Samuel Abrams, veteran high school teacher and now Director of the National Center for the Study of Privatization in Education, at Teachers College, Columbia University, wrote an excellent book about the perils of for-profit schooling. Most of the book tells the story of the rise and calamitous fall of the Edison Project. The business magazine Barron’s published a scathing review of the book by anti-public school ideologue Bob Bowdon, whose film “The Cartel” compared the New Jersey teachers’ union to the mafia.
Samuel Abrams wrote a response to the review. Here is the original letter, followed by the heavily edited published version:
The original letter to the editor:
To the Editor:
In faulting me in his review of Education and the Commercial Mindset for focusing on the failure of Edison Schools rather than the success of National Heritage Academies (NHA), Bob Bowdon misses a central point of my book (“Balancing the Books: Slurring Charter Schools,” Sept. 4).
Edison was the standard-bearer of a movement hailed by Wall Street analysts in the 1990s to outsource the operation of public schools to for-profit educational management organizations (EMOs). Analysts forecasted that Edison and similar EMOs surfacing in its wake would run 10 to 20 percent of the country’s public schools by 2010 and reward investors handsomely. By 2010, the portion of public schools run by EMOs was 0.7 percent and has not changed since. Moreover, investors in Edison saw the stock plummet 90 percent from when it was taken public with much fanfare by Merrill Lynch in 1999 to the time it was taken over in 2003 by the private equity firm Liberty Partners, which, in turn, sold the company in 2013 for 80 percent less than it had paid.
While NHA has indeed tripled in size since 2001 to 84 schools today, as Bowdon writes, this growth along with that of other for-profit EMOs such as the Leona Group and Mosaica constitutes a blip relative to what analysts had predicted.
Furthermore, in contending that I ignored the consistent proliferation of charter schools, Bowdon misses another central point of my book. As I wrote in my prologue, “With the number of charter schools as a whole—from solo operations to network members—growing from 2 in Minnesota in 1992 to 6,440 across 42 states and the District of Columbia by 2013, the appeal and force of educational outsourcing cannot be questioned.”
Finally, in dismissing my argument that the complexity of primary and secondary schooling does not afford parents the transparency essential to conventional contract enforcement, Bowdon cites the complexity of Android and Apple smartphones as proof that complexity itself presents no barrier to the commercial model. Bowdon thus misses yet a third central point of my book.
While smartphones as well as their networks are clearly complex, they are discrete goods and services, respectively, and consequently comport with the commercial model because their effectiveness may be easily judged. In the case of primary and secondary schooling, however, the immediate consumer is a child or adolescent while the parent is at a necessary distance. School districts are accordingly well justified in outsourcing discrete services like busing or food preparation to commercial operators but not a complex service like school management. The implicit information asymmetry in the latter case generates significant potential for moral hazard.
Samuel E. Abrams
New York, N.Y.
Here is the heavily edited and sharply reduced version that Barron’s published, along with a defensive comment by the book editor:
Missing the Point
To the Editor:
In faulting me in his review of Education and the Commercial Mindset for focusing on the failure of Edison Schools rather than the success of National Heritage Academies, or NHA, Bob Bowdon misses a central point of my book (“Slurring Charter Schools,” Balancing the Books, Sept. 2).
Edison was the standard-bearer of a movement hailed by Wall Street analysts in the 1990s to outsource the operation of public schools to for-profit educational management organizations. Analysts forecasted that Edison and similar EMOs surfacing in its wake would run 10% to 20% of the country’s public schools by 2010 and reward investors handsomely. By 2010, the portion of public schools run by EMOs was 0.7% and hasn’t changed since. Moreover, investors in Edison saw the stock plummet 90% from when it was taken public with much fanfare by Merrill Lynch in 1999, to the time it was taken over in 2003 by the private-equity firm Liberty Partners, which, in turn, sold Edison in 2013 for 80% less than it had paid.
Samuel E. Abrams
New York City
Editor Gene Epstein replies: Bowdon wrote that Edison was a case of “switching a government-run monopoly for a privately run monopoly.” That was the reason he dismissed Edison for not being an example of competitive alternatives to government-run schools. Abrams misses this central point, apparently expecting Bowdon to be impressed by the fact that Edison was “hailed by Wall Street analysts.”
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