The Struggle to Re-Embed Education as a Public Good

By virtue of deploying market mechanisms at any level of the education system, we embed the sector into the circuits of capital, a process that leads to its financialisation. This move transmutes education into a commodity, subject to market logic and profit motives, resulting in what can be called a hyper-commodification of education and knowledge.

Karl Polanyi reminds us that labour, money, and land are “fictitious commodities” — goods treated as though they were created for sale, when in fact they are essential to life itself. Their commodification generates what Polanyi calls a double movement: markets attempt to disembed them from social life, while society, seeking to protect itself from social and ecological harm, mobilizes to re-embed them through regulation or collective action such as the #FeesMustFall Movement.

Nearly a century after Polanyi’s seminal work The Great Transformation, I contend that we can extend his conceptualisation of fictitious commodity to education and knowledge. The commodification of education creates a tension between market logic and the social imperative to safeguard education as a public good.

When education is commodified, access becomes stratified, intersectional inequalities deepens, and the entire system attracts crisis tendencies i.e. student debt crises and disinvestment. Society, in turn, pushes back, as we have seen with the #FeesMustFall movement, a powerful decolonial re-embedding project driven by students demanding free, decommodified education.

The deeply ingrained intersectional inequalities across race, class, gender, and geography underscore the perils of marketising any social good, be it education or health. Yet the ubiquitous, self-reproducing nature of capitalism constantly disavows this social imperative, insisting that such goods remain subject to capitalists’ notions.

Financialisation in the South African Education System

The crisis in South Africa’s education system today is inextricably linked to this process of financialisation. This is illustrated by the declining state funding for higher education, the massive accumulation of student debt, the dysfunction within NSFAS, and the rapid expansion of a for-profit private education sector. The dynamics which have continuously deepened the structural inequalities inherited from the apartheid epoch, further distancing education away from being for public benefit.

Stats SA data reveals a concerning shift: in 2023, government grants provided just R48.3 billion, which accounted for 45% of the total higher education income, while tuition fees contributed R38.8 billion (36%) and other streams made up the remaining 19%. Vital to note that over the past five years (2019–2023), South African universities have averaged roughly R45-46 billion in government grants and R48-49 billion in other income streams annually. This confirms a structural reliance on tuition and private income, which consistently outpaced public funding over the period and indicative of a systemic pattern. Even the R5 billion (20%) increase in government grants after #FeesMustFall was an emergency intervention, not a sustained reinvestment.

The picture is not so encouraging neither in basic education. The effects of austerity have seen real per-learner spending in public schools remain stagnant or declining such as in the case of 2019/20: R27,756 → 2022/23: R26,437 a decline of 4.8%.  According to Ground Up, public schools located in poorer provinces such as Limpopo and the Eastern Cape, now rely on being subsidies by parental fees to stay afloat, this creates a default form of privatisation that ties access to quality education directly to a household’s ability to pay.

Public Capital, Private Schooling

The Public Investment Corporation (PIC), South Africa’s state-owned asset manager, managing public pensions, plays a pivotal role in shaping this landscape. Through the Schools and Education Investment Impact Fund of South Africa  (SEIIFSA), an education-focused vehicle managed by Old Mutual Investment Group, the PIC had committed R1 billion and invested R685,296,495 as of 31 March 2018.

The PIC holds a 71.43% shareholding in the fund, with Old Mutual and the Eskom Pension and Provident Fund each holding 14.28%. Through SEIIFSA, the PIC has financed 33 schools across seven provinces, benefitting roughly 21,500 learners.

Other allocations underscore this trend: in 2012, the PIC invested about R360 million to Curro Holdings, a chain of private schools targeting upper-middle-income families and South Africa’s largest private school operator, via SEIIFSA and Old Mutual Life Assurance.

Together, these figures show how state-managed capital is actively financing the expansion of the for-profit private schooling sector, effectively channeling public pension funds into ventures listed on the Johannesburg Stock Exchange.

Why Prescribed Assets Matter

The education landscape is reshaped by this kind of investor-driven expansion, which inevitably positions the private education as much more desirable and superior to public education. This morphing embeds market logic deeper into the education system. Meanwhile, the public sector is hit with budget cuts and therefore a decline in real-term funding and as a result shortages of teachers, infrastructure backlogs and poor education.

This is precisely why prescribed assets, policy instruments that direct a portion of institutional investment toward socially productive sectors, become crucial. Instead of giving freedom of capital allocation to purely market-driven criteria, prescribed assets would mandate the PIC to invest a specified percentage of its portfolio into public education, this would support decolonial curriculum development, student debt relief, infrastructure, teacher training and children’s nutrition and development.

International precedent shows this is a workable policy. Malaysia’s Employees Provident Fund (EPF) invests systematically in public housing and infrastructure, balancing returns with national development goals. Brazil’s BNDES historically channelled pension-backed capital into industrial and social infrastructure projects that spurred inclusive growth.

South Africa could and should follow suit. With PIC assets R3 trillion, even a modest prescribed allocation could systematically address the education crisis equitably.

Re-Embedding Education in the Social Contract

Such a shift would amount to a Polanyian re-embedding of education into the social contract. Prescribed assets could provide patient, long-term capital financing university expansion, clearing historic student debt, and revitalising failing public schools without resorting to further marketisation.

This would transform the PIC from a passive investor in profit-seeking private schools into an active driver of public-centred education, ensuring that public funds generate public value.

Education is too central to the project of decolonial development to remain at the mercy of market logic. Prescribed assets offer South Africa an opportunity to reclaim education as a social good and deliver a system that is accessible, equitable, resilient and recognises the human in the most marginalised in our society.

If we are to arrest the deepening stratification of education and its vulnerability to financial crises, we must act now to ensure that we have the kind of markets that serve society — not the other way around.

* Funzani Mtembu is a development and feminist economist, activist, and consultant with over 10 years of experience advancing inclusive growth and gender justice. A committed advocate for decoloniality, she was an active participant in the 2015 Fallist movement (#FeesMustFall), which deepened her dedication to building a decolonial society and just economy. Her work integrates feminist economics, infrastructure and industrial policy, climate and fiscal justice to promote equitable development. Funzani continues to consult with civil society, governments, and multilateral partners in efforts to centre women and marginalised communities in economic transformation.

** The views expressed do not necessarily reflect the views of IOL or Independent Media.