Now we have a different, perhaps more empirical, narrative of humanistic decline: the financial/demographic one. This logic holds that the humanities, particularly as offered in liberal arts schools, are not cost-effective at scale. Even worse, that scale itself is dwindling along with the country’s college-age population: a million fewer students were enrolled in US higher education in 2018 than were in 2011. The Department of Education predicts that college closures will “triple” and mergers will “double” in the coming years, and Moody’s notes that 25 percent of private colleges now run deficits.
There is a certain truth to this recent narrative of humanistic decline as it plays out in liberal arts schools, but it is not that of obsolescence or expense. Nor is it reducible to the liberal arts school itself, even as such schools often stand in for the fate of humanities in recent academic debates. Rather, this moment reveals shifts in the coalition among the humanities, government budgets, and institutional finance as each has assumed new dimensions since the 1970s.
It’s true that government budgets and subsequently private finance have sustained the humanities in recent years, but the humanities have sustained such finances, too. The humanities have offered colleges and universities a way to be perceived as genuinely distinct from corporations and banks, even as they become more influenced by and dependent on those bodies. A university and a corporation’s organization of scientific research are different but relatable entities; but no corporation has anything like the “priceless” form of value that a Comparative Literature department offers. This odd alliance, wherein the humanities both sustains and is undercut by financial schemes within the university, produces a discourse of serial crisis. How did we get here, and what effect will “the death of the humanities” narrative have this time around?
The Quantitative Easing of the Humanities
The GI Bill marked a pivotal moment in higher education. But such a bill should be seen as more broadly reflective of the country’s Keynesian moment: roughly, the late 1940s through the early 1970s, in which art, public culture, and, yes, education, were funded directly by both state and federal governments. In the 1950s and ’60s, as Sharon Zukin notes, public expenditure in arts through universities “opened art as a second career for people who had not yet been integrated into the labor market” so much so that by the end of that decade “more than a million adults in America had identified their occupation as in some way connected with the creative arts.” 
Indeed, as millions more students and dollars entered colleges and universities, the number of colleges and universities increased. And as they expanded by population served and subject areas taught, universities became more radical places, particularly in relation to their own funding. Students in New York and Massachusetts began to demand wages for attending college — the “Wages for Students” campaign. From 1969 to 1975, after intense student and community protests and strikes, the City University of New York announced a program of “open admissions,” which included accessible and free remedial education, Spanish-language instruction, and a tuition-free university.
Of course, there were always dissenters from the Keynesian order, and they too laid their eyes on the expanding university. American neoliberal economists like Milton Friedman took note of this expansion. As Melinda Cooper laconically notes, they “began to suspect there was a connection between free and low tuition and the militancy of the student movement.”  The extension of their concerns into policy prescriptions — fewer grants, more loans — was aided by the coming contraction of the US economy. By the mid-1970s, the Keynesian curtain had begun to draw to a close. The reasons for its denouement were legion: the emerging productive output of a newly rebuilt Western Europe and Japan, the spending on and loss of the Vietnam War, the reaching of a limit of productive/consumptive capacity in many domestic industries, the rise of an offshore financial system and dollar market. By 1979, inflation topped out at 13 percent a year, and by the early ’80s this particular act was indeed over.
Yet the role of higher educational institutions had come to play in cultivating and professionalizing the arts and humanities would not, of course, be ended at the speed with which Ronald Reagan quelled the air traffic controllers’ strike. As Howard Singerman and Mark McGurl have recounted in their complementary studies of the cultural and administrative success of MFA programs, the Keynesian moment had sutured arts, literature, and the university closely together and rendered them mutually dependent. Now, in a new era of inflation, wage stagnation, and a diversified institutional financial sector hungry for fee-based transactions and safe places to park assets, the budgets of colleges and universities — and with them support for arts and humanities — would undergo a structural change. They would no longer be places to fund but to invest in; a path was laid in which federal money that went into colleges and universities would return from them to private entities. In the sciences, publicly funded research could now be privatized under the auspices of the Bayh-Dole Act of 1980: grants to students became interest-bearing loans to them.
This is also the moment when government revenue streams shift from tax-based to bond-based, or when we move from the “tax state” to the “debt state” in Wolfgang Streeck’s words. Instead of taxing high-earning Americans and corporations, the US government would sell them interest-bearing bonds — treasury bills. The fact that since the 1980s, the United States’s government debt has grown exponentially is itself a measure of this transition. As Sandy Brian Hager notes, from 1944 to 1979, such bonds averaged a one percent loss; from 1980 to 2015, the average return on US treasuries was 5.5 percent. It’s not only that a financial class is bankrupting public infrastructure, but that we are paying them to do it.
Government “debt” is of course a toxic political subject, but it sustains many financial industries both in the United States and abroad, and it allows for both a continuous supply of safe assets as well as a benchmark against which risk may be assessed. The tax-state to debt-state transition quickly and forcefully shrank direct transfers from states to public universities. But that did not mean there was less money in circulation — indeed there was more. Only now, that money needed to circulate profitably without going into well-known sinkholes like rising wages or social welfare programs — both of which could challenge the social relations of the emerging austerity program.
Tuition at both private and public schools began its alpine ascent at this moment, as well. Rising tuition meant that available money could be channeled through student loans, which became (1976 for public loans; 1984 for private loans; both strengthened in 2005) impossible to discharge through bankruptcy. Soon after, the US government began guaranteeing private loans to students under the FFEL program and did so until 2010. Still, as of 2014, more than 75 percent of student loans were secured by US Treasury obligations.  Finally, public and private colleges and universities increasingly turned to bond markets to fund construction and infrastructure. These bonds would be secured by rising tuition, discounted by the state, and, as The Economist has noted, offer institutional as well as wealthy individual investors another safe harbor: they are low risk and tax free. In each scenario, universities produce much needed liquidity for financial markets and allow for the private capture of public wealth — this is the trick of post-’70s finance.
One effect of this influx of money has been to erase many of the distinctions between public and private universities, indeed to reconfigure what public education means. The federal government guarantees some of the money that flows into private colleges and private universities through loans and research funding, while flagship public schools have essentially become private in their funding since they increasingly have less direct state support to draw on. Likewise, consortiums such as the National Association of Independent Colleges and Universities have been crucial in lobbying for continued and increased access to public funding for private institutions. Humanists, for their part, have been slow to view the public financing of private education at the university level with the same degree of abhorrence they view the voucher system in secondary education.
Yet even as the public versus private distinction lessens in higher education, the profit versus nonprofit distinction, one which even a few years ago seemed tentative, looks for now to have endured. Indeed, The New York Times recently reported that “some owners of private colleges turn a tidy profit by going non-profit.” Nonprofits pay little to no real estate taxes and may be donated to for a tax deduction. The tax breaks allotted to nonprofits enable private schools to “build up” rather than “spend down” their endowments. Endowments make more capital investment possible. This pressures public schools to strive for similar endowments, through private fundraising and tuition increases. And only nonprofit entities may float municipal bonds, themselves tax-exempt.
The humanities may seem to be an outlier in this scheme, but, ideologically, their role is crucial. They provide the nonprofit character that, above and beyond the legal status, sustains this operation. As we saw with the TARP bailout of investment banks in 2008–’09, public subsidy of banks and corporations is not a popular policy prescription. But universities appear to be of a different sort. Even with ever-decreasing state backing, “education” remains, along with health care, one of the most supported and sought-after state services. Unlike Big Ten football or university-based public-private partnerships, the humanities offer the semblance of a genuinely non-transactional space. What is so distinct about the humanities, of course, is that they cannot be valued or priced by any consistent metric. They are a form of conceptual elaboration that has as their structure a refusal of a predetermined outcome. This open reflexivity contrasts quite sharply with the ends-oriented logic of profit.
Once institutionalized in American universities, humanistic reflexivity was perfectly suited to both a life of erudition and to the patrician “gentleman’s C.” Corralled under its sign was an institutional space of latitude that ranged from critical inquiry to luxury purposelessness; one could explore existentialism or one could simply do nothing. It’s enough to remember George W. Bush’s commencement address to Yale in 2001, when he reminisced about his days in the Sterling Library. Bush, who had been a history major at Yale, and a friend, he recounted, “had a mutual understanding: [he] wouldn’t read aloud, and I wouldn’t snore.” Bush then continued: “And to the C students — I say, you, too, can be president of the United States.”
But in the 1980s, like consumer goods and tuition prices, the gentleman’s C became subject to an inflationary spiral. The humanities led the charge. The whole point of the gentleman’s C was that the gentleman didn’t need it; it cost him little intellectually or monetarily. But pump enough money into the humanities market, and, like housing and equities, its stated value will rise. Indeed, the humanities have been operating under the same kind of quantitative easing plan that has sustained the US economy, post-2008: loose government money wards off inflation or depression by boosting asset prices.
And yet, the ability of the humanities to signify multiple, contradictory positions within the university persists even in the face of their simultaneous inflation and diminution. The humanities function — rhetorically — as both the worst choice a student could make — for the price — and the site of insistence that the university won’t capitulate to an overly econometric logic simply by the fact that they continue to offer the humanities. They are perceived as a mark of indulgence and despair even while, as Christopher Newfield has been tirelessly demonstrating for years, they actually make money for the university because they cost so little to administer.  The humanities organize academic obsolescence as well as offer a space of critique of the institution itself, and these properties truly do distinguish a college or university from a corporation. Where else can you find an English department?
Newfield’s point that the humanities subsidize the sciences has been widely cited and corroborated. Why doesn’t it then stick, or resonate more powerfully, both within and beyond humanist circles? Here I’d like to add to his wonderful research. The humanities play a dual role: they both make money and ground a discourse of losing it. They can always be cut more, but they will not be cut completely as long as the nonprofit organization of higher education remains in place. And humanities scholars have been as attached to this discursive bind as anyone else. Rather like Foucault’s Victorian doctor, who declares the horrors of homosexuality unspeakable before he undertakes a careful cataloging of them, humanities scholars have joined the funeral dirge for their own disciplines. But in the face of a seeming market correction, we need to ask: Is this funeral for the wrong corpse?
Time for a Humanities Haircut?
After a series of college closings and near-bankruptcies, in January 2019, such lamentation intensified when an idiosyncratic liberal arts school, one whose reputation supersedes its endowment, Hampshire College, announced that it too would be closing. (“Seeking to partner” with another institution was the choice idiom.)  Because of Hampshire’s roster of distinguished alumni along with its national profile, it became a kind of anchor in a long-simmering discussion: is this how the liberal arts–based humanities will end, not with a bang but a merger?
Writing in The Nation, Hampshire Professor Margaret Cerullo offered this assessment:
As small colleges nationwide find themselves under siege, Hampshire may be the demonstration case. If [Hampshire] college can be destroyed — [even though it was] founded as an alternative by powerful institutions in western Massachusetts (Amherst, Mount Holyoke, Smith, and UMass Amherst) […] — then the arts and the liberal arts as inspiration to lives of critical inquiry and social engagement will have been dealt another serious blow.
Such sentiments are less a description of the problem the humanities face than they are a symptom of it. First, they reinscribe the false dichotomy between the economy’s instrumentality and the humanities’ abstraction by isolating the latter from the former. Since the early 1980s this hasn’t been an either/or situation — it’s been a both/and. The humanities’ abstract character has precisely enabled their economic instrumentation in colleges and universities, which has enabled the humanities to expand and seemingly democratize. Hampshire College — and many other small, private schools—could not have prospered for as long as they did without this pairing. The actual democratization of access to liberal arts schools was possible only under highly leveraged conditions.
These colleges are less “under siege” than they are confronting the end of the same quantitative easing that ballooned the number of institutions, their longevity, and their rosters. Doing so had the further effect of conflating “critical inquiry” and “critical thought” with a kind of institutional liberal arts. Yet that has necessarily been a conflation with institutional finance, too. Now it seems, without the student population to absorb the money, to recycle the funds not going to public infrastructure or wages under the auspices of the debt state, the private liberal arts school itself may undergo a market correction. Thus producing a new crisis in the humanities.
In New England today, one can hardly drive five miles without seeing another precarious private college or university admitting whoever it can find and offering them a “financial aid package” that means they’ll be paying off their debt for the next 30 years. And where do their graduates go? Many head down the road, to take up jobs as assistant managers, service workers, and so on. Should these students have the time and space to develop a sense of humanistic reflection? Absolutely. Should that be done in a private liberal arts school? The more these schools have become imbricated in institutional finance, the harder it is to make that case.
In fact, it’s not “the humanities” that will suffer, but certainly many individual colleges and universities will, and the ones serving already marginalized populations will go first. Indeed, what is unique about Hampshire is that its decline transpires alongside its alternative yet blue-blood heritage. Regardless, some aspects of institutional liberal arts will be forced to take a “haircut,” bond-industry lexicon for a write-down of value. Yet since the humanities are not equally distributed across such schools, and each relates to institutional finance through its own endowment and state-funding structure, “the humanities” itself is the wrong site of critique and attachment. Indeed, it is too humanistic.
Humanists might use this moment to rethink the imaginary of the humanities, along with the private liberal arts school and the reality of what the quantitative easing of the humanities has promised and what it has delivered. Both have long had the effect of making “the humanities” less a site to understand the political economy of colleges and universities than one to obfuscate it. Perhaps a market correction in the humanities will open a space for a new conversation — new analysis and new demands. That doesn’t mean the fallout won’t be real, and painful. But humanities scholars would benefit from being less sentimental about the reasons for the Keynesian state’s success, as Annie McClanahan has explored, and more sanguine about realities of its disappearance. 
What would it mean to have a genuinely public humanities, one which has existed and could exist in places as diverse as union schools, community centers and continuing-education initiatives, community colleges, and so on? What would it mean to have a genuinely public college or university, one free from both the debt state and its perverse double, philanthropy? Mourning the loss of private liberal arts schools will not lead to such conversations. Understanding the arc of their recent trajectories might.
We know now where that arc has led. Perhaps, as humanists, it is now time to ask ourselves the very question that has greeted newly minted humanities graduates, standing with degree in hand on the day of their graduation, wide-eyed if daunted, and maybe a little hung-over: “Well … what are you going to do with that?”
Leigh Claire La Berge is associate professor of English at BMCC CUNY. In addition to her book Scandals and Abstractions, La Berge is the co-editor of Reading Capitalist Realism (Iowa, 2014) and the author of numerous articles that have appeared in venues such as The Journal of Cultural Economy, Studies in American Fiction, and The Radical History Review.
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 Andrew Carnegie, The Empire of Business, p. 110.
 Sharon Zukin, Loft Living.
 Melinda Cooper, Family Values.
 Bob Meister, “Debt and Taxes,” p. 150.
 Chris Newfield, Unmaking the Public University.
 That closing is now on hold after faculty, student, and alumni protested. Yet discussion of it cost Hampshire nearly half of their student body, and they will not be matriculating a full-sized class in the fall.
 McClanahan, Annie J. "Becoming Non-Economic: Human Capital Theory and Wendy Brown's Undoing the Demos." Theory & Event, vol. 20 no. 2, 2017, pp. 510-519. Project MUSE, muse.jhu.edu/article/655783.