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Education Inc.

When I first heard about education management organizations, I have to admit that I was intrigued. But the more I learned about them, the more I became convinced that they can never deliver what they promise. I thought of my initial reaction after reading that Christopher Whittle is once again trying to sell for-profit preparatory schools to a gullible audience.

For those with a short memory, Whittle is indelibly associated with Edison Schools Inc. In the early 1900s, Whittle became convinced that he could succeed in providing a quality education and make money in the process. He based this delusion on economies of scale. But renovating schools, purchasing equipment and hiring teachers remain expensive no matter how often the process is repeated. (For detailed background, I highly recommend Kenneth J. Saltman's The Edison Schools (Routledge, 2005).)

It was not surprising, therefore, that his corporation, which at its zenith was valued at about $1.3 billion and operated some 113 schools, saw its stock plunge from nearly $38 a share to as little as 15 cents. Although Edison was discredited and all but broke, it was able to stay alive only because the Florida Retirement System, the pension fund for public employees, bought the company for $182 million in 2003 in a controversial transaction that among other indefensible things allowed Whittle to retain control. The irony was that about half of the members were teachers.

Nevertheless, Whittle is back. This time he's ready to open Avenues, a bilingual, for-profit prep school, in the fall in New York. Ever the salesman, he tells listeners that a decade from now Avenues will be an international network of 20 academies serving students in K-12 around the globe ("Has Avenues Mastermind Chris Whittle Learned His Lesson?" The New York Observer, Jun. 11). According to his schedule, the second school will be in Beijing, where he is now working with Chinese officials.

What I find so puzzling in light of the troubled history of EMOs is the willingness of otherwise intelligent and sophisticated people to buy into Whittle's plan. In an online chat on Oct. 12, 2005 to promote his new book titled Crash Course: Imagining a Better Future for Public Education, I posed the following to Whittle: "The innovations you advocate largely assume that public schools can be run like businesses. This is the same argument you made when you founded Edison Schools, which have left investors devastated. Why will your latest plan prove any more successful for stakeholders?"

He answered: "There is a big difference in 'run like businesses' and 'run by businesses.' I don't advocate the first of these - and believe the second can be a useful (though not exclusive) alternative to public schools. I think it is safe to say that virtually all of the innovations considered in the book are highly specific to public schools and would not appear in businesses."

I still don't understand the distinction that Whittle is trying to make. The best I can come up with is that EMOs are public because they use public dollars to pay the bills, but they are private because the corporations hire principals and teachers, and otherwise manage the operation of schools. Yet in this strange arrangement, they've posted a dismal track record. Almost all of Edison's dozen or so competitors have either vanished, barely survived or converted to non-profit status. Only one or perhaps two has posted an anemic profit, but neither has expanded.

Reformers argue that EMOs need more time to demonstrate what they can accomplish. But I doubt they will be any more successful in the long haul than traditional public schools when the schools they run are populated by students from similar socioeconomic backgrounds.

Correction: Edison Schools Inc. began in the early 1990s.

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The opinions expressed in Walt Gardner's Reality Check 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.

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