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The Business Model and Its Discontents

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Dear Deborah,

You were a great partner in our debate last week in Washington, where the two of us—accustomed to differing—sparred with former governor of Colorado Roy Romer (who now chairs the group ED in ’08) and Jon Schnur (the founder of New Leaders for New Schools). I think we surprised everyone, perhaps even ourselves, by arguing in opposition to the idea that there should be a larger federal role in education in the future.

Our joint position was that the federal government should have a larger role in providing pre-kindergarten, after-school programs, nutrition, and healthcare, but should reduce its regulatory role in the classroom. Specifically, we agreed that NCLB has failed. NAEP scores increased more in the five years before the enactment of NCLB than in the five years since. Secretary Spellings and others like to refer to NAEP gains since 2000, but NCLB was not signed into law until January 2002. And as I pointed out, scores for 8th grade reading have been flat since 1998, and these are students who were in 3rd grade when NCLB was signed.

We also criticized NCLB’s heavy emphasis on testing and the narrowing of the curriculum. Gov. Romer and Jon Schnur emphasized that our nation is in crisis, that achievement must be much, much higher. I agree with them about that; you probably don’t. But I don’t see that Congress has answers to raising achievement. And it is my guess that the pressure to raise scores on standardized tests is not leading to higher achievement or to more thoughtful citizens, but to greater ingenuity on the part of states, districts, and schools in gaming the system.

As you pointed out (and correct me if I am wrong), some of the smartest people in the nation with great educations learned how to game our nation’s financial system, and they have brought us to the brink of ruin.

And speaking of gaming the system, I see the billionaire Eli Broad—who has done so much to promote the adoption of business models in the public schools—has given Harvard University $44 million to establish an “Educational Innovation Laboratory” at Harvard, headed by Dr. Roland G. Fryer Jr. Dr. Fryer, you may recall, is the Harvard economist who briefly served as New York City’s “chief equality officer.” He had the brilliant idea that the best way to raise test scores in New York City was to offer to pay kids up to $500 a year to get higher test scores.

As I read the story in The New York Times, I learned that Dr. Fryer’s plan to reward 3,000 middle school students with cell phone minutes for test scores and behavior was cancelled because the city was unable to raise enough money from private donors to pay the cost. This is the first time that it has been revealed that this controversial pay-the-student plan was cancelled.

Dr. Fryer, with Mr. Broad’s millions, will now proceed to evaluate the cash-for-scores plan that he designed for students in 4th and 7th grades. Maybe someone will remind Dr. Fryer that it is not customary for social scientists to evaluate their own programs.

It appears that the purpose of the Broad research laboratory at Harvard is to continue the Broad Foundation’s campaign to bring business methods to the schools. What a strange irony that this would occur at the very time that our financial system teeters on the brink of disaster! Do we really want the same “data-driven approach” in our schools?

Diane

16 Comments

Does this mean that neither of you see any value in national content specific standards for math and science (not to mention one definition of proficiency)? If not then you are in favor of Mississippi being able to define "proficient in math" as being able to use a calculator without dropping it. Whatever happened to "Brown V Board"?
Talk about gaming the system. Oh yea it's that "all deliberate speed" wording.

Right on John Stallcup! I agree with you completely on your proposal for national standards, a national assessment, and one definition for "proficient" from Boston to Beverly Hills.

This would clearly create a more equitable system of schools nationwide. Kids from Mississippi would have access to AND be responsible for the same rich body of knowledge that kids from Massachusetts get. Who loses out on this one? To the best of my experience - no one.

At the debate, I supported national content standards, national testing, and national curriculum (broadly defined).
But I think that national testing should be no-stakes, akin to NAEP. Let states and school districts, which are closest to schools, decide on how to reform schools.
Congress can't do it!
Diane

Diane,

One of the primary reasons for the tests are so schools can identify which students are having trouble and hopefully get them the help they need at as early an age as possible. While I realize some states use this data for promotion/retention purposes (which I don't necessarily subscribe to), approximately half the states use their test data as a competency determination for high school graduation (which I do believe in).

I also agree that local districts and states should take the information from these national tests and standards and amend their policies accordingly. But please, can we get away from the duplicitous practices of some states setting their own anemic standards and even weaker definitions for proficient simply to get the money from the feds?

Diane, here I will merely take issue with the post title.

"The Business Model" is not about paying students, nor is it some foreign thing being foist upon Education, the latter a glorious and superior system of people and processes unique and unlike any other in the world.

Education is a human effort. It is designed by humans, executed by humans, and consumed by humans. In that sense, it is like all other human endeavor. Education, then, is subject to the laws of behavioral science and that study of human behavior we call economics.

Where we have gone wrong these past 100 years is in treating education as if it is somehow beyond the laws of nature which govern human interactions, underlie the way we lead and follow and share and negotiate, the way we divvy up scarce resources and decide who will take responsibility and who will take orders, the processes by which we determine how excellence will be rewarded and how inadequacy will be remedied.

Sneering condemnation of the sector of humans who create things, who serve others, who do the sometimes uninspiring, who print your books and fund and deliver the internet and create the software and build the buildings and run the airlines you fly on... this is below this column, and a poor example for students of all ages, everywhere.

Ed,
Last time I checked, economics was about the subject of markets, not human behavior. Humans do a lot of stuff outside of the marketplace, and at least half a dozen other social science disciplines have emerged since the time of Aristotle to deal with them. The study of schooling can benefit from each of them in their own way.

Tony Waters

Hi Diane:
Isn’t part of the problem is that education is governed by “crisis?” But how is the crisis Eli Broad diagnosed any different than that of previous years? In 1892 the Committee of Ten issued its report on high school education. In the 1930s the whole child movement was considered revolutionary. After Sputnik in 1958, a crisis in science education was pronounced. In 1983 it was proclaimed that the Nation at Risk Report which blamed the schools for the decline of American education was issued, etc., etc. Crisis seems to be as much a political and administrative strategy in education, as it is a diagnosis of any new problem. Our political system rewards advocates on any side who point out that things are either in crisis, or wonderful (e.g. your Eli Broad example). This leaves little time for more intentional and thoughtful incremental change which improves human institutions much more systematically and reliably.

Tony,
Dude, Last time you checked, you didn't check.

"Economics is concerned with humanity's well-being or welfare. It encompasses the social organizations and the relationships..."
"Economic activity is directed toward the satisfaction of human wants"
"the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses."

Those are 3 of the first 7 sentences I found on the topic.

Ed,
Economics like most other fields may be concerned, directed toward, and study some kinds of human behavior (e.g. that which is focused by markets and trade). But nothing you mention here says that it explains all human behavior. There is no one discipline that does this, despite the occasional pretensions of economists, psychologists, biologists, sociologists, philosophers, meta-physicians, or whatever. The fact of the matter is that economics is useful for situations involving trade and markets, psychologists for evaluating individual behavior, and so forth. They cross out of their own disciplines at their own peril.

This does not mean that economics is not useful for evaluating how schools work on occasion. They are, particularly when it comes to organizing the rationalized financial end of things since schools certainly do participate in labor markets, textbook markets, etc. But, schools are far more than the business office and HR, particularly when children are involved. Children are notorious for non-economic qualities like sentiment, love, affection, fear, and so forth. Many such emotions are irrational in the economic sense, and accordingly not particularly suited to economic modeling/assumptions. To top it off, particularly the young children, are not particularly price-sensitive as any parent and advertiser knows—it takes years of socialization to resist the siren call of television commercials.

If Eli Broad wants to use his own money to validate his narrow assumptions about human behavior, I guess that he can go for it. But I still think that his program would be better if he were to pay attention to the insights that other disciplines offer.

Tony Waters

Tony: Diane's comments were addressed at far more than paying kids. It was a broad swipe at all efforts to treat the professional staff of schools like other professionals are treated, engineers, designers, landscapers, accountants, bankers, producers, you name it. And, in fact, her snide commentary on the business world is part of a larger attempt to teach both the consumers and the deliverers of education that business people are bad; education people are special.

Ed,

You have defeated your own argument.

A certain thoughtfulness is missing from the business model in education. This doesn't mean people in business can't be thoughtful. Of course they can. But why does the business model in education show such a crass face?

Not all business people favor the business model in education, and not all proponents of the business model come from a business background. The business model applies the concept of the "bottom line" to education and ignores many other things of value. It is a dangerous situation--test scores have become ends in themselves, and subject matter has thereby been cheapened.

I see nothing snide about Diane's column, nor do I take it as an attack on business people. Our economy is in bad shape, and certain business models have failed dismally. It is time to reassess those practices--and our values overall--instead of rashly imposing flawed models and narrow values on schools.

Along comes Tony Waters, a thoughtful and knowledgeable commenter, and how do you respond to his points? "Dude, Last time you checked, you didn't check." Then you cited the first sentences of several sources you checked.

Does reading the first sentence of a source constitute "checking"? Not even on a standardized test! Did your quotes refute or even address Tony's points? No.

If you want to convince people of the virtues of the business model, give a virtuous argument! Otherwise you end up confirming exactly what you set out to deny.

Diana Senechal

Diana, its such a funny thing. Its always OK for a liberal to attack those of opposite viewpoints, their motives, research, and of course their "tone"; but the conservative may never simply discuss the topic; they repeatedly must engage in these silly debates on style and niceness points each time they attempt to correct a liberal in response.

I am sorry, I don't know who Tony Waters is, but it was he who lowered the tone with his "last time I checked" comment. I don't, in fact, mind that its a high school tone; I do not go around looking to award and subtract points for niceness. I do mind that he wrongly characterized economics as merely the study of markets.

Economists don't believe that markets are some strange force outside of human endeavor. Economists see themselves as studying human relations, and optimizing the results for all concerned.

To be more technical, the equation I have here defining demand has 7 variables; two of these represent purely human thought and emotion.

(If you have definitions of economics which say otherwise, by all means bring them out instead insisting that I am unthoughtful just because we disagree). :-)

Now, as Tony points out, when we talk of applying basic business sense to education, we are usually talking about hiring, paying,rewarding, and organizing professionals. Next, we are usually talking about suppliers, be they of texts or internet services or lunch or auxiliary after school services. Finally, we are talking about feedback processes, which all great organizations have.

To then use some crackpot's (or visionary's) plan to pay students in combination with the government-induced (see my blog post on firesidelearning) panic in the housing credit markets as a "thoughtful" analysis of the overall effort to bring discipline and excellence to education, well...I can't fault Diane; I don't have to meet a weekly deadline. But I don't have to applaud either.

Oh, and...it looks like it was not the data driven part that failed the financial system. It was when those outside a process that was working well (Fannie Mae's risk modeling)...jumped in to insist that the data be ignored and increasingly more benefits (high risk loans) be tossed at the "poor".

Ed,

My comment has nothing to do with your conservative standpoint. It is not a question here of liberal vs. conservative. The "business model" proponents include a certain strand of liberals; and some conservatives oppose this model.

From what I understand, the "business model" evaluates everything in relation to the "bottom line," the test scores. That which increases test scores is deemed good; that which does not, bad. Behaviorists take over from there: If rewards such as cell phone minutes bring up the test scores, then offer cell phone minutes. If cash does the trick, then cash.

This is problematic in several ways. First, the NYS tests (especially ELA) are so empty of content that they don't deserve to rule the schools in such a manner. If they and the curriculum had more substance, I believe students would do better on them; there would be something for the mind to strive for.

Second, the formulas for value-added models are flawed at this stage. They should not be used to judge schools or teachers. Yet the practice is spreading despite its glaring problems. From what I have seen, the proponents of such value-added models do not acknowledge the flaws or listen to the critics. The school report cards are erratic and misleading enough. Soon we will have teacher report cards.

Third, as the radical liberals over at Fordham have commented, monetary incentives for test scores breed cynicism and are otherwise amoral. See here:

http://www.edexcellence.net/flypaper/index.php/tag/student_pay/

It is one thing to assert that economics and the economy affect all aspects of life. It is another to say they explain or control all aspects of life. I would never deny the effect of economics on education. But it is dangerous to reduce education to the bottom line, and sad (at best) to bribe kids with cell phone minutes and cash.

Diana Senechal

P.S. As for my remarks on thoughtfulness. I simply meant that good ideas merit thoughtful responses. I hold myself to the same standard and often fall short of it.

Diana and all, good morning! Amazingly, another sunny one here where we don't normally expect them!

I guess we are victims of mixing too many topics. If you go back to my original response, I took on only the title of the post--the "Business Model", and not the specifics of rewarding kids for grades or scores. The latter is an experimental, stop-gap measure in a unique geographic and social setting, and I'd rather not get into it.

In this broader context, I am asking those in education to open their minds and hearts.

If education needs improving, let us open ourselves to the possibilities that we can learn from other walks of life.

Let us not hold educators up as so special as to be above all the other professions, but humbly admit that ideas and processes which work with other world class knowledge workers may well work for teachers.

Hi Ed and Diana:

For what it is worth, I rather liked being called “dude.” Hasn’t happened in years! If you want to know more about me, you can go to Chico State’s (California) web site for the Department of Sociology. From this perspective, I certainly agree that cross-fertilization is important, even from educators, businesspeople, and economists!

The sociology part perhaps explains my sensitivity to the use of economics models for other types of behavior. I still think that the proper place for economics is in the study of markets, trade, and so forth. It is what they study the most, and what they do best. However, as with many disciplines, some economists give into the temptation of “reductionism,” i.e. the idea that all things can be reduced to the “metrics” they prefer. The metric for economists is typically money, since that after all is what they study.

I thought of this yesterday when sitting in a school site council meeting in which it was explained that all expenditures of funds (we have something like $40,000 to distribute) must be specifically tied to improvements in something that is “measurable.” And “measurable means measurable.” In practical terms, this means that the $40,000 needs to be spent in a fashion that demonstrates that some statistic moved in a school of 1100 students. The essential question is what bankg did we get for the buck? And this is a question in my mind at least, coming straight out of business models, economics models, or whatever else you want to call it. Anyway, we will fake it as the committee has done in the past.

Perhaps it is unfair to blame this insistence on quantification of the often unquantifiable on economics, business, or accounting (as in “accountability”). But sometimes it is really tempting!

Tony

Hi Ed and Diana:

For what it is worth, I rather liked being called “dude.” Hasn’t happened in years! If you want to know more about me, you can go to Chico State’s (California) web site for the Department of Sociology. From this perspective, I certainly agree that cross-fertilization is important, even from educators, businesspeople, and economists!

The sociology part perhaps explains my sensitivity to the use of economics models for other types of behavior. I still think that the proper place for economics is in the study of markets, trade, and so forth. It is what they study the most, and what they do best. However, as with many disciplines, some economists give into the temptation of “reductionism,” i.e. the idea that all things can be reduced to the “metrics” they prefer. The metric for economists is typically money, since that after all is what they study.

I thought of this yesterday when sitting in a school site council meeting in which it was explained that all expenditures of funds (we have something like $40,000 to distribute) must be specifically tied to improvements in something that is “measurable.” And “measurable means measurable.” In practical terms, this means that the $40,000 needs to be spent in a fashion that demonstrates that some statistic moved in a school of 1100 students. The essential question is what bankg did we get for the buck? And this is a question in my mind at least, coming straight out of business models, economics models, or whatever else you want to call it. Anyway, we will fake it as the committee has done in the past.

Perhaps it is unfair to blame this insistence on quantification of the often unquantifiable on economics, business, or accounting (as in “accountability”). But sometimes it is really tempting!

Tony

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