCSE countries 'need to develop mechanisms of funding partnerships through which governments, enterprises and individuals can all contribute'.

The weakest link for OCSE member countries, in the midst of all of the good educational reform proposals, consists in the relation between training, research and finance. When considering the 'revolution from above' implemented by the Bologna model, it is evident that the general orientation is towards the lowering of the quality of basic university education (with the Bachelor replacing the old Laurea) and the promotion of specialistic and elitist qualifications (paid Master degrees). 'In England 80% of students leaves university with a Bachelor. For the majority this brutally lowers the level of education achieved' (2). Higher education reform proposals take the public loan schemes implemented in the United States as exemplary, 'but we would raise doubts as to their real value, when we see, for instance, that many young people joined the war in Iraq merely to pay for their studies' (3).

From this perspective, the Bologna Declaration represents one of the shock treatments the OCSE Secretary-General referred to. It is no less than the application to education of the principles that regulate post-fordist flexible production, with the privatisation of training costs (through increased university fees coupled with added costs for specialisations) and its deregulation connected to the needs of private industries (with the competition amongst university research centres). From now on, education comes with precarisation. The economic colonisation of the educational field has triggered an international cycle of struggles for the right to study. In these struggles, flexibility and precariousness in the educational processes are coupled with that of researchers confronted with cuts to public funding and the managerial organisation of the production of knowledge and innovation. In France, more than two thousand directors of laboratory research presented their resignations from administrative duties as a protest against lack of funding, to oppose the 550 job cuts and to demand new input into the research sector. We want to understand how far the connection between education, research and post-fordist finance can define a field of conflict that can live up to the current productive asset on a global scale.

Cognitive capitalism and finance

Knowledge that innovates productive processes, the 'technical progress' that constributes to the increase of labour productivity and the mass consumption of goods and services, does not come from the sky nor is it external to the context of economic growth. Innovation knowledge is produced: for this very reason, it must be paid for. In other words, the technical progress generated by knowledge production must be regarded as a cost. Theoretical developments in the field of micro-economic analysis of growth factors state this. Theories of endogenous growth have exposed the limits of neoclassical theory according to which free knowledge and innovation is external to human practice - something the parrot whispered to Robinson - and free (4). The question lies in the relation between the innovation of productive processes and the transformation of financial systems. The link between economic growth and financial systems goes through the funding of the production of technical innovation. “Growth depends on the conditions of development of the balance between saving and investment, because these influence the accumulation of factors that determine the trajectory of technical progress.”(5)

If innovation is endogenously produced, how is it paid for and by whom? Given that the production of innovation is essentially uncertain (6) due to the difficulty of forecasting its economic revenues, how is the interest of potential investments attracted? Furthemore, given that in a highly cognitive-communicative economy (7) where the informal dissemination of innovations goes against the possibility of fully protecting their proprietorship(8), innovation knowledge is a public good, what mechanisms allow for its appropriation or reduction, whether private or public (9)? These questions are usually answered with models of allocation of savings, the main source of funding for economic growth. During the 1980’s, liberalised stock markets favoured the redirection of mass savings into private shares which, as rigid forms of wealth, ensured high revenues. The housing market is the best known example of how, along the lines of changes in the internal structure and social composition of savings, modifications of stock market products liquified the realisation of easy revenues (10). Liberalised stock markets also contributed to accelerate company restructurings along the lines of lean production, thus decreasing the production expenses due to the excessive cost of money. The more stock markets allowed for easy revenues, as savings left the banking system (dis-intermediation) to be invested in shares of mobile property (quoted in the stock market), the more banks were forced to keep interest rates high in order to retain savings.

On the one hand, the restructuring diminuished costs in an increasingly competitive global context, and therefore helped lowering prices and setting off disinflation; on the other hand, the actual increase of interest rates due to competition between stock markets and banks has eliminated one by one position revenues and easy gains (as in the housing sector(11), thus forcing savings to be directed in shares).

To be continued [...]

Translated by Arianna Bove. This paper was presented in Paris May 2005 at the seminar series on cognitive capitalism. The original in Italian is available here.

(1) 'Education needs to adapt to a changing world'. Donald J. Johnston, Herald Tribune March 19, 2004 (tr:

(2) Il diritto allo studio minacciato. Verso un aumento delle tasse universitarie, in “Solidariet´┐Ż”, 18 marzo, 2004, Ticino/Svizzera. The quoted text was distributed as a leaflet by a group of students of the Movement for Socialism at the University of Geneva.

(3) 'The current reshaping of higher education is going to not only curtail the means to study for the majority of students in the near future, but also increase the pressure on the wages of graduates from these universities. In fact, our future employers will not think twice about paying less for a Bachelor achieved in three years than for a four year graduate.' Ibidem

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