For the past century, the New School produced iconoclastic thinkers. Now it is finding that idealism is very expensive.

By Ginia Bellafante

• Oct. 16, 2020
   

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By the time the coronavirus arrived to darken the fortunes of so many universities around the country, the New School had already been dealing with longstanding financial difficulties. It would soon face a budget shortfall of $130 million and was set to draw down its endowment by an astonishing $80 million, nearly a quarter of its total value.

To put that figure in perspective, the president of Princeton said in May that spending anywhere above 6 percent of the university’s $26 billion endowment — roughly $1.5 billion — was “not sustainable.” The New School had reached the point of existential crisis long before Princeton ever would.

Given the New School’s history, the handling of these challenges has produced a mountain of ironies. Founders of the university had envisioned an institution where faculty was largely self-governing — a model that eliminated “the usual administration retinue’’ to keep overhead expenses to a bare minimum. Now the university was confronting a staff and student body outraged over what they viewed as a bloated and top-heavy bureaucracy amid sudden and desperate cost-cutting.

How was it possible that an institution marketing its progressive credentials to prospective students around the world could remain blind to its own inequities? Why were there now budget cuts to libraries, for instance, when so many executives at the university were making so much money?

In recent weeks, faculty and staff have been in revolt over the implementation of cuts that seem to distribute the burdens of austerity unevenly. When Sanjay Reddy, an economics professor at the university, analyzed compensation data, he found that management salaries had increased by 45 percent between 2014 and 2019. During that same period, revenue increased only 17 percent.

In fact, Mr. Reddy’s data also show that as a proportion of endowment, in 2017 the president at the New School made far more than the president of Harvard. (The university counters that the compensation for its highest-paid employees — as a percentage of total salaries — has decreased over the last seven years.)

In April, the university announced that it was cutting the salaries of the leadership team by 12 percent — and the salary of the new president, Dwight McBride, who had the strange fate of beginning just that month, by 15 percent. But even with furloughs and slashes to retirement plans, this was not going to be enough to shore things up. So on Oct. 2, the New School laid off 122 employees — most of them low-level administrators and clerical workers in what struck faculty and staff as the deepest betrayal of the school’s principles.

A recent letter to the administration from students in the economics department pointed out, that the value of the president’s residence, a townhouse owned by the university for many years now worth roughly $15 million, would cover the salary of the recently terminated assistant in their division for 340 years.

In a video teach-in organized to convey the collective anger around staff reductions, Emerson Brathwaite, an assistant in the drama department, spoke about feeling discarded. “I am the only person of color in the administration at drama for the last 15 years,’’ he said as one of those who was laid off. “How do you guys preach EDI” — meaning equity, diversity and inclusion — “and you release the only person of color you have on your staff?”

A consistent source of grievance among faculty members has been the administration’s reluctance to mine their expertise to manage the current upheaval. This, too, has been perceived as an insult in light of the school’s conception as an engine of modern problem-solving. Instead, administrators hired a corporate consultancy called Huron, an outfit founded by former partners at Arthur Andersen, the accounting firm that collapsed in connection with the Enron scandal.

“The McKinsey-fication of everything is not helpful,’’ Rachel Sherman, the chair of the sociology department, told me. “We have departments full of economists and social scientists. I’m not saying let the theater department do this, or that we can dance our way to solvency.”

When I asked a spokeswoman for the university about these ongoing conflicts she said, “The New School remains strong and resilient," adding that the university’s decision making “was guided by values of equity, inclusion, and social justice, and with input from faculty, staff, and student leaders across our campus.”

Several days ago, Mr. McBride took questions from faculty members in a conference call. They wanted to know about Huron. Mr. McBride answered, in part, that the consultants were able to provide “quantitative analytic capacity.”

This sounded like the vague and suspicious vernacular of management advisers, not the spoken language of a university president and humanities scholar — Mr. McBride has a doctorate in English — who wrote a book called “Why I Hate Abercrombie & Fitch: Essays on Race and Sexuality.”

Mr. McBride went on to explain that anyone you talk to in higher education would acknowledge the profound pressures of the current moment. “They manifest themselves in different ways,’’ he said, “depending on — just to be candid and crude — how rich you are as an institution.”

Here, he had landed on the crux of things. The New School, like Hampshire College, for example, another avant-garde citadel pushed to the brink of closure last year, was not in the practice of graduating students to private equity and venture capital and Citibank.

It would never be rich because its alumni weren’t. The New School’s financial model is almost entirely tuition-dependent; the pandemic simply laid bare its unusual vulnerability. Crushing mistakes had been made long before the new president’s appointment. Chief among them, the decision, a decade ago, to build a university center on Fifth Avenue.

Cultural institutions do not expand their real-estate footprint like home buyers turning to mortgage brokers. They fund huge capital projects by finding billionaires to pay for them, typically in turn for name placement. Instead, the university borrowed the money — more than $300 million of the total $400 million cost.

The New School was born in a moment of tumult; 100 years later it finds itself in an equally chaotic time. At a moment of historic social reckoning it could play a vital role in reshaping the world; instead it has been left in a position of falling down on values it can no longer seem to afford. Here it has company. Increasingly, we are seeing that the upkeep of progressive principles too often costs money progressive institutions don’t have.

Late in the summer, when teachers at Brooklyn Friends, a Quaker private school founded in 1867, sought to unionize, the head of school immediately challenged the move by petitioning the National Labor Relations Board (eventually, after a strike, the teachers prevailed). Brooklyn Friends has one of the smallest endowments in the independent school universe of New York.

To survive, the New School will have to think inventively about new ways to make money: It will surely have to consider selling off real estate and refinancing its debts. Julia Ott, a historian at the university who advances critiques of capitalism, had her own great idea, of the kind impossible to imagine coming from high-priced consultants.

What if the university leveraged its bohemian cachet to raise money from those who socially benefit from proximity to it? Ms. Ott was talking about the uncountable number of hedge fund managers who occupy the West Village to demonstrate that they are cooler than hedge fund managers who occupy the Upper East Side. The cultivation of your self-image should cost at least as much as the price of your townhouse. Wasn’t it time to pony up?

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Corporate Consultants Set Their Targets on American Universities
The administration of The New School has sought the services of a firm founded by alumni of Enron-affiliated Arthur Andersen.
By Jaskiran Dhillon, Cinzia Arruzza and AAUP-TNS Media Collective

Nation Magazine, OCTOBER 23, 2020

Last year, the leadership of The New School (TNS) celebrated its storied progressive history by organizing a centennial festival. The event, featuring artistic events, panels, and exhibitions, was intended to highlight its reputation as a quirky, heterodox university committed to social justice. “We ask the questions that lead to new questions, challenging the status quo,” said the announcement. The festival was also a hugely expensive event, promoted as a fundraiser, albeit one seemingly quite ineffective at its goal of raising money. Months down the line, the university is struggling with a projected budget shortfall of $130 million. But contrary to the celebratory spirit of its carefully crafted public image, the leadership is attempting to transform the university—without the input and against the wishes of faculty, staff, and students—into a corporate paragon of anti-labor austerity.

On August 6, employees of The New School received an e-mail from the new president, Dwight A. McBride, a long-time administrator as well as a scholar of race and literary studies. The e-mail announced that the school would undergo extensive “reimagining” and that it had hired Huron Consulting, “a firm with a dedicated practice focused on higher education,” to guide them. Many of us in the TNS community were flabbergasted by the decision to invest hundreds of thousands of dollars in an external consulting company in the middle of a purported fiscal crisis, rather than mobilizing resources and expertise already present in-house. Union members were concerned about the possibility for union busting given the new president’s stance on unions.

As it turns out, they were right to be worried. On October 2—five months after Huron was hired, and with the approval of the Board of Trustees—the school laid off 122 employees to offset the projected budget shortfall. More than a third of the laid-off employees were union members, and essential positions were eliminated in student advising, health services, and departmental administration. The total number of employees who have lost their jobs and health insurance in the middle of a pandemic is even higher because dozens of employees furloughed in March will not be recalled.

Taken together, the number of employees laid off to combat “administrative bloat”—the steady increase in spending on administrative positions, including substantial increase in salaries and related benefits for the leadership of the university—approximates 20 percent of The New School’s staff. The layoffs made minimal difference to the budget shortfall: In fact, they are only meant to result in annual savings of $12 million, starting from the fiscal year 2022. The decision to throw around 200 workers into unemployment in the midst of the worst pandemic in a century looks all the more cynical and shocking.

Huron, the shadowy entity in dialogue with the administration behind closed doors, is a corporate consulting firm that has been mired in corruption from the beginning. It was established in 2002 by 25 former executives of Arthur Andersen, an accounting agency that went under in 2001–02. The agency had been cooking the books for the energy giant Enron, a company that became a household name signifying corporate corruption, as well as the subject of a bestselling book and a documentary. Using “mark-to-market” (MTM) accounting, Enron was able to claim prospective future profits and list them on its current balance sheet, wildly and fraudulently inflating the company’s value. This was not its only crime. Enron routinely advocated the privatization of essential services and resources and expanded its operation to India, Mozambique, and Argentina. In India, Human Rights Watch accused the firm of paying police to violently attack protesters. By the time the company collapsed,shareholders had lost $74 billion, and its employees lost billions in pension benefits—all under the watchful eye of Arthur Andersen.

It didn’t take long for Huron to follow in the footsteps of its corrupt creators. In 2009, Huron became embroiled in its own scandal, accused of overstating pretax income from 2005 to early 2009. The consulting firm ended up having to pay out millions of dollars, between a civil fine and reparations to shareholders. Perhaps unsurprisingly, several of Huron’s executive leaders are Republican Party donors. In spite of the occasional donation to a Democratic candidate, Huron executives seem to be particularly keen on supporting Republicans like John McCain, Mike Pence, Mitt Romney, George W. Bush, and Ted Cruz.

Huron turned its eye to the field of higher education in 2015. Remarkably, Huron’s own primers point to post–Hurricane Katrina dispossession as a model for universities looking to navigate the crises brought about by Covid-19. In a report titled “COVID-19 and Hurricane Katrina: Parallels and Lessons Learned,” Huron advocates that universities immediately institute aggressive measures such as staff and faculty layoffs, program closures, salary reductions, and hiring freezes. The fact that “renewal plans” engineered by private and public entities in the aftermath of Hurricane Katrina exacerbated racialized dispossession seems not to have been a concern.

In 2017, under the watch of the reactionary, “right-to-work” Governor Scott Walker, Huron was hired by the University of Wisconsin—historically a exemplar of the state-funded, public institution serving the poor as well as the affluent—to manage a state-driven austerity plan. In addition to laying off a hundred employees, reducing employment for non-tenure-track staff, and forcibly reassigning tenured faculty, Huron’s plan shuttered thriving programs in humanities and social sciences and drove mass faculty layoffs at the university’s Stevens Point Campus.

The University of New Hampshire (UNH) didn’t fare any better. In 2019, UNH paid Huron $600,000 to produce a cost-saving, “reimagining” assessment that Huron claimed would save the university $12 million over two years. The solutions proposed in the report included cuts to research and libraries, layoffs of facility and maintenance staff, and adjustments to the faculty mix (the combination of tenure track and untenured positions) based on a merely quantitative criterion for cost efficiency, credit hour production (CHP) per faculty member. CHP is the total number of credit hours produced in a semester and is calculated multiplying the number of students enrolled by the credit hour per course.

Huron’s business model for restructuring higher education also emphasizes the expansion of the market through online learning and the development of global education platforms. It not only suggests that universities use the strategy of their “Fortune 1000 counterparts,” it advocates fostering corporate educational partnerships. This is plainly at odds with The New School’s historic commitment to promoting and defending the values of intellectual and academic freedom.

Outside of corporate and institutional boardrooms, fierce resistance to the “reimagining” is mounting across The New School. Employees, students, and faculty are demanding to have a voice in shaping the future of their university. In an unprecedented display of solidarity among students, faculty, and staff members, the unions present on campus (UAW Local 7902, Teamsters Local 1205, and AFM local 802) and The New School’s American Association of University Professors Chapter have come together under the umbrella of the New School Labor Coalition, organizing a campaign to force the school’s leadership to recognize the community’s needs and to bring its workers to the table.
 
In a couple of emotional Zoom meetings, laid-off workers described the effects of the university’s austerity measures, the imposition of what Ruth Wilson Gilmore refers to as “organized abandonment.” Some employees have been working at the school for up to 20 years or more, only to find themselves with no retirement, no income, and no health insurance. Underfunded graduate students expressed rage about the number of teaching fellowships that have been canceled, one of the few sources of income for international students on a visa. And an exhausted faculty body, whose salaries have been cut, retirement contributions halted, and research funds eliminated, expressed their concerns about being confronted with an institution they no longer recognize as their own.

Despite repeated requests, university leadership has yet to meet with the labor coalition. Demands for financial transparency and meaningful participation in decision-making have been similarly deflected. Crucial information has been withheld even from the task force of faculty, staff, and administrators created by the administration to help “reimagine” the university, leading all faculty and staff representatives in the task force to send a letter to the president and the provost explaining that they find it impossible to fulfill their mission without access to transparent and reliable data about the school’s finances.

The administration’s actions add up to what Naomi Klein calls the “shock doctrine”—the tactic of using a supposed crisis to “push through radical pro-corporate measures.” Corporate sharks like Huron have been helping university bosses across the country implement different versions of this austerity-driven doctrine, and The New School is clearly no exception. This vision of the future is not only borne on the backs of the most vulnerable in our communities; it threatens to undermine higher education itself. To remain true to its historical commitments, The New School needs to dispense with corporate models that cut to the bone, and begin listening to those who make the institution, against all odds, a place of humane, progressive education.


Jaskiran Dhillon is the president of The New School Chapter of the American Association of University Professors and an associate professor of global studies and anthropology.


Cinzia Arruzza is the vice president of The New School Chapter of the American Association of University Professors and the co-author of Feminism for the 99%: A Manifesto.


AAUP-TNS Media Collective is the media working group of The New School’s American Association of University Professors chapter.

Early-twentieth-century American socialist Rose Pastor Stokes became a media celebrity after she married a wealthy heir. But her political life was much more interesting: she was one of the Socialist Party’s most effective speakers, inspiring the era’s striking workers with rousing orations.

https://jacobinmag.com/2020/10/rose-pastor-stokes-rebel-cinderella-review