SQUINTS 26 November 2012 -- Privatizing K-12 Education: Being Half-Pregnant?

Driving to privatized K-12 education, prompted by an elysian perspective of the wonders of competition, characterizes one major faction of the K-12 reform movement.  The anthem:  Schools need to be business-like and accountable.  Lost in the rhetoric of reform driven by the mantra, markets, and simply competing; you don’t get the pig without the squeal, anymore than being half-pregnant has credibility.

Markets and Schools

Competition in 2012, and for at least most of the 20^th century, has veered away from the embryonic economic thought of The Wealth of Nations, to markets that are neither pure, nor perfect, nor even “free,” the latter a term one ideology likes to toss about but misunderstands.  Step away from the present debates and ask some simple questions:  If K-12 schools are made a private good, executed for profit, what does its organization look like; can they elect to refuse markets; can education reflect double-digit brands of knowledge, ala detergents; how are schools’ choices strategized and executed in the context of 21^st century business theory and practice; can you monotonically transpose a school’s functions into business parameters; can you have educational market "yin" without the "yang?"

Let your imagination soar -- by roughly 2025 about one-third of our 98,000 public schools is privatized, performance and decisions driven by short run competitive behavior and profit maximization.  Immediately, there are two core market opportunities, market share to be pirated from other privatized schools, and growing the market by undercutting remaining public schools.   Tagging along, a host of functional market influences from envisioning strategic and operating processes of schools as firms.

Putting “Business” Into K-12

View through a business lens some market implications, both as assets and liabilities, as they impact K-12 as a firm.

Contrary to romanticized business, the overwhelming motivation of any firm in a competitive market is not the joy of competing, but to either drive competitors out of business or buffer decisions from competition, especially price competition; Microsoft.  One alternative is market segmentation, partition those markets so the K-12 firm can tailor learning products to more homogeneous market preferences and avoid competition:  Quality learning for the high-end market; "consumer" level learning for the mass market priced at what the traffic will bear; a paint-by-the-numbers knowledge package for those who believe learning ends with schools’ state grades, and mythology-punctuated curricula for the artificial reality set, the Bobby Jindal model.

 

A nagging question is product improvement.  Every product change is costly, and there is virtue in stretching the product life cycle if change isn’t compelled competitively.  Would new knowledge simply be inventoried until that need for new thought is forced?  Would national progress be narrowly relegated to only ideas’ next quarter’s NPBT or RONA?  Another is warranties; does the K-12 firm warrant its learning for more than a summer, and how?  A new market opportunity for the liability segment of the legal profession; class action suits for K-12 learning malfeasance, to buttress the familiar mesothelioma and mesh implant suits and add to TV advertising revenues?  Or, a post-sale market opportunity to offer replacement knowledge, at a price, for learning exceeding its shelf life?

Don’t ignore the market distortions of misleading advertising and price manipulation if needed market regulation is bypassed.  Sucker parents are created every minute, there to be tackled as a brand-switching opportunity from another local K-12 firm, or a remaining public system usefully demonized in promotion, or where bait-and-switch pricing works, or where you can price discriminatorily because of constrained parental options.  Greed-induced corrupt practices in present charters are already being documented.

The education production function in the K-12 firm offers many ways to max those profits.  As the overriding goal of the firm has become scoring on predetermined tests achieved using the latest neural findings, the teacher becomes low hanging fruit for cost reduction through automation.  This is not far-fetched, given avatar software development, and the latest breakthroughs in AI and shrinking microprocessors. The teaching staff can be slashed, remaining human resources positioned on the firm’s assembly lines to nurture student exceptions, while the teaching avatar/AI package drills students using the Kahn Academy’s, CCSSI’s, and other canned bites of alleged learning. Facial recognition technology takes attendance and registers whether the audience is appropriately responding, triggering any needed algorithmic change.  The avatar never tires, reprogrammable as needed to meet the current day’s change in what’s viral in the knowledge biz, and test productivity soars while health care costs and the nuisance of a union fade away.

Perhaps the greatest service to an education nation from privatization of K-12 would be the phase-out of most collegiate schools of education, arguably a critical cause in evolutionarily dumbing-down American public K-12, precipitating the present reform movements.  An open secret is the profound silence of those schools in responding to the challenge of "Teach for America" that simply bypasses them, to launching any credible defense of their philosophies and curricula in the face of the assaults on public K-12.  America’s teachers have been exiting those schools with sets of obsolete rubrics, little subject matter excellence, and with attitude sets that convey entitlement and suppress objectivity.  It is tribute to American perseverance and inventiveness that millions of K-12 teachers in their first half-dozen classroom years, if they don’t exit the profession, learn on their own how to expedite learning.  Simultaneously, troubling, is the statistic floated recently by a long-time educator, that our teachers on average spend 20 minutes per week reading anything about education.  Add that to frequent public K-12 administrative ignorance in promoting appropriate teacher development; managerial excellence in the private sector has for decades recognized the imperative of continuing professional human resource development.  Chalk up one for privatization.

Quality assurance, now and future, beggars the understanding the function has been accorded since the early 1900s.  Not initiated by W. E. Deming, but certainly multiplied by his teaching, contemporary QA has moved as far away from the present standardized testing debacle as a Prius or Fisker Karma differs from Henry Ford’s one color/model fits all.   Presumably a competently managed privatized K-12 firm’s early move would be away from the standardized testing employed initially to "set up" public K-12 for takeovers, and scrap the present costs of testing in favor of firm-wide process controls of all factors controlling test mission delivery and profits.  Ironically, another point for privatization, but one penalty for its ethics?

Customer complaints?  The K-12 firm might dramatically improve parts of the overall system, of competitive necessity being responsive to avoid share loss, but it also enables the customer service function to be outsourced cutting costs.  Via videoconferencing, business for Finland, Singapore, India, etc.?  Another advantage of the private model is that a large share of present K-12 superintendents and principals would finally be vetted for competency, improving school performance and transparency, albeit likely adding a fractional point to US unemployment.

Another effect of privatization might be the creation of sports business profit centers, eliminating the hypocrisy of trying to designate the function as education, reducing the need for systems to cheat by financially funneling education dollars to sports under the table.  Even present assessments of customer preferences indicate those activities in K-12 are significantly preferred to learning functions, commanding more organizational loyalty, and able to extract higher prices.

Lastly, a challenge is the creation of an entirely new organizational scheme for the private K-12 version.  Present public school organization theory is one hundred years old, obsolete even before the onset of the 21^st century, but any urgency to experiment or innovate never prospered.  Privatization would offer freedom to escape the rigidity and obsolescence of the public model, invent with panache.  A downside, there is presently little robust theory and even less precedent for how alternate K-12 organization models might impact school performance.

Privatization Positives

Glass half empty, or glass half full?  The above issues have permeated the real world practice of American business for well over a century, manifesting in both the Fortune 500 as well as in our mass of smaller firms.  Some positives of the K-12 "firm" surfaced, but many negatives go with the territory of "markets" lacking rigorous regulation.  

Are there not comprehensive upsides?

Given enough mass and dollars, coupled with corporate responsibility, or at least intelligent selfishness, there can be.  An example is the corporate math and science initiative now being fielded by energy giant, Exxon.  Is this the model for a national K-12 system, total corporate ownership and stewardship of K-12 schools?  No question that corporate sophistication and the capacity to bring together the very best human resources, and focus those diverse skills on creating K-12 learning, could be a major step-up from what any local school system (or even rare intelligent state stewardship) can bring to the education party.  Currently, that stewardship is not only missing but being hypocritically perverted in the US Department of Education and by Arne Duncan.

Another patently obvious advantage of private sector vitality is the presence of entrepreneurship, risk-taking, and creativity in especially small to medium-sized US businesses, versus what evolved in US public K-12 education.  The paucity of both creativity, risk-taking, objectivity, and even transparency in many public K-12 systems is breathtaking, driven by many of the factors some see as presently public K-12 virtues -- local control and perspectives, hometown knowledge resources, boards elected for popularity, and we want the school system to "be just like us."

Still another plus for the K-12 firm could be, as noted above, more effective recruitment and training of key K-12 human resources, whether classroom teachers or administrators who can actually manage competently and ethically.  Our nation's K-12 teachers, on balance, may be a cut above other professions in their level of altruism and commitment, but not every teacher is saintly.  In parallel an argument is that the private sector has developed far better instincts for motivating its resources, and algorithms for assessing human performance, than either traditional public education or the naive and disastrous VAM models have introduced.

A Splash of Cold Water

That 2025 scenario a bit of a stretch?  Not even close to more creative or bizarre visions that have been floated for education as the requirement for success in a world “that is not your father’s economy,” as the idiom goes.  Rather, a cold shower for the naively enamored of fictional markets.

The less humorous, and more strategic question is, will America trash a century of experience in creating orderly and highly democratized K-12 learning – even if public education dropped the ball in the second half of that century – to pursue en masse a still untested but more dynamic model of K-12?  The bad news is that present so-called reform has managed some of that in icarian fashion with standardized testing and VAM and is failing.  The good news is, that for the major dollars expended, and all of the promotional hype accorded alleged reform and accountability, the real marketplace, the souls in those classrooms and paying the bills for K-12 education, are starting to ask some hard questions. 

Normatively, would our nation benefit more by having K-12 education organized and mediated politically, with a single strategic focus but the expected political baggage, or subject to the positive and negative dynamics, and risks of using market reasoning and forces to resolve its parameters?  There is clearly room for debate.  Not debatable, that using market concepts to mediate K-12 education precludes just cherry-picking their virtues in allocating resources and ignoring their consequences.  Buy the pig and you get the whole beast right down to the chitlins.

The "think" versus "thimk" option; is there a less structurally

disruptive way to boost American K-12?

Fortuitously, theories of human resource organization and management have evolved independently of the environments for execution; multiple types of markets, versus public sectors, versus armies, versus religions, et al.  The present reform premise – only privatization enables K-12 accountability and change – is both phony and bait-and-switch.

Now, almost routinely, media pundits feel free to cite the US public K-12 establishment as a failed American experiment.  The sense of the critiques seems to be, public K-12 ignorance and self-centricity over the last several decades created its own bed, let them sleep in it.  In a sense American public K-12 has failed, no mystery why "accountability" is the war cry of alleged reformers. A large swath of America's K-12 schools is still occupied by usually well-intentioned but self-righteous or dogmatic administrators, and even teachers, in denial of or resentful of change, sincerely believing that what they think they possess as knowledge is still good enough in 2012 and beyond, or paranoid that it is not.  With the phenotype of local school boards educationally naive, or worse, and states' controls wimpy or politicized, many systems truly believe themselves immune from more than imposed bureaucratic accountability.

The issue is this displays on both sides all the societal wisdom of "throwing the baby out with the bathwater."

Potentially, at least greater accountability of K-12 public education could be accessible now without massive systemic restructuring -- and at lower direct and opportunity costs -- if the retro human resources still entrenched in public educational bureaucracies and blocking its scrutiny were actually challenged by their constituencies or states' oversight, and contemporary organizational and managerial values replaced present K-12 bureaucratic practice.  The "other" reform mantra: US public schools could become managerially contemporary, and competent, without adopting the full mantle of profit-driven enterprise and competition.