Editors Note: An earlier version of this text was delivered as a talk at the 2012 Edu-Factory conference, “The University is Ours!” which took place in Toronto, April 27-9.
During the 1990s, a rationalization of the workplace in American universities occurred, a process that critics described with terms like privatization, neoliberalization, financialization, and commericalization. By the late 1990s, however, the leading edge of this restructuring shifted from the university’s rationalization to its integration as a site of accumulation and investment in the circulatory system of capital. Notably, however, our discourse hasn’t changed, and today we continue to talk as if all that was happening in the university was the same process of rationalization. This is not to say that words like neoliberalization or privatization have nothing to tell us, but rather that, because the majority of gains were received from these changes by the end of the 90s, these words no longer capture the leading edge of change in universities today. Once adjunct labor makes up 70% of the university’s instructional workforce, for example, you can’t raise that percentage further without increasing the managerial workload of the 30% remaining tenure faculty. What we want to do here is to briefly outline the new insertion of the university into the reproductive circuits of capitalism.
The university is no longer primarily a site of production (of a national labor force or national culture) as it was in the 1970s and 80s, but has become primarily a site of capital investment and accumulation. The historical process through which this transformation was implemented is long and complicated, and we cannot give a detailed account of it here. Instead, we want to describe the general shape of this new model and the consequences it might have for political action in a university setting. We take as paradigmatic the case of the University of Michigan, where this model has been worked out in its most developed form and from which it is spreading across the United States, as university administrators across the country look to and emulate what they glowingly call the “Michigan model.” In this new university, instruction is secondary to ensuring the free flow of capital. Bodies in classrooms are important only to the extent that money continues to flow through the system. It is a university that in a global sense has ceased to be a university—its primary purpose is no longer education but circulation. This is the new logic of the university. If we want to fight it, we have to understand it.
There are two key mechanisms through which the university has been coupled into circulation—or, to be technical, coupled into the circulation of both productive capital and money capital. The first is the cycle of wealth transfer that moves federal dollars directly into corporate and bank coffers. Well-known examples of these processes include the TARP bailout program after the 2008 financial crisis and the system of military privatization, grants, and contracting firms built up by the Bush administration after 2001. In the education sector, these programs of direct wealth transfer were localized most conspicuously in the (now defunct and much abused) Federal Family Education Loan Program (FFELP), wherein the federal government purchased loans originated in its name from private banks (the premium paid by the U.S. government on each loan was direct profit for the bank). The federal funding of R&D at research universities works in the same way: by paying for the research that corporations would otherwise have to carry out for themselves, the federal government improves their profitability. So does the government’s backing of 100% of the loan value of federal loans from 1998 to the present day, and private loans from 2005-2010, which makes these loans risk-free for banks and secondary investors (in the securities markets) and inspires predatory and excessively risky lending practices.
The second mechanism, the emergence in the post-crisis context of capital over-accumulation—that is, a surplus of capital with no profitable investment outlet—has helped to transform universities into privileged sites of capital investment. Due to market conditions and credit availability, universities have been able to increase tuition without limit (for example, at the University of Michigan, tuition has gone up 297% since 1990), which in turn has driven up their credit ratings and made borrowing cheap for them. As a result, banks, hedge funds, and institutional investors have begun investing heavily in and through universities, buying up construction and other bonds as well as student loans. In this way, some of the money that once was put into the faltering credit and mortgage markets has found a new home in the student loan and secondary student loan markets.
Through these mechanisms, the university has come to serve as a key site for capital accumulation and the investment of over-accumulated capital. This takes place primarily at four locations, which operate as sinks or pools for investment and accumulation: construction, endowments, loans, and R&D. Construction functions as a safe site of investment when profits are hard to find. Aggressive capital-raising campaigns for endowments by universities have served (on a smaller scale) the role that pension and large equity funds once did: namely, pooling together vast sums of money that people have accumulated as wages in order to make them available once again to the financial system. Student loans—which have now topped $1 trillion, surpassing credit card debt in total value—are a site for the investment of excess capital, in both direct loans and the secondary SLABS market. R&D, as mentioned above, transfers business expenses to the federal government by routing them through the university; the university then sells patented technologies back to the business, which in effect gets two transfers for the price of none.
Currently, the University of Michigan has four sources of revenue (in 2010 numbers): tuition generates $1,015 million (roughly $412 million of this in student loans); federal research money, approximately $1 billion (roughly half is appropriated by the university directly through the F&A program); the endowment (which, after a vigorous capital raising campaign from 2000-2009 that generated $3.2 billion in new donations and gifts), sits at roughly $6.6 billion, but which only adds $253 million (in 2011) to operating revenues each year; and, finally, funding from the state, totaling $315 million in 2010). What is important here is not just that the state represents a tiny fraction of the university’s funding, but the degree to which there is a convergence between the university’s revenue and its insertion into the sphere of finance capital. From a revenue perspective, the university is completely dependent on the circulation and accumulation of capital in and through the institution.
All universities, public and private, small and large, research to teaching colleges, are moving toward this circulation model and beginning to aggressively chase these dollars, because the university’s integration into circulation is rarely partial. All of its components are mutually dependent—attracting R&D depends on having the best labs, which in turn depends on the ability to engage in new construction, which in turn depends on the credit rating, which in turn depends on the endowment and tuition hikes, which in turn depend on there being sufficient credit in credit markets for students to withdraw, which depends on having fancy, new buildings to attract rich out-of-state students paying marked up tuition.
When seen from the perspective of students and workers instead of capital, the race to integration sets in motion a series of destructive cycles. First, it leads to a sort of infrastructure arms race. As research universities pursue R&D dollars, they build bigger and more technologically advanced labs trying to lure faculty who are capable of landing federal grants. The same happens with on-campus housing and classrooms, as universities chase increasingly rich, fickle student-consumers who can afford to take out massive loans to pay for professional school or whose parents can pay exorbitant out-of-state tuitions. But these building booms are only possible because of the over-accumulation of capital in U.S. banks and financial institutions and the lack of more attractive investment options. At the same time, these rich undergraduate and professional students are being chased after by admissions professionals because they and their families can potentially contribute to the endowment, which ends up shutting out poor, of color, and marginal students. Raising tuition to maintain the credit rating and the flow of capital generates an increasing dependence on rich students who can pay or students who are willing to take out massive loans to finance their education. And then the cycle starts all over again.
But this cycle cannot sustain itself forever—at the very least, it has weak points. Because it displaces in part the capital-labor relation inherent in production, the primacy of circulation creates new potential crises. Capital must pass through certain points, and at these chokepoints political pressure can be applied. Thus, the new university suffers all of the same problems as any other just-in-time operation; namely, if the circulation of money ceases or is interrupted—even for a few days—the system is thrown into chaos (which might explain in part why some university administrations have been so quick to repress student protests over the last few years). The problem with attacking circulation is that it is frequently immaterial—there are no bars of gold in a bunker underneath the financial aid office. How would you attack an endowment? Where is the flow of student loans made material?
We want to suggest that a politics against the university of circulation has to engage in two tactics towards one strategic goal. First, make material the immaterial circuits of capital flow; and second, attack the weak links, the chokepoints in the system of circulation. Consider, for example, the strategy of occupation deployed in the California student struggles of 2009, which sought to register and interrupt the flow of capital into construction and away from instruction. The occupation strategy, however, was relatively unsuccessful in interrupting the flow of capital per se, since, after all, the bonds have already been sold long before construction begins. Another possible weak link in the chain of circulation is presented by student loans, especially since they are most often dispersed through a centralized office during a few days in the fall and winter. These offices could be made into critical points for blockage. If we are to combat the university of circulation, we have to invent new ways of materializing these immaterial flows in order to capture and make vulnerable the university’s sinks and pools.
Finally, this system of integration into circulation could only emerge with the rise of an administrative class educated in neoclassical forms of economics in U.S universities. To truly move beyond this situation, to the university we desire—a free, open university—we have to, as Foucault once said, cut off the head of the king. Only the removal of this administrative class and its replacement with a system of student-worker control will have the power to delink the university from the sphere of circulation and turn its considerable material and social capabilities to other ends.
 The authors would like to thank Rob Halpern for comments on an early version of this talk.
 See Naomi Klein’s account of these circuits in The Shock Doctrine (New York: Picador, 2008).
 This is not an isolated instance: state/federal wealth transfer is built directly into the university education system, as the federal government guarantees many forms of loans and many states have agencies set up that monitor secondary student loan markets closely and begin to buy loans when credit appears tight.
 The federal government (NIH, etc) spent $32 billion in 2010 on university research, or 60% of the total research funds taken in by universities. In 2010, the Department of Defense spent $87 billion on research (spread across private and public firms and university related research). In 2013, total government funding for R&D is projected at $142.2 billion. In terms of market share, in 2010, universities left $125 billion on the table. Perhaps we can get some sense of where administrators are trying to take us by focusing on what they see as the sources of growth.
 These guarantees extend, importantly, into the secondary market for securitized student loans—where the real money is.
 The credit ratings of some major public universities like University of Michigan are actually higher than those of the U.S. Treasury. One result is that “century bonds” are becoming increasingly popular in university finance circles. In October 2011, a public university (Ohio State) offered century bonds for the first time; the University of Southern California, Tufts, MIT, the University of Pennsylvania, and the University of California quickly followed suit. These bonds are founded on the “stability” of the universities’ current credit ratings and the bet that universities will remain on solid financial ground for the next 100 years. University administrators have sold these bond issuances with the idea that their endowments will outperform the Dow, making it “free” money for universities. We should be wary of this disturbingly familiar logic on the part of both the buyers of these bonds and the universities who are putting up student tuition as collateral. Instead of just making bad bets on mortgages and student loans, finance is now making bad bets on universities and universities, for their part, are locking themselves into dangerous loan contracts that will force them into debt crises like those spreading across Europe right now if and when their credit ratings start to slip. What is clear here is the logic of circulation: the notion that universities, which produce nothing, will be “more stable” than industrials over the next century. Given the current volatility of the student loan and university landscape, these bets appear ridiculous at best.
 All universities negotiate what is known as an F&A (Facilities and Administration) rate with the federal government (and frequently different rates from each government granting agency). The F&A rate is the percentage of federal grant money awarded to researchers at a given university that the university is allowed to claim off the top for the university’s “in-direct” costs (providing buildings, paper clips, secretarial labor) to make science research happen. These rates are negotiated by universities individually (thus, large universities have more bargaining power and higher rates) and contain very specific provisions for how much of new building costs can be claimed as part of the F&A rate. Currently, the University of Michigan’s F&A rate is 55%; for comparison, UC Berkeley’s F&A rate for 2011 is 56%. For a readable introduction to F&A rates see: http://www.tamus.edu/offices/budget-acct/acct/costs/facilities/
 Michigan’s endowment pays out 4.5% on five-year average of the returns from the investment of the different funds that make up the endowment. In 2009, the endowment lost $1.2 billion. In 2010, the rate of return was 12%. The five-year average payout at 4.5% is set up to help the endowment ride out market downturns and to serve as a roadblock to populist administrators or state legislators who might want a higher percentage of endowment returns to fund instruction.
 Our analysis here is making one simplification: we have left out the revenue from the University of Michigan’s health system (hospitals and health clinics) as explaining the overlaps between the university’s finances and that of the hospital would have taken us too far afield in this short piece. As well, the health system has for the last few years just barely broken even, making its contribution to the university’s bottom line zero. However, the drag of new construction in the health system and the problems of the “multi-versity” model are important to keep in mind.
 It is no coincidence that the building boom on U.S. campuses has coincided precisely with the economic collapse: the University of Michigan since 2007 has issued $2.3 billion in new construction bonds, while across the United States, “universities and colleges have built more than $11 billion worth of new facilities in each of the last two years—in the depths of the economic downturn.” It should also be noted that the price tag of a building is actually just 1/3 of what it costs over its lifetime (so the total cost of infrastructure investments should really be computed at three times the face value of the bond offerings). See Jon Marcus, “Public Universities Plow Ahead with Construction Despite Tight Budgets,” http://californiawatch.org/higher-ed/public-universities-plow-ahead-construction-despite-tight-budgets-15273
 See the analysis posted by OaklandCommune on the blog Bay of Rage, “Blockading the Port is only the First of Many Last Resorts,” http://www.bayofrage.com/featured-articles/blockading-the-port-is-only-the-first-of-many-last-resorts/