School & District Management Opinion

Confronting the Free Marketeers: Will They Plow Through Us?

By Anthony Cody — October 11, 2012 6 min read
  • Save to favorites
  • Print

Follow me on Twitter at @AnthonyCody

Yesterday I had the strange experience of waking up to a blog post by someone I had never before encountered claiming he had “kicked Anthony Cody’s ass six ways to Sunday” - in the headline no less! And stranger still, the post made no explicit reference to my work, and provided no link to anything I had written. I left a fairly mild comment indicating that I was interested in dialogue, but this headline left me a bit stunned.

A few hours later I got an apology from the author, Tom Segal, who explained that it was a joke gone awry, and that he had sent it to his editors as a second option never thinking they might use it. The headline has now been changed, and apologies offered and accepted. So now we can return to the substance, and take a look at what Tom Segal is actually saying.

In response to my post, “What Happens when Profits Drive Reform?” Tom Segal has written a full-throated defense of the profit-seeking enterprises in the education sector. I think he overstates their value, and brushes aside legitimate concerns about the dangers our public schools face.

He begins:

You can't have high-quality digital tools without the profit motive (heck, you certainly can't have that computer without the profit motive,)

This raises my very first question. Was not the internet itself at least partly invented in the absence of a profit motive? As Bill Fitzgerald points out here, wasn’t Apache created largely in the absence of a profit motive? These are just two examples of incredibly valuable tools created in various ways not dependent on a profit motive. Government agencies at all levels are capable of being productive and creative. Contrary to the ideology of the free marketeer, creativity is not solely driven by a desire for profit, as Daniel Pink has so eloquently explained.

But that said, I am not, in principle, opposed to profit-seeking companies participating in the field of education. I think as educators we need to be cautious about adopting every new thing that comes along, but there are certainly some innovations worthy of investment.

Tom Segal then writes:

The prevailing wisdom of detractors of private enterprise in education is this polarization or insinuation that schools are "victims" and corporations are there to prey on them. However, this simply does not hold true if you look at any segment in industry. Does Toyota get stigmatized for preying on its customers? Or Pfizer? Or Apple? Not that I'm aware of (though I admit I have not been actively scouring the message boards of late). Cars that don't hold up don't sell, medical products that don't cure don't sell, and computers that don't deliver don't sell--the free market holds everyone accountable, as long as competition and visibility persist.

He goes on to explain:

When I hear people crying foul and pointing fingers at a few bad apples (like, say, K12 Inc.) souring the space, I have an easy answer for them: don't buy those products. Don't pay for those services. Find an alternative that better suits your needs. That is the beauty of a free market: once a company has been exposed as a fraud or a problem-child, there goes their business. Choice--it keeps the chosen honest, and it keeps the chooser in control. I would argue that the existence of the private sector is in fact the best way to ensure that bad apples get spotted and cast aside.

Tom Segal comes at this argument from the stance of a free marketeer. In the world of the magical market, any flaw that is pointed out is an anomaly that will be fixed when the market is somehow made perfectly transparent, and consumers have greater choices.

What he advocates is:

...what you need is the profit motive coupled with a truly transparent market filled with a multitude of options. Does this market exist yet in today's educational landscape? Nope. But the way to get there is to promote the symbiotic relationship of schools and entrepreneurs, not to detract from it.

Then we get another assertion:

No company will, long-term, be able to sell a product that is overpriced and under-delivers.

However, In the case of technology products being sold in the schools, we do not only care about the long-term. We have a constant wave of products being sold to us that are all promised to revolutionize our classrooms. We have billions of education dollars being spent, and often the results are poor. The companies selling these products may shift to new ones, or may even go out of business - but the money is spent.

But more importantly, Segal has conflated two different sorts of markets. While his argument focuses mainly on technological products - software, curriculum, and various devices being sold to schools, a far greater concern is the marketization of schools themselves.

Educators are working on the ground, in schools, and we are seeing how this plays out. The problems with K12 Inc. cannot simply be waved off as a bad apple that the market will soon sort out. While the ideology of the free market calls for unfettered competition, in reality, corporations seeking profits hunt for every possible advantage. The company that cuts the most corners makes the most money. The key is to cut costs without hurting the bottom line. The “virtual schools” are cases in point. Teachers must teach hundreds of students, and have only a few minutes a day to spend on each of them - and this is sold as “individualized instruction”!

Many corporations in this field seek governmental support, in spite of their dedication to the marketplace. As I pointed out in my earlier post on this subject, (and is documented in this report from Maine) K12 Inc. worked through non-profits and ALEC to advance legislation that mandated the use of virtual education providers. When it serves them, they are willing to use any levers of power they can access.

These issues are not anomalies that can be brushed aside - this is the way the world of capitalism works in the USA in 2012.

We are also concerned about the wholesale replacement of public schools with semi-private charter schools, including many being run for profit. Most charter schools do not have unions representing their teachers. Most require their teachers to work long hours, and do not offer due process protections. As a result they have high turnover, which helps keep salaries low. Many charter schools have been demonstrated to focus their services on students that are easier (also cheaper) to teach. They have fewer special education students, fewer English learners, and some require parental participation - an advantage public schools cannot emulate. Many have attrition rates that are higher than regular public schools, indicating that students who cannot hack it are being exited. I saw this firsthand in Oakland, when students who had problems at the KIPP middle school would transfer in to our school mid-year.

These charter schools are in direct competition with neighborhood public schools. When the public schools lose students, they lose the funding that goes with them. And who is left behind for the public schools to take care of? The hardest to teach special ed students, the English learners fresh off the boat, the student with parents in prison. This is creating a negative feedback loop in many of our cities, where our public schools are being starved of the resources they need to perform the services we demand of them.

The invisible hand of the market does not provide a remedy for this trend.
The magic of “choice” does not cure all. What happens is that parents who are mobile and relatively well-resourced take advantage of the choices, and leave behind those without such advantages. This is feeding the growth of economic and racial segregation.

We must, as a society, decide what we want. Do we want a school system that brings all the children of our community together? Do we want to fund neighborhood schools at levels adequate to meet the great challenges they face? Do we want schools controlled by locally-elected school boards responsive to their communities? Do we want schools where teachers have due process protections so they can speak up for themselves? Do we want schools with stable teaching staffs, who can bargain together for decent compensation, working conditions and benefits? These are the things that I want, and I see them under threat from those who believe marketplace competition is the answer.

The market is wonderful for some things. But we have to be clear about what we value, and not all of these values are well served by the profit motive.

Towards the end of his essay, Tom Segal writes:

It's pretty clear to me that education is trending toward the inclusion of the private sector, and that most of the recent innovations in the learning experience have been generated by this trend. Haters can keep hating, but the train has left the station. You can either get on board and help streamline its direction, or you can stand in its way and incrementally slow it down as it plows right through you.

Advocates of technology and entrepreneurship would do well to recognize the limitations of the marketplace in transforming our schools. Those of us who question this are not simply “haters.” We have very real concerns based on the results we are seeing in our communities. We are certainly feeling as if the profit-seekers are “plowing through” us, but forgive us if we fail to get on board just yet.

Diane Ravitch has posted another response to Tom Segal’s essay, authored by a former charter school teacher who is currently pursuing his MBA. He writes:

Your error lies in in your belief that the dynamics of a capitalistic market apply within the mandate of the public education sector. They simply do not. By law, schools must accept all students that walk through their doors. Name me one company that has that mandate. There simply isn't one. A competitive market is based on choice. Choice by the vendor to offer the product and choice by the consumer to reject the product. At the end of the day, the vendor doesn't have to sell to everyone and the consumer doesn't have to buy anything (whether because they don't want it or can't afford it). In education, this is unacceptable. The entire basis of public education is anti-competitive by design, and with good reason. In competition, someone always loses out. When you are dealing with children, this is unacceptable. If education becomes for profit, we will end up with the same thing we have in health care-40 million people who are left with nothing while for profit care providers make enormous profits. For our country, this would be incredibly destructive.
There is also a huge difference between schools working with for profit vendors and schools themselves becoming for profit vendors. For profit vendors will do whatever it takes to maintain the highest profitability. Cut wages, eliminate less profitable products, close down entire production facilities, etc. This type of instability may work in a world where companies are dealing with widgets. However, introducing this type of volatility into the education world is extremely destructive. I have seen students suffer through the poor performance of their school, the subsequent closing, and their shuffling to yet another poorly performing school. This is not "market efficiency" that is necessary in education. It is instability introduced at the most vulnerable time in an adolescent's life.

What do you think? Are you ready to get on board the the free market train? Or are you going to take a stand for a different set of values?

Related Tags:

The opinions expressed in Living in Dialogue are strictly those of the author(s) and do not reflect the opinions or endorsement of Editorial Projects in Education, or any of its publications.