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‘Hire’ Learning in America

(20 December 1972)

From The Militant, Vol. 12 No. 51, 20 December 1948, p. 4.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

America’s colleges and universities are often called institutions of “hire” education. Most of them are controlled by boards of trustees who are largely wealthy businessmen and corporation executives. They govern the funds – which means they dictate salaries, promotions, selection of personnel, hiring and firing. It is their views on matters economic, social and political that are pumped into the heads of students.

In recent years the ties of higher education to the capitalist profit system have been greatly strengthened. A large number of leading colleges and universities are investing endowment funds in private businesses – ranging from Rockefeller Center to a spaghetti factory – whose profits are used to maintain these educational institutions.

A nation-wide study reported by Benjamin Fine in the Dec. 13 N.Y. Times reveals that of the $2½ billion of endowments held by the country’s colleges and universities “about $1 billion, or 40 per cent, is invested in real property, business or commodities. Before the war less than 20 per cent was so invested, the rest being in government bonds or gilt-edged securities.”

Last year 455 colleges and universities, including such giants as Columbia and New York University, reported they owned or operated private-profit enterprises whose products were sold to outside persons. The profits from this billion-dollar investment totalled $150,492,583 – all tax-exempt.

A large part of this investment is in speculative real estate “which then usually is leased to the original owner or operated by the institution itself.” Another financial device is “establishment by alumni and friends of holding companies, organized to own and operate businesses, the income of which goes to the university.” An important source of profit is the “creation of research ind patent-holding companies.”

New York University has acquired in the last few years f our different types of businesses, namely, the C.F. Mueller spaghetti company; the Ramsey Corp., making pistons; American Limoges China, Inc.; and Howes Leather Co., a $35 million outfit that nets two to three millions profit yearly. The tax savings on profits of these four firms – since they are used for “educational purposes” – amounts to $1½ million a year.

The country’s largest university, Columbia, in addition to $16,471,685 invested in apartment houses and similar real estate, owns a $28,230,311 slice of Rockefeller Center – which indicates how much say Standard Oil and Chase National Bank have in the directing of “hire” learning in the United States.

Many businessmen and corporations zye eager to encourage this method of financing universities, because it provides a means of dodging the 38% corporate-profits tax. “Almost all the major institutions,” reports Fine, “are besieged by offers from business organizations to ‘buy out’ their buildings and then lease them back.”

Dr. Carter Davidson, president of Union College which a year ago acquired the real estate, store building and warehouse of Abraham Straus & Co., Brooklyn department store, conceded that “some institutions have abused their privilege somewhat in buying factories and then claiming tax exemption for these corporations.”

At any rate, it’s easy to see why higher education in America is devoted to “shielding” the youth from the ideas of Marxian socialism.

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Last updated: 28 March 2023