Commentary: Understanding privatization - What Thomas Knudsen doesn't get
by Ron Whitehorne on May 10 2012 Posted in Commentary
Thomas Knudsen says critics who talk about privatization have it wrong. Speaking at the School Reform Commission community budget hearing at Kensington Creative and Performing Arts High School last week, the chief recovery officer said, “For-profit businesses will not be running schools. This is not about privatizing schools.”
SRC Chair Pedro Ramos chimed in, disputing that accelerating the growth of charters represents privatization, because charter schools are, according to the law, public schools.
As someone who has characterized the SRC’s policy as privatization, let me say that Knudsen and Ramos miss the point.
For starters, nonprofits are private associations governed by self-selected boards. As such, they are not subject to the Sunshine Act and Right to Know Law or the ethics laws that apply to public officials.
The mission of many nonprofits distinguishes them from for-profit corporations and exerts influence on economic decisions. But although nonprofits do not have to answer to stockholders who expect maximum returns on their investments, they are impacted by market forces. In a competitive market environment, they must maximize revenue and reduce costs. The behavior of some large nonprofits, like Blue Cross Blue Shield, mirrors that of private insurers. The bottom line, not the quality of health care, drives economic decisions.
In Pennsylvania, charter schools are nonprofits by law. Although Ramos and others may characterize them as public schools, a more accurate description would be that they are a hybrid: publicly funded but privately managed.
Many have pointed out that some charter schools are driven by making money for would-be entrepreneurs who double-dip as CEOs and landlords or providers of services. But outlawing these practices will not change the fundamental dynamic, which is that charters, independent of their motives, are businesses competing for customers in an education marketplace. They are privately governed by trustees who have no public accountability beyond getting their charter renewed every five years.
Privatization of education is about transforming schools into businesses and making education market-driven. It is about rolling back the public sector. Families, who traditionally have expected that education will be provided as a public service, are being transformed into consumers who shop around for the best buy for their taxpayer dollars.
Reducing the public sector means there is more wealth for corporations in the form of reduced taxes and new markets to exploit. A for-profit sector of education management organizations, consulting firms, testing companies, and textbook publishers exists alongside a market-friendly collection of nonprofit think tanks and service providers. The motive is not simply economic, but ideological and political as well. A healthy public sector challenges the idea that markets always do it better.
Just to be clear, I’m not saying that public schools do not have to operate efficiently. Certainly, we have seen more than our share of bureaucratic mismanagement and fiscal irresponsibility by the District. Indeed, part of why the “the market does it better” argument has gained traction is because of disinvestment and neglect of the public sector.
The crucial difference is that a public system recognizes that it is a social decision how much will be invested in education and not a calculation of profit and loss. The quality of public education is largely a reflection of political will, both in terms of the willingness to invest resources and the engagement of citizens in making the system responsive to public needs.