Privatize Schools: Why It's Crony Capitalism At Its Worst

No one can deny America's public education system suffers from multiple and chronic problems that result in our country lagging behind other industrial nations and being marred with rampant inequality. Parents, educators and politicians, faced with what they see as “failing schools,” have trotted out many solutions in desperation. Some may potentially work, while others, such as No Child Left Behind, have proved to be counterproductive. One type of reform proposal calls for turning aspects of public education over to be managed by the private sector. The most crude form of privatization would be selling public schools to the highest bidder, but thankfully no one is doing that. The most common forms of partial privatization are vouchers and charter schools, among others. Proponents claim these policies will inject innovation and competition otherwise stifled by government bureaucracy. While there is a lot of great potential in inviting those outside to experiment with alternative approaches in education, sadly under current sociopolitical conditions privatization has inevitably done more harm than good, like what has happened to many other privatization efforts in the past around the globe.

One study after another shows existing privatization policies implemented today have not lived up to their promises. One conducted by University of Virginia researchers on Cleveland's voucher program indicates the program had "no visible effects." In Philadelphia, assigning public schools to be run by "educational management organizations" also did not improve anything. The facts leave us scratching our heads — what could have gone wrong? Don't markets run things more efficiently than governments?

History provides us ample cases of privatizations gone terribly wrong. Some are due to a lack of transparency and fairness, which enables the politically connected to take advantage. In post-Communist Russia, it was necessary to privatize key industries inefficiently run by the state to "free the market." However, privatization at the time instead led to extreme concentration of wealth on the hands of “oligarchs,” many of them coming from the former Soviet elites. Some are due to misalignment between public interest (the original mission of the institutions to be privatized) and profit — consider how the Learning Channel became purveyor of Honey Boo Boo in private hands. Finally, when essential services are privatized, the private companies are frequently not held accountable for their performance. In Israel, the privatization of School Health Service in 2004 was found to have severely compromised the quality of service eight years later, after the government neglected from monitoring the companies that replaced public school nurses.

Today's school-privatization policies are vulnerable to all of these defects. First, under charter school programs, government officials are able to preferentially grant charters to organizations with connections to the political establishment. Cases of blatant corruption have occurred in New York and Chicago. Additionally only a small portion of students are allowed to enjoy any benefits provided by charter schools and vouchers, as charter schools frequently screen out students deemed undesirable, while vouchers are given through lottery to only the lucky. Late economist Milton Friedman was among the early advocates of vouchers, but people forget he emphasized vouchers "must be universal, available to all parents, and large enough to cover the costs of a high-quality education." Voucher policies in real life fall short of any of these criteria. Secondly, when private entities running schools are driven solely by profit, especially when big private equity firms are involved, the education they provide may not be the best for students. Education is not a consumer good. When buying a household item, one expects full information about this item to process in his head to make an informed decision. Education, on the other hand, is supposed to lift someone from ignorance and give him or her the very skills to process information. Lastly, when parents and the community do not adequately watch how schools entrusted to private entities are doing, fraud and abuses are bound to emerge from the schools.

Since any full-fledged, free-market privatization program with full transparency, such as the universal vouchers Friedman championed, is politically unrealistic today, current efforts towards privatization of our schools have instead resulted in a monstrously distorted market much like our dysfunctional health care system. Free market competition sounds neat, but adding another layer of rent-seeking in our education system does not. Large corporations already exert an inordinate influence on our political system before and after Citizens United, and any privatization scheme now would expose the education system further to their machinations. The American people are already saddled with military-industrial and prison-industrial complexes. Creating another one, the education-industrial complex (which some authors argue is already happening), does a great disservice to the nation and especially the young among us.

The call to privatize schools, along with the efforts across the country to render aspects of public education into private hands, is a symptom of governments' and parents' desire to escape from the current dilemma, to find a “savior” from outside instead of facing problems head-on and taking responsibility. To effect positive and lasting change in our public schools, changing their decision-making process into a more democratic and participatory one would be a good start. Let students themselves have a substantial voice in how their schools are run. 

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Yi Wu

Yi is a recent graduate from Boston University, currently working in the market research industry. His interests include economic policy, criminal justice/drug policy, education and human rights. Ardent fan of soccer, 1960-1970s rock and folk music, and dance works of Pina Bausch.

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