Welcome to the Education-Industrial Complex

May 7, 2015

A SocialistWorker.org contributor looks at the Wall Street profiteers and their political allies behind the education "reform" movement--and what we can do to stop them.

LAST MONTH, a high school student in Warren, New Jersey, finished taking the state's mandatory PARCC test and did what everybody does after taking a test: She talked to her friends about it. This being 2015, her conversation took the form of a tweet, which referenced one of the test questions.

Thirty miles away, alarm bells rang in the Manhattan headquarters of the Pearson Corp., owners of the PARCC test: The tweet had "initiated a Priority 1 Alert for an item breach," a school official later wrote. Corporate officials swung into action, contacting their partners in the New Jersey Department of Education, with whom they have a $108 million contract.

That night, the Warren school district's testing coordinator received a call from a state official informing her about the "breach" and requesting that the student be suspended. The next morning, Warren school superintendent Elizabeth Jewett e-mailed her colleagues about the incident:

The DOE informed us that Pearson is monitoring all social media during PARCC testing. I have to say that I find that a bit disturbing–and if our parents were concerned before about a conspiracy with all of the student data, I am sure I will be receiving more letters of refusal once this gets out.

Students work through standardized tests
Students work through standardized tests

At the time, the Jewett didn't even know that Pearson was doing far more than "monitoring" social media. Because the student's Twitter handle didn't involve her name, Pearson got Twitter to turn over her private personal information, on the grounds that she had violated the testing company's "intellectual property."

As Jewett predicted, the spying revelations added fuel to the fire for parents and educators who were already upset at the state's cozy relationship with Pearson, and their joint agenda to implement a mandatory testing regime in line with the Common Core standards that have reshaped schools across the country with virtually no democratic discussion about their educational merits.

Pearson's online stalking is not only creepy--it reveals many of the most threatening features of the corporate takeover of public education: the tight partnership between corporations and government officials; the use of intellectual property claims to stifle the free exchange of ideas that is a vital part of learning; and the suppression of the rights of students, parents and teachers to resist the growing emphasis on testing "data" to measure education and knowledge.

Welcome to the Education-Industrial Complex.

"THE ENTIRE education sector now represents nearly 9 percent of the U.S. GDP," gushed an advertisement for a 2013 investor conference titled "Private Equity Investing in For-Profit Education Companies." The ad continued: "Merger and acquisition activity in for-profit education last year surpassed activity at the peak of the Internet boom."

Six years earlier, Jonathan Kozol warned in Harper's magazine about the coming siege on public education. Quoting a prospectus given to him by a friend on Wall Street, Kozol wrote, "'The education industry represents...the final frontier of a number of sectors once under public control' and 'the largest market opportunity' since health care services were privatized during the 1970s."

Just as the health care industry encompasses a wide array of fields in which capital can find ways to mine profit out of our basic need for health and wellness--from pharmaceuticals to hospitals to the especially egregious example of insurance--so the education sector contains a variety of sub-industries.

There is the educational materials business, which covers everything from curricula, textbooks (digital and print), to homework materials to, of course, standardized tests. This field is increasingly dominated by Pearson, a British company that made $5 billion in revenues last year.

In states like New York, Pearson has gotten contracts to provide curriculum, tests and teacher certification exams, creating a closed loop without accountability, as education writer Alan Singer explained when the contracts were being signed in 2012: "Pearson standardized exams will assess how well teachers implement Pearson instruction modules and Pearson's common core standards, but not what students really learn or whether students are actually learning things that are important to know."

As Pearson and its competitors push for greater use of their standardized tests materials to measure learning, the market for test tutoring continues to grow. Test preparation is now almost a billion-dollar industry in itself, and the number of test prep centers in the U.S. has more than doubled over the past 15 years.

But these industries, which find ways to extract money from around the edges of public school systems, are small potatoes compared to the prospect that truly excites Wall Street--the complete privatization of public education.

The past decade saw an explosion of for-profit education at the college level--with disastrous effects summarized by a Bloomberg investigative series:

For-profit colleges have mushroomed into a $30-billion-a-year industry at taxpayer expense by targeting vulnerable populations--disabled military and veterans, the homeless, immigrants and minorities--with misleading promises of low costs, online academic help, and lucrative jobs after graduation.

While federal aid to these colleges, owned by such prominent corporations as Goldman Sachs Group and Washington Post Co., has increased sixfold in a decade and their executives have pocketed $2 billion in pay and stock sales, most for-profit college students drop out and can't repay their loans, the series showed, helping prompt House and Senate hearings, a scathing Government Accountability Office report, and a 24 percent decline in the companies' stock market value.

THE PROBLEM for Goldman and Washington Post Co. is that American secondary education is already dominated by wealthy but "non-profit" private schools--and "public" schools that still charge a small fortune--leaving for-profit colleges little room to operate except as con artists on the fringes.

That's why the main goal for privatizers has always been to get at the part of the U.S. education system that is truly public. "The K-12 market is the Big Enchilada," declared the investors prospectus cited by Kozol.

Enter the charter schools, which were originated by educators who wanted teachers to create experimental schools, but were overrun by Wall Street when hedge funds figured out that they could be a tool--like subprime mortgages were a decade before--to make money, regardless of the cost to society.

The importance of charter schools for investors is they are a legal fiction. They receive taxpayer money, but aren't bound by government rules the way public schools are.

Not only does this allow charters to cherry-pick their students for higher test scores-which they still mostly fail to achieve because they rely on inexperienced and overworked teachers--but it also allows them to be run for profit, or by a non-profit board that can be a shell for business interests.

Public opinion ran against previous privatization attempts like school vouchers, but it has tipped in favor of charter schools because people don't understand that they are a threat to public schools.

Government complicity is key to allowing this fiction to continue. States across the country have allowed charter to brazenly claim, before legislators, that they are public schools, so they can continue to receive public funding--but insist, in the courts, that they are private entities so they can fight audits and teachers' union drives.

But that's far from the only way that the government has been working hand in hand with the privatizers.

In 2009, Barack Obama inserted into his economic stimulus bill the "Race to the Top" program, which dangled extra funds for education in front of state governments, provided they pass education "reforms." Obama was using the dire budget crises facing most states during the Great Recession to drive through a Christmas list of measures pushed by the Education-Industrial Complex.

Race to the Top pitted states against each other in a competition for desperately needed money, based on which state education departments would go the furthest in implementing Common Core curricula and testing regimes; basing teacher assessments on test scores; and increasing the number of charter schools.

Through this cynical move, Obama's Education Department has radically changed public education across the states without ever having to subject these changes to a meaningful debate. Thus, when News Corp. announced in 2010 the purchase of an education technology company, its right-wing CEO Rupert Murdoch declared that K-12 education was "a $500 billion sector in the U.S. alone that is waiting desperately to be transformed."

MURDOCH SOUNDED like the Bush administration officials who confidently declared that Iraqis were desperately waiting for a U.S. invasion to liberate them. The results have been about the same, both in terms of the wreckage they've caused and the resistance they've provoked--from unprecedented numbers of test boycotts to a revived militant wing inside teachers' unions.

The resistance is fueled by the fact that the profit motive driving corporate education reforms so clearly runs counter to good educational practice.

The reformers emphasize standardized tests not because research shows this to be the best way to measure learning, but because it is the easiest and cheapest way.

They claim to value good teachers, but aim to systematically deskill them down to curriculum readers and test administrators--and turn knowledge from the shared reservoir that teachers possess and students can discover within themselves into a finite set of facts and memorization techniques that can be owned and copyrighted.

Finally, they pretend to be trying to save public education while they actually have a vested interest in seeing it fail.

"Look at the current state of K-12 public education," that Private Investor Equity conference ad gleefully noted. "School districts across the U.S. are underfunded, underperforming, and well behind the curve when it comes to adopting quality technologies...Public funding and private endowments are both down, and neither will be particularly reliable in the future. So 2013, and beyond, will see numerous for-profit companies making inroads into public and non-profit education by taking over large swaths of the market."

The Education-Industrial Complex sees no conflict of interest here. Its leaders claim that what is good for profits is also good for education--and many of them probably believe it just as sincerely as the conqueror who sees the riches he has won through burning and pillaging as proof that he is carrying out God's will.

Bill Gates was indignant when reporters noted that a deal to put Pearson's Common Core System of Courses on tablets made by Microsoft could make Bill Gates--owner of more than $13 billion worth of Microsoft stock--a handsome profit from the Common Core curriculum that is largely a creation of the Bill and Melinda Gates Foundation.

"This is philanthropy," Gates sniffed. "This is trying to make sure students have the kind of opportunity I had...and it's almost outrageous to say otherwise, in my view."

Perhaps Gates is feeling defensive because the growing movement against Common Core testing is making it clear that, unlike school districts and state departments of education, regular people aren't buying what he's been selling--as evidenced by the tremendous support of public school parents for the Chicago teachers strike in 2012 and the growing opt-out movement against standardized testing in the past few years.

As more parents, students and teachers join the fight to defend their schools, we need to deepen our understanding of the scope of the threat we face from the Education-Industrial Complex--and build support for the idea that free and well-funded public education is a fundamental human right, one that is far more important that the latest Wall Street get-rich-quick scheme.

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