This work reveals the fraught nature of the relationship between the academy and the state in order to provide a more coherent framework for thinking about the way in which universities, and academic activities in general, are best organized and regulated. It uses extensive historical case analysis based on the emergence of the nation state and the academy in Europe, along with very focused case material examining events in Australia within the context of developments in international education, particularly in the Asia Pacific region.

Australia is at the forefront of the globalization of education services. From the late 1980s, the nation began the single most dramatic shift in policies affecting education and research. It moved from collegial self-regulation (within the European tradition) towards market fundamentalism. Australian higher education now rivals––and in many respects surpasses––the U.S. as a market model. But it is, at the same time, also an abomination. Reasons for the change were complex and related to the economic rise of Asia as well as to Australia’s closer alignment to the United States. However, the impacts were profound and disturbing. In the decade that followed, Australia built an international export industry in higher education that became the envy of the world. By 2005, around one-quarter of all students attending Australian universities were foreign nationals, and their fees were underwriting a massive expansion in the system.

Fears that market regimes left untethered would destroy the intellectual base and moral fiber of the universities were routinely ignored. Critics were demonized and silenced as an aggressive marketing machine propelled the industry forward, ruthlessly exploiting the lucrative markets to Australia’s near north. But the costs soon began to mount in terms of human tragedy.

Finally, in May of 2009, thousands of Indian students protested in the streets of Australia’s major cities, and the situation could not be ignored. Suddenly Australia’s relationship with one of its major trading partners was in serious jeopardy, largely due to the fact that the idea of pastoral care––once a fundamental tenet of higher education––had been trampled in the rush for profits.

Australia’s zealous embrace of academic capitalism offers a historic lesson for universities and policymakers around the world. However, as shown throughout this work, the Australian experience is simply the repetition of the very same lesson that has been offered over and over again since the beginning of institutional higher learning. But it is a lesson that the world can no longer ignore.

The study of higher education and the role of universities in society invariably falls among the disciplines of public policy, higher education, and philosophy, but these very different perspectives offer conflicting narratives and inadequate solutions to current problems. This work redefines the parameters of these historic debates and brings together, for the first time, trends in thinking about the changing role of the nation state with major developments within higher education around the globe. More importantly, it develops a very robust theoretical approach to the way in which higher learning is understood, offering important new insights into the legitimizing role of the academy. Drawing on a wealth of historical and current empirical evidence, this book presents a powerful argument that universities are foremost civil institutions, not unlike parliament or the judiciary. Their broad purpose, as the crucibles and legislatures of advancing human technology, cannot be understated. They make up a large part of the ballast that allows the democratic state to function properly.

Unlike many other critiques of academic capitalism, this work does not wholly reject the use of the market to help organize universities; however, it does provide an overarching framework through which the role of the market and its influence on the state might be properly considered. As national governments and policy makers all around the world struggle to finance the massive demand in higher education, this work provides a timely and penetrating analysis.