Hidden Markets: The New Education Privatization

reviewed by Kenneth Saltman - December 22, 2009

coverTitle: Hidden Markets: The New Education Privatization
Author(s): Patricia Burch
Publisher: Routledge, New York
ISBN: 041595567X, Pages: 200, Year: 2009
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Patricia Burch’s book Hidden Markets: The New Education Privatization demands attention. It promises to reveal a largely unnoticed yet transformational force in public education. It does just that. According to Burch, the markets that are largely hidden are the for-profit educational contracting markets. Who are they hidden from? The public that ostensibly owns and controls public education. Burch illustrates in painstaking detail the explosion in the past decade of for profit educational contractors who make an enormous fortune from public dollars while they steadily shift control over educational policy and priority from public to private governance.  

Hidden Markets clearly and plainly makes a few contributions that are somewhat stunning. These make the book a valuable addition to literature on educational privatization as well as an important resource, not just for education scholars but particularly for administrators, school board members, teachers unions, teachers, and students, and really all citizens concerned about the future of public schooling. One such contribution is the irrefutable and empirically rich evidence detailing the vast extent of the major initiatives and forces behind the “new privatization”: major for-profit firms, industry associations and lobbyists, Special Educational Service providers or for-profit tutoring, testing, and curriculum companies, the rapid rise of virtual charter schools, and the lucrative database and benchmark assessment industry. The detail and extensiveness of the research reveals Burch to be an extremely important voice among those stand-out scholars who track and study privatization empirically, such as Alex Molnar, Martin Carnoy, Henry Levin, Gary Miron, Christopher Lubienski, Stephen Ball, Kathy Lugg, Janelle Scott, Amy Stuart Wells, Kevin Welner, and the late Gerald Bracey.

Burch makes another significant contribution by illustrating how public policy, especially “No Child Left Behind” (NCLB), has set the stage for public schools to be widely required to use for-profit educational contractors while the contractors themselves are not required to fulfill government mandates. These laws require information gathering and reporting to further ease the expansion of for-profit contractors taking more control and draining more public money. Such glaring and egregious examples of this demonstrate the way that schools under NCLB must use private Special Educational Service providers (SESs), but those SESs are not held accountable to provide for special needs and bilingual services which the law requires of publicly-run schools. Burch details how, under the guise of innovation and experimentation, private contractors frequently replicate traditional problematic approaches to schooling and reproduce existing inequalities rather than ameliorate them.     

Burch gives powerful ammunition to critics of public school privatization who contend that the secrecy and unaccountability of the private sector undermines schools as sites of democratic deliberation. She also illustrates the extent to which the new privatization relies far less on evidence of effectiveness than on the ideology of neoliberalism, which celebrates privatization and deregulation while denigrating all things public as necessarily inefficient and bureaucratically encumbered. She spotlights as well the ideology of corporate culture that imagines schools as businesses, parents as consumers, and the public as nothing other than a private market.  

Burch’s intervention is especially trenchant at a moment when the basic tenets of neoliberalism have been utterly discredited by economists across the political spectrum (good luck finding an economist who will argue that markets regulate themselves). Yet, in U.S. education policy the neoliberal trend expands seemingly unabated as both parties increasingly treat public schooling as if it has no other function than to serve economic ends, making workers and consumers work towards the aim of concentrated capital accumulation and a global race to the bottom for suppressed wages. All aspects of Race to the Top demonstrate a perverted socialism for the rich along the lines of the 2008 financial bailouts. Billions of public dollars are being dangled in front of states to induce them to expand privatized and managerialist school reform, including charter schools, cash for grades, turnarounds, and other schemes. Such mainstream policy preferences imagine historically neglected schools as private enterprises that need to be subjected to the “creative destruction” of private markets. As America’s largest financial and automotive businesses are deemed “too big to fail” and rescued with public wealth, America’s public schools are being set up to be declared “failed” and then replaced by allegedly “competitive” markets. If the current concentrated control over the Educational Management Organizations are any indication of what can be expected in the future, once universal public schooling can be redefined as a private industry subject to “creative destruction,” a small number of massive companies like Edison Learning, K12, and Imagine, Inc. will be able to dominate the industry and claim they too are “too big to fail.”  (The precedent is of course The Edison Schools which in 2002, when on the verge of a total stock collapse, was saved from failure by former and present governors of Florida Jeb Bush and Charlie Christ who used public money, the Florida Public School teacher retirement funds, to buy up the stock and take the company private. Incidentally, as it became difficult for Edison to expand, the company spun off Tungsten and Newton to profit from the kinds of educational contracting that Burch details.)

The crisis of neoliberal U.S. public schooling involves a profound abdication of commitment towards investing in public schools as a site for fostering democratic culture and social renewal. In the context of an otherwise commercially saturated civil society, public schools are one of the very few common spaces in the United States that offer the potential for public deliberation over public values. As the new reforms concentrate governance control of charters under predominantly private business councils, narrow the meaning of education to standardized test performance, and limit the possibilities of teaching as an intellectual and social endeavor to tactics of test preparation, the potential role of schools to foster engaged democratic citizens is utterly crushed.

While an extremely valuable contribution for being a careful, empirical study on the underexplored dimension of privatization focused on contracting, Hidden Markets opens up questions about the broader context of how privatization is being implemented and the relationships between aspects of the broader privatization movement. Specifically, while admirably offering a criticism of neoliberalism as it structures the policy field and school reform, Burch’s insights can be expanded to consider the ways neoliberalism intersects with other powerful discourses such as positivism and discipline and the ways these discourses are gendered, raced, and sexed.  

Burch writes, “I am not suggesting that we stop asking questions about the effects of reforms on student achievement” (p. 11). A weakness with regard to the cultural politics of education is apparent in many liberal critics of privatization, who regularly assume that quality educational delivery, “student achievement,” and “achievement gap” are functional categories that can be universally agreed upon rather than identifying these terms as profoundly ideologically-charged framings of school policy at odds with, for example, critical pedagogical approaches that would aim for social transformation. The goal of “achievement” conceals assumed purposes and values of schooling while denying the struggle over whose knowledge, values, and ways of seeing should be taught and learned in schools, and how particular interpretations and claims secure social authority. The dominant assumption is one in which the normalized body of knowledge is to be exchanged for greater educational honors towards the end of exchanging it for economic opportunity. As David Hursh, Sandra Mathison, and Mark Garrison1 among others powerfully emphasize, we must understand the emphasis on standardized testing that dominates “achievement” framings as both utterly central to historical struggles over public education and as central to the current neoliberal school reforms. As the debates over policy, practice, and reforms are thoroughly captured by the logic of efficacy which reifies a falsely universalized and falsely neutral claim to quantifiably verified truth, it is imperative for educational scholars committed to public and democratic forms of schooling to put forward revalued conceptions of student attainment that are comprehended through social conceptions of change. What the teachers’ unions, education scholars, teachers, and everyone concerned about strengthening public education has to grasp is that as long as the framing of educational quality remains trapped within the current frame of allegedly neutral and allegedly objective quantifiable “student achievement,” public education stands to be dismantled as these mistaken valuations of learning are inextricably bound up with the anti-democratic concentration of governance, ownership, and control that come with privatization.

The book also lends itself to expanding on what Burch refers to as a “critical” approach to privatization which in Hidden Markets means, “…that the studies step outside of the immediacy of policy requirements and popular trends, and think hard about policy origins and assumptions. The studies also are critical as they concern the policies’ social justice implications” (p. 10).

The conception of “critical” in Hidden Markets ought to be expanded to recognize that educational privatization is an instrument of class and cultural warfare waged by the rich on the rest.2 That is, “critical” ought to refer to the constitutive material and symbolic power struggles playing out through education. What is afoot in the current privatization initiatives, which are far more expansive than the forms identified by Burch as the “new privatization,” is an attempt to do nothing short of transforming public education into a private market, essentially ending public education. This is being done not just through the forms discussed by Burch but also by what Naomi Klein calls “disaster capitalism” and David Harvey describes as “accumulation by dispossession.” In education I have termed this concept “Capitalizing on Disaster” or “Smash and Grab privatization” in which declarations of disaster, failure, and crisis are used to implement longstanding privatization initiatives that could not be otherwise enacted through deliberative political means. As well, these takings of public schools are being done in coordination with broader neoliberal agendas such as the privatization of public housing and dispossession of poor predominantly non-white citizens from communities. This broader privatization trend is particularly evident in the rapidly expanding charter movement (which is a frontal assault on teachers unions, teacher work, and teaching as a critical and intellectual endeavor, and the tip of the privatization movement), the continuing voucher movement, Race to the Top, the organized efforts of the “venture philanthropies” 3 such as the Gates, Broad, and Walton foundations as well as numerous neoliberal think tanks, associations, and political organizations and back-to-back US Departments of Education dominated by bureaucrats with a corporate view of school reform.  

These organizations and individuals are rapidly succeeding in smashing teachers unions and overrunning local school boards in order to put in place privatized school networks as in New Orleans after Katrina. Indeed the experiment in schooling in post-Katrina New Orleans, that great neoliberal experiment in privatization where public schooling was remade into privatized charter networks, is currently being expanded state-wide in Louisiana as the Louisiana Governor Bobby Jindal, Louisiana Board of Education Superintendent Paul Pastorek, and Recovery School District CEO Paul Vallas seek to ratchet up school failure scores to declare more and more public schools as “failed” and subject to closure and replacement by privatized schools. The privatizers have a profound antipathy for teacher education and academically grounded certification, local school boards and community governance, and an outspoken hostility for educational theory in favor of anti-intellectual practicalism, teacher de-skilling, and a relentless penchant for radical experimentation especially with unproven market-based reforms.

Reading Hidden Markets I couldn’t help but think that while Burch is absolutely right about the hidden markets she identifies, these are hardly the only ones. Perhaps the most significant hidden market radically expanding in U.S. public schooling is the “non-profit” charter industry. Non-profit charters are premised on injecting a healthy dose of “market competition” into schooling, forcing schools to compete against each other for students and letting those schools that do not raise scores “go out of business.” Despite the business rhetoric of competition, since their inception charters have relied disproportionately on grants and philanthropic donations (the Gates Foundation poured billions into charters to “leverage” private money to influence the spending of public money) and now increasingly on government incentives and one time payouts. In the Recovery School District, charters are receiving roughly double ($15,000) the per student support relative to the Orleans Parish School Board schools, yet in traditional measures of student achievement, compared by rate of improvement, the RSD lags. The two major academic national studies of charters find that they on the whole do worse than traditional public schools in traditional measures of student achievement. It is important to realize that in the past decade charters have gotten unending support politically from the zealous, organized, and richly funded charter movement along with national and state charter lobbying groups, Washington think tanks like Fordham, AEI, Hoover, and Heritage. They also receive financial support from the so called “venture philanthropies,” especially the Gates and Broad Foundations, the New Schools Venture Fund and Charter School Growth Fund, all of which aim to replace public schooling with a national “market” in education.   

The back of Hidden Markets has a quote from the brilliant liberal policy scholar Jeffrey Henig praising the book for not sounding “shrill” and “alarmist” like some critics of privatization apparently do. Someone needs to follow Henig around with a bullhorn (the kind that comes with a siren on it) for a day or two and repeat over and over, “Jeffrey, the neoliberal goal is to end public education! Jeffrey, they are winning! Jeffrey, get alarmed!” What Henig and other smart liberal policy wonks somehow do not seem to comprehend is that as the Democratic party steals the educational agenda from the Republicans, the political right is organizing for the long haul to support charters in the short run in order to declare them as a failed experiment and set the stage for full bore educational privatization. This is becoming increasingly overt in the literature of the neoliberal foundations. Andrew Smarick of AEI writing in Hoover’s Education Next openly admits in his article “The Turnaround Fallacy” that the real attraction of charter schools is that they can be declared failed and closed to set the stage for a private industry in education dominated by “churn” or “creative destruction.”4  

Despite starting as a grassroots movement for innovative, independent, and alternative school models, the now dominant corporate charter model of the “venture philanthropists” has emphasized “replicating” traditional school models and rigid approaches to learning that stand to create not innovation but rather homogeneous McEducation. The instability and unsustainability of charters comes in part from the fact that the extra money can and will dry up both from these philanthropies and from the government. When this happens, charters will eventually go “out of business” (aided by a test-based valuation of quality), but not before doing all they can to cut costs to survive. Cutting costs has historically included: displacing and underpaying local experienced teachers; hiring inexperienced teachers and burning them out while their salaries are low; using cheap inexperienced Teach for America teachers, uncertified teachers, and relying on alternative certification, all of which are inferior to fully certified teachers, according to the studies; union-busting; manipulating test scores; importing cheap teachers from overseas; counseling or pushing out special needs students and English language learners to raise test scores; and contracting the running of schools to for-profit management companies.

“Non-profit” charters are often public in name but not in practice. Charters shift governance to unelected councils dominated by business people. These councils redistribute decisions about schools away from public community control. They subcontract to private for-profit companies that drain public funds and can maintain financial secrecy away from public oversight. They introduce new educational inequalities under the guise of freedom of “choice” as they favor those citizens with the most money, social networks, and cultural savvy to game the school selection process. Charters also drain public resources as schools compete with each other to draw parents by spending money on private public relations and advertising that could be spent on teachers, books, and schools. Charters imagine students economically as workers and consumers and consequently they over-emphasize high stakes tests, pushing schools to treat knowledge as something that students consume and regurgitate rather than fostering the kinds of public education that prepares students to think critically about the world they inhabit and to learn to act as citizens with others to change it for the better. Charters fail to address the problems of racial segregation and White flight becoming complicit with the abandonment of the democratic aspirations of the civil rights movement. Finally, charters set the stage for future school privatizations by for-profit companies by being subject to closure.

Behind these Hidden (and not so hidden) Markets there are some additional hidden myths that need to be named and challenged. One is that public education has “failed” (a convenient market metaphor) and that it is now time to “give the market a chance.” The reality is that the gross inequalities in public education are the result of the linkage of real estate markets to school funding and the longstanding influence of business in thoroughly shaping the select school failures of today – from the Business Roundtable to the National Association of Manufacturers, from corporate philanthropies to direct business partnerships, the current state of schools owes much to the longstanding mistake of having given the market a chance.5  

A related hidden myth is that when privatization advocates declare public schooling “a failure” (as has Bill Gates and a panoply of CEOs and pro-privatization policy wonks), they do not mean all public schools have failed. They are really uttering a racially-coded attack on working class and poor people who have been historically denied fair distribution of educational resources. Now the same predominantly white beneficiaries of unequal distribution of educational resources are participating in profiteering by targeting working class and poor students of color, schools, and communities for privatization. Why have the educational profiteers failed to make inroads into the rich white suburbs of major cities? These schools and communities have been the beneficiaries of the constitutive struggle over public space and public resources and have no interest in having their public dollars skimmed off for the owners and managers, lawyers, and investors in the Edison Schools, Kipp, etc. This leads to one more hidden myth.  

The kind of schooling pushed by the privatization advocates aims to transform a current dual system of public schooling into another dual system of public schooling. In the current dual system, elite public schools in rich predominantly white communities largely prepare managers, leaders, and professionals for the top of the economy and the state while the underfunded public schools in poor, working class, and predominantly non-white communities largely prepare the docile, disciplined workforce for the bad jobs at the bottom of the economy and for exclusion from the economy altogether.  

Despite the ceaseless neoliberal and liberal rhetoric of crisis and failure, the public schools as Freire, Bourdieu, Ollman and others recognize do largely what they are supposed to do: produce the stratified workforce while sanctifying inequality as a matter of individual merit or talent. The neoliberal privatization reforms maintain the dual system, leaving in place the elite public schools but targeting poor schools and predominantly students of color to turn them into short term profit opportunities in numerous ways. For example, some reforms include the contracting, testing, and tutoring schemes illustrated by Burch but also for-profit management, charters, and all the ancillary profits that can be generated through privatization like the public funds that will pour into marketing charter schools to prospective “customers” through advertising and public relations, the lucrative real estate deals through charters, etc. At present, the lower end of the dual system provides a deferred investment in low pay, low skill disciplined workers and fodder for the for-profit prison industry and the military. Privatization targets the low end of the dual system and pillages the public sector for short term profits benefiting mostly the ruling class and professional class (poverty pimping) while doing nothing to transform the dual system of public education into a single system as good as its best parts throughout. For investors in privatization, the benefits are double: money can be made in the short run by draining public tax revenue while the future exploitable workforce can still be produced for the long run. And as the investors are benefiting twice they can feel good that they are giving poor students “every opportunity” to benefit themselves.  

Meanwhile, class mobility is declining, unemployment is rising, and the shifting of economic inequality and exclusion onto school kids who will need to be (in the words of Thomas Friedman) “more entrepreneurial” to get and keep scarcer jobs, displace the violence of the capitalist economy onto the weakest and most vulnerable citizens, children. As I write this, one in five U.S. children is on food stamps with ballooning rates of child homelessness. Clearly, the goal should not be to emulate the financial bailout and see how we can all help to subsidize the rich getting richer by replicating a more lucrative system of dual education – the rich part still public and the poor part privatized. Rather, the goal must be to end the dual education system.  

The first step involves following the rest of the industrialized nations and federalizing the educational funding system. The second step involves funding poor schools and students more than the students in the richest schools are funded to compensate for the additional obstacles faced by poverty (objections to this should reckon with the fact that a single soldier in Afghanistan is currently costing the public $500,000-1million per year). The third step involves revaluing teaching as the most important profession by treating it as an intellectual, socially transformative pursuit rather than a technical skill. The fourth step involves replacing the pedagogical and evaluative system of high stakes standardized testing with one based on the processes of learning at the heights of knowledge, the university, and making the teaching profession a genuinely academic6 one (not just a professional one, as liberals argue, and not one that replicates the corporate workforce, as neoliberals argue). The fifth step requires recognizing that the culture inside schools is inseparable from the culture outside of schools: a public and democratic rationale for public schooling has to be linked to a collective goal of expanding democratic social relations, and as such it has to begin to take seriously how schooling is involved in subject formation and how it either affirms or contests relations of power and domination in the broader society. Expanding democratic social relations through education involves not just teaching a democratic culture and ethos, and engaged habits of civic participation but also demands linking educational projects to efforts to democratize control of the economy. It is time to link criticism such as Burch’s of how markets (more or less hidden) threaten good education to a project that rethinks how good education sets the stage for people to get rid of markets where they have no place and more importantly to make markets subordinate to the common good and control of the people.


1. For an excellent historical account of the political struggles over standardized testing see Mark J. Garrison’s A Measure of Failure: The Political Origins of Standardized Testing (Albany:  SUNY Press, 2009). For an excellent contemporary take on the relationships between standardized testing and neoliberalism see David Hursh’s High Stakes Testing and the Decline of Teaching and Learning (Lanham, MD: Rowman & Littlefield, 2008).

2. See for example David Harvey, A Brief History of Neoliberalism (New York: Oxford University Press, 2007), and in the context of education Kenneth Saltman, Capitalizing on Disaster: Taking and Breaking Public Schools (St. Paul, MN:  Paradigm, 2007), Henry Giroux, The Terror of Neoliberalism, (St. Paul, MN: Paradigm, 2004), Michael Apple, Educating the Right Way (New York:  Routledge, 2007), David Hursh, High Stakes Testing and the Decline of Teaching and Learning (New York  Rowman and Littlefield, 2008), and the excellent work on this by scholars such as E. Wayne Ross, David Gabbard, to name a few.

3. My new book The Gift of Education: Venture Philanthropy and Public Education (New York: Palgrave, 2010) details this largely ignored radical market based transformation of educational philanthropy.

4. Andrew Smarick (2010), “The Turnaround Fallacy” Education Next, 10(1) available at http://educationnext.org/the-turnaround-fallacy/.

5. See for example Joel Spring, Educating the Consumer-Citizen (New York: Routledge, 2003), and Dorothy Shipps, School Reform Corporate Style (Lawrence, Kansas: University of Kansas Press, 2006).

6. For excellent views of the teacher as a socially transformative intellectual see Henry A. Giroux’s Teachers as Intellectuals (Westport, CT: Bergin and Garvey, 1988), and Stanley Aronowitz’s recent Against Schooling and For an Education that Matters (St. Paul, MN:  Paradigm, 2008).

Cite This Article as: Teachers College Record, Date Published: December 22, 2009
https://www.tcrecord.org ID Number: 15882, Date Accessed: 5/28/2022 5:57:29 AM

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