Growing Corporate Control of Education Policy

At the end of May, the huge international bank, JPMorgan Chase, announced a $325 million initiative to support building, expanding, and renovating charter schools in the United States [ Education Week, 28 May]. The bank said it would give $50 million in grants to community-development financial institutions to support charter schools. It will also provide about $175 million in debt financing and about $100 million in “new markets tax-credit equity” for charter schools. It said this finance would help underwrite about 40 charter schools.

It is the latest development in a trend in the US in which major corporations and private foundations pour millions of dollars into charter schools which they approve.

Charter schools are publicly funded schools operated independently of government. They are not bound by most of the rules and regulations governing public schools. They are in fact privatized schools. As such, they provide a ready avenue for increasing corporate control over the direction of education in the US.

The original vision of charter schools back in the 1980s was that they would be created by public school teachers who would seek out the most alienated students, those who had dropped out or those who were likely to do so. The teachers in these experimental schools would find better ways to reach these students and bring what they’d learned back to the regular public school. The fundamental idea was that charter schools would help public schools and enrol students who needed extra attention and new strategies.

Now, charter schools are seen as competition for public schools. In some cities, charter school chains seek to drive out public schools and have succeeded in some instances. The expansion of charter schools has been heavily underwritten by hedge-fund managers, the Walton Family Foundation, the Eli and Edythe Broad Foundation and other major private foundations. Now, other major financial institutions are also getting involved.

The foundations and other corporations are aggressively promoting their own agenda – choice, competition and the privatisation of public education. As Professor of Education at New York University and former US assistant secretary of education under President George Bush Snr, Diane Ravitch, says in a forthcoming article:

The expansion of charters fulfils the dreams of education entrepreneurs and free-market advocates, who would dismantle public education if given the chance. [ The Nation, 14 June 2010]

For example, the Broad Foundation funds charter schools, including KIPP [Knowledge is Power Program] schools which is the largest chain of charter schools in the US and the Green Dot network, as well as Teach for America. It trains school administrators who support its reform agenda of choice and competition. It offers financial rewards to urban school districts to implement performance pay for teachers. The Walton Family Foundation provides annual funding of over $100 million to charter schools and school choice programs across the US.

These wealthy foundations now have tremendous influence over national education policy. As Eli Broad told the Wall Street Journal last year [28 August 2009], “we’re at a golden moment now,” with a president and an education secretary who, he said, agree with his reform agenda.

This is no accident. In the 2008 presidential campaign, the Broad and Gates Foundations contributed $60 million for an initiative called “ED in ‘08” designed to make education a priority issue in the campaign. Broad bragged to the Wall Street Journal that the result was that the candidates talked about “standards, a longer school day, a longer school year in some cases, better teaching, and incentive compensation and charter schools.” Performance pay for teachers and the expansion of charter schools are now the centre-pieces of President Obama’s education policy.

As Diane Ravitch says of what she has labelled as the “Billionaires Boys Club”:

We have never in the history of the United States had foundations with the wealth of the Gates Foundation and some of the other billionaire foundations—the Walton Family Foundation, The Broad Foundation. And these three foundations—Gates, Broad and Walton—are committed now to charter schools and to evaluating teachers by test scores. And that’s now the policy of the US Department of Education. We have never seen anything like this, where foundations had the ambition to direct national educational policy, and in fact are succeeding. [ Democracy Now, 5 March 2010]

But, Broad is not satisfied with what the foundations achieved in the last presidential campaign and with the current administration. On a scale of one to 10, he said it ranked a two. Clearly, he expects that they will exert even greater influence in the future.

Not only are the foundations exercising greater influence over national education policy, but they have begun to use their wealth to exert greater direct control of the policies of individual school districts. For example, last April several private foundations pledged $64.5 million for raises and bonuses in the Washington DC school district’s contract with the teachers’ union subject to a series of conditions, including the right to withdraw the funding if there is a change in the leadership of the Washington school system [ Washington Post, 27 April 2010].

The Walton Family Foundation, the Robertson Foundation, the Laura and John Arnold Foundation and the Broad Foundation made it a condition of their funding that they could withdraw their financial support if Schools Chancellor, Michelle Rhee, left or is fired before the funding agreement’s expiration in 2012.

Such demands were unheard of until now. Although the foundations involved have donated hundreds of millions of dollars to school reform initiatives across the US, this is the first attempt to embed private money in a public collective bargaining agreement with teacher unions. Rhee is planning to use about a third of the $64.5 million help pay for a five-year, 20 percent pay raise for teachers. The rest would fund a performance pay plan in which teachers could qualify for bonuses of up to $20,000 to $30,000 annually by meeting certain levels of student and teaching achievement.

Diane Ravitch says that the wealthy foundations now have so much influence over education policy that public education is itself at risk:

….with the proliferation of charter schools, the bottom-line issue is the survival of public education, because we’re going to see many, many more privatized schools and no transparency as to who’s running them, where the money is going, and everything being determined by test scores. [ Democracy Now, 5 March 2010]

By introducing the idea of market competition, entrepreneurs encourage everyone to think of their own private advantage and to forget about the common good, about the responsibilities of the community to the education of its children. [ Education News, 13 March 2010]

Even more profound are the implications for democratic control over education policy. As she writes in her new book, The Death and Life of the Great American School System:

There is something fundamentally antidemocratic about relinquishing control of the public education policy agenda to private foundations run by society’s wealthiest people; when the wealthiest of these foundations are joined in common purpose, they represent an unusually powerful force that is beyond the reach of democratic institutions….
They have taken it upon themselves to reform public education, perhaps in ways that would never survive the scrutiny of voters in any district or state. If voters don’t like the foundations’ reform agenda, they can’t vote them out of office. The foundations demand that public schools and teachers be held accountable for performance, but they themselves are accountable to no one. If their plans fail, no sanctions are levied against them. They are bastions of unaccountable power. [pp. 200-201]

This then is the extent of private control over public education policy in the US and the dominance of the agenda of choice and competition. It is also set to increase in England where the new coalition government has announced the expansion of “academies”.

Academies are the English version of charter schools. They are government funded but independently operated by private sponsors, mostly by private companies and religious organisations. At present, there are only about 200 of these schools out of 24 000 schools in England.

Thousands of existing schools could be turned into academies. The legislation to “fast track” the new arrangements dispenses with the legal right of parents and teachers legal right to oppose such plans and removes local government authorities’ powers to veto a school’s attempt to switch status [ The Guardian, 6 June].

The government will also make it easier for new independent schools to be set up by parents, teachers and charities with government funding support. Already, many for-profit companies are lining up to operate these schools.

Australia has a much larger private school sector than either the US and England, but it is almost entirely run by religious organisations. There is little direct corporate influence over Australia’s school system and its role, to date, has been relatively benign.

However, there are calls for this to change and the United States is being put up as a model.

Former Victorian Premier, Steve Bracks, who now advises the National Australia Bank, has called on private business to play a greater role in funding and shaping public education [ The Age, 19 March 2010]. In a speech to the Schools First Conference in March, Bracks said that President Obama’s partnership with philanthropic organisations (read Gates, Broad, Walton and other foundations) in funding education innovation and reform should resonate in Australia.

Adam Smith, Chief Executive of the Australian Youth Foundation, a philanthropic group which co-sponsors the Schools First program with the NAB, told the conference: “I think there is an absolute fundamental role for corporate Australia to not just invest in but to transform education in this country.”

He recommended a report called Best in Class published last year by the Ernst & Young, one of the world’s largest business services corporations, as the model for Australia’s top corporations to transform education. The report highlights how corporations make direct financial grants to students and teachers to improve student outcomes and to improve the quality of teaching and school leadership. It also maps out ways large corporations and philanthropic organisations can systematically influence broad education policy and programs.

Smith called for changes to be made so that companies can more easily provide direct funding to schools apart from through building funds and scholarships. This will require greater decision-making powers for school principals, or so-called “local autonomy” for schools.

This is the attraction of devolution of power in the public education system to big corporations. Not only is it essential to their agenda of extending the market in education and creating greater competition between schools, but it also provides an avenue for corporations to directly influence and fund education policies and programs. It is a way to reduce government control and oversight of corporate relations with schools. It will provide the way to dismantle public education in Australia as it is in the US and England.

Diane Ravitch’s comments should resonate in Australia. They should serve to warn advocates of public education that the establishment of a market in education started by David Kemp and continued by Julia Gillard is just the beginning of a new corporate agenda for greater competition and privatization in Australian education.

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