Economic crisis,technology and the management of education

The cycles of capitalism

Within the history of capitalism, there have been major technological innovations that have given rise to ‘surges’ which have disrupted the prevailing technologies – canals, from 1771 to 1793; steam power and railways, from 1829 to 1848; steel and heavy engineering, from 1875 to 1895; cars and mass-production, from 1908 to 1929; information and communications technology, from 1971 to 2007 (Perez, 2009; Perez and Rutherford, 2009). In the aftermath of the 2008 crisis, the search is now on for a technology which can set the next growth-spurt in motion (Boyer, 2011: 72). Each of these technologies, during their respective installation periods, enabled substantial productivity gains and profit to be made. Each technology attracted investment capital, and over-investment occurred, so much so that bubbles formed. The regulation of financial markets during these periods was weak: accumulation was its own legitimation; wealth became polarised; financialisation took hold. The hand of the government rested very lightly, if at all, upon the shoulders of the markets. Eventually, the bubbles did indeed burst, as they had done so in 1793, in 1848, in 1890, in 1929 and in 2007. To repeat: these crises mark the end of a technology-led surge during which the innovation is installed (to use Perez’s term). That installation period – and the investment and speculative capital which it attracts – leads eventually to a market meltdown, a crisis.

What follows a crisis? Of itself, argues Perez, each technological innovation would not lead to much unless its deployment was enabled by a new institutional and organisational infrastructure (which would include education) that was compatible with it – a social technology, so to say. Therefore, so this argument runs, each ‘installation’ period antedates a crisis, but thereafter there are long ‘deployment periods’: that is, between 1797 and 1829; between 1850 and 1875; between 1895 and 1908; and between 1933 and 1970. By a ‘deployment period’ Perez means a time when the government intervenes to enable a social and organisational infrastructure which is compatible with the new technology which had initially been installed before a financial crisis, thereby facilitating its wider deployment. Thus: whereas, before a crisis, government is disinclined to intervene, thereafter it does so; and whereas, before a crisis, the investors and the financiers hold sway, thereafter the government intervenes on behalf of producers. It does so because economic liberalism (which enabled the ‘surge’) is seen as unstable, unable to deploy the innovation or to deliver ‘socially optimal outcomes’. In brief, the result is that, after a crisis, the market is ‘embedded’: that is, embedded within the state during the long post-crisis deployment period. The government intervenes in order to curb financialization and to further the deployment of the new technology.

Consider an example: take Perez’s fourth ‘great surge of development’, that of the installation of the technologies of oil, cars and mass-production, beginning in 1908. The technologies were installed, attracted investment – excessively so – and this resulted in a market crash, in 1929. So ended the ‘installation’ period. There followed recession and/or depression of varying duration (longer in the UK than in the United States, not ending until after the second world war, in 1945). But, in both countries, Keynesian state-backed solutions (the New Deal in the 1930s in the US; the welfare state in the UK in the late 1940s) comprised the physical and institutional infrastructures that were compatible with the mass-production technologies which had been ‘installed’ before the crisis. These infrastructural changes allowed for the ‘deployment’ of the technologies, enabling the long post-war economic boom into the 1950s and 1960s. However, this state of affairs did not last, for two reasons. First, the technological innovations which had been deployed reached maturity. By the 1960s the productivity gains which they had generated began to taper off. Second, business began to rail against the embedding of the market within the state. So the very governments which had initially facilitated the deployment of the technology in the 1930s, 1940s and 1950s came to be regarded as the problem. Business resolved thereafter to ‘disembed liberalism’ from the state. This it did during the 1980s (Blyth, 2002: 6). The 1960s and 1970s saw the gradual downturn after the post-war economic boom, and the formation of the OPEC oil cartel sealed its fate, quadrupling the price of oil and putting western capitalism into recession. Meanwhile, as expectations of the welfare state rose, the capacity to fund it fell. Politically, after 1979, the decision taken was to allow inflation to rise: the welfare payouts remained nominally the same, but their purchasing power declined. For these reasons the long economic cycle which had begun in the early twentieth century could not be sustained.

The end of the long economic cycle from 1908 to 1972 coincided with what Perez calls the ‘installation’ of a powerful new technology – information and communications technology – which in the late 1970s was to mark the early stages of a major new economic cycle. The crucial term here is ‘communications’: the Internet was the contemporary counterpart to the canals of the eighteenth century and to the railways of the nineteenth. Here was a new ‘surge’ when investment was considerable, and politically it coincided with a re-assertion of economic liberalism. There followed after 1980 a period of increasing financialization: that is, when profit accrued from financial ‘products’ rather than from material commodities (Krippner, 2005: 174). In the 1990s, investment focused on the ‘dot.com’ technologies, a market-bubble which crashed in 2000. This was superseded quickly by speculation and trading in complex financial ‘products’ and easy credit. Automated algorithm-based transactions only added to the complexity. This second bubble burst in 2007–2008, bringing to an end the ‘installation’ period of ICT which had commenced in the 1980s. In 2008, after the crash, when the logic of financialization had seemingly run its course, the hitherto much-reviled state ended up bailing out those very financial institutions whose under-regulated practices had produced the crisis in the first place.

In the immediate aftermath of the 2008 banking crisis, the Labour government’s response was decidedly Keynesian, but was very short-lived. In both the United States and the United Kingdom, the so-called ‘efficient market’ had needed trillions of dollars and pounds from the much-maligned state in order to recapitalise the banks. Even though the evidence was incommensurate with the dominant neo-liberal paradigm, the politics remained decidedly with it. A ‘classical austerity politics backstop’ (Blyth, 2013: 208) has prevailed. Thereafter, in 2010, the UK Coalition government’s policy turned on two approaches: to maximise long-term growth (by investing in transport and broadband infrastructure, and by supporting skills and research); to reform the public sector (by empowering citizens – small state/big society), by reducing bureaucractic red-tape in the delivery of front-line services, and by granting more power to local government (Kickert 2012:174). School expenditure was protected. However, the neo-liberal narrative is recovering; it is back in business (De Cock et al., 2012:87; Hall et al., 2013: 19–20). What had been at root a banking crisis has now been ‘converted’ into a crisis of the welfare state. No longer are fast-and-loose financial institutions seen as the root cause; instead it is (in the UK) said to be a too-generous welfare state which has allegedly failed to limit benefit-fraud, despite official figures that these assertions are wildly exaggerated: only 0.7% of total benefit expenditure is overpaid due to fraud (Department for Work and Pensions, 2013). The welfare state is now deemed not to be the solution, but the problem itself: it needs to be ‘hollowed out’: that is, private providers should deliver most public services (Lodge and Hood, 2012: 82).

Thus it is that the crisis has been theorised, and long-term ‘austerity’ in the wake of a short-lived Keynesian ‘boost’ has been its policy consequence. If Perez is correct, then the government may, in this aftermath of the financial crash, begin to re-assert itself; or, in Blyth’s terms, to ‘re-embed’ the market within the state. That is to say, it may seek to enable social technologies which will serve the material (digital) technologies which had been installed between the 1970s and the 2008 crash. This ‘deployment’ of ICT – part of the ‘re-embedding’ of economic liberalism – would have to be managed – a political decision, not merely one based on economics. How might this occur?

Management discourse and the economic cycle

The work of Perez attends to an explanation of the great technologically-driven economic cycles within western capitalism. The focus is now on organisations and their management. It is informed by the work of Abrahamson (1997), Gantman (2005), and Adler and Heckscher (2006). Specifically, the question is put: is it possible to infer management rhetorics from a given stage in the economic cycle: its upswings, peaks and downturns?

Two ideal-types of management rhetoric have been delineated during the past century: the rational and the normative (Abrahamson, 1997), the former being sometimes referred to as ‘control’, the latter as ‘commitment’ (Adler and Heckscher, 2006). The rational rhetoric comprises notions akin to engineering (as in benchmarks, measurement, time-on-task, standards and mechanisms), to accountancy (as in audits) and to formal bureaucracy. Furthermore, there tends to be an association between economic liberalism and the emergence of these rational ‘control’ rhetorics, as distinct from softer ‘commitment’ rhetorics (Adler and Heckscher, 2006: 69). Take, for example, the period between about 1890 and the 1920s. At that time a rational ‘control’ period existed which was informed by the theory of scientific management and Fordism. It coincided with one of Perez’s technology-led ‘installation periods’: that is, from 1908 to 1929. Or consider the period since the late 1970s, one in which economic (neo)-liberal policies were also implemented, and again one which coincided with another technology-driven ‘surge’, this time driven by digital technologies. Here, too, rational ‘control’ practices helped to push the surge forward: for example, business process re-engineering (Abrahamson, 1997: 515). Historically, therefore, rational management tends to intensify when a major technology-driven economic upswing gathers pace, and especially so if it is grounded in economic liberalism.

What of normative rhetorics (Abrahamson, 1997) or ‘commitment’ rhetorics (Adler and Heckscher, 2006)? These ‘soft’ rhetorics are more likely to be deployed near the end of a major economic upswing when the technology which had initially given rise to the upswing ceases to provide high productivity-gains, and when rational controls no longer elicit workers’ compliance. At this point managers resort to ‘softer’ appeals in order to re-motivate workers to be more productive (Abrahamson, 1997). An example of this is the rise of industrial psychology and human relations management theory in the 1920s before the 1929 crash (Kaufman, 2008). For Abrahamson, normative rhetoric tends to persist beyond the peak of an upswing until such time as the business cycle picks up again, at which point there is a gradual resumption of a more rational rhetoric.

Adler and Heckscher (2006: 70) take a similar line. They argue that each economic upturn and downturn requires an attendant institutional ‘superstructure’, or management technique, one broadly based on rational ‘control’ or on ‘commitment’. Rational control rhetorics associate with sustained economic growth, and especially so if they embrace economic (neo)-liberalism. Thus we see the following periods of strong rational control: between the 1890s–1910s, scientific management; between the 1940s–1960s, systems rationalism; and from 1990 to 2005, business process re-engineering, downsizing and outsourcing. In this last case, it will be recalled that the 1980s and 90s coincided with what Perez called the ‘installation period’ of the new digital technologies, a surge also associated with these rational control rhetorics. However, as the economic cycle which had begun in 1972 neared its peak towards 2000 – and complementary to these control rhetorics –non-rational notions to do with leadership, emotional management, teams and shared/distributed leadership emerged thereafter. So, Adler and Heckscher’s (2006) ‘commitment’ rhetorics accord with Abrahamson’s (1997) ‘normative’ (as opposed to ‘rational’) appeals. They have emerged as the legitimacy of rational control rhetorics has been questioned.

All this said, therefore, we would now, in 2014 expect to see a continuation of these commitment or normative appeals until such time as the next economic upturn begins, at which point there would be a strengthening of rational control. Thus, for Perez, we are awaiting a political outcome which may optimally see the government set out the conditions for the wider ‘deployment’ of the very ICT technologies which had been ‘installed’ before the crash. Once that political outcome has been achieved (and with it the commencement of the required social infrastructures), and once economic growth strengthens, then, for Abrahamson (1997) and for Adler and Heckscher (2006), we can expect to see a re-assertion of the rational at the expense of the normative.

To summarise: we have addressed the question ‘Does a major financial crisis portend a shift in the mode of management?’ Two theorists have been considered: Perez and Abrahamson. Perez is interested in explaining the ‘surges’ of major economic cycles within capitalism as being the result of disruptive, productive and profitable technological innovations. The initial installation of a technology leads to an over-investment ‘bubble’, which bursts, after which the state will intervene in order to enable new social and institutional infrastructures (including educational) to support the wider deployment of the new technology. But this deployment has to be managed within those institutions which will enable it. Here is relevant Abrahamson’s work. It suggests that normative management rhetorics emerge towards the end of an economic upswing. When the productive power of the technology wanes, and/or when rational control procedures no longer elicit compliance, managers resort to softer appeals. These normative rhetorics tend to continue through a peak and into the subsequent downturn, until such time as strong economic growth resumes.

Before the analysis turns to education, three points are in order. First, in the immediate aftermath of a crisis, as now, the fear of unemployment is great and those in employment may, for the moment, comply out of fear of job-loss, and not in response to soft rhetorical appeals. Second, it bears repeating that there is never a complete replacement by the normative of the rational, or vice versa; at issue is the variation in the weighting given to each, and why. During the past century, the ‘default’ rhetoric has been the rational, with the normative ‘embellishing’ it as and when it has been needed. Third, and finally, with reference to Perez, the chronological phases of a major cycle – that is, those of installation, recession/depression and deployment – can vary in their duration. Events such as two world wars and the effects of the formation of OPEC in the 1970s have intervened, with different consequences for nation states. For example, the post-1929 ‘deployment’ period began earlier in the US (the New Deal in the 1930s), but in the UK the introduction of the welfare state, mass secondary education, suburbanisation, and the nationalisation of railways, were all delayed until after the second world war. Although the chronology of the phases varies, the sequence does not.

The financial crisis and the management of educational organisations

Have there been shifting managerial rhetorics in the management of education which correspond to the analyses of Abrahamson (1997) and of Adler and Heckscher (2006)? A full historical analysis is not possible here; but consider the period between 1945 and 2013, one which spans two of Perez’s cycles (the ‘deployment’ phase of the fourth, from the 1930s/40s to 1972; and the ‘installation’ phase of the fifth, which began in the 1970s). In the UK, from the 1940s to the 1960s, there was a period of economic growth when the technologies which had been installed before 1929 were deployed more widely (in the US during the late 1930s; in the UK after 1945). This post-war period until the mid-1960s was marked mainly by ‘rational’ or ‘control’ rhetorics, though there were residues of human relations management theory. In education, there was much ado about ‘aims’ and ‘objectives’; there were clear demarcations between the subjects of the curriculum, between the teacher and pupils, and between ‘home’ and school. The ‘grammar’ of (secondary) schooling was bureaucratic, and the rituals and architecture of the schools expressed it. Behaviourism was the dominant paradigm within educational psychology. Open systems theory (that is, a focus on the relationship between organisations and their environments), rational decision-making and problem-solving, cybernetics and information theory all entered the field of educational administration in the 1950s; and the search began for general theories of educational administration which could combine formal structures, social interactions and individual motivations (Hoyle, 1969:40). However, in the late 1960s and into the 1970s, economic recession set in. Normative or commitment rhetorics re-emerged more strongly, but did not replace the extant bureaucratic practices. Comprehensive schools replaced hitherto separate structures in secondary education, but, within secondary schools, the structures and modes of control remained hierarchical, although there were exceptions. Open-plan schools and the integrated pedagogical code were much discussed but little practised. As economic recession deepened in the late 1970s, the political choices for dealing with it came to the fore and the educational options were aired in a spate of polemics about the nature of schooling (Cox and Dyson, 1971; Judge, 1974), and in the Great Debate. Within the field of the management of education, phenomenology (Greenfield, 1973) challenged systems theory (Hills, 1980), and the move away from structuralist theories began.

After the previous fourth long cycle between 1908 and 1972 had ended, the new ICT-led ‘installation’ from the mid-1980s towards 2000 coincided with the ‘disembedding’, though not completely, of the market from the state. Economic growth occurred and with it came a re-assertion of rational rhetorics in business and education, especially in England: business process re-engineering, out-sourcing, a focus on ‘core’ business, audits, best practice, efficiency, effectiveness, benchmarks, league-tables, indicators, targets, plans and strategies, standards, time-on-task, ‘evidence’. In this, there are parallels to be drawn with the corresponding stage of the fourth long economic cycle which began in the US about 1908: a mix of laissez-faire economics and highly rational modes of management such as Taylorism and Fordism. Gunter (1997: 74), for example, has noted the clear parallels between the period 1900–1930 in the US and the 1990s in England. During both periods, business practices and accountability prevailed in education. This ‘cult of efficiency’ in American education (Callahan, 1962) was repeated in England in the late 1980s and 1990s. Rational control rhetorics and practices were to the fore. During both periods, economic liberalism coincided with the installation of powerful new technologies. In England, therefore, during the 1980s and 1990s, a coincidence of information technology and neo-liberalism enabled highly rational modes of management to operate. The rise of the educational qualitariat was relentless, a ‘reign of terror’ no less (Scott et al., 1999).

As the long ICT-led upturn from the 1970s began to waver in about 2000 there was a gradual re-insertion of a softer ‘commitment’ or ‘normative’ management rhetoric. However, the regulatory regime of Ofsted and similar agencies persisted; but as the legitimacy of rational rhetoric wore thin, there emerged appeals to trust, to community, to delight and enchantment, to emotion, to network, to leadership (charismatic and distributed) and to collaboration. Here, in passing, one can draw a parallel with the waning in the 1920s of the technology-led upswing which had begun around 1900. That upswing had coincided with a construction of the individual as ‘rational’, only to be tempered thereafter by a notion of the worker as having ‘social’ needs, as argued by human relations management theorists (Hoyle, 1969: 36). Neither then, nor now, has the normative superseded the rational; it complements it. The balance between the rational and the normative has shifted, but only slightly, towards the normative. That it has shifted so little may appear to be surprising, given the weakening legitimatory power of the prevailing rational rhetoric, but in times of fiscal constraints on public expenditure, the fear of unemployment among public-sector workers may be sufficient to ensure the appearance of their compliance and collaboration, if not their actual commitment (Kaufman, 2008: 27).

Distributed leadership: the model of choice in the 21st century?

The dominant discourse in the management of education in the UK is distributed leadership. Its endorsement is curious: it eludes an agreed definition (Hartley, 2007); its theoretical basis is unclear (Lakomski, 2008; Serpieri, et al., 2009); it lacks a consideration of power (Hartley, 2010; Hatcher, 2005; Lumby, 2012), and the evidence of a direct causal association between distributed leadership and pupil achievement remains unconvincing (Bolden, 2011: 259). Even so, it has a number of powerful legitimations. It resonates with a culture in which there is a weakening of boundaries and firm categories; it purports to produce a collective organisational wisdom which may help to deal with complex situations, as they arise; it accords with the notion of professional collegiality, serving as a ‘soft’ counter-weight to a range of rational controls whose power to motivate is ebbing; and indeed this soft rhetoric may convey a sense of workplace democracy. All these legitimations have underpinned the emergence of distributed leadership, but, given the weak evidence-base in support of it, why does it persist as a discourse?

Distributed leadership may be an early example of a ‘social technology’, or infrastructure, which is compatible with the material technology of ICT. It is not just a legitimatory rhetoric. It is arguably also a productive practice which is of a piece with the post-crisis deployment phase of ICT. Recall Perez’s argument about the necessity of an organisational and institutional change after the 2008 financial crisis. The ICT technologies which were ‘installed’ before 2007 allow for collaboration: vision, sound and text now converge digitally. The economy is less material than of old. It is increasingly ‘immaterial’ – cognitive and affective; what Moulier-Boutang (2011) terms cognitive capitalism. Thus, in the emerging transformation to cognitive capitalism, ‘socio’ is productive; ‘solo’ is less so. Looser structures – ephemeral, and virtual in their geography – are claimed to be more productive than the ‘enclosures’ of solid modernity. ICT enables a new mode of sociality; it can generate a ‘collective intelligence’ (as in open-source software) which is productive. It has the capacity to permeate economic and social boundaries: that between living and working; and between producing and consuming (Kallinikos, 2011:131). Nevertheless, the reality of this new work order (Gee et al., 1996) is somewhat less than the rhetoric suggests, especially for ‘non-core’ workers.

Put differently, ICT is symbiotic with distributed leadership. Its discourse maps easily onto the software of digital technologies: shared, distributed, solution-seeking, convergent, smart, open. But this software also generates rational ‘big data’: accessible in real-time, collected and collated in the cloud, available and distributed to managers, but much less so to others. Access to this information is asymmetrical. A recent study, Big Data, declares that ICT has the potential to measure ‘[…] variations in the performance of teachers in improving the academic achievement of students – teacher value-added – that can be an effective tool for helping to increase productivity in education’ (McKinsey Global Institute, 2011: 101). The ‘sociality’ of digital technology may also enable structural re-formations: within organisations (expressed as distributed leadership), and amongst professions (as in, say, extended schools). Even so, it is important to note that ICT, of itself, will not assure these re-formations; it will facilitate them. Professional cultures may not so easily coalesce. None of this is to say that distributed leadership has intentionally been established so that it strikes a discursive accord with digitization, but it is to suggest that there is a strong intellectual resonance between the two which, taken with its other legitimations mentioned earlier, may explain its currency.

Once economic growth reaches a sustainable pace, and if Abrahamson is correct, then we may expect to see the re-assertion of rational rhetoric, at the expense of the normative. On that basis, therefore, distributed leadership, which purports to be a normative or commitment rhetoric, would logically fade because distributed leadership is not a rational rhetoric. To signal the early demise of distributed leadership may, however, be somewhat premature. Even well into the next economic upswing, distributed leadership may persist, at least as a discourse. We have said that the tension between ‘autonomy’ and ‘accountability’ has been a recurring theme of late in the management of education. How, it is asked, can distributed leadership co-exist with intrusive forms of accountability? The empirical evidence in favour of distributed leadership is not strong; the rhetoric outruns the reality. However, that might not matter; it may be that at this stage the dispersal and adoption of the rhetoric alone will suffice. The speculation here is that one of the intentions of the discourse of distributed leadership may be to change the disposition of teachers so that they, like other knowledge workers, will become at ease psychologically in a more ‘collaborative’ digital environment. This discourse is arguably part of a new structural isomorphism in the management of consent in educational organisations as they enter the post-crisis ICT-’deployment’ phase of the current major economic cycle which began in the 1970s. When this post-crisis ‘deployment’ period of ICT gathers pace, the type of rational control ‘exerted’ may not need to be so obviously rational, so bureaucratic, as in the past. Rational controls may come to be incorporated and distributed in the big-data software in a far less conspicuous way than occurred during the fourth long cycle (1908–1970) when rational control was built into the visible and audible moving assembly-line, or made explicit in formal bureaucracies, or expressed in Ofsted-type inspection rituals, or in the symbols of architecture, timetables and dress codes.