The question frequently arises: Why do so many billionaires support the privatization of public education? Surely, they don’t care about making a profit as they are already billionaires. Here is one possible answer, as reader Randal Hendee posted this comment on the blog about the motives of the billionaires who support “reform”:
There’s a lot of evidence that reducing the cost of public education is one of the main goals of people like Gates, Broad, and the Waltons. They’re playing a long game that they hope will result in lower taxes for big property owners and for the wealthy in general. At the same time, they see profit in “reform” because even with relatively lower tax revenues, a new cohort of children enrolls every year. Once the opportunists tap into that public revenue stream (through privately operated charters, educational technology, data mining, real estate deals, and so on), the cash cow will keep on giving. Or so they hope.
The Walton family fortune is based mainly on cost reduction (that and inventory control via technology and breakneck expansion). The Walton billionaires are billionaires because Walmart learned how to squeeze both suppliers and employees. In the process they put thousands of local merchants out of business. The Waltons are trying to undermine American institutions such as public schools and labor unions. To imagine that these efforts have nothing to do with cost reduction doesn’t square with company history. (If you want to know more about how the family stays so rich, google “Walton tax avoidance.”)
While Eli Broad is said to favor higher taxes for the rich, cost reduction is a big part of the Broad efforts. Broad wants fewer schools, larger class sizes, more charters. Charter expansion is one of his big goals, and of course many charter teachers work in sweatshop conditions for relatively low pay. Some of this cost saving is diverted to marketing and high administrative salaries. But the long term idea is to spend less on schools, not more. Presumably, free market incentives will spur “higher achievement.”*
Here’s what Bill Gates said about education and technology (and cost reduction) at the 2013 Davos Conference:
“Well, we’re taking the Internet revolution and we’re applying it in more areas. So, for example, in education the idea that not only are the best lectures online, but you can interact with people, talk to other students, that we ought to be able to deliver education that’s higher quality but dramatically lower cost. There’s a lot of excitement about that.
“MOOC means Massively Online Open Courseware and a lot of good pioneers that are learning and making that stuff better and better. The [Gates] Foundation is the biggest funder of that activity ’cause we see so much promise and the increasing price of education just doesn’t work. You know, a lot of our unemployment is because kids aren’t well educated enough. If you’re a college graduate, unemployment is very low. We’ve got to increase access to education, but letting the price go up won’t allow that.”
Anytime you hear someone say, “You can’t solve the problem by throwing money at it,” that person wants to reduce the cost of (that is, underfund) public schools, particularly the ones in poor urban neighborhoods and areas of rural poverty. Gates often used to preface his education remarks by stating that we spend way more than we used to but have little to show for it. He never took inflation into account, nor did he mention special education mandates.
Sure, the “reformers” want to “transform” public education by destroying it, but cost reduction is built into their overall scheme.
*Note: Eli Broad publicly supported Governor Jerry Brown’s proposal to raise taxes for education, but he simultaneously funded a “dark money” effort to fight the same proposition.
Diane Ravitch's blog 
Still Clueless …
Reblogged this on donotmalignme.
Reblogged this on David R. Taylor-Thoughts on Texas Education.
Have these people ever met a child?
Teachers really shouldn’t take the Obama Administration and the ed reform “movement” advice on bonuses rather than regular raises. It’s terrible financial policy for middle class people.
I can’t imagine why ed reformers are pushing it other than to cut costs. It’s a blatant rip-off:
“Several developments help account for wage stagnation: the economy’s globalized and technological nature, which has placed more bargaining power in the hands of employers, and long periods of relatively high unemployment, compounded by waves of layoffs and excessive numbers of discouraged and underemployed workers, leaving some employees fearful to ask for more.
The shift in compensation that favors one-shot-only rewards over incremental increases in salary that compound over time also appears to be playing a significant role.”
They’re taking away your ability to compound money gradually over time, and “compounding money over time” is the only financial tool middle class people have that they can leverage.
Every time you hear “incentive bonus!” rather than regular pay raise, grab your wallet.
The above way of posing the question is just another misdirection in the never-ending con game.
There is no Either/Or here.
To the extent that the public education stops being something that the People provide for themselves, in their own best interest, and becomes something that the Public has to beg and borrow from private providers and profiteers, Both the quality will go down And the cost to society will go up, steadily rising out of control.
Of course the private providers will lower the immediate cost to themselves, but that is not the cost, whether financial or social, that the Public will pay.
I don’t know whom you’re calling clueless, or why you’re even calling somebody clueless. For the record, I didn’t write the headline, and I’ve never framed the issue as an either-or proposition, but I do appreciate Diane’s reprinting my comment.
These billionaires are making a concerted long-term effort to reduce the cost of public education for THEM, and for their companies. Not for the average citizen. They want to reduce public expenditures on education in large part to reduce their so-called tax burden. And they want to siphon more public dollars into private hands.
Both objectives are part of the overall effort to transfer ever more wealth from everyday people to a small class of rich people. One of the ways the super-wealthy do this is to purchase influence over the tax code, bankruptcy laws, trade policy, health care regulations, and so on. That they’ve been incredibly successful in these efforts is evidenced by the growing wealth and income gaps between the very rich and nearly everybody else. Robert Reich, Dean Baker, David Cay Johnston, and many others have documented this over and over.
It’s no accident that Scott Walker, whose political sponsors are the Koch brothers, is proposing massive budget cuts to the University of Wisconsin system at the same time he’s overseeing the weakening of unions and the further privatization of public K-12 schools. Weaker unions mean lower wages and benefits for teachers and relatively lower expenditures for education. Lower expenditures for education at all levels will provide an excuse for further tax cuts and corporate tax breaks.
Further privatization means more “market opportunities” for the siphoning of public funds. I put the term market opportunities in quotes because privately operated charter schools, high-stakes testing, legally mandated tutoring programs, and so on resemble rackets more than they do legitimate businesses.
By far the worst trends in public education have come about since the anti-Obama backlash of 2010, when Republican governors sponsored by right-wing and libertarian funders swept into power. To imagine that these people–the politicians and the rich donors–do not want to reduce expenditures on public education doesn’t square with the public record. Wisconsin, Michigan, Ohio, Pennsylvania (which may be starting a turnaround), Texas, Florida, New Mexico–they’ve been trying to outdo themselves in adopting the ALEC agenda. And of course, alleged Democrats such as Cuomo and Malloy have aligned themselves with many of the so-called reforms.
Yes, our society will pay dearly for the billionaire-backed initiatives. The Walmart approach to business is a huge burden on the everyday people who shop there because of lower prices. For details, check out Ellen Ruppell Shell’s book titled Cheap: The High Cost of Discount Culture. Yes, the never-ending search for bad profits conducted by the most annoying companies in the world–AT&T, Comcast, fill-in-your-own-favorite–these companies will continue to gouge consumers as long as they’re given free rein.
But no, this does not change the fact that Bill Gates and friends want to reduce expenditures on–that is, reduce the cost of–public education.
Ditto for Jeff Bezos, who has built an empire on the basis of avoiding sales tax. (See Dean Baker on this subject.) Ditto for Reed Hastings, who wants schools nationwide to be run by “a few large non-profits,” meaning a small cluster of billionaires.
Jon Awbrey, I don’t disagree with most of what you say in your comment above. What I don’t get is how you got me confused with somebody else. Sometimes it helps to ask for clarification rather than misrepresenting someone’s viewpoint and glibly dismissing it out of hand.
Randal, I post comments that I like. I wrote the headline. I think it accurately reports your comment.
Randal,
Some days I’m short with people because I’m short on time.
It’s just possible that we both see the big picture and the long view in much the same way, but we all sink or swim by the sound-bytes we use to summarize our POV or that others choose to succinctify us.
The soi-disant “reformers” have gotten along swimmingly by capitalizing on a word that ranks up there with baseball, Mom, and apple pie on the American coat-of-arms.
And I will continue to suggest that “cost-reduction” simply sinks any attempt at criticism in the public eye, for all the same reasons.
We all know that a business enterprise will do everything it can to stretch the gap between what it charges others for its product and what it pays out to produce it, so that’s a triviality. But first it has to acquire the business. That’s the elephant in the classroom that fixating on red herrings like cost vs. quality causes people to forget.
In this case, “acquiring the business” means eliminating the competition. But there’s another big difference here, one that is also getting glossed over by the usual economic glossary of cost vs. quality.
Here the competition is not just another business on a par with every other business in the market but a public institution that was built up through long-term community investment over centuries. To the profiteers it’s just another mountain-top to be blasted away for any bit of non-renewable wealth they can extract from it.
Diane, I agree that the headline reflects the facts I tried to bring forward. After all, I was responding to your post that posed an identical question. I can’t fault your wording, even though I might frame the issue a little differently. The distortion is in Mr. Aubrey’s responses.
One thing I take issue with is the dismissive potshot approach to blog commentary. Today Mr. Awbrey either called you “clueless,” or called me clueless, or called both of us clueless. I wouldn’t have responded to that except that he finally did elaborate on his glib dismissal of my original comment. Thanks for reprinting it.
Randal,
I try to practice forbearance.
Jon Awbrey:
It’s obvious the self-proclaimed reformers are playing all kinds of semantic games. But they’re games anybody can play.
By narrowly construing the term “cost reduction” the way you do, you can deny that it means “reduce expenditures on public education,” which is the way I interpreted Diane’s original post, and it’s the meaning that would probably make sense to most readers.
One of the reasons I enjoy reading education blogs is that I learn new things of substance. So, big thanks to people like Diane (of course), Chiara, Laura Chapman, and many other frequent commenters; Anthony Cody, Valerie Strauss, Edushyster, Leonie Haimson, Audrey Amrein-Beardsley, Peggy Robertson, Tim Slekar, Mercedes Schneider, Peter Greene, Jersey Jazzman, Bruce Baker, and others who share actual experiences and Internet links and quotations, and who bring up little known facts and other items of substance.
That list reminds me I’m spending too much time on blogs!
Okay, I guess this is where I have to ask for clarification.
Are you really saying that the long-term aim of the privatizers is to “reduce expenditures on public education”?
Jon, I would say that a large part of the privatization movement wants to cut the cost of education by replacing teachers with technology. By firing experienced teachers and replacing them with young college graduates looking for a job while pondering their real career. By increasing class sizes.
Jon Awbrey:
And this is where I say your question tells me you did not actually read my comments. I didn’t say that THE long-term goal of the PRIVATIZERS is to reduce expenditures on public education.
As I indicated, I believe that, based on the words and deeds of these billionaires and the people they fund, reducing expenditures on public education is one of the billionaires’ primary long-term goals. Another is to cash in on what’s left of public education even as their political operatives succeed in cutting public education budgets.
A further goal is to exercise control over American education, partly for the sake of control, and partly for the purpose of creating more wealth (which arises from things like tax avoidance and corporate tax breaks, and from generating guaranteed streams of income–the “rackets” I referred to, which are made possible because of their cash-fueled advocacy–e.g., Gates and educational technology, Rupert Murdoch and technology married to canned curricula, and so on).
Like Robert Reich, I believe these billionaires are already acting as an oligarchy, but I also believe they’ve shown a desire for even more power. As an example, Reed Hastings believes in billionaire-run charter schools but not in school boards, which, as Diane frequently reminds us, are at the foundation of American democracy. His own words bear this out. Essentially, he believes in oligarchy. From where I sit, it looks like Gates, Broad, and the Waltons do, too.
There are plenty of privatizers who are not billionaires. But those people tend to be in the pay of billionaires. The privatizers I’m talking about are the few, the billionaires, who wield a wildly disproportionate amount of power because they use their wealth to purchase influence of all kinds in the realm of American education.
Yes, they want to reduce spending on public education, but that’s not all they want. They believe in the continued transfer of wealth and power from the many to the few. Working hard to reduce their tax liability by reducing expenditure on public education is one of their stratagems.
As I indicated earlier, we agree that all of their goals with respect to public education will result in worse education at a higher real cost to the society at large. If you want to make a claim to superior insights via constricted definitions and abstruse reasoning, be my guest. That’s not something I want to spend any more time responding to.
In this interview with Maria Bartiromo, Bill Gates says he wants to use technology to “dramatically” reduce the cost of education, starting at 3:43 of the video: http://www.cnbc.com/id/100409068
This is where Gates says, “Well, we’re taking the Internet revolution and we’re applying it in more areas. So, for example, in education the idea that not only are the best lectures online, but you can interact with people, talk to other students, that we ought to be able to deliver education that’s higher quality but dramatically lower cost.”
He may not know much about quality education, but Gates’s intentions are clear. He knows that the only way to dramatically reduce the cost of education is to pay fewer teachers less.
The interview was recorded at the Davos conference in January of 2013. I happened to be watching CNBC when they ran it. It was kind of shocking to hear him claim that “a lot of our unemployment is because kids aren’t well educated enough.” I’m sure most viewers knew that the high rate of unemployment at the time was actually due to the credit collapse of 2008 and resulting recession.
But that’s all part of his bogus narrative of American education. His solutions for the false crisis fit conveniently into his scenario of cost cutting through technology. The company he founded is in the technology business and, if this scenario were to play out, stands to reap big profits.
I’d be really careful with the switch in rhetoric, too, where ed tech is now portrayed as an “equity” issue.
Recall that ed reformers only changed the rhetoric when it came out they planned on using it as a cost-cutting measure. Jeb Bush sold it that way, and so did Gates.
It isn’t real hard for me to figure out who is coming out on the short end of that. I’ll go to a Rocketship class of 100 students per teacher sometime AFTER tony private schools adopt this, thanks.
I don’t need to be first. I’ll wait and see how it works in the wealthiest schools.
This would explain something that’s always confused me: for all their input on legislation, charter operators (here in Chicago, anyway) are totally silent on bills that would increase funding for education as a whole. They’re constantly going on about this alleged “funding gap” between charters and public schools, and the whole of their position on revenue is to take money from public schools and divert it to charters. Even though funding for all public schools would benefit them, too, they do nothing to achieve that. Of course, they could also just be driven by a desire to totally cripple public schools, as well, even if their own schools have less money than they would like.
Since at least the Reagan years, lower taxes on the wealthy and higher budgets for the Empire’s global wars of aggression have warped national budgets, leaving less federal aid to states and localities. Tax-cutting politicians, mostly but not only Republicans, have used people’s understandable hatred of taxes to get elected in many states, and then the cutting of school budgets began in earnest. Kansas is now the poster child for the irresponsible tax-cutting ideology.
Politicians who refuse to make the link between the U.S.’s wasteful war spending and bloated militarist budget and our financial woes (insufficient school budgets, crumbling infrastructure, lack of affordable housing, the worst inequality and poverty in the developed nations), politicians such as ALL the current candidates, including Bernie Sanders, due us all a disservice by lying by omission.
The annual National Security budget of the U.S. is more than one trillion dollars when all parts are factored in, not merely the Pentagon budget of more than $600 billion. That is way more than 60% of the discretionary budget. As Martin Luther King, Jr. warned us decades ago: “A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual doom.”
When the U.S. finally realizes it can no longer be the World Cop (and worst State Terrorist, killing more than 15 million people worldwide since 1945), and begin considering public schools and cooleges as well as infrastructure, its citizens’ health and housing and living wage jobs as vital parts of its true National Security, this will become, finally, a sane and sensible nation. But I am not hopeful that day will ever come.
Does the Overclass, which so-called education reform is a stalking horse for, really seek to lower spending on education?
I don’t think so; rather, they intend to redirect ever more spending toward themselves, which entails taking money from public schools (except for the large sums spent on tests and parasitic consultants, but that can be seen as a roundabout way to get the money by another means, since the tests are a vehicle for destabilizing public schools) and redistributing it to the private schools (charters and vouchers) they are promoting.
They are happy if the pie keeps growing, as long as they control what the ingredients are and who gets to stuff their face.
I agree with you. Charters are inefficient splinter operations that often squander resources, waste money on lobbying and advertising. They do not save us money; they redistribute wealth to the upper tier that does not need it, and they impoverish middle class taxpayers by destroying teaching careers.
In addition to the myopia of the pro-charter billionaires, their inherent arrogance is astounding. They believe they are superior in all ways so they should know what is best for the working class, even when facts repeatedly show their big “reform” is a fake.
There can be little doubt that the profit-seekers looking at public education and other public services as cash cows have proliferated. Consider the Education Industry Association (EIA). Founded in 1990, EIA is the trade group and lobby for more than 225 for-profit organizations seeking the benefits of “federal-state-local advocacy, public relations support, professional development, peer-to-peer networking and more.
EIA draws its membership from: “Learning Centers and Test Prep Providers, On-line Educators, Technology Solution Developers, Charter School Management Organizations-EMOs, Private Schools, Special & Alternative Education Providers, Marketing Consultants, Early Education Providers, Professional Development Consultants, and Education Investors & Brokers.”
I started writing about EIA shortly after it was formed. Among the earliest supporters was the Rosa and Milton Friedman Foundation, established to promote market-based everything, including education. An early conference (2001) was organized around eight themes: “Growing Your Education Business. Measuring Success, Contracting with Charter Schools, Exploring Technology, Forging a Partnership, Forming Strategic Alliances, Assessing the Education Industry, and Networking with Industry Leaders.
That conference had sessions on financing charter facilities; dealing with “restricted and outmoded preparation and certification of teachers;” tapping federal funds for private for-profit ventures (especially “at risk” students); and the implications of mandated assessments and a possible backlash against them. Other sessions treated the growth of on-line assessments of students and teachers, staff development, and virtual schools.
Here is a sample of the tone and topics for sessions: “Education Doesn’t Need a Band-Aid, It Needs a New Heart,” “Sell the Sizzle and Not the Steak,” “The War on Charter Schools,” “The Emergence of National Schooling Companies,” “Strategies for Charter School Facility Financing,“ “To Outsource or Not to Outsource,” “Growing Your Education Business,” “Certified or Qualified? Current Trends in Teacher Preparation and Certification,” “Recruiting Executives and Principals for For-Profit Education Companies,” “Finding Them, Hiring Them and Holding Them,” “Would You Like to Hang Out a Shingle?” “Federal and State Trends in Educational Reform and Assessment,” “Title One and Special Education Reform.”
Relatively few of the high-profile companies that were active in EIA in 2002 are still around. In 2015, the “Platinum” members with revenue of $7 million or more (annual member fee $6,500) included Academic Tutoring Centers; AdvancedPath Academics, Inc.; ATS Project Success; Charter Schools USA; Fairmont Education Group; Fusion Group; GEMS Educational Solutions; Infinite Access/ MCH Strategic Data; Kumon North America; Learning.com; National Heritage Academies; Schnabel Learning; and The Parthenon Group.
However, the most surprising Platinum member is: Johns Hopkins University School of Education, with the Dean, David W. Andrews also serving on the Board of EIA and selling, I kid you not, the reputation of the university.
For a “discounted rate” EIA members can purchase a “Design Review” of use in marketing their for-profit products or services. Each paid-for review offers that EIA member a “Johns Hopkins University Certificate for Completion of a Successful Design Review.” The reviews are conducted by “a team” at Johns Hopkins School of Education (JHU,SED.)
Here is part of the pitch to members: “Can you imagine walking into a Superintendent’s office armed with a positive outcome report by none other than the Johns Hopkins School of Education?! Do you think your competitors will have this feather in their cap? The answer is a resounding NO! Picture your new marketing campaign that features your positive outcome with the Johns Hopkins School of Education! And most importantly, imagine what you will learn about your own product or service and the best ways to continually improve in order to produce the best educational outcomes for your students.” …Even a small investment of a few thousand dollars, you can have the Johns Hopkins seal of approval attached to your company.” “Again, imagine having that ammunition during your next district meeting!”
There are the five “packages” of reviews/studies you can buy, each with a Johns Hopkins University School of Education seal of approval. These reviews and studies have are being are marketed as approvals, as documenting “your positive outcome,” and as “ammunition” for your sales. A positive bias and endorsement is all but guaranteed for these so-called reviews and studies.
The least expensive package at $3,500-$5,000 is an Instructional Design Review. This Includes a rubric-based assessment of the logic of your business model, its theoretical framework, use of evidenced-based strategies, analyses of your customers in addition to an assessment of your instructional objectives, pedagogy, and delivery/user support.
The most expensive at $38,000-up is an Effectiveness Study. This a large-scale study of the outcomes of your program based on one or more rigorous “quasi”-experimental studies (non-randomized) or randomized controlled trials.
The Dean of the JHU School of Education, David Andrews, and his colleagues are scheduled to drum-up some business at this EIA’s summer EDVentures conference in Orlando, July 15 –17.
The “Vision” statement says the School “will lead the world in attracting the most talented and diverse individuals into the fields of education, counseling, and public safety. The Division of Public Safety Leadership ”cultivates and sustains viable communities through educational programs that foster the ethical, social, and intellectual development of current and future public safety officials.
It is useful to remember that Johns Hopkins University in about 3 miles, 15 minutes by car, from the site of the April 27 shooting and riots around 1700 N. Broadway in Baltimore, Maryland. Since April 27, Baltimore has had a surge in shootings.
There is no shame in all of this trafficking of market-based education, not for the Dean, the School, or John Hopkins University. No shame, no guilt, no embarrassment, no moral center. All sold out, for profit.
And that seems to be the condition for the whole of American society being sought by the billionaires and their shills.
You really couldn’t make this up! The vulture capitalist guide book to “investing” in education! I wonder who is the wunderkind behind the prostituting of the Johns Hopkins good name?
55 years ago, the Harvard Schools of Government and Education would have called “S.O.B.’s” (Sons of Business), by JFK.
I guess there’s no one protecting the Kennedy legacy at his namesake.
I’m not saying anything that hasn’t been said by above posters in greater detail. I have long viewed so-called education reform as a shifting of where the money goes. Teachers are getting stagnating or declining pay, benefits and retirement packages. Administrators are not. It’s where the business model has truly applied.
Look no further than charters. Teachers work for low pay but administrators and CMOs cash in. In Detroit, when University Yes Prep teachers voted to unionize, the CMO immediately stated that it would drop its management of that school. But why? If they believed they were a capable school and it was all about the children and they kept the same staff, what suddenly made the difference? Answer: a single collective, coherent teacher voice.
This is all about who gets the money. Not about kids.
Current Reform=Lazy attempt to save money ( It is so obvious!)
Whatever their motives may be they are being extremely short sighted, myopic and abysmally ignorant.
They are “killing the goose that lays the golden eggs”. In the long run they will be the recipients of their own avarice or whatever is driving them.
The problem is that everyone else suffers with them.
WE know this. How to get this across is the 64,000 dollar question before it gets any worse than it is now.
In my view it is not only in education but in so very many ways this lack of vision is killing our country and indeed our planet.
I’m sorry, but this whole line of thinking is a little like saying that the military industrial complex is trying to reduce expenditures on war.
I don’t think the analogy works at all, for the simple reason that whereas the military-industrial complex has been fully enmeshed with the civilian political system for many decades, the private corporate system and the American public education system are not yet one and the same.
That’s why Diane’s work and the efforts of like-minded people are so crucial–to prevent that eventuality. Quibbling over the wording of a blog post isn’t going to advance the cause.
Anyone who in 1986 read Robert Thoburn’s book “The Children Trap” (referring to public schools) hasn’t been surprised by the unrelenting attack on public schools. The book declared: “I imagine every Christian would agree that we must remove the godless humanism from public schools. There is only one way to do that: Abolish public schools. Christians should run for school board seats…our goal is to hamper public schools [as board members]…to shut them down, district-by-district, school-by-school.” I’m a seminary-educated Christian and I absolutely detest what Thoburn urged, but it did strike a cord with many people, including politicians who saw it as a step toward being elected and by opportunistic profiteers who saw it as a way of getting a huge slice of taxpayer money intended for public schools by setting up charter schools.