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The New Era of Greed

Editor's note: Bridging Differences returns today after a two-week holiday break.

Dear Deborah,

I want to wish you and our readers—and most especially our editors at Education Week!—a happy, healthy New Year. The times are challenging indeed, and all of us should try to be as kind as possible to others and do whatever we can to bring about a world where kindness and civility are the norm.

As I see it, our mission this year will be to keep a close watch on the "reforms" that are now in vogue. In light of the nearly $5 billion that the federal government is using to promote its version of "reform," there will be quite a lot for us to talk about. None of these "reforms" have been validated by experience or experiments, but we'll talk more about that later. They just happen to be the ideas that Barack Obama, Arne Duncan, Joanne Weiss (previously COO of the NewSchools Venture Fund, now director of the Race to the Top fund), the Gates Foundation, and the Broad Foundation want to impose. Someday we will find out if they make a difference.

I want to kick off 2010 by talking about the new era of greed. Not a pleasant topic, to be sure, but there's no time like the present.

Living as we do in a market economy, we all understand that the profit motive rules in most private transactions. That's okay with me. I don't mind if the guy who sells me a car makes a commission, and the auto manufacturer makes a profit. I expect that there is a profit margin built into everything I buy, whether it is shoes or groceries or office supplies. This is no surprise.

Most people, however, feel uncomfortable at the idea of the profit motive becoming a regular part of public education, unless referring to vendors of materials. I know I do. I recoiled when I first heard the idea that children would be paid for raising their grades and test scores; I saw this scheme as undermining the core value of intrinsic motivation. If we pay children to study, will they continue to study if the pay stops? Without intrinsic motivation, education is a lost cause. My discomfort with the profit motive in public education is another reason I dislike merit pay. Merit pay assumes that teachers will not work hard unless they are paid more. It has been my experience that the overwhelming majority of teachers are working as hard as they know how; they will be happy to get more money for their efforts, but they have not been holding back and waiting for a bonus to spur them to greater effort.

Now, the Obama administration, with its odious Race to the Top, is welcoming entrepreneurs into public education with the expectation that the profit motive will lift achievement. This is arrant nonsense, though it is likely to take a decade before we see how little we have gained by this venture. A few weeks ago, my friends Checker Finn and Rick Hess published an amusing little essay called "Greedheads' Christmas: The Seedy Side of Entrepreneurial Education Reform." They acknowledged that many of today's "for-profit and non-profit operators are self-promoters out to make a buck—and some are little more than snake oil salesmen." The Race to the Top, they note, "has become a red light district for lusty charlatans and randy peddlers."

The new era of greed doesn't trouble them, because they believe that the world of public education has long been dominated by a government monopoly that serves the interests of adults, but not children. They believe that the only thing worse than a marketplace of greedy vendors is a government monopoly that is sluggish and bureaucratic.

Yes, there will be many greedy vendors in this new marketplace. Adult interests will be very well served. I know of charter school leaders who are paid between $400,000 and $500,000 annually. These are not principals, but entrepreneurs. Some of their schools enroll no more than 1,000 students. I read about a charter school founder who owns a for-profit company that supplies all the goods and services needed by his charter school; he clears a profit of over $1 million yearly. Who says that education doesn't pay?

As the states remove their caps on charter schools, the entire sector will expand rapidly and become the Wild West of entrepreneurship. As more students are handed over to the private sector with public dollars, there will be financial scandals. It is inevitable. Greed is a powerful motivator.

During the 1930s, educators debated whether the schools were reflections of society or whether they might lead the way to social change. I think it is pretty clear that the so-called "reform" movement reflects the dominant values of an earlier decade. Remember how policymakers became excited in the early 1990s by the idea of reinventing government, outsourcing, and deregulation? The formula for success, they believed, was choice, competition, and accountability. Charter schools were born in this era and are only now becoming the Great Hope for the Future of Education, the darling of the big foundations and the Obama administration, as they were for the Bush administration.

Look what deregulation did for our nation's financial institutions. Over the past year or so, we have seen the ruin that unchecked greed unleashed on our society. Let's see what it does to our nation's public education system.

Diane

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