Educational Finance, Innovation, and Social Production

E Educational Finance, Innovation, and Social Production Kenneth J. Saltman University of Massachusetts Dartmouth, Dartmouth, MA, USA Introduction In the past 40 years, education has been subject to calls for “innovative” financing schemes that break with long-standing public funding arrangements. Most often “innovation” is a euphemism to describe projects that are principally about varieties of educational privatization. There are intertwined structural and ideological causes for the turn to such market reforms. Among the most significant causes are ongoing crises of capitalist accumulation that have especially since the 1970s and the advent of neoliberal globalization resulted in capital pillaging the public sector for profit. Among public sectors, public education in particular has been targeted to be transformed into a private industry. In this sense “innovative” educational finance schemes need to be comprehended as both ruling class strategies of capital accumulation and an expression of the social and cultural reproduction of capital. A number of transnational organizations including the World Bank/International Monetary Fund, World Trade Organization, and corporate and philanthropic foundations have promoted such educational restructuring on behalf of a transnational capitalist class and through the promotion of particular cultural ideologies including especially neoliberalism, human capital ideology, consumerism, and ideologies of technological and financial innovation. In most of the industrialized world, educational funding is federalized. In the United States, educational funding is mostly funded by states and locales. Around the world the so-called innovative educational finance schemes aim to create profit opportunities for rich investors by shifting the ownership and control of numerous aspects of education away from government ownership and control and toward private individuals with capital. Often the possibilities for profit taking come through collecting public money while cutting educational resources. Sometimes the possibilities for profit come from displacing teachers with for-profit technology. The so-called innovative educational financing schemes are not only about creating ways for the rich to strip wealth from public sector institution. They are also an ideological project that produces society by fostering particular kinds of social relationships and producing particular kinds of identifications, values, and ideologies. In the last 40 years, the neoliberal restructuring of schooling has been dominated by privatization and contracting. However, integral to such alleged innovation have been turned to repressive pedagogical approaches and school models oriented around © Springer Nature Singapore Pte Ltd. 2019 M. A. Peters, R. Heraud (eds.), Encyclopedia of Educational Innovation, https://doi.org/10.1007/978-981-13-2262-4_116-1 2 Educational Finance, Innovation, and Social Production corporeal control. Educational repression is not only big business but is symptomatic of how ongoing crises of capital accumulation are being resolved through coercion in a context of rising inequality and declining class mobility. Also, integral to “innovation” has been the turn to the making of students into commodities through student production of digital data and the use of various forms of philanthropy with a marketbased agenda. and politics of education. The shift to private ownership, control, and management of schools allowed educational wealth and resources to be expropriated from the educational process by investors. For example, for a time the largest for-profit Educational Management Organization, the Edison Schools now Edison Learning, allowed hundreds of millions of dollars to be extracted from the school management process for the owners of the business. At the expense of smaller class sizes, more teachers, and better facilities, vast sums of money went to the bank accounts of Christopher Whittle, Benno Schmidt, and other owners of the company. Such companies targeted urban and rural schools and districts that were already subject to historical disinvestment. Profit depended on spending less on each student than the low per pupil amount dedicated by the public system. These companies were shunned by schools and districts in richer locals with high levels of per pupil spending. Privatizing the Purpose of Education In the 1980s the expansion of neoliberal ideology resulted in the promotion of privatization and deregulation of numerous aspects of schooling. Neoliberalism also fostered a cultural shift celebrating the private sector and market experimentation and redescribing the public sector in private sector terms, particularly through the language of competition, choice, failure, and consumption. The public purposes of schooling in making citizens was largely eclipsed as neoliberalism focused the role of schooling on work and consumption. Educational innovation became synonymous with markets and technology (Means 2019). The Privatization of Schools The privatization and corporatization of schools which have accelerated since the 1980s include allowing private businesses to manage schools, charter school reforms that allow this and voucher schemes that provide public money for private schooling and scholarship tax credits that use taxes to incentivize the use of private schools instead of public schools. Educational Management Organizations (EMOs) and Charter Management Organizations (CMOs) played steadily larger roles in managing schools. Such market-based “innovation” has included school commercialism initiatives, contracting, and public-private partnerships. The dominant form of such “innovation” has had significant anti-democratic effects with regard to both the economics The Privatization of Knowledge The shift to for-profit entity managing schools transferred governance and control of schools away from the public and communities and into the hands of a small number of rich and politically powerful individuals often located far from the school. Privatization has tended toward standardization and homogenization of school models running counter to critical and public educational traditions that embrace the cultural politics of knowledge. These approaches mistakenly treat knowledge as a commodity to be delivered and consumed by students; they disregard student experience and subjectivity and local context; they conceal the relationships between knowledge and the broader social world. In so doing these approaches to schooling delimits the possibilities of learning for social agency instead making knowledge into a commodified object of restricted market exchange: consume decontextualized and meaningless knowledge, and then regurgitate such knowledge in exchange for degrees, work, and consumption. Knowledge Educational Finance, Innovation, and Social Production 3 is not in this view a means of comprehending the self and the social and acting on the world with others. class hierarchy by establishing de facto class and race-segregated charter districts. Charter finance schemes have included federally funded tax credits that allowed corporations to profit by investing in charter expansion. Charter schools have also been the basis for a massive and lucrative bond market in charter municipal bonds. Charter bonds are issued to finance charter school development. Often these bonds are backed by the public and its money. If the charter school fails and the bond fails, then the public is stuck with the debt. Charter schools have also been the basis for charter real estate investment schemes such as the one run by tennis star Andre Agassi and his partner Bryan Turner. These businesses acquire public schools cheaply from the public and then lease the school physical site back to their own charter school at profitable rates. Thus, as Bruce Baker points out, the public pays twice for a public school, while the investors take money that could be funding schools. Charter schooling on the whole has served as a means to further enrich rich owners, investors, and administrators while appearing to introduce a significant school reform that in fact does nothing to challenge the gravest educational and social inequalities and exacerbating many of them. Vouchers are another long-standing project of the political right to transform public schooling into a private industry. Vouchers give public money to citizens to buy private educational services. Studies around the world show that such schemes result in the degradation of public school systems and the development of low-quality private schools. Vouchers are also a problematic scheme in that they allow public money to fund private religious education. Scholarship tax credits or what Welner has termed “neo-vouchers” use tax refunds to incentivize citizens to opt out of public schools by using tax credits to pay for private schools. Scholarship tax credits erode public school funding and support privatization in much the way that vouchers do. In addition to these long-standing neoliberal privatization schemes, innovative education financing has more recently been taking the form Charters, Vouchers, and Bonds One of the most significant so-called innovative educational finance schemes from the 1980s to the present has been charter schooling. Charter schools allow private for-profit or nonprofit organizations to manage schools. Charters began with the intent to allow the proliferation of alternative and innovative school models. However, they were largely coopted by venture philanthropists and promoted as a means to privatize schools. While charter schools have been celebrated by their promoters, they have failed to improve on traditional public schools in terms of traditional measures of academic achievement let alone allowing for democratic educational practice. However, charter schools have been found to exacerbate racial segregation, pay teachers less while inflating administrator and owner pay, result in fewer certified and experienced teachers, and push out students with disabilities, behavior issues, and English-language learners. Under a guise of competition with public schools, charters have dumped on neighboring public school students whose needs require additional financial support. Charters are mostly private nonprofit schools contracting with districts. Some charters are for-profit schools. For-profit schools drain educational resources from the schools in the form of owner profits. Often nonprofit charters subcontract operations for forprofits or allow profit by paying the charter administrators and board member exorbitant salaries. Following Hurricane Katrina in New Orleans, the public schools were not rebuilt and instead four distinct charter districts were created. A principal reason for this was to fire all of the New Orleans teachers and destroy their union. Chartering by undermining collective bargaining worsens teacher pay and job security increasing teacher turnover and decreasing teacher experience. Studies have shown that the charter districts in New Orleans have replicated the racialized 4 Educational Finance, Innovation, and Social Production of social impact bonds (Saltman 2018a). Social impact bonds begin around 2010. They bring together governments, banks, and philanthropic foundations to allow public service arrangements to become financial investments for banks. Social impact bonds have banks pay for the service, and if the program is deemed successful, then the government pays the bank back with significant additional money. The philanthropies help set up the deals and often are involved in arranging evaluation of the programs. Proponents of social impact bonds claim that these schemes are more accountable than direct government provision of services because of the measurement. Critics suggest that the schemes inflate the costs of already successful programs allowing banks to bilk the public sector while influencing the program evaluations. Critics also suggest that banks cherry pick already successful programs to increase the likelihood of success and hence profit taking. merge for-profit enterprises with nonprofit ones. These companies along with giant media companies like Google, Apple, and Microsoft are at the forefront of getting digital technology businesses into schools. Technology outfits stand to fulfill a rightist dream of ending the very conception of the public school and replacing it with collections of private educational services – that is, “unbundling” the school. These companies are promoting adaptive learning technologies that frame teachers as technology facilitators rather than teachers. In a financial sense, this stands to allow technology companies to hijack the role of teachers and their salaries regardless of the lack of efficacy established by these experimental approaches to teaching. As well, a new and massive industry in data capture and commodification has opened with the introduction of such technology-based learning platforms in schools. CZI, for example, built its school model Summit using Facebook engineers, and CZI is acquiring forprofit education companies to expand its cache of student data. As adaptive learning technology makes a case of each student, it also sorts and sifts students in a new form of techno-tracking (Saltman 2018a). The latter two “innovative” finance schemes of digital surveillance and social impact bonds appear to be converging as impact investors increasingly rely upon digital surveillance to measure and track youth who are rendered into investment commodities. Philanthropy and the Digital Frontier of Privatization Educational privatization has grown most significantly in the area of the spread of for-profit digital technology in classrooms. This has several implications for educational finance. Cyber school companies such as K12, Inc. have functioned as Educational Management Organizations running schools for profit particularly by displacing teachers with technology. Conventional measures of quality reveal extremely low performance for cyber schools. One study found that a year in K12, Inc. was worse than no schooling at all. Technology companies such as Google, Apple, Microsoft, Chan Zuckerberg Initiative, Emerson Collective, and Omidyar Network have managed to get hardware, software, and adaptive learning technology into schools. Big venture philanthropists like Gates, Walton, and Broad which are nonprofit organizations aggressively promoted the aforementioned dominant forms of privatization. Increasingly the large so-called “philanthrocapitalsts” like CZI, Omidyar, and Emerson are structured as limited liability companies and Repressive Schooling and Pedagogy The steady expansion of efforts to transform public education into a private industry coincides with a 20-year project that has steadily expanded the use of repressive technologies in schools. Such repression ranges from the militarization to “prisonization” of schools. This includes the transformation of charter schools into military academies, the hiring of military officers as educational leaders, the Troops to Teachers program, and the expansion of JROTC. As well, schools have been subject to ever greater security apparatuses ranging from police presence, metal Educational Finance, Innovation, and Social Production 5 detectors, lockdown drills, and repressive pedagogies. Repressive pedagogies include drugging children into attention with ADHD drugs to improve standardized test performance, “grit” pedagogies that revive archaic behaviorism, and the use of biometric teaching devices that purport to measure learning through the impact of teaching on the bodies of children (Saltman 2016). These repressive pedagogies are contrary to dialogue-oriented forms of teaching and learning, and they run counter to forms of education that aim to foster debate, dissent, curiosity, and creativity. They are also big business. The market in attention control drugs alone is a multi-billion dollar market. The standardized test and textbook business that justifies to the use of these drugs is as well a multi-billion dollar industry. Profits drive the standardization and “accountability” movement, drive privatization schemes, and push repression but do not address educational and social inequalities. “Innovative” finance schemes deepen social and educational inequalities by exacerbating unequal distribution of educational resources and failing to address the ways that educative practices reproduce a racialized class hierarchy. Moreover, these schemes are beholden to forms of teaching and learning that deny the ways that claims to truth are interwoven with material and symbolic values and contests. It is necessary to contextualize these so-called innovative educational finance schemes in terms of the broader political, economic, and cultural forces, systems, and social antagonisms that animate them. Innovative educational finance schemes are the consequence of broader class and cultural antagonisms including especially the contest between ruling class people and everyone else. Around the world a transnational capitalist class seeks to transform public institutions into private industries. This includes a global project to transform public education into private forprofit business. Those with the greatest wealth, namely, the super-rich and corporations, stand to benefit by helping to erode public education systems and put in their place for-profit schemes to manage schools and contract their operations. The last 30 years of school reforms have been oriented around bashing public schools and public school teachers, defunding public school systems, and promoting reforms that do not raise the investment in all schools to the levels of the best funded and supported schools. As well, in place of equalizing and raising support and investment for the historically underfunded schools, public schools have instead been given tests and standardization. On a global national and local scale, an infrastructure has been built by ruling class people to promote the shift to private forms of schooling. The World Bank, World Trade Organization, and other supranational organizations promote pay-for-fee services in poor countries rather than promoting universal, free, high-quality public schooling. Transnational media corporations such as Apple, Microsoft, Google, Amazon, and Facebook and their related corporate philanthropy organizations such as the Bill and Melinda Gates Foundation and Chan Zuckerberg Initiative have played an outsized role in promoting forms of education that shift control over teaching and learning from teachers and communities to media corporations and corporate media curriculum designers while setting the stage for the growing industry in commodified data capture generated through the student use of online educational technologies. As well, large corporate foundations run by some of the richest people on the planet such at the Walton Family Foundation, the ExxonMobil Foundation, and the Eli and Edythe Broad Foundation have actively sought to promote voucher schemes, charter expansion, and privatized models of teacher and leader preparation. The class-based contest over the future of public schooling is interwoven with a cultural contest over whether public schooling will function in the interest of expanding democracy or contributing to its erosion (Saltman 2018b). Knowledge, curriculum, and pedagogy are not neutral deliverables despite being framed as such by liberals, conservatives, and techno-utopians. Rather, knowledge, curriculum, and pedagogy represent particular values, assumptions, perspectives, and ideologies of real people with real social locations and with material and symbolic interests. Democratic approaches to education and culture help students comprehend how claims to truth are related to particular ideologies and interests. 6 Educational Finance, Innovation, and Social Production They also help students to transform acts of interpretation and judgment into social intervention and self-governance. They also help students develop democratic dispositions for dialogue, dissent, debate, curiosity, and creativity. Most socalled innovative educational finance schemes are interwoven with approaches to schooling that promote repressive pedagogies of control and approaches to schooling grounded in transmissional rather than democratic and dialogic models of teaching and learning. these short-term profit opportunities for capital. Similarly, today the expansion of impact investing and digital technologies, data surveillance, and data commodification in schools appears to be less about producing effective workers or participating citizens. These schemes are more oriented around the prospect of short-term profits for large media companies and banks that seek to use students to generate commodified data or become commodities in bank schemes like charter municipal bonds and impact investment securities to do inflated contracting with governments. It is crucial for citizens today to realize that there are more than just financial costs to the public sector in these schemes. There are also the costs of undermining socially progressive and democratic forms of schooling and culture. Just because historically “innovative” educational finance schemes have largely been means for the rich to fleece the public sector and instruments for exploitation that does not mean that innovation must be thought of in these terms. Innovative educational finance can be reconceptualized in terms of the public interest, the common good, and the common wealth. Such a conception of innovative educational finance would begin by first seeking to transform educational funding in a progressive fashion that not only equalizes school funding but gives the most resources to the schools most historically shortchanged. Innovative educational finance needs to be conceived in public terms of shared educational labor for shared benefit. This suggests rejecting the logic of privatization that encloses and privatizes educational resources toward the end of restricted benefit for the rich. It also suggests rejecting the current tendency to view public schooling for the private ends of commerce and inclusion into capitalism through consumerism and work. Public, democratic conceptions of schooling demand not only reviving the purposes of schooling for democratic political ends but also as a precondition for economies grounded in ecological sustainability, shared economic benefit, and democratized forms of working in and managing the economy. In this view innovative educational finance would be subsumed under public, Conclusion Schooling inevitably produces the future. Historically, public schooling has been implicated in reproducing the economy by making students who would be future workers destined to take their place in a particular part of the workforce (Bowles and Gintis 2011). Schools teach knowledge and skills wrapped in ideology for the workplace. In the industrial economy, schools taught working class students not just basic skills but dispositions of obedience to authority. Professional class schools taught students not just academic knowledge but also dispositions for leadership roles in the public and private sectors. Public schools allowed for capital accumulation by creating the conditions for workers to have their labor shortchanged by owners of industry. This required a long-term investment in making disciplined and docile workers. In the postindustrial service economy, the social and cultural reproductive role of schools changed with schools increasingly becoming the means for short-term profit through contracting and privatization. The time- and labor-intensive mandate for learned self-regulation in the industrial economy gave way to more direct forms of social control in the postindustrial economy. Institutions target bodies as the locus of control and profit. Capital values students less and less as future workers whose future work can be exploited and more and more as objects useful for short-term contracting profits. The market-based restructuring of public education since the 1980s was central to creating Educational Finance, Innovation, and Social Production 7 humane, and egalitarian values and culture rather than values for individualized profit-seeking. Such democratic values and culture for the economy and education would be truly innovative. Means, A. J. (2019). Learning to save the future. New York: Routledge. Saltman, K. J. (2016). Scripted bodies: Corporate power, smart technologies, and the undoing of public education. New York: Routledge. Saltman, K. J. (2018a). The swindle of innovative educational finance. Minneapolis: University of Minnesota Press. Saltman, K. J. (2018b). The politics of education: A critical introduction (2nd ed.). New York: Routledge. References Bowles, S., & Gintis, H. (2011). Schooling in capitalist America. Chicago: Haymarket Books.