Continuing our reprints of material from our print predecessors, the article below first appeared in issue #3 of revolution magazine (August/September 1997). It appeared along with the piece on the crisis of liberal education.


by Philip Ferguson

Students today are continually confronted with substantial incrreases in fees. For instance, at Canterbury University full-time course fees went up in 1996 to $2,200, from $1,700 in 1995. In July 1996, on a motion from the students association president, the university council set a fee of $2,400 for 1997. Later this year the university administration will be meeting to set fees for 1998, with another increase likely.

Meanwhile, total student debt to the government edges up to around $2 billion. This figure is bound to continue to rise significantly thanks to ongoing fee increases and cutbacks in government subsidies to universities. In addition, it is likely that many students borrow from banks, parents and other private sources.

Increasing student indebtedness, the growing difficulty of making ends meet and the frustration of being treated as children and being made to rely on parent funding – 25 being the new age of ‘maturity’, if you’re a student! – all no doubt contributed to the anger and militancy of the student protests of the past few years.

Yet, clearly, the marches of thousands of students and several occupations, most notably at Canterbury University at the end of 1993 and Otago in August 1996, have failed to stem the tide of fee rises. In fact, at Canterbury opposition to fee increases has disappeared altogether, a trend which is observable across the country now, despite the efforts by some sections of the left to pretend otherwise.

What is behind the worsening situation of students and tertiary education? Why have the protests failed and largely fizzled out?*

No free education

Unfortunately, expressing militant outrage and having right on your side are not adequate weapons for a serious struggle for free education. Moreover, the politics of student protest have been directed against the symbols rather than the source of the problem. Critics of fee increases and government retrenchment in the tertiary sector have vented most of their anger at the Business Roundtable, the Todd taskforce, individual university administrations, Lockwood Smith during his time as education minister or, at best, the so-called ‘new right’. Everywhere except for where it really belongs – at the doorstep of mainstream slump capitalism.

The general tenor of student protests suggests that the government has followed a mistaken policy, that it does not ‘understand’ that young people are an important resource and that subsidising their education is in the country’s best interests. Most student protesters naively believe that they have a better understanding of what they call the ‘clountry’s interest’ than the government which administers the capitalist system.

But it is precisely this sort of ‘opposition’ which lets the government and the system it manages off the hook. The critics have consistently missed the chief point about the government’s education policy – whether at tertiary, secondary or primary level. This is that under capitalism there can be no free education.

Welfare state capitalism is a thing of the past; the inherent crisis tendencies of this decrepit social and economic system mean that what the ruling class could allow for during the several decades of boom following World War 2, are now luxuries which will not be subsidised through state spending.

The capitalists simply do not need and cannot afford large numbers of graduates in subjects such as history, classics, philosophy, sociology, political science, English, cultural studies, gender studies, fine arts and so on. This is not some plot by the ‘new right’. It is a fundamental fact of mainstream capitalism which, for the past 20 years, has been in a perpetual state of decay in New Zealand.

Decrepit capitalism – whether administered under ‘Keynesian’ or ‘free market’ guise – has been unable to create any sustained period of growth in New Zealand since the 1973 recession. In fact we are now living in a slump society and, as long as capitalism remains, the crap society we have now is as good as it gets!

Not only can slump capitalism not provide free education, it now wants to commodify (and in some cases, privatise) chunks of the education sector to make them profit-driven.

New right a diversion

It is irrelevant which of our rich enemies is minister of education or which pro-capitalist party or parties park their bums on the government benches. It is also a dangerous diversion to imply that the problems facing students can be resolved by getting rid of any particular education minister or berationg the Todd taskforce, the Business Roundtable or university administrations. Lockwood Smith has been replaced, for instance – although not necessarily as a result of the inane slogans raised by students to demand his resignation – but the problems facing students are worse than ever. This is because the real problem is the capitalist system and its mainstream defenders. We can also see this if we just look at the role of the Todd taskforce on tertiary education a few years ago.

The taskforce’s two main options, which involved huge student fee rises, were met with large-scale student protests. The government merely turned around and made cuts which meant university administrations would bring in fee levels well under the taskforce’s recommendations. In this way the government hoped many students would be relieved andthink they had won a victory. The government could also rely, as usual, on left groups to do their part in maintaining the fiction that students had won a partial victory. In reality, however, students had suffered yet another defeat.

Every fee increase is a defeat, not just because they make life harder for students (which is bad enough) but, more importantly, because they undermne any idea that free education can ever be won. Even where, as in the case of Canterbury, militant action such as the 1993 occupation contributed to the relatively low increase in fees in 1994, students were still immediately in a worse position than they were in 1993. Moreover, the relatively lower increase in 1994 meant that the following year’s increase was much higher. (University administrations can sit out short bouts of radical student protest and ‘catch up’ their fee rises a year or two later.)

The Todd taskforce and other so-called ‘new right’ initiatives have been convenient stalking horses used by the mainstream capitalist establishment: they aim to scare us with the extreme options in order to get us to accept things which are still a lot worse than what we’ve had up to now, and even get us to see such a situation as a ‘victory’. Meanwhile, free education recedes further and further into the background.

Slump capitalism

In contrast to the politics of student protest over the past few years, an effective struggle for free education has to begin with an understanding that slump capitalism cannot provide it – and that slump society is all that modern capitalism is capable of. In today’s conditions a fight for free education is a fight against our present social and economic system, a clapped-out form of organising society which is well past its use-by date.

As long as this system remains there will be no free education. Whatever money the state has for subsidies will not go to socially-useful sectors such as public education, but to private enterprise such as Comalco (which effectively receives an annual $500 million handout) and NZ’s richest corporation, Fletcher Challenge (which has received huge state assistance, including massive tax credits) and which is now being blessed with the national forests for $1.2 billion, although they are valued at $1.6 billion. Telecom, which is today valued at $12 billion, was sold off in 1990 for $4 billion. The state has also bailed out the BNZ – twice! Similarly, in the health sector, the state is cutting back on the services people need, while helping underwrite the profitability of the private sector out of the state purse.

In order to understand the present situation in education – and other sectors such as health – it is necessary to examine how caitalism actually operates.

Production for profit

Capitalism is a system built upon production for private profit. It does not produce goods and services because people need them or even want them; all of its activities are ssubordinate to profit-making and capital accumulation.

As capitalists are forced to compete with each other to survive they have to constantly raise productivity through the introduction of more and more sophisticated plant and machinery, the money expended on this being constant capital. Yet it is living labour which is the source of wealth creation, for labour-power is the only commodity capable of producing more than its own value (see What is exploitation?)

As the capitalists are forced to increase their constant capital in relation to their variable capital (that spent on labour-power), less value is embodied in each commodity. It is possible for the capitalists to increase their total profit because so many more commodities are being produced. But the greater proportion of total capital allocated to constant capital means the rate of profit is pulled down, since this rate consists of surplus-value divided by the sum of constant and variabble capital. Over a period of time the rate of profit reaches a level where the capitalists cannot finance the next round of productive investment and the system starts to go into crisis.

Capitalists then invest in non-productive fields such as the stock market, property speculation, junk bonds, futures markets etc. This creates an artificial bubble which soon bursts as real economic relations assert themselves: share prices collapse, the finance sector goes into crisis. This tendency for the rate of profit to fall was noted by bourgeois economists as far back as the 1820s and was characterised by Marx as “in every respect the most important law of modern poltical economy” )Marx, Grundrisse, Allen Lane, 1973, pp748). Although capitalist economists do not understand how and why it happens, they are certainly aware of its existence (see, for instance, the OECD study, T.P. Hill, Profits and Rates of Return, Paris, OECD, 1979).

State spending

Lacking a Marxist analysis, most of the left, from the Alliance to self-styled far left groups, believe that tax is paid directly by workers through the PAYE system and that this finances state spending. In reality, however, state spending is essentially financed out of total surplus-value: it therefore lessens that amount of wealth the capitalists have at their disposal. Since state spen ding is funded out of surplus-value, when the system runs into major problems the capitalists demand that governments cut back on spending areas such as public health, education and social welfare. (This also explains why capitalists favour general tax cuts, not just cuts directly for themselves. At the same time, of course, they often ensure the state channels more funds and other assistance to their firms – under slump capitalism there is really no such thing as free competition, the free market etc).

Crisis-ridden modern capitalism simply cannot survive without huge doses of state assistance – this is clear both in those economies which have been mlore successful over the past few decades (Germany, Japan and parts of east Asia) and in the most decayed and declining capitalist economies (Britain and the US).

Even with all these massive handouts, capitalism in this country is incapable of bringing and sustaining economic growth and dynamism. There is no possibility of such a system, or any government which upholds it, reintroducing free tertiary education, high quality and free public health and so on.

Arguing on their terms

Yet so far most campaigners against Labour and National attacks on tertiary education have argued the issue on the basis of the present social and economic system. This is one of the main reasons they have been losing the struggle. For when people like Lockwood Smith or Wyatt Creech or Roundtable types say that the system cannot afford free education, they are not so much lying as tacitly admitting that this system is a failure.

Unfortunately, most people still accept capitalism and therefore see little alternative to rising fees. As long as the mass of the people accept that this system is the best on offer and that it can’t be gotten rid of, they will accept all kinds of cuts as necessary. People will even get into arguments over where in the fields of education, health, social welfare and so on cuts should be made.

The student protests have not challenged any of this. They have not in any way raised people’s consciousness about the nature of capitalism. Even at their most militant they have simply reinforced the illusion that free education can be achieved under the present system. At the same time the politics of these protests – and the far left has to bear the main blame for this – confused people as to the actual workings of capitalism by putting forward reformist views about government spending, creating the illusion that higher state spending under the present system would improve workers’ and students’ living standards.

A good example of this was the 1996 Otago occupation and the way it was hailed by the Socialist Workers Organisation. The Otago occupation was directed against the university administration, demanding that it not increase fees for 1997 and that it come out against the government’s education policy. According to the SWO, which was heavily-involved in the occupation and whose members presumably were involved in drawing up these demands, the Otago action “shows the way forward” (headline article, Socialist Worker, August 19, 1996, p8).

Yet these demands did not go anywhere near as far as even the official policy of the Alliance party or NZ First, both of which called for free tertiary education and the scrapping of fees, or even the official policy of the Labour Party which said it would lower fees to $1,000 if it got into government again!**

Such minimal demands as those raised at Otago do not “show the way forward”. They are useless for exposing anything about the capitalist system to students. Indeed, given that they do not even go so far as the three leading ‘opposition’ mainstream parties at the time of the occupation, they are incapable of providing an alternative to bourgeois politics. Most students might well have figured that it would be better to just wait until these other parties got into power, since they were pledging more than the occupation and its SWO enthusiasts were demanding!

In the end the increase in fees at Otago, following the protest which the SWO believed “showed the way”, was larger than the fee increase at Canterbury where a right-wing student president belonging to the National Party moved the motion at the university council for an increase!

Spontaneous protests, which the left in New Zealand idolises, are not capable of generating the analyses, demands and strategies needed to win. While the SWO champions struggles which demand less than the official programme of NZ First, the Alliance and Labour, and result in fee increases larger than those moved by National Party student politicians, free education continues to recede, and its attainment appears to students ever more unrealistic. This, of course, is essential for the system: it has to continually lower our expectations because it is incapable of providing a decent life and the opportunity for people to fulfil their potential.

In contrast, we need an alternative that doesn’t accept the limits of this clapped-out system as the basis of arguments about the quality of life. We need to say that free education is a part of the quality of life for all. That education at all levels should be available to every member of society and that if this system cannot provide it then we will struggle to replace it with a system which can.

The necessary starting point for making these arguments is a critical, Marxist analysis of capitalism today, not the embrace and romanticisation of single-issue campaign student politics. In particular, the inner contradictions of capitalism as a system based on production for profit rather than human need, and the role of state spending within capitalism, need to be addressed. Without this, protest action will remain at the level of frustration. It will continue to be politically directionless and eventually wear itself out, leaving behind yet another layer of demoralised and burnt-out activists to join those who failed to develop such an analysis in the 1970s and 1980s.

Meanwhile, the system will continue to stagger along at our expense.


* In 1999 there was a fresh upsurge at Canterbury, including three occupations and several very large rallies. However, the upsurge which, at its peak, saw the university closed for a Friday afternoon and a student/staff/administration rally of 3,500 demanding increased government spending on tertiary education, evaporated, partly because of the election of the fifth Labour government at the end of 1999. The sudden appearance of this upsurge, and its equally sudden disappearance, simply confirmed the key political arguments made in this 1997 article.

** Labour, as usual, was lying. When they got into government in 1999, fees continued to rise significantly.

Further reading: Can students be radical?

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