Higher Indoctrination: Universities and Corporate Control


Universities are viewed as institutions independent of the concerns of the rest of society, where free inquiry, for the sake of knowledge itself, is encouraged. However, an examination of the developments that took place in the North American university system over the last century or so, will reveal a situation significantly different from the one that has been presumed to exist. A dramatic restructuring had been undertaken, between 1894 to 1929, that permanently placed policy making decisions over education in the hands of an industrial minority. Unbeknownst to the public at large, their very positions of power placed them in a direct conflict of interest with the generally accepted aims of higher education.

Although Marx’s solution for the ills of capitalism have turned out to be a political disaster, his critique of capitalism, nevertheless, was quite apt. Our understanding of capitalism is a society that practices a policy of free-enterprise. In actuality, the situation is closer to what Marx had described. He defined a capitalist state as one in which the “owners of the means of production”, that is, the industrial class, or the major corporations, manipulate the industry, the government, the media, and the educational system, towards their own personal ends, and at the expense of the masses, or who he would have called the “proletariat”.

Marx predicted that, in the advanced stages of capitalism, universities would become “factories of mental production”. What he meant was, that universities would become tools of the state-apparatus, guided by commercial interests, to first, coordinate necessary research projects, and second, to exercise control over the population, through the formulation of a national ideology designed to foster adherence and dedication to the capitalist agenda.

Financial Groups

As late as 1860, in American industry, manufacturing was still concentrated in small shops and factories. Following the construction of railroads, new possibilities for growth emerged, as major markets were opened. Large industrial establishments grew as the more successful competitors captured large and larger shares of the national market. Small business and joint stock companies were displaced in favor of the modern corporation as the basic structure of business organization. Discovering unrestrained competition to be detrimental to profits, businessmen turned to the merger to secure control of specific markets, where the major companies would buy out most of its competitors in a specific industry. This merger movement came increasingly to rely on a few banks for finance.

By the turn of the century, the bankers and other financiers held massive amounts of corporate loans, bonds and stocks. The end result was that by 1929, the 200 largest financial corporations owned 48 percent of the assets of all non-financial business in the US.

What emerged from these massive operations were financial groups. The typical financial group always included a major investment bank as its core, which, in turn, was supported by several commercial banks and insurance companies, all inked through a network of shared directors. Hence, every financial group was surrounded by client satellites in a particular industry or industries, such as heavy manufacturing, mineral extraction, railroads, or utilities. The major groups at the turn of the century were: the Morgan-First National; Kuhn Loeb; Rockefeller; Boston; Mellon; Chicago; Cleveland and Dupont.

The financial groups and their client members were all among the 250 largest corporations in the US. Among the 200 largest non-financial corporations, at least 44% could be positively identified as members of financial groups, clustered around 17 of the nations 50 largest financial institutions. The vast majority of the remaining 112 largest non-financial corporations tended to have ties, such as loans and interlocking directors, to the financial groups.

As late as the 1890s, the educational system of higher education was still guided by emphasis on communicating a Protestant ethic. The curriculum consisted primarily of biblical languages, including Hebrew, Greek and Latin; the trivium, or grammar, logic and rhetoric; and the quadrivium, arithmetic, geometry, astronomy, and music. The governing boards of higher American schools were drawn largely from the clergy and were also guided mainly by ecclesiastical or devotional notions of education.

However, by the end of the nineteenth century, American colleges and universities were coming under the governance of business and politicians. Businessmen dominant position in the industrial and financial establishment were often persuaded to make large contributions to higher institutions in exchange for positions on university governing boards. In the two decades from 1901 to 1920, almost 45% of all board members of colleges or universities, were attached as either an officer or director to at least one company affiliated with a major financial group. 60% of these were affiliated through one of the core investment or commercial banks.

The Foundations

Although a great number of technical and scientific institutes were being founded, they were simply not enough to produce the large numbers of engineers, technicians, and scientists required by the industrial revolution. Therefore, businessmen turned to the rapid transformation of the university system as a solution to their problem. Although a great number of technical and scientific institutes were being founded, they were simply not enough to produce the large numbers of engineers, technicians, and scientists required by the industrial revolution. Therefore, businessmen turned to the rapid transformation of the university system as a solution to their problem.

In 1906, Andrew Carnegie endowed a foundation with a grant of 10 million dollars, called the Carnegie Foundation for the Advancement of Teaching (CFAT). From 1906 to 1929, 80% of the members of the executive committee of this foundation maintained some direct connection with a major business or financial corporation either as directors or executive officers. 30% of the executive committee members were attached to companies with membership in either the Morgan-First National or the Rockefeller group.

The General Board of Education was similarly chartered by John D. Rockefeller in 1903. Among the businessmen on his board, between 1903 and 1929, were some of the nation’s most prominent bankers and industrialists, including Andrew Carnegie and John D. Rockefeller Jr. Three-quarters of the lawyers who served on the board were also corporate officers and directors. Among such members, 44% belonged to the Morgan group, 44% to the Rockefeller group, and 12% to the Kuhn-Loeb group.

CFAT Trustees were concerned that, since “education was not touched by the Constitution”, it had “no guidance from the central government looking toward unifying and coordinating the separate State systems.” They similarly complained that “private initiative in the field of education has been both unguided and unrestrained by supervision on the part of State governments.” Frederick T. Gates, of the GEB, also explained that the Rockefeller endowment was: “not merely to encourage higher education in the United States, but … mainly to contribute, as far as may be, toward reducing our higher education to something like an orderly and comprehensive system.”

Ostensibly, the CFAT was established to endow a national pension fund for professors. Access to the Pension fund, a rarity at the time, made it possible for select institutions to offer an additional incentive that could attract and keep prominent faculty members, gaining further prestige to the Carnegie system universities.

Furthermore, states which applied to the pension system were accepted only on the condition that the state university follow specific internal reforms. Through a massive infusion of funds into selected universities the GEB was able to elevate certain institutions into unparalleled stature.


World War I, like all the wars of the twentieth century, were primarily for monetary interests. Nevertheless, it provided a unique opportunity for the financial groups to secure control over the entire higher education, to reorganize its research efforts for corporate ends, and to disseminate propaganda, first, to conceal the real motives of the war, and then secondly, to present it in such a manner as to justify participation it in as a just cause.

A conference was called soon after the America’s declaration of war, where all the major educational associations federated to establish the Emergency Council on Education (ECE), whose founding charter declared its purpose “to place the educational resources of the country more completely at the service of the National Government and its departments.” The ECE then called upon President Wilson “to take steps looking toward the immediate comprehensive mobilization of the educational forces of the nation for war purposes under centralized direction.” Among the first resolutions passed by the new organization was a call for an “increased scientific research for war purposes”, a demand for “educational propaganda; lectures, pamphlets, etc.; to make clear the purposes of the war and maintain the morale of the people,” and a request for instructions on a postwar “recasting of courses of study in light of the lessons of the war.”

National Research

In a capitalist dictatorship, the educational system must serve two ends. The first is to that research is properly coordinated with the needs of industry. In order to direct national research to required ends, the National Research Council (NCR) was formed, “whose purpose shall be to bring into cooperation existing governmental, educational, industrial, and other research organizations.” Primarily, the NRC would established a nationally based priority of research priorities.

Individual research proposals, although submitted by scholars from around the country, with a variety of independent motives, were ultimately judged and funded with reference to a national research agenda outlined by the NCR.

Most scholars were probably not even aware that a national research agenda existed, except to the extent that professional interest led them to respond to indirect signals, such as what proposals were being funded and what kind of research being published.

The guidelines formulated by the NCR Anthropology and Psychology Division, provide an excellent example of the precision with which national research agendas were being established:

  1. Finding the “causes of labor unrest and resultant excessive high turnover, low production, and high costs.”
  2. A study of the “psychological and pathological aspects of labor problems relative to health, efficiency, and productiveness in industry.”
  3. Continued “analysis, classification, and specification of industrial employments”,
  4. A determination of ways to overcome “misapprehensions and prejudices” of workers to capitalism.
  5. Discovery of ways to counteract “similar industrial tendencies and fallacies” from becoming prevalent in the schools.
  6. A study of the “psychology and psychiatry of trouble-makers”.


The second fundamental purpose of education in a capitalist dictatorship is to act as an effective means for the dissemination of propaganda, to assure the population that national policy decisions are being carried out, not by a handful of powerful members of the industry and for their own ends, but that the government are representatives of the people with their better interest in mind. In order to prevent the monopoly of certain interest groups, the American constitution did not authorize the federal government to exercise direct authority over education. Originally, the one federal educational agency was the US Board of Education (USBE), established in 1867, whose only task was the collection and distribution of statistics on education. Nevertheless, financial interests circumvented restrictions by hiring “outside experts” or “consultants”, to interpret the ESBE’s data to formulate recommendations published as official policy.

The formation and diffusion of an orthodox American state-ideology, or national myth-legend, was a task carried out by the USBE and the NHSB. The National Historical Service Board, called together in 1917 by the Carnegie Institute, placed itself at the service of the national government.

In a span of one and a half years, the NHSB revolutionized American social science curriculum. The NHSB wrote several pamphlets or “teachers’ leaflets” which were printed and distributed by the USBE. These were utilized by professors, schoolteachers, newspapers, and a number of private agencies promoting “education in patriotism.” The first teacher’s leaflet was careful to warn educators that using outright lies or false information was a “mistaken view of patriotic duty”, that was likely to be counterproductive in the long run.

Instead, it argued for the virtues of patriotic “interpretation” by emphasizing certain events as opposed to others, or by developing a “moral” theme. The pamphlet noted that “history, properly studied or taught, is constantly reminding the individual of the lager life of the community… This common life and the ideals which guide it have been built up through the sacrifice of individuals in the past, and it is only by such sacrifices in the present that this generation can do its part in the continuing life of the local community, the State, and the Nation.”

Clyde Barrow commented that “the full-scale rewriting of history under state supervision not only facilitated a short-term justification of American participation in the war, but also helped to institutionalize a much broader and more permanent ideological conception of the United States in the social sciences and humanities.” (Universities and the Capitalist State, p. 144)

The pamphlet went on to provide detailed suggestions on what to teach and how to teach history “properly” . It urged teachers to stress the difference between Germany on the one hand, and France, Britain, and the United Sates on the other, as a conflict originating in the struggle between absolutism and democracy. This was a continuation of the same revolutionary struggle for liberty which America had initiated in the American Revolution of 1776. If it had been America’s destiny to perfect democracy, it was now America’s responsibility to defend democracy wherever it was threatened and bring it to the rest of the world.

The first teachers’ leaflet made recommendations on how to interpret and reinterpret events in ancient, mediaeval, and modern history; from the time of Hammurabi, king of ancient Mesopotamia, and the origin of government by law, to Germany’s Kaiser Wilhelm, its direct antithesis; to using the struggle between Sparta and Athens in the Peloponessian War of ancient Greece as a historical metaphor for the present war.

The leaflet even suggested that in teaching English history, the Germanic element of English civilization, derived from the Saxons, be de-emphasized as unimportant. As well as other suggestions on how to interpret specific events in history, this series of pamphlets subsequently provided official biographies of historical figures, course outlines, textbook recommendations.

Western History

Essentially, if we were to have been brought up in the Soviet Union, we would have been taught that first the world was subjected to feudalism. This period was followed by the industrial revolution, in which the capitalist class brutally exploited the workers. Fortunately, we would have been taught, a workers’ revolution took place in 1918, when the people removed the evil capitalists from power, and erected a benevolent proletarian dictatorship, which has been safeguarding the rights of the people ever since.

This is national myth-legend necessary to fostering adherence to the state-apparatus, no matter how unjust. However, the Soviet Union was not a communistic state, not that such a state were desirable, but rather, a system of state-capitalism, dominated by the elite at the expense of the masses.

There was as much communism in the Soviet Union as there is democracy in the United States. Nevertheless, we are taught the illusion that, by going to the polls every four years, and choosing from least despicable of two or three candidates, somehow we are participating in the process of decision making. Instead, through campaign funding and lobbying, the industrial class, or the capitalists, as Marx would have referred to them, manipulate the government for their own objectives. Similarly, as Noam Chomsky has pointed out, when we talk of corporate control of the media, we have to remember that the media are corporations, and therefore, tout their agenda.

We are taught that our prosperity is due to both our technical ingenuity, as well as to the superiority of our institutions. We learn that the Third World, on the other hand, according to the propaganda of the IMF and the World Bank, is in a primitive stage of development, in need of our investment. In reality, corporate interests have recognized they must proffer some degree of benefits to the citizens of the countries in which they are headquartered. In the Third World however, where their activities are beyond the jurisdictions of their local governments, Western capitalists have established dictatorships, or puppet governments willing to used brutality, to ensure the continuous flow of cheap labor and raw materials. Then, pointing the relative prosperity and “freedoms” of their own countries, they assure their citizens of their good fortune.

Essentially, we live in a society where corporate interests have wrested power from the Church, and who have sought to rewrite history to legitimize their takeover. Therefore, we are taught the myth that it was the Greek philosophers who through their cleverness first devised the idea of democracy, a system which has been evolved through the centuries, first by the Romans, then the parliamentary system of the Middle Ages, and through the continuing effort of intellectuals against the dogmatism of the Church, has culminated in our modern secular state system.



Barrow, Clyde W. Universities and the Capitalist State: Corporate Liberalism and the Reconstruction of American Higher Education. 1894-1928. Madison, (Wisconsin: The University of Wisconsin Press, 1990).

Blum, William. Killing Hope: US Military and CIA Interventions Since WW II. (Common Courage, 1995).

Chomsky, Noam and Herman, Edward. Manufacturing Consent. The Political Economy of the Mass Media. (Pantheon Books, 2002).

Chomsky, Noam and Herman, Edward. The Washington Connection and Third-World Fascism. (South End Press, 1980).

Korten, David. When Corporations Rule the World. (West Hartford and San Francisco: Kumarian Press and Berret-Koehler Publishers, 1995).

Livingstone, David. The Dying God: The Hidden History of Western Civilization.


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